The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. IGSB is a iShares Short-Term Bond fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between IGSB and VXF? And which fund is better?
IGSB and VXF have the same expense ratio: 0.06%. IGSB is mostly comprised of BBB bonds while VXF has a high exposure to the technology sector. Overall, IGSB has provided lower returns than VXF over the past 11 years.
In this article, we’ll compare IGSB vs. VXF. We’ll look at annual returns and holdings, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss IGSB’s and VXF’s performance, risk metrics, and industry exposure and examine how these affect their overall returns.
|Name||iShares 1-5 Year Investment Grade Corporate Bond ETF||Vanguard Extended Market Index Fund ETF Shares|
|Category||Short-Term Bond||Mid-Cap Growth|
The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) is a Short-Term Bond fund that is issued by iShares. It currently has 26.63B total assets under management and has yielded an average annual return of 2.51% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.06%.
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%.
IGSB’s dividend yield is 0.83% higher than that of VXF (2.02% vs. 1.19%). Also, IGSB yielded on average 12.97% less per year over the past decade (2.51% vs. 15.47%). IGSB and VXF have the same expense ratio: 0.06%.
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|IGSB Bond Sectors||Weight|
IGSB’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and BB at 50.48%, 40.04%, 7.46%, 2.21%, and 0.09%. The fund is less weighted towards Below B (0.0%), B (0.0%), and US Government (0.0%) rated bonds.
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|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%.
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The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a Beta of 0.34 with a Sharpe Ratio of 0.82 and a Treynor Ratio of 4.82. Its Mean Return is 0.19 while IGSB’s R-squared is 26.13. Furthermore, the fund has a Alpha of 0.69 and a Standard Deviation of 2.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Treynor Ratio of 10.92 with a Mean Return of 1.24 and a Alpha of -3.26. Its Beta is 1.23 while VXF’s R-squared is 85.73. Furthermore, the fund has a Standard Deviation of 18.04 and a Sharpe Ratio of 0.79.
IGSB’s Mean Return is 1.05 points lower than that of VXF and its R-squared is 59.60 points lower. With a Standard Deviation of 2, IGSB is slightly less volatile than VXF. The Alpha and Beta of IGSB are 3.95 points higher and 0.89 points lower than VXF’s Alpha and Beta.
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IGSB had its best year in 2019 with an annual return of 7.01%. IGSB’s worst year over the past decade yielded 0.7% and occurred in 2015. In most years the iShares 1-5 Year Investment Grade Corporate Bond ETF provided moderate returns such as in 2011, 2017, and 2016 where annual returns amounted to 1.34%, 1.41%, and 1.77% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IGSB would have resulted in a final balance of $13,103. This is a profit of $3,103 over 11 years and amounts to a compound annual growth rate (CAGR) of 2.51%.
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%.
IGSB’s CAGR is 12.97 percentage points lower than that of VXF and as a result, would have yielded $31,027 less on a $10,000 investment. Thus, IGSB performed worse than VXF by 12.97% annually.
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