The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and VLUE is a iShares Large Value fund. So, what’s the difference between BSV and VLUE? And which fund is better?
The expense ratio of BSV is 0.10 percentage points lower than VLUE’s (0.05% vs. 0.15%). BSV is mostly comprised of AAA bonds while VLUE has a high exposure to the technology sector. Overall, BSV has provided lower returns than VLUE over the past ten years.
In this article, we’ll compare BSV vs. VLUE. We’ll look at risk metrics and industry exposure, as well as at their annual returns and performance. Moreover, I’ll also discuss BSV’s and VLUE’s fund composition, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||Vanguard Short-Term Bond Index Fund ETF Shares||iShares MSCI USA Value Factor ETF|
|Category||Short-Term Bond||Large Value|
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 iShares MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
BSV’s dividend yield is 0.41% lower than that of VLUE (1.48% vs. 1.89%). Also, BSV yielded on average 6.64% less per year over the past decade (2.27% vs. 8.91%). The expense ratio of BSV is 0.10 percentage points lower than VLUE’s (0.05% vs. 0.15%).
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|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.
|General Motors Co||3.19%|
|Micron Technology Inc||3.14%|
|Cisco Systems Inc||3.05%|
|International Business Machines Corp||2.76%|
|Ford Motor Co||2.23%|
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
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The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Alpha of 0.21 with a Treynor Ratio of 3.33 and a Standard Deviation of 1.33. Its Sharpe Ratio is 0.98 while BSV’s Beta is 0.38. Furthermore, the fund has a Mean Return of 0.16 and a R-squared of 78.38.
The iShares MSCI USA Value Factor ETF (VLUE) has a Treynor Ratio of 0 with a Standard Deviation of 0 and a Beta of 0. Its Alpha is 0 while VLUE’s Sharpe Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a R-squared of 0.
BSV’s Mean Return is 0.16 points higher than that of VLUE and its R-squared is 78.38 points higher. With a Standard Deviation of 1.33, BSV is slightly more volatile than VLUE. The Alpha and Beta of BSV are 0.21 points higher and 0.38 points higher than VLUE’s Alpha and Beta.
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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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in BSV would have resulted in a final balance of $11,679. This is a profit of $1,679 over 7 years and amounts to a compound annual growth rate (CAGR) of 2.27%.
With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
BSV’s CAGR is 6.64 percentage points lower than that of VLUE and as a result, would have yielded $5,568 less on a $10,000 investment. Thus, BSV performed worse than VLUE by 6.64% annually.
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