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BSV vs. VV: What’s The Difference?

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.

Introduction To Mutual Funds
Introduction To Mutual Funds
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Summary

BSVVV
NameVanguard Short-Term Bond Index Fund ETF SharesVanguard Large-Cap Index Fund ETF Shares
CategoryShort-Term BondLarge Blend
IssuerVanguardVanguard
AUM67.71B37.65B
Avg. Return2.27%14.75%
Div. Yield1.48%1.26%
Expense Ratio0.05%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%).

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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.

VV - Holdings

VV HoldingsWeight
Apple Inc5.7%
Microsoft Corp5.35%
Amazon.com Inc3.87%
Facebook Inc Class A2.19%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.81%
Tesla Inc1.37%
Berkshire Hathaway Inc Class B1.3%
NVIDIA Corp1.24%
JPMorgan Chase & Co1.24%

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%.

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Risk Analysis

BSVVV
Mean Return0.161.24
R-squared78.3899.86
Std. Deviation1.3313.75
Alpha0.21-0.08
Beta0.381.01
Sharpe Ratio0.981.04
Treynor Ratio3.3314.14

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.

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Performance

Annual Returns

BSV vs. VV - Annual Returns

YearBSVVV
20204.67%20.99%
20194.92%31.39%
20181.34%-4.44%
20171.2%22.03%
20161.42%11.65%
20150.92%1.07%
20141.32%13.39%
20130.17%32.65%
20121.98%16.09%
20113.04%1.58%
20104.0%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

BSV vs. VV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BSV$10,000$12,7852.27%
VV$10,000$42,97014.75%

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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