Skip to content

VCIT vs. JPST: What’s The Difference?

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

The expense ratio of VCIT is 0.13 percentage points lower than JPST’s (0.05% vs. 0.18%). VCIT is mostly comprised of BBB bonds and JPST has a high exposure to A bond. Overall, VCIT has provided higher returns than JPST over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

VCITJPST
NameVanguard Intermediate-Term Corporate Bond Index Fund ETF SharesJPMorgan Ultra-Short Income ETF
CategoryCorporate BondUltrashort Bond
IssuerVanguardJPMorgan
AUM48.39B17.32B
Avg. Return5.84%2.57%
Div. Yield2.33%0.94%
Expense Ratio0.05%0.18%

The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) is a Corporate Bond fund that is issued by Vanguard. It currently has 48.39B total assets under management and has yielded an average annual return of 5.84% over the past 10 years. The fund has a dividend yield of 2.33% with an expense ratio of 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%.

VCIT’s dividend yield is 1.39% higher than that of JPST (2.33% vs. 0.94%). Also, VCIT yielded on average 3.27% more per year over the past decade (5.84% vs. 2.57%). The expense ratio of VCIT is 0.13 percentage points lower than JPST’s (0.05% vs. 0.18%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Holdings

VCIT - Holdings

VCIT Bond SectorsWeight
BBB55.28%
A37.85%
AA5.22%
AAA1.57%
Below B0.08%
Others0.0%
B0.0%
BB0.0%
US Government0.0%

VCIT’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 55.28%, 37.85%, 5.22%, 1.57%, and 0.08%. The fund is less weighted towards Others (0.0%), B (0.0%), and BB (0.0%) rated bonds.

JPST - Holdings

JPST Bond SectorsWeight
A39.21%
BBB36.75%
AAA14.9%
AA9.14%
Others0.0%
Below B0.0%
B0.0%
BB0.0%
US Government0.0%

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.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

VCITJPST
Mean Return0.440
R-squared63.180
Std. Deviation5.080
Alpha0.890
Beta1.350
Sharpe Ratio0.910
Treynor Ratio3.430

The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) has a Mean Return of 0.44 with a R-squared of 63.18 and a Beta of 1.35. Its Alpha is 0.89 while VCIT’s Treynor Ratio is 3.43. Furthermore, the fund has a Sharpe Ratio of 0.91 and a Standard Deviation of 5.08.

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

VCIT’s Mean Return is 0.44 points higher than that of JPST and its R-squared is 63.18 points higher. With a Standard Deviation of 5.08, VCIT is slightly more volatile than JPST. The Alpha and Beta of VCIT are 0.89 points higher and 1.35 points higher than JPST’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

VCIT vs. JPST - Annual Returns

YearVCITJPST
20209.55%2.17%
201913.97%3.36%
2018-1.75%2.19%
20175.5%0.0%
20165.3%0.0%
20150.88%0.0%
20147.47%0.0%
2013-1.8%0.0%
201211.36%0.0%
20117.94%0.0%
201010.65%0.0%

VCIT had its best year in 2019 with an annual return of 13.97%. VCIT’s worst year over the past decade yielded -1.8% and occurred in 2013. In most years the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares provided moderate returns such as in 2017, 2014, and 2011 where annual returns amounted to 5.5%, 7.47%, and 7.94% 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

VCIT vs. JPST - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VCIT$10,000$12,2665.84%
JPST$10,000$10,7912.57%

A $10,000 investment in VCIT would have resulted in a final balance of $12,266. This is a profit of $2,266 over 3 years and amounts to a compound annual growth rate (CAGR) of 5.84%.

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%.

VCIT’s CAGR is 3.27 percentage points higher than that of JPST and as a result, would have yielded $1,475 more on a $10,000 investment. Thus, VCIT outperformed JPST by 3.27% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.