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.
Summary
| VCIT | JPST | |
| Name | Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares | JPMorgan Ultra-Short Income ETF |
| Category | Corporate Bond | Ultrashort Bond |
| Issuer | Vanguard | JPMorgan |
| AUM | 48.39B | 17.32B |
| Avg. Return | 5.84% | 2.57% |
| Div. Yield | 2.33% | 0.94% |
| Expense Ratio | 0.05% | 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%).
Fund Composition
Holdings
| VCIT Bond Sectors | Weight |
| BBB | 55.28% |
| A | 37.85% |
| AA | 5.22% |
| AAA | 1.57% |
| Below B | 0.08% |
| Others | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
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 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.
Risk Analysis
| VCIT | JPST | |
| Mean Return | 0.44 | 0 |
| R-squared | 63.18 | 0 |
| Std. Deviation | 5.08 | 0 |
| Alpha | 0.89 | 0 |
| Beta | 1.35 | 0 |
| Sharpe Ratio | 0.91 | 0 |
| Treynor Ratio | 3.43 | 0 |
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.
Performance
Annual Returns
| Year | VCIT | JPST |
| 2020 | 9.55% | 2.17% |
| 2019 | 13.97% | 3.36% |
| 2018 | -1.75% | 2.19% |
| 2017 | 5.5% | 0.0% |
| 2016 | 5.3% | 0.0% |
| 2015 | 0.88% | 0.0% |
| 2014 | 7.47% | 0.0% |
| 2013 | -1.8% | 0.0% |
| 2012 | 11.36% | 0.0% |
| 2011 | 7.94% | 0.0% |
| 2010 | 10.65% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| VCIT | $10,000 | $12,266 | 5.84% |
| JPST | $10,000 | $10,791 | 2.57% |
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.
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