VEA vs. BNDX: What’s The Difference?

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. VEA is a Vanguard Foreign Large Blend fund and BNDX is a Vanguard N/A fund. So, what’s the difference between VEA and BNDX? And which fund is better?

The expense ratio of VEA is 0.03 percentage points lower than BNDX’s (0.05% vs. 0.08%). VEA also has a high exposure to the financial services sector while BNDX is mostly comprised of A bonds. Overall, VEA has provided higher returns than BNDX over the past ten years.

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

Summary

VEA BNDX
Name Vanguard FTSE Developed Markets Index Fund ETF Shares Vanguard Total International Bond Index Fund ETF Shares
Category Foreign Large Blend N/A
Issuer Vanguard Vanguard
AUM 157.48B 116.41B
Avg. Return 7.05% 4.63%
Div. Yield 2.49% 0.94%
Expense Ratio 0.05% 0.08%

The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 157.48B total assets under management and has yielded an average annual return of 7.05% over the past 10 years. The fund has a dividend yield of 2.49% with an expense ratio of 0.05%.

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) is a N/A fund that is issued by Vanguard. It currently has 116.41B total assets under management and has yielded an average annual return of 4.63% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.08%.

VEA’s dividend yield is 1.55% higher than that of BNDX (2.49% vs. 0.94%). Also, VEA yielded on average 2.42% more per year over the past decade (7.05% vs. 4.63%). The expense ratio of VEA is 0.03 percentage points lower than BNDX’s (0.05% vs. 0.08%).

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Fund Composition

Holdings

VEA - Holdings

VEA Holdings Weight
Nestle SA 1.5%
Samsung Electronics Co Ltd 1.4%
ASML Holding NV 1.16%
Roche Holding AG 1.1%
Toyota Motor Corp 0.92%
LVMH Moet Hennessy Louis Vuitton SE 0.84%
Novartis AG 0.82%
Shopify Inc A 0.7%
AstraZeneca PLC 0.67%
SAP SE 0.66%

VEA’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.5%, 1.4%, 1.16%, 1.1%, and 0.92%.

LVMH Moet Hennessy Louis Vuitton SE (0.84%), Novartis AG (0.82%), and Shopify Inc A (0.7%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the VEA’s holdings at 0.67% and 0.66%.

BNDX - Holdings

BNDX Bond Sectors Weight
A 29.19%
AA 26.79%
AAA 21.59%
BBB 19.41%
Others 1.57%
Below B 1.45%
B 0.0%
BB 0.0%
US Government 0.0%

BNDX’s Top Bond Sectors are ratings of A, AA, AAA, BBB, and Others at 29.19%, 26.79%, 21.59%, 19.41%, and 1.57%. The fund is less weighted towards Below B (1.45%), B (0.0%), and BB (0.0%) rated bonds.

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Performance

Annual Returns

VEA vs. BNDX - Annual Returns

Year VEA BNDX
2020 10.29% 4.6%
2019 22.08% 7.88%
2018 -14.47% 2.94%
2017 26.44% 2.4%
2016 2.51% 4.67%
2015 -0.21% 1.08%
2014 -5.71% 8.83%
2013 22.12% 0.0%
2012 18.6% 0.0%
2011 -12.57% 0.0%
2010 8.47% 0.0%

VEA had its best year in 2017 with an annual return of 26.44%. VEA’s worst year over the past decade yielded -14.47% and occurred in 2018. In most years the Vanguard FTSE Developed Markets Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.51%, 8.47%, and 10.29% respectively.

The year 2014 was the strongest year for BNDX, returning 8.83% on an annual basis. The poorest year for BNDX in the last ten years was 2013, with a yield of 0.0%. Most years the Vanguard Total International Bond Index Fund ETF Shares has given investors modest returns, such as in 2015, 2017, and 2018, when gains were 1.08%, 2.4%, and 2.94% respectively.

Portfolio Growth

VEA vs. BNDX - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VEA $10,000 $14,044 7.05%
BNDX $10,000 $13,695 4.63%

A $10,000 investment in VEA would have resulted in a final balance of $14,044. This is a profit of $4,044 over 7 years and amounts to a compound annual growth rate (CAGR) of 7.05%.

With a $10,000 investment in BNDX, the end total would have been $13,695. This equates to a $3,695 profit over 7 years and a compound annual growth rate (CAGR) of 4.63%.

VEA’s CAGR is 2.42 percentage points higher than that of BNDX and as a result, would have yielded $349 more on a $10,000 investment. Thus, VEA outperformed BNDX by 2.42% annually.


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