VBR vs. JPST: What’s The Difference?

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

The expense ratio of VBR is 0.11 percentage points lower than JPST’s (0.07% vs. 0.18%). VBR also has a high exposure to the financial services sector while JPST is mostly comprised of A bonds. Overall, VBR has provided higher returns than JPST over the past 3 years.

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

Summary

VBR JPST
Name Vanguard Small-Cap Value Index Fund ETF Shares JPMorgan Ultra-Short Income ETF
Category Small Value Ultrashort Bond
Issuer Vanguard JPMorgan
AUM 48.08B 17.32B
Avg. Return 12.28% 2.57%
Div. Yield 1.6% 0.94%
Expense Ratio 0.07% 0.18%

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 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%.

VBR’s dividend yield is 0.66% higher than that of JPST (1.6% vs. 0.94%). Also, VBR yielded on average 9.71% more per year over the past decade (12.28% vs. 2.57%). The expense ratio of VBR is 0.11 percentage points lower than JPST’s (0.07% vs. 0.18%).

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Fund Composition

Holdings

VBR - Holdings

VBR Holdings Weight
Diamondback Energy Inc 0.55%
VICI Properties Inc Ordinary Shares 0.54%
IDEX Corp 0.54%
Nuance Communications Inc 0.5%
Molina Healthcare Inc 0.48%
Signature Bank 0.46%
Novavax Inc 0.44%
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%.

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.

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Risk Analysis

VBR JPST
Mean Return 1.08 0
R-squared 82.2 0
Std. Deviation 18.37 0
Alpha -5.09 0
Beta 1.23 0
Sharpe Ratio 0.67 0
Treynor Ratio 9.15 0

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Beta of 1.23 with a Mean Return of 1.08 and a Sharpe Ratio of 0.67. Its Alpha is -5.09 while VBR’s Standard Deviation is 18.37. Furthermore, the fund has a Treynor Ratio of 9.15 and a R-squared of 82.2.

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

VBR’s Mean Return is 1.08 points higher than that of JPST and its R-squared is 82.20 points higher. With a Standard Deviation of 18.37, VBR is slightly more volatile than JPST. The Alpha and Beta of VBR are 5.09 points lower and 1.23 points higher than JPST’s Alpha and Beta.

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Performance

Annual Returns

VBR vs. JPST - Annual Returns

Year VBR JPST
2020 5.82% 2.17%
2019 22.76% 3.36%
2018 -12.22% 2.19%
2017 11.79% 0.0%
2016 24.8% 0.0%
2015 -4.67% 0.0%
2014 10.55% 0.0%
2013 36.57% 0.0%
2012 18.78% 0.0%
2011 -4.05% 0.0%
2010 24.97% 0.0%

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 2019 was the strongest year for JPST, returning 3.36% on an annual basis. The poorest year for JPST in the last ten years was 2017, with a yield of 0.0%. Most years the JPMorgan Ultra-Short Income ETF has given investors modest returns, such as in 2013, 2012, and 2011, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

VBR vs. JPST - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VBR $10,000 $11,403 12.28%
JPST $10,000 $10,791 2.57%

A $10,000 investment in VBR would have resulted in a final balance of $11,403. This is a profit of $1,403 over 3 years and amounts to a compound annual growth rate (CAGR) of 12.28%.

With a $10,000 investment in JPST, the end total would have been $10,791. This equates to a $791 profit over 3 years and a compound annual growth rate (CAGR) of 2.57%.

VBR’s CAGR is 9.71 percentage points higher than that of JPST and as a result, would have yielded $612 more on a $10,000 investment. Thus, VBR outperformed JPST by 9.71% annually.


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