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VGT vs. BNDX: What’s The Difference?

The Vanguard Information Technology Index Fund ETF Shares (VGT) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and BNDX is a Vanguard N/A fund. So, what’s the difference between VGT and BNDX? And which fund is better?

The expense ratio of VGT is 0.02 percentage points higher than BNDX’s (0.1% vs. 0.08%). VGT also has a high exposure to the technology sector while BNDX is mostly comprised of A bonds. Overall, VGT has provided higher returns than BNDX over the past ten years.

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

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Summary

VGTBNDX
NameVanguard Information Technology Index Fund ETF SharesVanguard Total International Bond Index Fund ETF Shares
CategoryTechnologyN/A
IssuerVanguardVanguard
AUM54.13B116.41B
Avg. Return20.84%4.63%
Div. Yield0.66%0.94%
Expense Ratio0.1%0.08%

The Vanguard Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.

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%.

VGT’s dividend yield is 0.28% lower than that of BNDX (0.66% vs. 0.94%). Also, VGT yielded on average 16.21% more per year over the past decade (20.84% vs. 4.63%). The expense ratio of VGT is 0.02 percentage points higher than BNDX’s (0.1% vs. 0.08%).

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Fund Composition

Holdings

VGT - Holdings

VGT HoldingsWeight
Apple Inc19.58%
Microsoft Corp16.53%
NVIDIA Corp4.22%
Visa Inc Class A3.16%
PayPal Holdings Inc2.76%
Mastercard Inc Class A2.76%
Adobe Inc2.39%
Intel Corp1.94%
Salesforce.com Inc1.91%
Cisco Systems Inc1.9%

VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.

Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

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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Risk Analysis

VGTBNDX
Mean Return1.760
R-squared74.840
Std. Deviation16.610
Alpha10.410
Beta1.020
Sharpe Ratio1.230
Treynor Ratio20.550

The Vanguard Information Technology Index Fund ETF Shares (VGT) has a R-squared of 74.84 with a Beta of 1.02 and a Alpha of 10.41. Its Sharpe Ratio is 1.23 while VGT’s Standard Deviation is 16.61. Furthermore, the fund has a Mean Return of 1.76 and a Treynor Ratio of 20.55.

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Treynor Ratio of 0 with a Standard Deviation of 0 and a Beta of 0. Its Alpha is 0 while BNDX’s R-squared is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Mean Return of 0.

VGT’s Mean Return is 1.76 points higher than that of BNDX and its R-squared is 74.84 points higher. With a Standard Deviation of 16.61, VGT is slightly more volatile than BNDX. The Alpha and Beta of VGT are 10.41 points higher and 1.02 points higher than BNDX’s Alpha and Beta.

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Performance

Annual Returns

VGT vs. BNDX - Annual Returns

YearVGTBNDX
202045.94%4.6%
201948.68%7.88%
20182.52%2.94%
201737.07%2.4%
201613.73%4.67%
20155.02%1.08%
201418.01%8.83%
201330.91%0.0%
201214.05%0.0%
20110.52%0.0%
201012.74%0.0%

VGT had its best year in 2019 with an annual return of 48.68%. VGT’s worst year over the past decade yielded 0.52% and occurred in 2011. In most years the Vanguard Information Technology Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2014 where annual returns amounted to 13.73%, 14.05%, and 18.01% 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

VGT vs. BNDX - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VGT$10,000$42,97720.84%
BNDX$10,000$13,6954.63%

A $10,000 investment in VGT would have resulted in a final balance of $42,977. This is a profit of $32,977 over 7 years and amounts to a compound annual growth rate (CAGR) of 20.84%.

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%.

VGT’s CAGR is 16.21 percentage points higher than that of BNDX and as a result, would have yielded $29,282 more on a $10,000 investment. Thus, VGT outperformed BNDX by 16.21% annually.


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