BSV vs. SCHX: What’s The Difference?

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between BSV and SCHX? And which fund is better?

The expense ratio of BSV is 0.02 percentage points higher than SCHX’s (0.05% vs. 0.03%). BSV is mostly comprised of AAA bonds while SCHX has a high exposure to the technology sector. Overall, BSV has provided lower returns than SCHX over the past ten years.

In this article, we’ll compare BSV vs. SCHX. We’ll look at portfolio growth and holdings, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss BSV’s and SCHX’s performance, risk metrics, and annual returns and examine how these affect their overall returns.

Summary

BSV SCHX
Name Vanguard Short-Term Bond Index Fund ETF Shares Schwab U.S. Large-Cap ETF
Category Short-Term Bond Large Blend
Issuer Vanguard Schwab ETFs
AUM 67.71B 30.89B
Avg. Return 2.27% 14.60%
Div. Yield 1.48% 1.41%
Expense Ratio 0.05% 0.03%

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.

The Schwab U.S. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.

BSV’s dividend yield is 0.07% higher than that of SCHX (1.48% vs. 1.41%). Also, BSV yielded on average 12.33% less per year over the past decade (2.27% vs. 14.60%). The expense ratio of BSV is 0.02 percentage points higher than SCHX’s (0.05% vs. 0.03%).

Fund Composition

Holdings

BSV - Holdings

BSV Bond Sectors Weight
AAA 71.65%
BBB 13.08%
A 11.95%
AA 3.28%
Others 0.03%
Below B 0.01%
B 0.0%
BB 0.0%
US Government 0.0%

BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.

SCHX - Holdings

SCHX Holdings Weight
Apple Inc 5.37%
Microsoft Corp 5.1%
Amazon.com Inc 3.69%
Facebook Inc A 2.08%
Alphabet Inc A 1.84%
Alphabet Inc Class C 1.78%
Berkshire Hathaway Inc Class B 1.32%
Tesla Inc 1.31%
NVIDIA Corp 1.25%
JPMorgan Chase & Co 1.18%

SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.

Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.

Risk Analysis

BSV SCHX
Mean Return 0.16 1.24
R-squared 78.38 99.83
Std. Deviation 1.33 13.8
Alpha 0.21 -0.14
Beta 0.38 1.02
Sharpe Ratio 0.98 1.03
Treynor Ratio 3.33 14.06

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Alpha of 0.21 with a R-squared of 78.38 and a Standard Deviation of 1.33. Its Treynor Ratio is 3.33 while BSV’s Beta is 0.38. Furthermore, the fund has a Sharpe Ratio of 0.98 and a Mean Return of 0.16.

The Schwab U.S. Large-Cap ETF (SCHX) has a Beta of 1.02 with a Treynor Ratio of 14.06 and a R-squared of 99.83. Its Alpha is -0.14 while SCHX’s Standard Deviation is 13.8. Furthermore, the fund has a Mean Return of 1.24 and a Sharpe Ratio of 1.03.

BSV’s Mean Return is 1.08 points lower than that of SCHX and its R-squared is 21.45 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than SCHX. The Alpha and Beta of BSV are 0.35 points higher and 0.64 points lower than SCHX’s Alpha and Beta.

Performance

Annual Returns

BSV vs. SCHX - Annual Returns

Year BSV SCHX
2020 4.67% 20.9%
2019 4.92% 31.4%
2018 1.34% -4.52%
2017 1.2% 21.91%
2016 1.42% 11.78%
2015 0.92% 1.02%
2014 1.32% 13.33%
2013 0.17% 32.54%
2012 1.98% 16.06%
2011 3.04% 1.61%
2010 4.0% 15.88%

BSV had its best year in 2019 with an annual return of 4.92%. BSV’s worst year over the past decade yielded 0.17% and occurred in 2013. In most years the Vanguard Short-Term Bond Index Fund ETF Shares provided moderate returns such as in 2018, 2016, and 2012 where annual returns amounted to 1.34%, 1.42%, and 1.98% respectively.

The year 2013 was the strongest year for SCHX, returning 32.54% on an annual basis. The poorest year for SCHX in the last ten years was 2018, with a yield of -4.52%. Most years the Schwab U.S. Large-Cap ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.33%, 15.88%, and 16.06% respectively.

Portfolio Growth

BSV vs. SCHX - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,294 2.27%
SCHX $10,000 $36,987 14.60%

A $10,000 investment in BSV would have resulted in a final balance of $12,294. This is a profit of $2,294 over 10 years and amounts to a compound annual growth rate (CAGR) of 2.27%.

With a $10,000 investment in SCHX, the end total would have been $36,987. This equates to a $26,987 profit over 10 years and a compound annual growth rate (CAGR) of 14.60%.

BSV’s CAGR is 12.33 percentage points lower than that of SCHX and as a result, would have yielded $24,693 less on a $10,000 investment. Thus, BSV performed worse than SCHX by 12.33% annually.


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