BSV vs. VXF: What’s The Difference?

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 - 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

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

BSV vs. VXF - 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

BSV vs. VXF - 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.


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