The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and BNDX is a Vanguard N/A fund. So, what’s the difference between VTI and BNDX? And which fund is better?
The expense ratio of VTI is 0.05 percentage points lower than BNDX’s (0.03% vs. 0.08%). VTI also has a high exposure to the technology sector while BNDX is mostly comprised of A bonds. Overall, VTI has provided higher returns than BNDX over the past ten years.
In this article, we’ll compare VTI vs. BNDX. We’ll look at holdings and industry exposure, as well as at their annual returns and fund composition. Moreover, I’ll also discuss VTI’s and BNDX’s risk metrics, portfolio growth, and performance and examine how these affect their overall returns.
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Summary
| VTI | BNDX | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Vanguard Total International Bond Index Fund ETF Shares |
| Category | Large Blend | N/A |
| Issuer | Vanguard | Vanguard |
| AUM | 1.26T | 116.41B |
| Avg. Return | 14.70% | 4.63% |
| Div. Yield | 1.26% | 0.94% |
| Expense Ratio | 0.03% | 0.08% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.03%.
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%.
VTI’s dividend yield is 0.32% higher than that of BNDX (1.26% vs. 0.94%). Also, VTI yielded on average 10.07% more per year over the past decade (14.70% vs. 4.63%). The expense ratio of VTI is 0.05 percentage points lower than BNDX’s (0.03% vs. 0.08%).
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Fund Composition
Holdings
| VTI Holdings | Weight |
| Apple Inc | 4.9% |
| Microsoft Corp | 4.6% |
| Amazon.com Inc | 3.33% |
| Facebook Inc Class A | 1.88% |
| Alphabet Inc Class A | 1.66% |
| Alphabet Inc Class C | 1.56% |
| Tesla Inc | 1.18% |
| Berkshire Hathaway Inc Class B | 1.09% |
| NVIDIA Corp | 1.07% |
| JPMorgan Chase & Co | 1.06% |
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
| 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.
Performance
Annual Returns
| Year | VTI | BNDX |
| 2020 | 20.95% | 4.6% |
| 2019 | 30.8% | 7.88% |
| 2018 | -5.13% | 2.94% |
| 2017 | 21.16% | 2.4% |
| 2016 | 12.68% | 4.67% |
| 2015 | 0.4% | 1.08% |
| 2014 | 12.56% | 8.83% |
| 2013 | 33.51% | 0.0% |
| 2012 | 16.41% | 0.0% |
| 2011 | 1.06% | 0.0% |
| 2010 | 17.26% | 0.0% |
VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% 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 |
| VTI | $10,000 | $23,156 | 14.70% |
| BNDX | $10,000 | $13,695 | 4.63% |
A $10,000 investment in VTI would have resulted in a final balance of $23,156. This is a profit of $13,156 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
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%.
VTI’s CAGR is 10.07 percentage points higher than that of BNDX and as a result, would have yielded $9,461 more on a $10,000 investment. Thus, VTI outperformed BNDX by 10.07% annually.
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