BSV vs. VBR: What’s The Difference?

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

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

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

Summary

BSV VBR
Name Vanguard Short-Term Bond Index Fund ETF Shares Vanguard Small-Cap Value Index Fund ETF Shares
Category Short-Term Bond Small Value
Issuer Vanguard Vanguard
AUM 67.71B 48.08B
Avg. Return 2.27% 12.28%
Div. Yield 1.48% 1.6%
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 Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.

BSV’s dividend yield is 0.12% lower than that of VBR (1.48% vs. 1.6%). Also, BSV yielded on average 10.01% less per year over the past decade (2.27% vs. 12.28%). The expense ratio of BSV is 0.02 percentage points lower than VBR’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.

VBR - Holdings

VBR Holdings Weight
Diamondback Energy Inc 0.55%
VICI Properties Inc Ordinary Shares 0.54%
IDEX Corp 0.54%
Nuance Communications Inc 0.5%
Molina Healthcare Inc 0.48%
Signature Bank 0.46%
Novavax Inc 0.44%
Howmet Aerospace Inc 0.44%
Apollo Global Management Inc Class A 0.42%
Brown & Brown Inc 0.41%

VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.

Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.

Risk Analysis

BSV VBR
Mean Return 0.16 1.08
R-squared 78.38 82.2
Std. Deviation 1.33 18.37
Alpha 0.21 -5.09
Beta 0.38 1.23
Sharpe Ratio 0.98 0.67
Treynor Ratio 3.33 9.15

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

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Beta of 1.23 with a Mean Return of 1.08 and a Sharpe Ratio of 0.67. Its R-squared is 82.2 while VBR’s Alpha is -5.09. Furthermore, the fund has a Standard Deviation of 18.37 and a Treynor Ratio of 9.15.

BSV’s Mean Return is 0.92 points lower than that of VBR and its R-squared is 3.82 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than VBR. The Alpha and Beta of BSV are 5.30 points higher and 0.85 points lower than VBR’s Alpha and Beta.

Performance

Annual Returns

BSV vs. VBR - Annual Returns

Year BSV VBR
2020 4.67% 5.82%
2019 4.92% 22.76%
2018 1.34% -12.22%
2017 1.2% 11.79%
2016 1.42% 24.8%
2015 0.92% -4.67%
2014 1.32% 10.55%
2013 0.17% 36.57%
2012 1.98% 18.78%
2011 3.04% -4.05%
2010 4.0% 24.97%

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 VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% respectively.

Portfolio Growth

BSV vs. VBR - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
VBR $10,000 $32,611 12.28%

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 VBR, the end total would have been $32,611. This equates to a $22,611 profit over 11 years and a compound annual growth rate (CAGR) of 12.28%.

BSV’s CAGR is 10.01 percentage points lower than that of VBR and as a result, would have yielded $19,826 less on a $10,000 investment. Thus, BSV performed worse than VBR by 10.01% annually.


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