The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and VT is a Vanguard N/A fund. So, what’s the difference between BSV and VT? And which fund is better?
The expense ratio of BSV is 0.03 percentage points lower than VT’s (0.05% vs. 0.08%). BSV is mostly comprised of AAA bonds while VT has a high exposure to the technology sector. Overall, BSV has provided lower returns than VT over the past ten years.
In this article, we’ll compare BSV vs. VT. We’ll look at annual returns and risk metrics, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss BSV’s and VT’s performance, holdings, and portfolio growth and examine how these affect their overall returns.
Summary
| BSV | VT | |
| Name | Vanguard Short-Term Bond Index Fund ETF Shares | Vanguard Total World Stock Index Fund ETF Shares |
| Category | Short-Term Bond | N/A |
| Issuer | Vanguard | Vanguard |
| AUM | 67.71B | 30.44B |
| Avg. Return | 2.27% | 10.42% |
| Div. Yield | 1.48% | 1.65% |
| Expense Ratio | 0.05% | 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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
BSV’s dividend yield is 0.17% lower than that of VT (1.48% vs. 1.65%). Also, BSV yielded on average 8.14% less per year over the past decade (2.27% vs. 10.42%). The expense ratio of BSV is 0.03 percentage points lower than VT’s (0.05% vs. 0.08%).
Fund Composition
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.
| VT Holdings | Weight |
| Apple Inc | 2.85% |
| Microsoft Corp | 2.71% |
| Amazon.com Inc | 1.98% |
| Facebook Inc Class A | 1.1% |
| Alphabet Inc Class A | 0.97% |
| Alphabet Inc Class C | 0.95% |
| Tesla Inc | 0.7% |
| NVIDIA Corp | 0.64% |
| JPMorgan Chase & Co | 0.62% |
| Tencent Holdings Ltd | 0.6% |
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
Risk Analysis
| BSV | VT | |
| Mean Return | 0.16 | 0.9 |
| R-squared | 78.38 | 99.35 |
| Std. Deviation | 1.33 | 14.19 |
| Alpha | 0.21 | 0.2 |
| Beta | 0.38 | 1.01 |
| Sharpe Ratio | 0.98 | 0.71 |
| Treynor Ratio | 3.33 | 9.5 |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Beta of 0.38 with a Mean Return of 0.16 and a Sharpe Ratio of 0.98. Its Standard Deviation is 1.33 while BSV’s Alpha is 0.21. Furthermore, the fund has a R-squared of 78.38 and a Treynor Ratio of 3.33.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Sharpe Ratio of 0.71 with a Alpha of 0.2 and a R-squared of 99.35. Its Beta is 1.01 while VT’s Treynor Ratio is 9.5. Furthermore, the fund has a Mean Return of 0.9 and a Standard Deviation of 14.19.
BSV’s Mean Return is 0.74 points lower than that of VT and its R-squared is 20.97 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than VT. The Alpha and Beta of BSV are 0.01 points higher and 0.63 points lower than VT’s Alpha and Beta.
Performance
Annual Returns
| Year | BSV | VT |
| 2020 | 4.67% | 16.74% |
| 2019 | 4.92% | 26.8% |
| 2018 | 1.34% | -9.67% |
| 2017 | 1.2% | 24.19% |
| 2016 | 1.42% | 8.77% |
| 2015 | 0.92% | -1.88% |
| 2014 | 1.32% | 3.97% |
| 2013 | 0.17% | 22.98% |
| 2012 | 1.98% | 17.33% |
| 2011 | 3.04% | -7.71% |
| 2010 | 4.0% | 13.05% |
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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BSV | $10,000 | $12,785 | 2.27% |
| VT | $10,000 | $27,739 | 10.42% |
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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.
BSV’s CAGR is 8.14 percentage points lower than that of VT and as a result, would have yielded $14,954 less on a $10,000 investment. Thus, BSV performed worse than VT by 8.14% annually.
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