VGT vs. JPST: What’s The Difference?

The Vanguard Information Technology Index Fund ETF Shares (VGT) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between VGT and JPST? And which fund is better?

The expense ratio of VGT is 0.08 percentage points lower than JPST’s (0.1% vs. 0.18%). VGT also has a high exposure to the technology sector while JPST is mostly comprised of A bonds. Overall, VGT has provided higher returns than JPST over the past ten years.

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

Summary

VGT JPST
Name Vanguard Information Technology Index Fund ETF Shares JPMorgan Ultra-Short Income ETF
Category Technology Ultrashort Bond
Issuer Vanguard JPMorgan
AUM 54.13B 17.32B
Avg. Return 20.84% 2.57%
Div. Yield 0.66% 0.94%
Expense Ratio 0.1% 0.18%

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 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%.

VGT’s dividend yield is 0.28% lower than that of JPST (0.66% vs. 0.94%). Also, VGT yielded on average 18.26% more per year over the past decade (20.84% vs. 2.57%). The expense ratio of VGT is 0.08 percentage points lower than JPST’s (0.1% vs. 0.18%).

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Fund Composition

Holdings

VGT - Holdings

VGT Holdings Weight
Apple Inc 19.58%
Microsoft Corp 16.53%
NVIDIA Corp 4.22%
Visa Inc Class A 3.16%
PayPal Holdings Inc 2.76%
Mastercard Inc Class A 2.76%
Adobe Inc 2.39%
Intel Corp 1.94%
Salesforce.com Inc 1.91%
Cisco Systems Inc 1.9%

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%.

JPST - Holdings

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.

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Risk Analysis

VGT JPST
Mean Return 1.76 0
R-squared 74.84 0
Std. Deviation 16.61 0
Alpha 10.41 0
Beta 1.02 0
Sharpe Ratio 1.23 0
Treynor Ratio 20.55 0

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

The JPMorgan Ultra-Short Income ETF (JPST) has a Treynor Ratio of 0 with a R-squared of 0 and a Alpha of 0. Its Mean Return is 0 while JPST’s Standard Deviation is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.

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

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Performance

Annual Returns

VGT vs. JPST - Annual Returns

Year VGT JPST
2020 45.94% 2.17%
2019 48.68% 3.36%
2018 2.52% 2.19%
2017 37.07% 0.0%
2016 13.73% 0.0%
2015 5.02% 0.0%
2014 18.01% 0.0%
2013 30.91% 0.0%
2012 14.05% 0.0%
2011 0.52% 0.0%
2010 12.74% 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 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

VGT vs. JPST - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VGT $10,000 $22,245 20.84%
JPST $10,000 $10,791 2.57%

A $10,000 investment in VGT would have resulted in a final balance of $22,245. This is a profit of $12,245 over 3 years and amounts to a compound annual growth rate (CAGR) of 20.84%.

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%.

VGT’s CAGR is 18.26 percentage points higher than that of JPST and as a result, would have yielded $11,454 more on a $10,000 investment. Thus, VGT outperformed JPST by 18.26% annually.


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