The Vanguard Real Estate Index Fund ETF Shares (VNQ) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. VNQ is a Vanguard Real Estate fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between VNQ and JPST? And which fund is better?
The expense ratio of VNQ is 0.06 percentage points lower than JPST’s (0.12% vs. 0.18%). VNQ also has a high exposure to the real estate sector while JPST is mostly comprised of A bonds. Overall, VNQ has provided higher returns than JPST over the past ten years.
In this article, we’ll compare VNQ vs. JPST. We’ll look at holdings and risk metrics, as well as at their fund composition and annual returns. Moreover, I’ll also discuss VNQ’s and JPST’s performance, portfolio growth, and industry exposure and examine how these affect their overall returns.
Summary
| VNQ | JPST | |
| Name | Vanguard Real Estate Index Fund ETF Shares | JPMorgan Ultra-Short Income ETF |
| Category | Real Estate | Ultrashort Bond |
| Issuer | Vanguard | JPMorgan |
| AUM | 77.34B | 17.32B |
| Avg. Return | 11.05% | 2.57% |
| Div. Yield | 2.34% | 0.94% |
| Expense Ratio | 0.12% | 0.18% |
The Vanguard Real Estate Index Fund ETF Shares (VNQ) is a Real Estate fund that is issued by Vanguard. It currently has 77.34B total assets under management and has yielded an average annual return of 11.05% over the past 10 years. The fund has a dividend yield of 2.34% with an expense ratio of 0.12%.
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%.
VNQ’s dividend yield is 1.40% higher than that of JPST (2.34% vs. 0.94%). Also, VNQ yielded on average 8.47% more per year over the past decade (11.05% vs. 2.57%). The expense ratio of VNQ is 0.06 percentage points lower than JPST’s (0.12% vs. 0.18%).
Fund Composition
Holdings
| VNQ Holdings | Weight |
| Vanguard Real Estate II Index | 11.62% |
| American Tower Corp | 7.24% |
| Prologis Inc | 5.33% |
| Crown Castle International Corp | 5.01% |
| Equinix Inc | 4.3% |
| Public Storage | 2.85% |
| Simon Property Group Inc | 2.52% |
| Digital Realty Trust Inc | 2.49% |
| SBA Communications Corp | 2.1% |
| Welltower Inc | 2.09% |
VNQ’s Top Holdings are Vanguard Real Estate II Index, American Tower Corp, Prologis Inc, Crown Castle International Corp, and Equinix Inc at 11.62%, 7.24%, 5.33%, 5.01%, and 4.3%.
Public Storage (2.85%), Simon Property Group Inc (2.52%), and Digital Realty Trust Inc (2.49%) have a slightly smaller but still significant weight. SBA Communications Corp and Welltower Inc are also represented in the VNQ’s holdings at 2.1% and 2.09%.
| 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
| VNQ | JPST | |
| Mean Return | 0.89 | 0 |
| R-squared | 44.4 | 0 |
| Std. Deviation | 16.13 | 0 |
| Alpha | 2.47 | 0 |
| Beta | 0.76 | 0 |
| Sharpe Ratio | 0.62 | 0 |
| Treynor Ratio | 11.9 | 0 |
The Vanguard Real Estate Index Fund ETF Shares (VNQ) has a Standard Deviation of 16.13 with a Beta of 0.76 and a Alpha of 2.47. Its Mean Return is 0.89 while VNQ’s Treynor Ratio is 11.9. Furthermore, the fund has a R-squared of 44.4 and a Sharpe Ratio of 0.62.
The JPMorgan Ultra-Short Income ETF (JPST) has a R-squared of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its Alpha is 0 while JPST’s Treynor Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a Beta of 0.
VNQ’s Mean Return is 0.89 points higher than that of JPST and its R-squared is 44.40 points higher. With a Standard Deviation of 16.13, VNQ is slightly more volatile than JPST. The Alpha and Beta of VNQ are 2.47 points higher and 0.76 points higher than JPST’s Alpha and Beta.
Performance
Annual Returns
| Year | VNQ | JPST |
| 2020 | -4.72% | 2.17% |
| 2019 | 28.91% | 3.36% |
| 2018 | -5.95% | 2.19% |
| 2017 | 4.95% | 0.0% |
| 2016 | 8.53% | 0.0% |
| 2015 | 2.37% | 0.0% |
| 2014 | 30.29% | 0.0% |
| 2013 | 2.42% | 0.0% |
| 2012 | 17.67% | 0.0% |
| 2011 | 8.62% | 0.0% |
| 2010 | 28.44% | 0.0% |
VNQ had its best year in 2014 with an annual return of 30.29%. VNQ’s worst year over the past decade yielded -5.95% and occurred in 2018. In most years the Vanguard Real Estate Index Fund ETF Shares provided moderate returns such as in 2017, 2016, and 2011 where annual returns amounted to 4.95%, 8.53%, and 8.62% 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 |
| VNQ | $10,000 | $11,551 | 11.05% |
| JPST | $10,000 | $10,791 | 2.57% |
A $10,000 investment in VNQ would have resulted in a final balance of $11,551. This is a profit of $1,551 over 3 years and amounts to a compound annual growth rate (CAGR) of 11.05%.
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%.
VNQ’s CAGR is 8.47 percentage points higher than that of JPST and as a result, would have yielded $760 more on a $10,000 investment. Thus, VNQ outperformed JPST by 8.47% annually.
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