The Vanguard FTSE Europe Index Fund ETF Shares (VGK) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. VGK is a Vanguard Europe Stock fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between VGK and JPST? And which fund is better?
The expense ratio of VGK is 0.10 percentage points lower than JPST’s (0.08% vs. 0.18%). VGK also has a high exposure to the financial services sector while JPST is mostly comprised of A bonds. Overall, VGK has provided higher returns than JPST over the past 3 years.
In this article, we’ll compare VGK vs. JPST. We’ll look at fund composition and holdings, as well as at their performance and industry exposure. Moreover, I’ll also discuss VGK’s and JPST’s annual returns, risk metrics, and portfolio growth and examine how these affect their overall returns.
Summary
| VGK | JPST | |
| Name | Vanguard FTSE Europe Index Fund ETF Shares | JPMorgan Ultra-Short Income ETF |
| Category | Europe Stock | Ultrashort Bond |
| Issuer | Vanguard | JPMorgan |
| AUM | 25.7B | 17.32B |
| Avg. Return | 6.68% | 2.57% |
| Div. Yield | 2.52% | 0.94% |
| Expense Ratio | 0.08% | 0.18% |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% 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%.
VGK’s dividend yield is 1.58% higher than that of JPST (2.52% vs. 0.94%). Also, VGK yielded on average 4.11% more per year over the past decade (6.68% vs. 2.57%). The expense ratio of VGK is 0.10 percentage points lower than JPST’s (0.08% vs. 0.18%).
Fund Composition
Holdings
| VGK Holdings | Weight |
| Nestle SA | 2.82% |
| ASML Holding NV | 2.2% |
| Roche Holding AG | 2.13% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.58% |
| Novartis AG | 1.55% |
| AstraZeneca PLC | 1.27% |
| SAP SE | 1.25% |
| Unilever PLC | 1.23% |
| Novo Nordisk A/S B | 1.09% |
| Siemens AG | 0.96% |
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
| 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
| VGK | JPST | |
| Mean Return | 0.61 | 0 |
| R-squared | 92.76 | 0 |
| Std. Deviation | 16.65 | 0 |
| Alpha | 0.45 | 0 |
| Beta | 1.06 | 0 |
| Sharpe Ratio | 0.4 | 0 |
| Treynor Ratio | 5.12 | 0 |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Treynor Ratio of 5.12 with a Mean Return of 0.61 and a Alpha of 0.45. Its Standard Deviation is 16.65 while VGK’s Beta is 1.06. Furthermore, the fund has a R-squared of 92.76 and a Sharpe Ratio of 0.4.
The JPMorgan Ultra-Short Income ETF (JPST) has a R-squared of 0 with a Sharpe Ratio of 0 and a Mean Return of 0. Its Beta is 0 while JPST’s Treynor Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a Alpha of 0.
VGK’s Mean Return is 0.61 points higher than that of JPST and its R-squared is 92.76 points higher. With a Standard Deviation of 16.65, VGK is slightly more volatile than JPST. The Alpha and Beta of VGK are 0.45 points higher and 1.06 points higher than JPST’s Alpha and Beta.
Performance
Annual Returns
| Year | VGK | JPST |
| 2020 | 6.5% | 2.17% |
| 2019 | 24.26% | 3.36% |
| 2018 | -14.79% | 2.19% |
| 2017 | 27.06% | 0.0% |
| 2016 | -0.59% | 0.0% |
| 2015 | -1.87% | 0.0% |
| 2014 | -6.56% | 0.0% |
| 2013 | 24.93% | 0.0% |
| 2012 | 21.01% | 0.0% |
| 2011 | -11.49% | 0.0% |
| 2010 | 5.01% | 0.0% |
VGK had its best year in 2017 with an annual return of 27.06%. VGK’s worst year over the past decade yielded -14.79% and occurred in 2018. In most years the Vanguard FTSE Europe Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to -0.59%, 5.01%, and 6.5% 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 |
| VGK | $10,000 | $11,276 | 6.68% |
| JPST | $10,000 | $10,791 | 2.57% |
A $10,000 investment in VGK would have resulted in a final balance of $11,276. This is a profit of $1,276 over 3 years and amounts to a compound annual growth rate (CAGR) of 6.68%.
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%.
VGK’s CAGR is 4.11 percentage points higher than that of JPST and as a result, would have yielded $485 more on a $10,000 investment. Thus, VGK outperformed JPST by 4.11% annually.
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