IWD vs. BNDX: What’s The Difference?

The iShares Russell 1000 Value ETF (IWD) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and BNDX is a Vanguard N/A fund. So, what’s the difference between IWD and BNDX? And which fund is better?

The expense ratio of IWD is 0.11 percentage points higher than BNDX’s (0.19% vs. 0.08%). IWD also has a high exposure to the financial services sector while BNDX is mostly comprised of A bonds. Overall, IWD has provided higher returns than BNDX over the past ten years.

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

Summary

IWD BNDX
Name iShares Russell 1000 Value ETF Vanguard Total International Bond Index Fund ETF Shares
Category Large Value N/A
Issuer iShares Vanguard
AUM 54.1B 116.41B
Avg. Return 11.40% 4.63%
Div. Yield 1.57% 0.94%
Expense Ratio 0.19% 0.08%

The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.

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%.

IWD’s dividend yield is 0.63% higher than that of BNDX (1.57% vs. 0.94%). Also, IWD yielded on average 6.77% more per year over the past decade (11.40% vs. 4.63%). The expense ratio of IWD is 0.11 percentage points higher than BNDX’s (0.19% vs. 0.08%).

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Fund Composition

Holdings

IWD - Holdings

IWD Holdings Weight
Berkshire Hathaway Inc Class B 2.58%
JPMorgan Chase & Co 2.25%
Johnson & Johnson 2.24%
UnitedHealth Group Inc 1.78%
Procter & Gamble Co 1.71%
The Walt Disney Co 1.5%
Bank of America Corp 1.43%
Comcast Corp Class A 1.33%
Exxon Mobil Corp 1.2%
Pfizer Inc 1.18%

IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.

The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.

BNDX - Holdings

BNDX Bond Sectors Weight
A 29.19%
AA 26.79%
AAA 21.59%
BBB 19.41%
Others 1.57%
Below B 1.45%
B 0.0%
BB 0.0%
US Government 0.0%

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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Risk Analysis

IWD BNDX
Mean Return 1.03 0
R-squared 92.38 0
Std. Deviation 14.35 0
Alpha -3.23 0
Beta 1.02 0
Sharpe Ratio 0.81 0
Treynor Ratio 11.06 0

The iShares Russell 1000 Value ETF (IWD) has a R-squared of 92.38 with a Treynor Ratio of 11.06 and a Alpha of -3.23. Its Mean Return is 1.03 while IWD’s Sharpe Ratio is 0.81. Furthermore, the fund has a Beta of 1.02 and a Standard Deviation of 14.35.

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Alpha of 0 with a Mean Return of 0 and a Beta of 0. Its Sharpe Ratio is 0 while BNDX’s Treynor Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.

IWD’s Mean Return is 1.03 points higher than that of BNDX and its R-squared is 92.38 points higher. With a Standard Deviation of 14.35, IWD is slightly more volatile than BNDX. The Alpha and Beta of IWD are 3.23 points lower and 1.02 points higher than BNDX’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. BNDX - Annual Returns

Year IWD BNDX
2020 2.67% 4.6%
2019 26.34% 7.88%
2018 -8.4% 2.94%
2017 13.47% 2.4%
2016 17.09% 4.67%
2015 -3.95% 1.08%
2014 13.21% 8.83%
2013 32.18% 0.0%
2012 17.28% 0.0%
2011 0.21% 0.0%
2010 15.3% 0.0%

IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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.

Portfolio Growth

IWD vs. BNDX - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $17,165 11.40%
BNDX $10,000 $13,695 4.63%

A $10,000 investment in IWD would have resulted in a final balance of $17,165. This is a profit of $7,165 over 7 years and amounts to a compound annual growth rate (CAGR) of 11.40%.

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%.

IWD’s CAGR is 6.77 percentage points higher than that of BNDX and as a result, would have yielded $3,470 more on a $10,000 investment. Thus, IWD outperformed BNDX by 6.77% annually.


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