The Vanguard S&P 500 ETF (VOO) and the Vanguard Short-Term Bond Index Fund ETF Shares (BSV) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and BSV is a Vanguard Short-Term Bond fund. So, what’s the difference between VOO and BSV? And which fund is better?

The expense ratio of VOO is 0.02 percentage points lower than BSV’s (0.03% vs. 0.05%). VOO also has a high exposure to the technology sector while BSV is mostly comprised of AAA bonds. Overall, VOO has provided higher returns than BSV over the past ten years.

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

Summary

VOOBSV
NameVanguard S&P 500 ETFVanguard Short-Term Bond Index Fund ETF Shares
CategoryLarge BlendShort-Term Bond
IssuerVanguardVanguard
AUM753.41B67.71B
Avg. Return14.45%2.27%
Div. Yield1.34%1.48%
Expense Ratio0.03%0.05%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.

VOO’s dividend yield is 0.14% lower than that of BSV (1.34% vs. 1.48%). Also, VOO yielded on average 12.18% more per year over the past decade (14.45% vs. 2.27%). The expense ratio of VOO is 0.02 percentage points lower than BSV’s (0.03% vs. 0.05%).

Fund Composition

Holdings

VOO - Holdings

VOO HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62%
Amazon.com Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

BSV - Holdings

BSV Bond SectorsWeight
AAA71.65%
BBB13.08%
A11.95%
AA3.28%
Others0.03%
Below B0.01%
B0.0%
BB0.0%
US Government0.0%

BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.

Performance

Annual Returns

VOO vs. BSV - Annual Returns

YearVOOBSV
202018.35%4.67%
201931.46%4.92%
2018-4.42%1.34%
201721.78%1.2%
201611.93%1.42%
20151.35%0.92%
201413.63%1.32%
201332.33%0.17%
201215.98%1.98%
20112.09%3.04%
20100.0%4.0%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.

The year 2019 was the strongest year for BSV, returning 4.92% on an annual basis. The poorest year for BSV in the last ten years was 2013, with a yield of 0.17%. Most years the Vanguard Short-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2018, 2016, and 2012, when gains were 1.34%, 1.42%, and 1.98% respectively.

Portfolio Growth

VOO vs. BSV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VOO$10,000$36,57514.45%
BSV$10,000$12,2942.27%

A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in BSV, the end total would have been $12,294. This equates to a $2,294 profit over 10 years and a compound annual growth rate (CAGR) of 2.27%.

VOO’s CAGR is 12.18 percentage points higher than that of BSV and as a result, would have yielded $24,281 more on a $10,000 investment. Thus, VOO outperformed BSV by 12.18% annually.

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