The iShares Russell 2000 ETF (IWM) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. IWM is a iShares Small Blend fund and BNDX is a Vanguard N/A fund. So, what’s the difference between IWM and BNDX? And which fund is better?
The expense ratio of IWM is 0.11 percentage points higher than BNDX’s (0.19% vs. 0.08%). IWM also has a high exposure to the healthcare sector while BNDX is mostly comprised of A bonds. Overall, IWM has provided higher returns than BNDX over the past ten years.
In this article, we’ll compare IWM vs. BNDX. We’ll look at annual returns and risk metrics, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss IWM’s and BNDX’s performance, portfolio growth, and holdings and examine how these affect their overall returns.
Summary
| IWM | BNDX | |
| Name | iShares Russell 2000 ETF | Vanguard Total International Bond Index Fund ETF Shares |
| Category | Small Blend | N/A |
| Issuer | iShares | Vanguard |
| AUM | 66.48B | 116.41B |
| Avg. Return | 13.52% | 4.63% |
| Div. Yield | 0.86% | 0.94% |
| Expense Ratio | 0.19% | 0.08% |
The iShares Russell 2000 ETF (IWM) is a Small Blend fund that is issued by iShares. It currently has 66.48B total assets under management and has yielded an average annual return of 13.52% over the past 10 years. The fund has a dividend yield of 0.86% 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%.
IWM’s dividend yield is 0.08% lower than that of BNDX (0.86% vs. 0.94%). Also, IWM yielded on average 8.89% more per year over the past decade (13.52% vs. 4.63%). The expense ratio of IWM is 0.11 percentage points higher than BNDX’s (0.19% vs. 0.08%).
Fund Composition
Holdings
| IWM Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.52% |
| Intellia Therapeutics Inc | 0.33% |
| Crocs Inc | 0.3% |
| BlackRock Cash Funds Treasury SL Agency | 0.29% |
| Tenet Healthcare Corp | 0.26% |
| Lattice Semiconductor Corp | 0.26% |
| Tetra Tech Inc | 0.25% |
| II-VI Inc | 0.25% |
| EastGroup Properties Inc | 0.24% |
| Arrowhead Pharmaceuticals Inc | 0.24% |
IWM’s Top Holdings are AMC Entertainment Holdings Inc Class A, Intellia Therapeutics Inc, Crocs Inc, BlackRock Cash Funds Treasury SL Agency, and Tenet Healthcare Corp at 0.52%, 0.33%, 0.3%, 0.29%, and 0.26%.
Lattice Semiconductor Corp (0.26%), Tetra Tech Inc (0.25%), and II-VI Inc (0.25%) have a slightly smaller but still significant weight. EastGroup Properties Inc and Arrowhead Pharmaceuticals Inc are also represented in the IWM’s holdings at 0.24% and 0.24%.
| 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.
Risk Analysis
| IWM | BNDX | |
| Mean Return | 1.12 | 0 |
| R-squared | 77.73 | 0 |
| Std. Deviation | 18.87 | 0 |
| Alpha | -5.12 | 0 |
| Beta | 1.23 | 0 |
| Sharpe Ratio | 0.68 | 0 |
| Treynor Ratio | 9.56 | 0 |
The iShares Russell 2000 ETF (IWM) has a Treynor Ratio of 9.56 with a Alpha of -5.12 and a R-squared of 77.73. Its Sharpe Ratio is 0.68 while IWM’s Beta is 1.23. Furthermore, the fund has a Mean Return of 1.12 and a Standard Deviation of 18.87.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Alpha of 0 with a R-squared of 0 and a Sharpe Ratio of 0. Its Treynor Ratio is 0 while BNDX’s Standard Deviation is 0. Furthermore, the fund has a Beta of 0 and a Mean Return of 0.
IWM’s Mean Return is 1.12 points higher than that of BNDX and its R-squared is 77.73 points higher. With a Standard Deviation of 18.87, IWM is slightly more volatile than BNDX. The Alpha and Beta of IWM are 5.12 points lower and 1.23 points higher than BNDX’s Alpha and Beta.
Performance
Annual Returns
| Year | IWM | BNDX |
| 2020 | 19.89% | 4.6% |
| 2019 | 25.42% | 7.88% |
| 2018 | -11.02% | 2.94% |
| 2017 | 14.66% | 2.4% |
| 2016 | 21.36% | 4.67% |
| 2015 | -4.33% | 1.08% |
| 2014 | 4.94% | 8.83% |
| 2013 | 38.85% | 0.0% |
| 2012 | 16.39% | 0.0% |
| 2011 | -4.19% | 0.0% |
| 2010 | 26.76% | 0.0% |
IWM had its best year in 2013 with an annual return of 38.85%. IWM’s worst year over the past decade yielded -11.02% and occurred in 2018. In most years the iShares Russell 2000 ETF provided moderate returns such as in 2017, 2012, and 2020 where annual returns amounted to 14.66%, 16.39%, and 19.89% 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
| Fund | Initial Balance | Final Balance | CAGR |
| IWM | $10,000 | $18,691 | 13.52% |
| BNDX | $10,000 | $13,695 | 4.63% |
A $10,000 investment in IWM would have resulted in a final balance of $18,691. This is a profit of $8,691 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.52%.
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%.
IWM’s CAGR is 8.89 percentage points higher than that of BNDX and as a result, would have yielded $4,996 more on a $10,000 investment. Thus, IWM outperformed BNDX by 8.89% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
