The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Short-Term Bond Index Fund ETF Shares (BSV) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and BSV is a Vanguard Short-Term Bond fund. So, what’s the difference between VTV and BSV? And which fund is better?
The expense ratio of VTV is 0.01 percentage points lower than BSV’s (0.04% vs. 0.05%). VTV also has a high exposure to the financial services sector while BSV is mostly comprised of AAA bonds. Overall, VTV has provided higher returns than BSV over the past ten years.
In this article, we’ll compare VTV vs. BSV. We’ll look at portfolio growth and performance, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss VTV’s and BSV’s holdings, annual returns, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||Vanguard Short-Term Bond Index Fund ETF Shares|
|Category||Large Value||Short-Term Bond|
The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.
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%.
VTV’s dividend yield is 0.67% higher than that of BSV (2.15% vs. 1.48%). Also, VTV yielded on average 9.80% more per year over the past decade (12.07% vs. 2.27%). The expense ratio of VTV is 0.01 percentage points lower than BSV’s (0.04% vs. 0.05%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
|Berkshire Hathaway Inc Class B||2.98%|
|JPMorgan Chase & Co||2.82%|
|Johnson & Johnson||2.6%|
|UnitedHealth Group Inc||2.27%|
|Procter & Gamble Co||1.98%|
|Bank of America Corp||1.91%|
|Exxon Mobil Corp||1.6%|
|Comcast Corp Class A||1.57%|
|Verizon Communications Inc||1.32%|
VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.
Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.
|BSV Bond Sectors||Weight|
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.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
The Vanguard Value Index Fund ETF Shares (VTV) has a Treynor Ratio of 11.94 with a Standard Deviation of 13.78 and a Alpha of -1.92. Its Sharpe Ratio is 0.87 while VTV’s Mean Return is 1.05. Furthermore, the fund has a Beta of 0.98 and a R-squared of 92.61.
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Treynor Ratio of 3.33 with a Beta of 0.38 and a Mean Return of 0.16. Its Standard Deviation is 1.33 while BSV’s Sharpe Ratio is 0.98. Furthermore, the fund has a Alpha of 0.21 and a R-squared of 78.38.
VTV’s Mean Return is 0.89 points higher than that of BSV and its R-squared is 14.23 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than BSV. The Alpha and Beta of VTV are 2.13 points lower and 0.60 points higher than BSV’s Alpha and Beta.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VTV would have resulted in a final balance of $33,163. This is a profit of $23,163 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.07%.
With a $10,000 investment in BSV, the end total would have been $12,785. This equates to a $2,785 profit over 11 years and a compound annual growth rate (CAGR) of 2.27%.
VTV’s CAGR is 9.80 percentage points higher than that of BSV and as a result, would have yielded $20,378 more on a $10,000 investment. Thus, VTV outperformed BSV by 9.80% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.