The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. VO is a Vanguard Mid-Cap Blend fund and BNDX is a Vanguard N/A fund. So, what’s the difference between VO and BNDX? And which fund is better?
The expense ratio of VO is 0.04 percentage points lower than BNDX’s (0.04% vs. 0.08%). VO also has a high exposure to the technology sector while BNDX is mostly comprised of A bonds. Overall, VO has provided higher returns than BNDX over the past ten years.
In this article, we’ll compare VO vs. BNDX. We’ll look at performance and industry exposure, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss VO’s and BNDX’s fund composition, holdings, and annual returns and examine how these affect their overall returns.
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Summary
| VO | BNDX | |
| Name | Vanguard Mid-Cap Index Fund ETF Shares | Vanguard Total International Bond Index Fund ETF Shares |
| Category | Mid-Cap Blend | N/A |
| Issuer | Vanguard | Vanguard |
| AUM | 154.08B | 116.41B |
| Avg. Return | 14.34% | 4.63% |
| Div. Yield | 1.23% | 0.94% |
| Expense Ratio | 0.04% | 0.08% |
The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
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%.
VO’s dividend yield is 0.29% higher than that of BNDX (1.23% vs. 0.94%). Also, VO yielded on average 9.71% more per year over the past decade (14.34% vs. 4.63%). The expense ratio of VO is 0.04 percentage points lower than BNDX’s (0.04% vs. 0.08%).
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Fund Composition
Holdings
| VO Holdings | Weight |
| IDEXX Laboratories Inc | 0.78% |
| DocuSign Inc | 0.75% |
| Marvell Technology Inc | 0.68% |
| IQVIA Holdings Inc | 0.68% |
| Chipotle Mexican Grill Inc | 0.63% |
| Veeva Systems Inc Class A | 0.62% |
| Digital Realty Trust Inc | 0.62% |
| Centene Corp | 0.62% |
| Aptiv PLC | 0.62% |
| Carrier Global Corp Ordinary Shares | 0.61% |
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
| 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.
Risk Analysis
| VO | BNDX | |
| Mean Return | 1.14 | 0 |
| R-squared | 92.22 | 0 |
| Std. Deviation | 15.65 | 0 |
| Alpha | -2.71 | 0 |
| Beta | 1.11 | 0 |
| Sharpe Ratio | 0.83 | 0 |
| Treynor Ratio | 11.32 | 0 |
The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Standard Deviation of 15.65 with a R-squared of 92.22 and a Sharpe Ratio of 0.83. Its Treynor Ratio is 11.32 while VO’s Beta is 1.11. Furthermore, the fund has a Mean Return of 1.14 and a Alpha of -2.71.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Beta of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its R-squared is 0 while BNDX’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Treynor Ratio of 0.
VO’s Mean Return is 1.14 points higher than that of BNDX and its R-squared is 92.22 points higher. With a Standard Deviation of 15.65, VO is slightly more volatile than BNDX. The Alpha and Beta of VO are 2.71 points lower and 1.11 points higher than BNDX’s Alpha and Beta.
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Performance
Annual Returns
| Year | VO | BNDX |
| 2020 | 18.22% | 4.6% |
| 2019 | 31.04% | 7.88% |
| 2018 | -9.21% | 2.94% |
| 2017 | 19.25% | 2.4% |
| 2016 | 11.23% | 4.67% |
| 2015 | -1.34% | 1.08% |
| 2014 | 13.76% | 8.83% |
| 2013 | 35.15% | 0.0% |
| 2012 | 15.98% | 0.0% |
| 2011 | -1.96% | 0.0% |
| 2010 | 25.57% | 0.0% |
VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VO | $10,000 | $20,938 | 14.34% |
| BNDX | $10,000 | $13,695 | 4.63% |
A $10,000 investment in VO would have resulted in a final balance of $20,938. This is a profit of $10,938 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.34%.
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%.
VO’s CAGR is 9.71 percentage points higher than that of BNDX and as a result, would have yielded $7,243 more on a $10,000 investment. Thus, VO outperformed BNDX by 9.71% annually.
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