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IVV vs. BND: What’s The Difference?

The iShares Core S&P 500 ETF (IVV) and the Vanguard Total Bond Market Index Fund ETF Shares (BND) are both among the Top 100 ETFs. IVV is a iShares Large Blend fund and BND is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between IVV and BND? And which fund is better?

IVV and BND have the same expense ratio: 0.03%. IVV also has a high exposure to the technology sector while BND is mostly comprised of AAA bonds. Overall, IVV has provided higher returns than BND over the past ten years.

In this article, we’ll compare IVV vs. BND. We’ll look at industry exposure and annual returns, as well as at their fund composition and performance. Moreover, I’ll also discuss IVV’s and BND’s portfolio growth, risk metrics, and holdings and examine how these affect their overall returns.

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Summary

IVVBND
NameiShares Core S&P 500 ETFVanguard Total Bond Market Index Fund ETF Shares
CategoryLarge BlendIntermediate-Term Bond
IssueriSharesVanguard
AUM294.95B312.15B
Avg. Return14.48%4.09%
Div. Yield1.28%2.02%
Expense Ratio0.03%0.03%

The iShares Core S&P 500 ETF (IVV) is a Large Blend fund that is issued by iShares. It currently has 294.95B total assets under management and has yielded an average annual return of 14.48% over the past 10 years. The fund has a dividend yield of 1.28% with an expense ratio of 0.03%.

The Vanguard Total Bond Market Index Fund ETF Shares (BND) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 312.15B total assets under management and has yielded an average annual return of 4.09% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.03%.

IVV’s dividend yield is 0.74% lower than that of BND (1.28% vs. 2.02%). Also, IVV yielded on average 10.38% more per year over the past decade (14.48% vs. 4.09%). IVV and BND have the same expense ratio: 0.03%.

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Fund Composition

Holdings

IVV - Holdings

IVV HoldingsWeight
Apple Inc6.14%
Microsoft Corp5.76%
Amazon.com Inc3.83%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.17%
Alphabet Inc Class C2.07%
Tesla Inc1.42%
Berkshire Hathaway Inc Class B1.42%
NVIDIA Corp1.3%
JPMorgan Chase & Co1.23%

IVV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 6.14%, 5.76%, 3.83%, 2.29%, and 2.17%.

Alphabet Inc Class C (2.07%), Tesla Inc (1.42%), and Berkshire Hathaway Inc Class B (1.42%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IVV’s holdings at 1.3% and 1.23%.

BND - Holdings

BND Bond SectorsWeight
AAA68.72%
BBB16.17%
A11.87%
AA3.34%
Below B0.01%
B0.0%
BB0.0%
US Government0.0%
Others-0.11%

BND’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Below B at 68.72%, 16.17%, 11.87%, 3.34%, and 0.01%. The fund is less weighted towards B (0.0%), BB (0.0%), and US Government (0.0%) rated bonds.

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Performance

Annual Returns

IVV vs. BND - Annual Returns

YearIVVBND
202018.37%7.71%
201931.44%8.71%
2018-4.42%-0.04%
201721.79%3.62%
201611.9%2.57%
20151.34%0.39%
201413.62%5.96%
201332.31%-2.14%
201215.91%4.04%
20112.03%7.71%
201014.96%6.51%

IVV had its best year in 2013 with an annual return of 32.31%. IVV’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the iShares Core S&P 500 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.62%, 14.96%, and 15.91% respectively.

The year 2019 was the strongest year for BND, returning 8.71% on an annual basis. The poorest year for BND in the last ten years was 2013, with a yield of -2.14%. Most years the Vanguard Total Bond Market Index Fund ETF Shares has given investors modest returns, such as in 2017, 2012, and 2014, when gains were 3.62%, 4.04%, and 5.96% respectively.

Portfolio Growth

IVV vs. BND - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVV$10,000$41,97614.48%
BND$10,000$15,4564.09%

A $10,000 investment in IVV would have resulted in a final balance of $41,976. This is a profit of $31,976 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.48%.

With a $10,000 investment in BND, the end total would have been $15,456. This equates to a $5,456 profit over 11 years and a compound annual growth rate (CAGR) of 4.09%.

IVV’s CAGR is 10.38 percentage points higher than that of BND and as a result, would have yielded $26,520 more on a $10,000 investment. Thus, IVV outperformed BND by 10.38% annually.


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