The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. VEU is a Vanguard Foreign Large Blend fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between VEU and JPST? And which fund is better?
The expense ratio of VEU is 0.10 percentage points lower than JPST’s (0.08% vs. 0.18%). VEU also has a high exposure to the financial services sector while JPST is mostly comprised of A bonds. Overall, VEU has provided higher returns than JPST over the past ten years.
In this article, we’ll compare VEU vs. JPST. We’ll look at annual returns and performance, as well as at their holdings and risk metrics. Moreover, I’ll also discuss VEU’s and JPST’s portfolio growth, fund composition, and industry exposure and examine how these affect their overall returns.
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Summary
| VEU | JPST | |
| Name | Vanguard FTSE All-World ex-US Index Fund ETF Shares | JPMorgan Ultra-Short Income ETF |
| Category | Foreign Large Blend | Ultrashort Bond |
| Issuer | Vanguard | JPMorgan |
| AUM | 53.64B | 17.32B |
| Avg. Return | 6.64% | 2.57% |
| Div. Yield | 2.31% | 0.94% |
| Expense Ratio | 0.08% | 0.18% |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 53.64B total assets under management and has yielded an average annual return of 6.64% over the past 10 years. The fund has a dividend yield of 2.31% with an expense ratio of 0.08%.
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%.
VEU’s dividend yield is 1.37% higher than that of JPST (2.31% vs. 0.94%). Also, VEU yielded on average 4.06% more per year over the past decade (6.64% vs. 2.57%). The expense ratio of VEU is 0.10 percentage points lower than JPST’s (0.08% vs. 0.18%).
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Fund Composition
Holdings
| VEU Holdings | Weight |
| Tencent Holdings Ltd | 1.57% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.4% |
| Nestle SA | 1.22% |
| Taiwan Semiconductor Manufacturing Co Ltd | 0.98% |
| ASML Holding NV | 0.95% |
| Taiwan Semiconductor Manufacturing Co Ltd ADR | 0.91% |
| Roche Holding AG | 0.91% |
| Toyota Motor Corp | 0.75% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.68% |
| Novartis AG | 0.67% |
VEU’s Top Holdings are Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, Taiwan Semiconductor Manufacturing Co Ltd, and ASML Holding NV at 1.57%, 1.4%, 1.22%, 0.98%, and 0.95%.
Taiwan Semiconductor Manufacturing Co Ltd ADR (0.91%), Roche Holding AG (0.91%), and Toyota Motor Corp (0.75%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VEU’s holdings at 0.68% and 0.67%.
| 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
| VEU | JPST | |
| Mean Return | 0.56 | 0 |
| R-squared | 98.44 | 0 |
| Std. Deviation | 15.08 | 0 |
| Alpha | 0.28 | 0 |
| Beta | 0.99 | 0 |
| Sharpe Ratio | 0.4 | 0 |
| Treynor Ratio | 5.12 | 0 |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has a Treynor Ratio of 5.12 with a Sharpe Ratio of 0.4 and a Beta of 0.99. Its Standard Deviation is 15.08 while VEU’s R-squared is 98.44. Furthermore, the fund has a Mean Return of 0.56 and a Alpha of 0.28.
The JPMorgan Ultra-Short Income ETF (JPST) has a Beta of 0 with a Treynor Ratio of 0 and a Mean Return of 0. Its Sharpe Ratio is 0 while JPST’s Standard Deviation is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.
VEU’s Mean Return is 0.56 points higher than that of JPST and its R-squared is 98.44 points higher. With a Standard Deviation of 15.08, VEU is slightly more volatile than JPST. The Alpha and Beta of VEU are 0.28 points higher and 0.99 points higher than JPST’s Alpha and Beta.
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Performance
Annual Returns
| Year | VEU | JPST |
| 2020 | 11.39% | 2.17% |
| 2019 | 21.63% | 3.36% |
| 2018 | -13.97% | 2.19% |
| 2017 | 27.27% | 0.0% |
| 2016 | 4.77% | 0.0% |
| 2015 | -4.67% | 0.0% |
| 2014 | -4.05% | 0.0% |
| 2013 | 14.5% | 0.0% |
| 2012 | 18.55% | 0.0% |
| 2011 | -14.25% | 0.0% |
| 2010 | 11.85% | 0.0% |
VEU had its best year in 2017 with an annual return of 27.27%. VEU’s worst year over the past decade yielded -14.25% and occurred in 2011. In most years the Vanguard FTSE All-World ex-US Index Fund ETF Shares provided moderate returns such as in 2016, 2020, and 2010 where annual returns amounted to 4.77%, 11.39%, and 11.85% 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 |
| VEU | $10,000 | $11,655 | 6.64% |
| JPST | $10,000 | $10,791 | 2.57% |
A $10,000 investment in VEU would have resulted in a final balance of $11,655. This is a profit of $1,655 over 3 years and amounts to a compound annual growth rate (CAGR) of 6.64%.
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%.
VEU’s CAGR is 4.06 percentage points higher than that of JPST and as a result, would have yielded $864 more on a $10,000 investment. Thus, VEU outperformed JPST by 4.06% annually.
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