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VB vs. BNDX: What’s The Difference?

The Vanguard Small-Cap Index Fund ETF Shares (VB) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. VB is a Vanguard Small Blend fund and BNDX is a Vanguard N/A fund. So, what’s the difference between VB and BNDX? And which fund is better?

The expense ratio of VB is 0.03 percentage points lower than BNDX’s (0.05% vs. 0.08%). VB also has a high exposure to the technology sector while BNDX is mostly comprised of A bonds. Overall, VB has provided higher returns than BNDX over the past ten years.

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

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Summary

VBBNDX
NameVanguard Small-Cap Index Fund ETF SharesVanguard Total International Bond Index Fund ETF Shares
CategorySmall BlendN/A
IssuerVanguardVanguard
AUM137.72B116.41B
Avg. Return14.25%4.63%
Div. Yield1.14%0.94%
Expense Ratio0.05%0.08%

The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.

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%.

VB’s dividend yield is 0.20% higher than that of BNDX (1.14% vs. 0.94%). Also, VB yielded on average 9.63% more per year over the past decade (14.25% vs. 4.63%). The expense ratio of VB is 0.03 percentage points lower than BNDX’s (0.05% vs. 0.08%).

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Fund Composition

Holdings

VB - Holdings

VB HoldingsWeight
Charles River Laboratories International Inc0.34%
Pool Corp0.32%
Bio-Techne Corp0.32%
Avantor Inc0.32%
PerkinElmer Inc0.31%
Diamondback Energy Inc0.31%
VICI Properties Inc Ordinary Shares0.3%
IDEX Corp0.3%
Entegris Inc0.3%
Novavax Inc0.29%

VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.

Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

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

VBBNDX
Mean Return1.150
R-squared85.030
Std. Deviation17.820
Alpha-4.020
Beta1.210
Sharpe Ratio0.740
Treynor Ratio10.150

The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Alpha of -4.02 with a Sharpe Ratio of 0.74 and a Treynor Ratio of 10.15. Its Beta is 1.21 while VB’s Standard Deviation is 17.82. Furthermore, the fund has a R-squared of 85.03 and a Mean Return of 1.15.

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

VB’s Mean Return is 1.15 points higher than that of BNDX and its R-squared is 85.03 points higher. With a Standard Deviation of 17.82, VB is slightly more volatile than BNDX. The Alpha and Beta of VB are 4.02 points lower and 1.21 points higher than BNDX’s Alpha and Beta.

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Performance

Annual Returns

VB vs. BNDX - Annual Returns

YearVBBNDX
202019.08%4.6%
201927.37%7.88%
2018-9.3%2.94%
201716.24%2.4%
201618.31%4.67%
2015-3.65%1.08%
20147.51%8.83%
201337.8%0.0%
201218.22%0.0%
2011-2.68%0.0%
201027.89%0.0%

VB had its best year in 2013 with an annual return of 37.8%. VB’s worst year over the past decade yielded -9.3% and occurred in 2018. In most years the Vanguard Small-Cap Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2016 where annual returns amounted to 16.24%, 18.22%, and 18.31% 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

VB vs. BNDX - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VB$10,000$19,59714.25%
BNDX$10,000$13,6954.63%

A $10,000 investment in VB would have resulted in a final balance of $19,597. This is a profit of $9,597 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.25%.

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%.

VB’s CAGR is 9.63 percentage points higher than that of BNDX and as a result, would have yielded $5,902 more on a $10,000 investment. Thus, VB outperformed BNDX by 9.63% annually.


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