BSV vs. VBK: What’s The Difference?

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

The expense ratio of BSV is 0.02 percentage points lower than VBK’s (0.05% vs. 0.07%). BSV is mostly comprised of AAA bonds while VBK has a high exposure to the technology sector. Overall, BSV has provided lower returns than VBK over the past ten years.

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

Summary

BSV VBK
Name Vanguard Short-Term Bond Index Fund ETF Shares Vanguard Small-Cap Growth Index Fund ETF Shares
Category Short-Term Bond Small Growth
Issuer Vanguard Vanguard
AUM 67.71B 37.89B
Avg. Return 2.27% 16.53%
Div. Yield 1.48% 0.45%
Expense Ratio 0.05% 0.07%

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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.

BSV’s dividend yield is 1.03% higher than that of VBK (1.48% vs. 0.45%). Also, BSV yielded on average 14.26% less per year over the past decade (2.27% vs. 16.53%). The expense ratio of BSV is 0.02 percentage points lower than VBK’s (0.05% vs. 0.07%).

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.

VBK - Holdings

VBK Holdings Weight
Charles River Laboratories International Inc 0.78%
Pool Corp 0.73%
Bio-Techne Corp 0.73%
Avantor Inc 0.73%
PerkinElmer Inc 0.72%
Entegris Inc 0.7%
PTC Inc 0.62%
Fair Isaac Corp 0.57%
Bill.com Holdings Inc Ordinary Shares 0.56%
Avalara Inc 0.55%

VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.

Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.

Risk Analysis

BSV VBK
Mean Return 0.16 1.22
R-squared 78.38 80.56
Std. Deviation 1.33 17.95
Alpha 0.21 -2.81
Beta 0.38 1.18
Sharpe Ratio 0.98 0.78
Treynor Ratio 3.33 11.18

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

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Sharpe Ratio of 0.78 with a Beta of 1.18 and a Standard Deviation of 17.95. Its Treynor Ratio is 11.18 while VBK’s Mean Return is 1.22. Furthermore, the fund has a R-squared of 80.56 and a Alpha of -2.81.

BSV’s Mean Return is 1.06 points lower than that of VBK and its R-squared is 2.18 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than VBK. The Alpha and Beta of BSV are 3.02 points higher and 0.80 points lower than VBK’s Alpha and Beta.

Performance

Annual Returns

BSV vs. VBK - Annual Returns

Year BSV VBK
2020 4.67% 35.29%
2019 4.92% 32.75%
2018 1.34% -5.68%
2017 1.2% 21.9%
2016 1.42% 10.74%
2015 0.92% -2.51%
2014 1.32% 4.02%
2013 0.17% 38.18%
2012 1.98% 17.67%
2011 3.04% -1.43%
2010 4.0% 30.87%

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 VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.

Portfolio Growth

BSV vs. VBK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
VBK $10,000 $48,639 16.53%

A $10,000 investment in BSV would have resulted in a final balance of $12,785. This is a profit of $2,785 over 11 years and amounts to a compound annual growth rate (CAGR) of 2.27%.

With a $10,000 investment in VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.

BSV’s CAGR is 14.26 percentage points lower than that of VBK and as a result, would have yielded $35,854 less on a $10,000 investment. Thus, BSV performed worse than VBK by 14.26% annually.


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