The iShares MSCI EAFE Value ETF (EFV) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. EFV is a iShares Foreign Large Value fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between EFV and BIV? And which fund is better?
The expense ratio of EFV is 0.34 percentage points higher than BIV’s (0.39% vs. 0.05%). EFV also has a high exposure to the financial services sector while BIV is mostly comprised of AAA bonds. Overall, EFV has provided lower returns than BIV over the past 11 years.
In this article, we’ll compare EFV vs. BIV. We’ll look at fund composition and industry exposure, as well as at their performance and portfolio growth. Moreover, I’ll also discuss EFV’s and BIV’s risk metrics, annual returns, and holdings and examine how these affect their overall returns.
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Summary
| EFV | BIV | |
| Name | iShares MSCI EAFE Value ETF | Vanguard Intermediate-Term Bond Index Fund ETF Shares |
| Category | Foreign Large Value | Intermediate-Term Bond |
| Issuer | iShares | Vanguard |
| AUM | 14.37B | 39.05B |
| Avg. Return | 3.99% | 5.31% |
| Div. Yield | 2.94% | 2.06% |
| Expense Ratio | 0.39% | 0.05% |
The iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
EFV’s dividend yield is 0.88% higher than that of BIV (2.94% vs. 2.06%). Also, EFV yielded on average 1.32% less per year over the past decade (3.99% vs. 5.31%). The expense ratio of EFV is 0.34 percentage points higher than BIV’s (0.39% vs. 0.05%).
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Fund Composition
Holdings
| EFV Holdings | Weight |
| Novartis AG | 2.41% |
| Toyota Motor Corp | 2.21% |
| Commonwealth Bank of Australia | 1.59% |
| Siemens AG | 1.45% |
| Sanofi SA | 1.42% |
| HSBC Holdings PLC | 1.4% |
| TotalEnergies SE | 1.35% |
| Allianz SE | 1.23% |
| GlaxoSmithKline PLC | 1.18% |
| Rio Tinto PLC | 1.1% |
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
| BIV Bond Sectors | Weight |
| AAA | 54.51% |
| BBB | 25.24% |
| A | 16.97% |
| AA | 3.1% |
| Others | 0.15% |
| Below B | 0.03% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| EFV | BIV | |
| Mean Return | 0.42 | 0.35 |
| R-squared | 92.15 | 95.12 |
| Std. Deviation | 16.53 | 4.09 |
| Alpha | -1.77 | -0.07 |
| Beta | 1.05 | 1.33 |
| Sharpe Ratio | 0.26 | 0.89 |
| Treynor Ratio | 2.92 | 2.72 |
The iShares MSCI EAFE Value ETF (EFV) has a Beta of 1.05 with a Alpha of -1.77 and a Mean Return of 0.42. Its Standard Deviation is 16.53 while EFV’s Sharpe Ratio is 0.26. Furthermore, the fund has a Treynor Ratio of 2.92 and a R-squared of 92.15.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Beta of 1.33 with a Standard Deviation of 4.09 and a Mean Return of 0.35. Its R-squared is 95.12 while BIV’s Alpha is -0.07. Furthermore, the fund has a Treynor Ratio of 2.72 and a Sharpe Ratio of 0.89.
EFV’s Mean Return is 0.07 points higher than that of BIV and its R-squared is 2.97 points lower. With a Standard Deviation of 16.53, EFV is slightly more volatile than BIV. The Alpha and Beta of EFV are 1.70 points lower and 0.28 points lower than BIV’s Alpha and Beta.
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Performance
Annual Returns
| Year | EFV | BIV |
| 2020 | -2.78% | 9.71% |
| 2019 | 15.97% | 10.19% |
| 2018 | -14.88% | -0.09% |
| 2017 | 21.22% | 3.8% |
| 2016 | 4.87% | 2.86% |
| 2015 | -5.89% | 1.23% |
| 2014 | -5.65% | 7.0% |
| 2013 | 22.61% | -3.44% |
| 2012 | 17.52% | 7.02% |
| 2011 | -12.24% | 10.62% |
| 2010 | 3.18% | 9.55% |
EFV had its best year in 2013 with an annual return of 22.61%. EFV’s worst year over the past decade yielded -14.88% and occurred in 2018. In most years the iShares MSCI EAFE Value ETF provided moderate returns such as in 2020, 2010, and 2016 where annual returns amounted to -2.78%, 3.18%, and 4.87% respectively.
The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| EFV | $10,000 | $14,134 | 3.99% |
| BIV | $10,000 | $17,492 | 5.31% |
A $10,000 investment in EFV would have resulted in a final balance of $14,134. This is a profit of $4,134 over 11 years and amounts to a compound annual growth rate (CAGR) of 3.99%.
With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
EFV’s CAGR is 1.32 percentage points lower than that of BIV and as a result, would have yielded $3,358 less on a $10,000 investment. Thus, EFV performed worse than BIV by 1.32% annually.
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