The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. VCSH is a Vanguard Short-Term Bond fund and VT is a Vanguard N/A fund. So, what’s the difference between VCSH and VT? And which fund is better?
The expense ratio of VCSH is 0.03 percentage points lower than VT’s (0.05% vs. 0.08%). VCSH is mostly comprised of BBB bonds while VT has a high exposure to the technology sector. Overall, VCSH has provided lower returns than VT over the past ten years.
In this article, we’ll compare VCSH vs. VT. We’ll look at holdings and industry exposure, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss VCSH’s and VT’s performance, portfolio growth, and annual returns and examine how these affect their overall returns.
|Name||Vanguard Short-Term Corporate Bond Index Fund ETF Shares||Vanguard Total World Stock Index Fund ETF Shares|
The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) is a Short-Term Bond fund that is issued by Vanguard. It currently has 47.88B total assets under management and has yielded an average annual return of 3.12% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.05%.
The Vanguard Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
VCSH’s dividend yield is 0.24% higher than that of VT (1.89% vs. 1.65%). Also, VCSH yielded on average 7.30% less per year over the past decade (3.12% vs. 10.42%). The expense ratio of VCSH is 0.03 percentage points lower than VT’s (0.05% vs. 0.08%).
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|VCSH Bond Sectors||Weight|
VCSH’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 47.49%, 43.06%, 8.45%, 0.95%, and 0.03%. The fund is less weighted towards Others (0.02%), B (0.0%), and BB (0.0%) rated bonds.
|Facebook Inc Class A||1.1%|
|Alphabet Inc Class A||0.97%|
|Alphabet Inc Class C||0.95%|
|JPMorgan Chase & Co||0.62%|
|Tencent Holdings Ltd||0.6%|
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
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The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) has a Mean Return of 0.24 with a Treynor Ratio of 4.75 and a Standard Deviation of 2.34. Its Sharpe Ratio is 0.97 while VCSH’s R-squared is 37.53. Furthermore, the fund has a Alpha of 0.93 and a Beta of 0.48.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Standard Deviation of 14.19 with a R-squared of 99.35 and a Treynor Ratio of 9.5. Its Beta is 1.01 while VT’s Alpha is 0.2. Furthermore, the fund has a Mean Return of 0.9 and a Sharpe Ratio of 0.71.
VCSH’s Mean Return is 0.66 points lower than that of VT and its R-squared is 61.82 points lower. With a Standard Deviation of 2.34, VCSH is slightly less volatile than VT. The Alpha and Beta of VCSH are 0.73 points higher and 0.53 points lower than VT’s Alpha and Beta.
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VCSH had its best year in 2019 with an annual return of 6.85%. VCSH’s worst year over the past decade yielded 0.91% and occurred in 2018. In most years the Vanguard Short-Term Corporate Bond Index Fund ETF Shares provided moderate returns such as in 2017, 2016, and 2011 where annual returns amounted to 2.45%, 2.63%, and 2.94% respectively.
The year 2019 was the strongest year for VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VCSH would have resulted in a final balance of $13,569. This is a profit of $3,569 over 10 years and amounts to a compound annual growth rate (CAGR) of 3.12%.
With a $10,000 investment in VT, the end total would have been $24,537. This equates to a $14,537 profit over 10 years and a compound annual growth rate (CAGR) of 10.42%.
VCSH’s CAGR is 7.30 percentage points lower than that of VT and as a result, would have yielded $10,968 less on a $10,000 investment. Thus, VCSH performed worse than VT by 7.30% annually.
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