BSV vs. VOE: What’s The Difference?

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

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

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

Summary

BSV VOE
Name Vanguard Short-Term Bond Index Fund ETF Shares Vanguard Mid-Cap Value Index Fund ETF Shares
Category Short-Term Bond Mid-Cap Value
Issuer Vanguard Vanguard
AUM 67.71B 26.78B
Avg. Return 2.27% 12.52%
Div. Yield 1.48% 1.87%
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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

BSV’s dividend yield is 0.39% lower than that of VOE (1.48% vs. 1.87%). Also, BSV yielded on average 10.25% less per year over the past decade (2.27% vs. 12.52%). The expense ratio of BSV is 0.02 percentage points lower than VOE’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.

VOE - Holdings

VOE Holdings Weight
Carrier Global Corp Ordinary Shares 1.28%
International Flavors & Fragrances Inc 1.13%
Motorola Solutions Inc 1.12%
Discover Financial Services 1.09%
Welltower Inc 1.05%
Corteva Inc 0.99%
Valero Energy Corp 0.97%
Corning Inc 0.95%
Willis Towers Watson PLC 0.9%
D.R. Horton Inc 0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

Risk Analysis

BSV VOE
Mean Return 0.16 1.05
R-squared 78.38 88.76
Std. Deviation 1.33 15.98
Alpha 0.21 -3.77
Beta 0.38 1.11
Sharpe Ratio 0.98 0.75
Treynor Ratio 3.33 10.19

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

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Alpha of -3.77 with a Treynor Ratio of 10.19 and a R-squared of 88.76. Its Beta is 1.11 while VOE’s Sharpe Ratio is 0.75. Furthermore, the fund has a Mean Return of 1.05 and a Standard Deviation of 15.98.

BSV’s Mean Return is 0.89 points lower than that of VOE and its R-squared is 10.38 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than VOE. The Alpha and Beta of BSV are 3.98 points higher and 0.73 points lower than VOE’s Alpha and Beta.

Performance

Annual Returns

BSV vs. VOE - Annual Returns

Year BSV VOE
2020 4.67% 2.5%
2019 4.92% 27.98%
2018 1.34% -12.41%
2017 1.2% 17.05%
2016 1.42% 15.26%
2015 0.92% -1.8%
2014 1.32% 13.98%
2013 0.17% 37.65%
2012 1.98% 16.04%
2011 3.04% -0.32%
2010 4.0% 21.83%

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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

BSV vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
VOE $10,000 $33,655 12.52%

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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.

BSV’s CAGR is 10.25 percentage points lower than that of VOE and as a result, would have yielded $20,870 less on a $10,000 investment. Thus, BSV performed worse than VOE by 10.25% annually.


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