The JPMorgan Ultra-Short Income ETF (JPST) and the Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS) are both among the Top 100 ETFs. JPST is a JPMorgan Ultrashort Bond fund and VMBS is a Vanguard Intermediate Government fund. So, what’s the difference between JPST and VMBS? And which fund is better?
The expense ratio of JPST is 0.13 percentage points higher than VMBS’s (0.18% vs. 0.05%). JPST is mostly comprised of A bonds and VMBS has a high exposure to AAA bond. Overall, JPST has provided lower returns than VMBS over the past 3 years.
In this article, we’ll compare JPST vs. VMBS. We’ll look at risk metrics and fund composition, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss JPST’s and VMBS’s performance, holdings, and industry exposure and examine how these affect their overall returns.
Summary
| JPST | VMBS | |
| Name | JPMorgan Ultra-Short Income ETF | Vanguard Mortgage-Backed Securities Index Fund ETF Shares |
| Category | Ultrashort Bond | Intermediate Government |
| Issuer | JPMorgan | Vanguard |
| AUM | 17.32B | 16.61B |
| Avg. Return | 2.57% | 2.89% |
| Div. Yield | 0.94% | 1.23% |
| Expense Ratio | 0.18% | 0.05% |
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 Mortgage-Backed Securities Index Fund ETF Shares (VMBS) is a Intermediate Government fund that is issued by Vanguard. It currently has 16.61B total assets under management and has yielded an average annual return of 2.89% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.05%.
JPST’s dividend yield is 0.29% lower than that of VMBS (0.94% vs. 1.23%). Also, JPST yielded on average 0.32% less per year over the past decade (2.57% vs. 2.89%). The expense ratio of JPST is 0.13 percentage points higher than VMBS’s (0.18% vs. 0.05%).
Fund Composition
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.
| VMBS Bond Sectors | Weight |
| AAA | 100.01% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
| Others | -0.01% |
VMBS’s Top Bond Sectors are ratings of AAA, Below B, B, BB, and BBB at 100.01%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards A (0.0%), AA (0.0%), and US Government (0.0%) rated bonds.
Risk Analysis
| JPST | VMBS | |
| Mean Return | 0 | 0.21 |
| R-squared | 0 | 65.78 |
| Std. Deviation | 0 | 2.02 |
| Alpha | 0 | 0.37 |
| Beta | 0 | 0.54 |
| Sharpe Ratio | 0 | 0.94 |
| Treynor Ratio | 0 | 3.47 |
The JPMorgan Ultra-Short Income ETF (JPST) has a Standard Deviation of 0 with a R-squared of 0 and a Beta of 0. Its Mean Return is 0 while JPST’s Treynor Ratio is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.
The Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS) has a Standard Deviation of 2.02 with a Mean Return of 0.21 and a Alpha of 0.37. Its R-squared is 65.78 while VMBS’s Treynor Ratio is 3.47. Furthermore, the fund has a Beta of 0.54 and a Sharpe Ratio of 0.94.
JPST’s Mean Return is 0.21 points lower than that of VMBS and its R-squared is 65.78 points lower. With a Standard Deviation of 0, JPST is slightly less volatile than VMBS. The Alpha and Beta of JPST are 0.37 points lower and 0.54 points lower than VMBS’s Alpha and Beta.
Performance
Annual Returns
| Year | JPST | VMBS |
| 2020 | 2.17% | 3.77% |
| 2019 | 3.36% | 6.17% |
| 2018 | 2.19% | 0.87% |
| 2017 | 0.0% | 2.37% |
| 2016 | 0.0% | 1.43% |
| 2015 | 0.0% | 1.43% |
| 2014 | 0.0% | 5.81% |
| 2013 | 0.0% | -1.28% |
| 2012 | 0.0% | 2.47% |
| 2011 | 0.0% | 5.89% |
| 2010 | 0.0% | 5.24% |
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 2019 was the strongest year for VMBS, returning 6.17% on an annual basis. The poorest year for VMBS in the last ten years was 2013, with a yield of -1.28%. Most years the Vanguard Mortgage-Backed Securities Index Fund ETF Shares has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 2.37%, 2.47%, and 3.77% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| JPST | $10,000 | $10,791 | 2.57% |
| VMBS | $10,000 | $11,113 | 2.89% |
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 VMBS, the end total would have been $11,113. This equates to a $1,113 profit over 3 years and a compound annual growth rate (CAGR) of 2.89%.
JPST’s CAGR is 0.32 percentage points lower than that of VMBS and as a result, would have yielded $322 less on a $10,000 investment. Thus, JPST performed worse than VMBS by 0.32% annually.
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