The iShares Core MSCI Emerging Markets ETF (IEMG) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and BNDX is a Vanguard N/A fund. So, what’s the difference between IEMG and BNDX? And which fund is better?
The expense ratio of IEMG is 0.03 percentage points higher than BNDX’s (0.11% vs. 0.08%). IEMG also has a high exposure to the technology sector while BNDX is mostly comprised of A bonds. Overall, IEMG has provided higher returns than BNDX over the past ten years.
In this article, we’ll compare IEMG vs. BNDX. We’ll look at industry exposure and performance, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss IEMG’s and BNDX’s portfolio growth, fund composition, and holdings and examine how these affect their overall returns.
|Name||iShares Core MSCI Emerging Markets ETF||Vanguard Total International Bond Index Fund ETF Shares|
|Category||Diversified Emerging Mkts||N/A|
The iShares Core MSCI Emerging Markets ETF (IEMG) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 83.68B total assets under management and has yielded an average annual return of 7.41% over the past 10 years. The fund has a dividend yield of 1.78% with an expense ratio of 0.11%.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) is a N/A fund that is issued by Vanguard. It currently has 116.41B total assets under management and has yielded an average annual return of 4.63% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.08%.
IEMG’s dividend yield is 0.84% higher than that of BNDX (1.78% vs. 0.94%). Also, IEMG yielded on average 2.78% more per year over the past decade (7.41% vs. 4.63%). The expense ratio of IEMG is 0.03 percentage points higher than BNDX’s (0.11% vs. 0.08%).
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|Taiwan Semiconductor Manufacturing Co Ltd||5.37%|
|Tencent Holdings Ltd||4.42%|
|Alibaba Group Holding Ltd Ordinary Shares||4.38%|
|Samsung Electronics Co Ltd||3.49%|
|Naspers Ltd Class N||0.93%|
|Reliance Industries Ltd Shs Dematerialised||0.83%|
|China Construction Bank Corp Class H||0.77%|
IEMG’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Samsung Electronics Co Ltd, and Meituan at 5.37%, 4.42%, 4.38%, 3.49%, and 1.52%.
Naspers Ltd Class N (0.93%), Vale SA (0.91%), and Reliance Industries Ltd Shs Dematerialised (0.83%) have a slightly smaller but still significant weight. China Construction Bank Corp Class H and Infosys Ltd are also represented in the IEMG’s holdings at 0.77% and 0.74%.
|BNDX Bond Sectors||Weight|
BNDX’s Top Bond Sectors are ratings of A, AA, AAA, BBB, and Others at 29.19%, 26.79%, 21.59%, 19.41%, and 1.57%. The fund is less weighted towards Below B (1.45%), B (0.0%), and BB (0.0%) rated bonds.
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The iShares Core MSCI Emerging Markets ETF (IEMG) has a Alpha of 0 with a Treynor Ratio of 0 and a Standard Deviation of 0. Its Beta is 0 while IEMG’s Sharpe Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Mean Return of 0.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Standard Deviation of 0 with a R-squared of 0 and a Treynor Ratio of 0. Its Sharpe Ratio is 0 while BNDX’s Beta is 0. Furthermore, the fund has a Alpha of 0 and a Mean Return of 0.
IEMG’s Mean Return is 0.00 points lower than that of BNDX and its R-squared is 0.00 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than BNDX. The Alpha and Beta of IEMG are 0.00 points lower and 0.00 points lower than BNDX’s Alpha and Beta.
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IEMG had its best year in 2017 with an annual return of 36.78%. IEMG’s worst year over the past decade yielded -14.69% and occurred in 2018. In most years the iShares Core MSCI Emerging Markets ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.
The year 2014 was the strongest year for BNDX, returning 8.83% on an annual basis. The poorest year for BNDX in the last ten years was 2013, with a yield of 0.0%. Most years the Vanguard Total International Bond Index Fund ETF Shares has given investors modest returns, such as in 2015, 2017, and 2018, when gains were 1.08%, 2.4%, and 2.94% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IEMG would have resulted in a final balance of $15,037. This is a profit of $5,037 over 7 years and amounts to a compound annual growth rate (CAGR) of 7.41%.
With a $10,000 investment in BNDX, the end total would have been $13,695. This equates to a $3,695 profit over 7 years and a compound annual growth rate (CAGR) of 4.63%.
IEMG’s CAGR is 2.78 percentage points higher than that of BNDX and as a result, would have yielded $1,342 more on a $10,000 investment. Thus, IEMG outperformed BNDX by 2.78% annually.
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