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.
|Name||Vanguard Short-Term Bond Index Fund ETF Shares||Vanguard Small-Cap Growth Index Fund ETF Shares|
|Category||Short-Term Bond||Small Growth|
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%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
|BSV Bond Sectors||Weight|
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.
|Charles River Laboratories International Inc||0.78%|
|Fair Isaac Corp||0.57%|
|Bill.com Holdings Inc Ordinary Shares||0.56%|
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%.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
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.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
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.
|Fund||Initial Balance||Final Balance||CAGR|
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.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.