VCSH vs. VV: What’s The Difference?

The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. VCSH is a Vanguard Short-Term Bond fund and VV is a Vanguard Large Blend fund. So, what’s the difference between VCSH and VV? And which fund is better?

The expense ratio of VCSH is 0.01 percentage points higher than VV’s (0.05% vs. 0.04%). VCSH is mostly comprised of BBB bonds while VV has a high exposure to the technology sector. Overall, VCSH has provided lower returns than VV over the past ten years.

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

Summary

VCSH VV
Name Vanguard Short-Term Corporate Bond Index Fund ETF Shares Vanguard Large-Cap Index Fund ETF Shares
Category Short-Term Bond Large Blend
Issuer Vanguard Vanguard
AUM 47.88B 37.65B
Avg. Return 3.12% 14.75%
Div. Yield 1.89% 1.26%
Expense Ratio 0.05% 0.04%

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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.

VCSH’s dividend yield is 0.63% higher than that of VV (1.89% vs. 1.26%). Also, VCSH yielded on average 11.63% less per year over the past decade (3.12% vs. 14.75%). The expense ratio of VCSH is 0.01 percentage points higher than VV’s (0.05% vs. 0.04%).

Fund Composition

Holdings

VCSH - Holdings

VCSH Bond Sectors Weight
BBB 47.49%
A 43.06%
AA 8.45%
AAA 0.95%
Below B 0.03%
Others 0.02%
B 0.0%
BB 0.0%
US Government 0.0%

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.

VV - Holdings

VV Holdings Weight
Apple Inc 5.7%
Microsoft Corp 5.35%
Amazon.com Inc 3.87%
Facebook Inc Class A 2.19%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.81%
Tesla Inc 1.37%
Berkshire Hathaway Inc Class B 1.3%
NVIDIA Corp 1.24%
JPMorgan Chase & Co 1.24%

VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.

Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.

Risk Analysis

VCSH VV
Mean Return 0.24 1.24
R-squared 37.53 99.86
Std. Deviation 2.34 13.75
Alpha 0.93 -0.08
Beta 0.48 1.01
Sharpe Ratio 0.97 1.04
Treynor Ratio 4.75 14.14

The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) has a Mean Return of 0.24 with a Beta of 0.48 and a Standard Deviation of 2.34. Its Treynor Ratio is 4.75 while VCSH’s Sharpe Ratio is 0.97. Furthermore, the fund has a Alpha of 0.93 and a R-squared of 37.53.

The Vanguard Large-Cap Index Fund ETF Shares (VV) has a R-squared of 99.86 with a Treynor Ratio of 14.14 and a Alpha of -0.08. Its Mean Return is 1.24 while VV’s Beta is 1.01. Furthermore, the fund has a Sharpe Ratio of 1.04 and a Standard Deviation of 13.75.

VCSH’s Mean Return is 1.00 points lower than that of VV and its R-squared is 62.33 points lower. With a Standard Deviation of 2.34, VCSH is slightly less volatile than VV. The Alpha and Beta of VCSH are 1.01 points higher and 0.53 points lower than VV’s Alpha and Beta.

Performance

Annual Returns

VCSH vs. VV - Annual Returns

Year VCSH VV
2020 5.08% 20.99%
2019 6.85% 31.39%
2018 0.91% -4.44%
2017 2.45% 22.03%
2016 2.63% 11.65%
2015 1.25% 1.07%
2014 1.96% 13.39%
2013 1.37% 32.65%
2012 5.74% 16.09%
2011 2.94% 1.58%
2010 5.51% 15.81%

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 2013 was the strongest year for VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% respectively.

Portfolio Growth

VCSH vs. VV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VCSH $10,000 $13,569 3.12%
VV $10,000 $37,103 14.75%

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 VV, the end total would have been $37,103. This equates to a $27,103 profit over 10 years and a compound annual growth rate (CAGR) of 14.75%.

VCSH’s CAGR is 11.63 percentage points lower than that of VV and as a result, would have yielded $23,534 less on a $10,000 investment. Thus, VCSH performed worse than VV by 11.63% annually.


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