The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between BSV and VXF? And which fund is better?
The expense ratio of BSV is 0.01 percentage points lower than VXF’s (0.05% vs. 0.06%). BSV is mostly comprised of AAA bonds while VXF has a high exposure to the technology sector. Overall, BSV has provided lower returns than VXF over the past ten years.
In this article, we’ll compare BSV vs. VXF. We’ll look at fund composition and risk metrics, as well as at their performance and industry exposure. Moreover, I’ll also discuss BSV’s and VXF’s holdings, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| BSV | VXF | |
| Name | Vanguard Short-Term Bond Index Fund ETF Shares | Vanguard Extended Market Index Fund ETF Shares |
| Category | Short-Term Bond | Mid-Cap Growth |
| Issuer | Vanguard | Vanguard |
| AUM | 67.71B | 114.53B |
| Avg. Return | 2.27% | 15.47% |
| Div. Yield | 1.48% | 1.19% |
| Expense Ratio | 0.05% | 0.06% |
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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
BSV’s dividend yield is 0.29% higher than that of VXF (1.48% vs. 1.19%). Also, BSV yielded on average 13.20% less per year over the past decade (2.27% vs. 15.47%). The expense ratio of BSV is 0.01 percentage points lower than VXF’s (0.05% vs. 0.06%).
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.
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| CrowdStrike Holdings Inc Class A | 0.63% |
| Marvell Technology Inc | 0.6% |
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
Risk Analysis
| BSV | VXF | |
| Mean Return | 0.16 | 1.24 |
| R-squared | 78.38 | 85.73 |
| Std. Deviation | 1.33 | 18.04 |
| Alpha | 0.21 | -3.26 |
| Beta | 0.38 | 1.23 |
| Sharpe Ratio | 0.98 | 0.79 |
| Treynor Ratio | 3.33 | 10.92 |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Sharpe Ratio of 0.98 with a Alpha of 0.21 and a R-squared of 78.38. Its Treynor Ratio is 3.33 while BSV’s Beta is 0.38. Furthermore, the fund has a Standard Deviation of 1.33 and a Mean Return of 0.16.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Beta of 1.23 with a Mean Return of 1.24 and a R-squared of 85.73. Its Standard Deviation is 18.04 while VXF’s Alpha is -3.26. Furthermore, the fund has a Treynor Ratio of 10.92 and a Sharpe Ratio of 0.79.
BSV’s Mean Return is 1.08 points lower than that of VXF and its R-squared is 7.35 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than VXF. The Alpha and Beta of BSV are 3.47 points higher and 0.85 points lower than VXF’s Alpha and Beta.
Performance
Annual Returns
| Year | BSV | VXF |
| 2020 | 4.67% | 32.19% |
| 2019 | 4.92% | 28.04% |
| 2018 | 1.34% | -9.37% |
| 2017 | 1.2% | 18.1% |
| 2016 | 1.42% | 16.16% |
| 2015 | 0.92% | -3.26% |
| 2014 | 1.32% | 7.55% |
| 2013 | 0.17% | 38.37% |
| 2012 | 1.98% | 18.48% |
| 2011 | 3.04% | -3.61% |
| 2010 | 4.0% | 27.55% |
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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BSV | $10,000 | $12,785 | 2.27% |
| VXF | $10,000 | $44,130 | 15.47% |
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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.
BSV’s CAGR is 13.20 percentage points lower than that of VXF and as a result, would have yielded $31,345 less on a $10,000 investment. Thus, BSV performed worse than VXF by 13.20% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
