VIG vs. BNDX: What’s The Difference?

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

The expense ratio of VIG is 0.02 percentage points lower than BNDX’s (0.06% vs. 0.08%). VIG also has a high exposure to the industrials sector while BNDX is mostly comprised of A bonds. Overall, VIG has provided higher returns than BNDX over the past ten years.

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

Summary

VIG BNDX
Name Vanguard Dividend Appreciation Index Fund ETF Shares Vanguard Total International Bond Index Fund ETF Shares
Category Large Blend N/A
Issuer Vanguard Vanguard
AUM 71.92B 116.41B
Avg. Return 13.35% 4.63%
Div. Yield 1.56% 0.94%
Expense Ratio 0.06% 0.08%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.

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%.

VIG’s dividend yield is 0.62% higher than that of BNDX (1.56% vs. 0.94%). Also, VIG yielded on average 8.72% more per year over the past decade (13.35% vs. 4.63%). The expense ratio of VIG is 0.02 percentage points lower than BNDX’s (0.06% vs. 0.08%).

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Fund Composition

Holdings

VIG - Holdings

VIG Holdings Weight
Microsoft Corp 4.19%
JPMorgan Chase & Co 3.8%
Johnson & Johnson 3.67%
Walmart Inc 3.38%
Visa Inc Class A 3.22%
UnitedHealth Group Inc 3.22%
The Home Depot Inc 2.91%
Procter & Gamble Co 2.82%
Comcast Corp Class A 2.21%
Coca-Cola Co 1.98%

VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.

UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.

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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Risk Analysis

VIG BNDX
Mean Return 1.09 0
R-squared 92.2 0
Std. Deviation 12.25 0
Alpha 0.12 0
Beta 0.86 0
Sharpe Ratio 1.01 0
Treynor Ratio 14.33 0

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Sharpe Ratio of 1.01 with a Alpha of 0.12 and a R-squared of 92.2. Its Mean Return is 1.09 while VIG’s Beta is 0.86. Furthermore, the fund has a Treynor Ratio of 14.33 and a Standard Deviation of 12.25.

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

VIG’s Mean Return is 1.09 points higher than that of BNDX and its R-squared is 92.20 points higher. With a Standard Deviation of 12.25, VIG is slightly more volatile than BNDX. The Alpha and Beta of VIG are 0.12 points higher and 0.86 points higher than BNDX’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. BNDX - Annual Returns

Year VIG BNDX
2020 15.46% 4.6%
2019 29.71% 7.88%
2018 -2.02% 2.94%
2017 22.22% 2.4%
2016 11.84% 4.67%
2015 -1.95% 1.08%
2014 10.06% 8.83%
2013 28.99% 0.0%
2012 11.61% 0.0%
2011 6.21% 0.0%
2010 14.67% 0.0%

VIG had its best year in 2019 with an annual return of 29.71%. VIG’s worst year over the past decade yielded -2.02% and occurred in 2018. In most years the Vanguard Dividend Appreciation Index Fund ETF Shares provided moderate returns such as in 2012, 2016, and 2010 where annual returns amounted to 11.61%, 11.84%, and 14.67% 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

VIG vs. BNDX - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $21,645 13.35%
BNDX $10,000 $13,695 4.63%

A $10,000 investment in VIG would have resulted in a final balance of $21,645. This is a profit of $11,645 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

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%.

VIG’s CAGR is 8.72 percentage points higher than that of BNDX and as a result, would have yielded $7,950 more on a $10,000 investment. Thus, VIG outperformed BNDX by 8.72% annually.


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