The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and VV is a Vanguard Large Blend fund. So, what’s the difference between BSV and VV? And which fund is better?
The expense ratio of BSV is 0.01 percentage points higher than VV’s (0.05% vs. 0.04%). BSV is mostly comprised of AAA bonds while VV has a high exposure to the technology sector. Overall, BSV has provided lower returns than VV over the past ten years.
In this article, we’ll compare BSV vs. VV. We’ll look at fund composition and industry exposure, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss BSV’s and VV’s performance, portfolio growth, and holdings and examine how these affect their overall returns.
Summary
| BSV | VV | |
| Name | Vanguard Short-Term Bond Index Fund ETF Shares | Vanguard Large-Cap Index Fund ETF Shares |
| Category | Short-Term Bond | Large Blend |
| Issuer | Vanguard | Vanguard |
| AUM | 67.71B | 37.65B |
| Avg. Return | 2.27% | 14.75% |
| Div. Yield | 1.48% | 1.26% |
| Expense Ratio | 0.05% | 0.04% |
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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.
BSV’s dividend yield is 0.22% higher than that of VV (1.48% vs. 1.26%). Also, BSV yielded on average 12.48% less per year over the past decade (2.27% vs. 14.75%). The expense ratio of BSV is 0.01 percentage points higher than VV’s (0.05% vs. 0.04%).
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.
| VV Holdings | Weight |
| Apple Inc | 5.7% |
| Microsoft Corp | 5.35% |
| Amazon.com Inc | 3.87% |
| Facebook Inc Class A | 2.19% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.81% |
| Tesla Inc | 1.37% |
| Berkshire Hathaway Inc Class B | 1.3% |
| NVIDIA Corp | 1.24% |
| JPMorgan Chase & Co | 1.24% |
VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.
Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.
Risk Analysis
| BSV | VV | |
| Mean Return | 0.16 | 1.24 |
| R-squared | 78.38 | 99.86 |
| Std. Deviation | 1.33 | 13.75 |
| Alpha | 0.21 | -0.08 |
| Beta | 0.38 | 1.01 |
| Sharpe Ratio | 0.98 | 1.04 |
| Treynor Ratio | 3.33 | 14.14 |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Sharpe Ratio of 0.98 with a Treynor Ratio of 3.33 and a Standard Deviation of 1.33. Its R-squared is 78.38 while BSV’s Alpha is 0.21. Furthermore, the fund has a Beta of 0.38 and a Mean Return of 0.16.
The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Mean Return of 1.24 with a R-squared of 99.86 and a Standard Deviation of 13.75. Its Sharpe Ratio is 1.04 while VV’s Treynor Ratio is 14.14. Furthermore, the fund has a Alpha of -0.08 and a Beta of 1.01.
BSV’s Mean Return is 1.08 points lower than that of VV and its R-squared is 21.48 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than VV. The Alpha and Beta of BSV are 0.29 points higher and 0.63 points lower than VV’s Alpha and Beta.
Performance
Annual Returns
| Year | BSV | VV |
| 2020 | 4.67% | 20.99% |
| 2019 | 4.92% | 31.39% |
| 2018 | 1.34% | -4.44% |
| 2017 | 1.2% | 22.03% |
| 2016 | 1.42% | 11.65% |
| 2015 | 0.92% | 1.07% |
| 2014 | 1.32% | 13.39% |
| 2013 | 0.17% | 32.65% |
| 2012 | 1.98% | 16.09% |
| 2011 | 3.04% | 1.58% |
| 2010 | 4.0% | 15.81% |
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 VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BSV | $10,000 | $12,785 | 2.27% |
| VV | $10,000 | $42,970 | 14.75% |
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 VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.
BSV’s CAGR is 12.48 percentage points lower than that of VV and as a result, would have yielded $30,185 less on a $10,000 investment. Thus, BSV performed worse than VV by 12.48% annually.
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