VIG vs. JPST: What’s The Difference?

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

The expense ratio of VIG is 0.12 percentage points lower than JPST’s (0.06% vs. 0.18%). VIG also has a high exposure to the industrials sector while JPST is mostly comprised of A bonds. Overall, VIG has provided higher returns than JPST over the past ten years.

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

Summary

VIG JPST
Name Vanguard Dividend Appreciation Index Fund ETF Shares JPMorgan Ultra-Short Income ETF
Category Large Blend Ultrashort Bond
Issuer Vanguard JPMorgan
AUM 71.92B 17.32B
Avg. Return 13.35% 2.57%
Div. Yield 1.56% 0.94%
Expense Ratio 0.06% 0.18%

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 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%.

VIG’s dividend yield is 0.62% higher than that of JPST (1.56% vs. 0.94%). Also, VIG yielded on average 10.77% more per year over the past decade (13.35% vs. 2.57%). The expense ratio of VIG is 0.12 percentage points lower than JPST’s (0.06% vs. 0.18%).

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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%.

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

VIG JPST
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 Alpha of 0.12 with a Sharpe Ratio of 1.01 and a R-squared of 92.2. Its Beta is 0.86 while VIG’s Standard Deviation is 12.25. Furthermore, the fund has a Treynor Ratio of 14.33 and a Mean Return of 1.09.

The JPMorgan Ultra-Short Income ETF (JPST) has a Alpha of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Sharpe Ratio is 0 while JPST’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 JPST and its R-squared is 92.20 points higher. With a Standard Deviation of 12.25, VIG is slightly more volatile than JPST. The Alpha and Beta of VIG are 0.12 points higher and 0.86 points higher than JPST’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. JPST - Annual Returns

Year VIG JPST
2020 15.46% 2.17%
2019 29.71% 3.36%
2018 -2.02% 2.19%
2017 22.22% 0.0%
2016 11.84% 0.0%
2015 -1.95% 0.0%
2014 10.06% 0.0%
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 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

VIG vs. JPST - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $14,673 13.35%
JPST $10,000 $10,791 2.57%

A $10,000 investment in VIG would have resulted in a final balance of $14,673. This is a profit of $4,673 over 3 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

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%.

VIG’s CAGR is 10.77 percentage points higher than that of JPST and as a result, would have yielded $3,882 more on a $10,000 investment. Thus, VIG outperformed JPST by 10.77% annually.


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