The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. VBR is a Vanguard Small Value fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between VBR and BIV? And which fund is better?
The expense ratio of VBR is 0.02 percentage points higher than BIV’s (0.07% vs. 0.05%). VBR also has a high exposure to the financial services sector while BIV is mostly comprised of AAA bonds. Overall, VBR has provided higher returns than BIV over the past 11 years.
In this article, we’ll compare VBR vs. BIV. We’ll look at portfolio growth and holdings, as well as at their annual returns and fund composition. Moreover, I’ll also discuss VBR’s and BIV’s industry exposure, risk metrics, and performance and examine how these affect their overall returns.
|Name||Vanguard Small-Cap Value Index Fund ETF Shares||Vanguard Intermediate-Term Bond Index Fund ETF Shares|
|Category||Small Value||Intermediate-Term Bond|
The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
VBR’s dividend yield is 0.46% lower than that of BIV (1.6% vs. 2.06%). Also, VBR yielded on average 6.97% more per year over the past decade (12.28% vs. 5.31%). The expense ratio of VBR is 0.02 percentage points higher than BIV’s (0.07% vs. 0.05%).
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|Diamondback Energy Inc||0.55%|
|VICI Properties Inc Ordinary Shares||0.54%|
|Nuance Communications Inc||0.5%|
|Molina Healthcare Inc||0.48%|
|Howmet Aerospace Inc||0.44%|
|Apollo Global Management Inc Class A||0.42%|
|Brown & Brown Inc||0.41%|
VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.
Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.
|BIV Bond Sectors||Weight|
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
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The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a R-squared of 82.2 with a Sharpe Ratio of 0.67 and a Treynor Ratio of 9.15. Its Mean Return is 1.08 while VBR’s Standard Deviation is 18.37. Furthermore, the fund has a Alpha of -5.09 and a Beta of 1.23.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Beta of 1.33 with a Mean Return of 0.35 and a Alpha of -0.07. Its Sharpe Ratio is 0.89 while BIV’s R-squared is 95.12. Furthermore, the fund has a Standard Deviation of 4.09 and a Treynor Ratio of 2.72.
VBR’s Mean Return is 0.73 points higher than that of BIV and its R-squared is 12.92 points lower. With a Standard Deviation of 18.37, VBR is slightly more volatile than BIV. The Alpha and Beta of VBR are 5.02 points lower and 0.10 points lower than BIV’s Alpha and Beta.
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VBR had its best year in 2013 with an annual return of 36.57%. VBR’s worst year over the past decade yielded -12.22% and occurred in 2018. In most years the Vanguard Small-Cap Value Index Fund ETF Shares provided moderate returns such as in 2014, 2017, and 2012 where annual returns amounted to 10.55%, 11.79%, and 18.78% respectively.
The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VBR would have resulted in a final balance of $32,611. This is a profit of $22,611 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.28%.
With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
VBR’s CAGR is 6.97 percentage points higher than that of BIV and as a result, would have yielded $15,119 more on a $10,000 investment. Thus, VBR outperformed BIV by 6.97% annually.
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