JPST vs. VHT: What’s The Difference?

The JPMorgan Ultra-Short Income ETF (JPST) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. JPST is a JPMorgan Ultrashort Bond fund and VHT is a Vanguard Health fund. So, what’s the difference between JPST and VHT? And which fund is better?

The expense ratio of JPST is 0.08 percentage points higher than VHT’s (0.18% vs. 0.1%). JPST is mostly comprised of A bonds while VHT has a high exposure to the healthcare sector. Overall, JPST has provided lower returns than VHT over the past 3 years.

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

Summary

JPST VHT
Name JPMorgan Ultra-Short Income ETF Vanguard Health Care Index Fund ETF Shares
Category Ultrashort Bond Health
Issuer JPMorgan Vanguard
AUM 17.32B 17.94B
Avg. Return 2.57% 16.04%
Div. Yield 0.94% 1.15%
Expense Ratio 0.18% 0.1%

The JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.

The Vanguard Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.

JPST’s dividend yield is 0.21% lower than that of VHT (0.94% vs. 1.15%). Also, JPST yielded on average 13.47% less per year over the past decade (2.57% vs. 16.04%). The expense ratio of JPST is 0.08 percentage points higher than VHT’s (0.18% vs. 0.1%).

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Fund Composition

Holdings

JPST - Holdings

JPST Bond Sectors Weight
A 39.21%
BBB 36.75%
AAA 14.9%
AA 9.14%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
US Government 0.0%

JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

VHT - Holdings

VHT Holdings Weight
Johnson & Johnson 7.34%
UnitedHealth Group Inc 6.44%
Pfizer Inc 3.7%
Abbott Laboratories 3.48%
Thermo Fisher Scientific Inc 3.37%
AbbVie Inc 3.37%
Merck & Co Inc 3.33%
Eli Lilly and Co 3.17%
Danaher Corp 2.91%
Medtronic PLC 2.83%

VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.

AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.

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Risk Analysis

JPST VHT
Mean Return 0 1.33
R-squared 0 59.86
Std. Deviation 0 13.58
Alpha 0 7.99
Beta 0 0.75
Sharpe Ratio 0 1.13
Treynor Ratio 0 20.74

The JPMorgan Ultra-Short Income ETF (JPST) has a Alpha of 0 with a Mean Return of 0 and a Beta of 0. Its Sharpe Ratio is 0 while JPST’s Standard Deviation is 0. Furthermore, the fund has a R-squared of 0 and a Treynor Ratio of 0.

The Vanguard Health Care Index Fund ETF Shares (VHT) has a Alpha of 7.99 with a R-squared of 59.86 and a Standard Deviation of 13.58. Its Sharpe Ratio is 1.13 while VHT’s Mean Return is 1.33. Furthermore, the fund has a Treynor Ratio of 20.74 and a Beta of 0.75.

JPST’s Mean Return is 1.33 points lower than that of VHT and its R-squared is 59.86 points lower. With a Standard Deviation of 0, JPST is slightly less volatile than VHT. The Alpha and Beta of JPST are 7.99 points lower and 0.75 points lower than VHT’s Alpha and Beta.

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Performance

Annual Returns

JPST vs. VHT - Annual Returns

Year JPST VHT
2020 2.17% 18.21%
2019 3.36% 21.97%
2018 2.19% 5.55%
2017 0.0% 23.34%
2016 0.0% -3.33%
2015 0.0% 7.22%
2014 0.0% 25.38%
2013 0.0% 42.67%
2012 0.0% 19.1%
2011 0.0% 10.57%
2010 0.0% 5.75%

JPST had its best year in 2019 with an annual return of 3.36%. JPST’s worst year over the past decade yielded 0.0% and occurred in 2017. In most years the JPMorgan Ultra-Short Income ETF provided moderate returns such as in 2013, 2012, and 2011 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.

The year 2013 was the strongest year for VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.

Portfolio Growth

JPST vs. VHT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
JPST $10,000 $10,791 2.57%
VHT $10,000 $15,218 16.04%

A $10,000 investment in JPST would have resulted in a final balance of $10,791. This is a profit of $791 over 3 years and amounts to a compound annual growth rate (CAGR) of 2.57%.

With a $10,000 investment in VHT, the end total would have been $15,218. This equates to a $5,218 profit over 3 years and a compound annual growth rate (CAGR) of 16.04%.

JPST’s CAGR is 13.47 percentage points lower than that of VHT and as a result, would have yielded $4,427 less on a $10,000 investment. Thus, JPST performed worse than VHT by 13.47% annually.


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