The Vanguard Small-Cap Index Fund ETF Shares (VB) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. VB is a Vanguard Small Blend fund and IUSB is a iShares N/A fund. So, what’s the difference between VB and IUSB? And which fund is better?
The expense ratio of VB is 0.01 percentage points lower than IUSB’s (0.05% vs. 0.06%). VB also has a high exposure to the technology sector while IUSB is mostly comprised of AAA bonds. Overall, VB has provided higher returns than IUSB over the past ten years.
In this article, we’ll compare VB vs. IUSB. We’ll look at risk metrics and industry exposure, as well as at their performance and portfolio growth. Moreover, I’ll also discuss VB’s and IUSB’s holdings, annual returns, and fund composition and examine how these affect their overall returns.
|NameVanguard Small-Cap Index Fund ETF SharesiShares Core Total USD Bond Market ETF|
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 iShares Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
VB’s dividend yield is 0.96% lower than that of IUSB (1.14% vs. 2.1%). Also, VB yielded on average 10.13% more per year over the past decade (14.25% vs. 4.13%). The expense ratio of VB is 0.01 percentage points lower than IUSB’s (0.05% vs. 0.06%).
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|Charles River Laboratories International Inc||0.34%|
|Diamondback Energy Inc||0.31%|
|VICI Properties Inc Ordinary Shares||0.3%|
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%.
|IUSB Bond Sectors||Weight|
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
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The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Alpha of -4.02 with a Treynor Ratio of 10.15 and a R-squared of 85.03. Its Mean Return is 1.15 while VB’s Sharpe Ratio is 0.74. Furthermore, the fund has a Beta of 1.21 and a Standard Deviation of 17.82.
The iShares Core Total USD Bond Market ETF (IUSB) has a Standard Deviation of 0 with a R-squared of 0 and a Sharpe Ratio of 0. Its Beta is 0 while IUSB’s Alpha 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 IUSB and its R-squared is 85.03 points higher. With a Standard Deviation of 17.82, VB is slightly more volatile than IUSB. The Alpha and Beta of VB are 4.02 points lower and 1.21 points higher than IUSB’s Alpha and Beta.
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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 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VB would have resulted in a final balance of $18,228. This is a profit of $8,228 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.25%.
With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
VB’s CAGR is 10.13 percentage points higher than that of IUSB and as a result, would have yielded $5,524 more on a $10,000 investment. Thus, VB outperformed IUSB by 10.13% annually.
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