Skip to content

BSV vs. VGK: What’s The Difference?

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

The expense ratio of BSV is 0.03 percentage points lower than VGK’s (0.05% vs. 0.08%). BSV is mostly comprised of AAA bonds while VGK has a high exposure to the financial services sector. Overall, BSV has provided lower returns than VGK over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

BSVVGK
NameVanguard Short-Term Bond Index Fund ETF SharesVanguard FTSE Europe Index Fund ETF Shares
CategoryShort-Term BondEurope Stock
IssuerVanguardVanguard
AUM67.71B25.7B
Avg. Return2.27%6.68%
Div. Yield1.48%2.52%
Expense Ratio0.05%0.08%

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 FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.

BSV’s dividend yield is 1.04% lower than that of VGK (1.48% vs. 2.52%). Also, BSV yielded on average 4.41% less per year over the past decade (2.27% vs. 6.68%). The expense ratio of BSV is 0.03 percentage points lower than VGK’s (0.05% vs. 0.08%).

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).

Fund Composition

Holdings

BSV - Holdings

BSV Bond SectorsWeight
AAA71.65%
BBB13.08%
A11.95%
AA3.28%
Others0.03%
Below B0.01%
B0.0%
BB0.0%
US Government0.0%

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.

VGK - Holdings

VGK HoldingsWeight
Nestle SA2.82%
ASML Holding NV2.2%
Roche Holding AG2.13%
LVMH Moet Hennessy Louis Vuitton SE1.58%
Novartis AG1.55%
AstraZeneca PLC1.27%
SAP SE1.25%
Unilever PLC1.23%
Novo Nordisk A/S B1.09%
Siemens AG0.96%

VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.

AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.

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).

Risk Analysis

BSVVGK
Mean Return0.160.61
R-squared78.3892.76
Std. Deviation1.3316.65
Alpha0.210.45
Beta0.381.06
Sharpe Ratio0.980.4
Treynor Ratio3.335.12

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

The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Standard Deviation of 16.65 with a Sharpe Ratio of 0.4 and a Treynor Ratio of 5.12. Its Alpha is 0.45 while VGK’s R-squared is 92.76. Furthermore, the fund has a Mean Return of 0.61 and a Beta of 1.06.

BSV’s Mean Return is 0.45 points lower than that of VGK and its R-squared is 14.38 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than VGK. The Alpha and Beta of BSV are 0.24 points lower and 0.68 points lower than VGK’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!

Performance

Annual Returns

BSV vs. VGK - Annual Returns

YearBSVVGK
20204.67%6.5%
20194.92%24.26%
20181.34%-14.79%
20171.2%27.06%
20161.42%-0.59%
20150.92%-1.87%
20141.32%-6.56%
20130.17%24.93%
20121.98%21.01%
20113.04%-11.49%
20104.0%5.01%

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 2017 was the strongest year for VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% respectively.

Portfolio Growth

BSV vs. VGK - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BSV$10,000$12,7852.27%
VGK$10,000$18,3506.68%

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 VGK, the end total would have been $18,350. This equates to a $8,350 profit over 11 years and a compound annual growth rate (CAGR) of 6.68%.

BSV’s CAGR is 4.41 percentage points lower than that of VGK and as a result, would have yielded $5,565 less on a $10,000 investment. Thus, BSV performed worse than VGK by 4.41% annually.


Current recommendations:

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.

Leave a Reply

Your email address will not be published.