The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. EMB is a iShares Emerging Markets Bond fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between EMB and VOE? And which fund is better?
The expense ratio of EMB is 0.32 percentage points higher than VOE’s (0.39% vs. 0.07%). EMB is mostly comprised of BBB bonds while VOE has a high exposure to the financial services sector. Overall, EMB has provided lower returns than VOE over the past 11 years.
In this article, we’ll compare EMB vs. VOE. We’ll look at risk metrics and annual returns, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss EMB’s and VOE’s industry exposure, fund composition, and performance and examine how these affect their overall returns.
|Name||iShares J.P. Morgan USD Emerging Markets Bond ETF||Vanguard Mid-Cap Value Index Fund ETF Shares|
|Category||Emerging Markets Bond||Mid-Cap Value|
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
EMB’s dividend yield is 1.98% higher than that of VOE (3.85% vs. 1.87%). Also, EMB yielded on average 6.09% less per year over the past decade (6.43% vs. 12.52%). The expense ratio of EMB is 0.32 percentage points higher than VOE’s (0.39% vs. 0.07%).
|EMB Bond Sectors||Weight|
EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.
|Carrier Global Corp Ordinary Shares||1.28%|
|International Flavors & Fragrances Inc||1.13%|
|Motorola Solutions Inc||1.12%|
|Discover Financial Services||1.09%|
|Valero Energy Corp||0.97%|
|Willis Towers Watson PLC||0.9%|
|D.R. Horton Inc||0.89%|
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a Beta of 1.36 with a Treynor Ratio of 3.24 and a Mean Return of 0.44. Its Alpha is 0.89 while EMB’s R-squared is 23.34. Furthermore, the fund has a Sharpe Ratio of 0.55 and a Standard Deviation of 8.44.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Beta of 1.11 with a Standard Deviation of 15.98 and a R-squared of 88.76. Its Mean Return is 1.05 while VOE’s Sharpe Ratio is 0.75. Furthermore, the fund has a Treynor Ratio of 10.19 and a Alpha of -3.77.
EMB’s Mean Return is 0.61 points lower than that of VOE and its R-squared is 65.42 points lower. With a Standard Deviation of 8.44, EMB is slightly less volatile than VOE. The Alpha and Beta of EMB are 4.66 points higher and 0.25 points higher than VOE’s Alpha and Beta.
EMB had its best year in 2012 with an annual return of 17.64%. EMB’s worst year over the past decade yielded -7.42% and occurred in 2013. In most years the iShares J.P. Morgan USD Emerging Markets Bond ETF provided moderate returns such as in 2014, 2011, and 2016 where annual returns amounted to 6.69%, 7.2%, and 9.41% respectively.
The year 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in EMB would have resulted in a final balance of $19,295. This is a profit of $9,295 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.43%.
With a $10,000 investment in VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
EMB’s CAGR is 6.09 percentage points lower than that of VOE and as a result, would have yielded $14,360 less on a $10,000 investment. Thus, EMB performed worse than VOE by 6.09% annually.
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