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VTV vs. VCSH: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VCSH is a Vanguard Short-Term Bond fund. So, what’s the difference between VTV and VCSH? And which fund is better?

The expense ratio of VTV is 0.01 percentage points lower than VCSH’s (0.04% vs. 0.05%). VTV also has a high exposure to the financial services sector while VCSH is mostly comprised of BBB bonds. Overall, VTV has provided higher returns than VCSH over the past ten years.

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

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Summary

VTVVCSH
NameVanguard Value Index Fund ETF SharesVanguard Short-Term Corporate Bond Index Fund ETF Shares
CategoryLarge ValueShort-Term Bond
IssuerVanguardVanguard
AUM125.77B47.88B
Avg. Return12.07%3.12%
Div. Yield2.15%1.89%
Expense Ratio0.04%0.05%

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 Corporate Bond Index Fund ETF Shares (VCSH) is a Short-Term Bond fund that is issued by Vanguard. It currently has 47.88B total assets under management and has yielded an average annual return of 3.12% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.05%.

VTV’s dividend yield is 0.26% higher than that of VCSH (2.15% vs. 1.89%). Also, VTV yielded on average 8.96% more per year over the past decade (12.07% vs. 3.12%). The expense ratio of VTV is 0.01 percentage points lower than VCSH’s (0.04% vs. 0.05%).

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Fund Composition

Holdings

VTV - Holdings

VTV HoldingsWeight
Berkshire Hathaway Inc Class B2.98%
JPMorgan Chase & Co2.82%
Johnson & Johnson2.6%
UnitedHealth Group Inc2.27%
Procter & Gamble Co1.98%
Bank of America Corp1.91%
Exxon Mobil Corp1.6%
Comcast Corp Class A1.57%
Intel Corp1.36%
Verizon Communications Inc1.32%

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%.

VCSH - Holdings

VCSH Bond SectorsWeight
BBB47.49%
A43.06%
AA8.45%
AAA0.95%
Below B0.03%
Others0.02%
B0.0%
BB0.0%
US Government0.0%

VCSH’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 47.49%, 43.06%, 8.45%, 0.95%, and 0.03%. The fund is less weighted towards Others (0.02%), B (0.0%), and BB (0.0%) rated bonds.

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Risk Analysis

VTVVCSH
Mean Return1.050.24
R-squared92.6137.53
Std. Deviation13.782.34
Alpha-1.920.93
Beta0.980.48
Sharpe Ratio0.870.97
Treynor Ratio11.944.75

The Vanguard Value Index Fund ETF Shares (VTV) has a Standard Deviation of 13.78 with a Mean Return of 1.05 and a Treynor Ratio of 11.94. Its Beta is 0.98 while VTV’s Sharpe Ratio is 0.87. Furthermore, the fund has a R-squared of 92.61 and a Alpha of -1.92.

The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) has a Standard Deviation of 2.34 with a Alpha of 0.93 and a Sharpe Ratio of 0.97. Its Treynor Ratio is 4.75 while VCSH’s Beta is 0.48. Furthermore, the fund has a R-squared of 37.53 and a Mean Return of 0.24.

VTV’s Mean Return is 0.81 points higher than that of VCSH and its R-squared is 55.08 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than VCSH. The Alpha and Beta of VTV are 2.85 points lower and 0.50 points higher than VCSH’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. VCSH - Annual Returns

YearVTVVCSH
20202.23%5.08%
201925.85%6.85%
2018-5.39%0.91%
201717.12%2.45%
201616.88%2.63%
2015-0.89%1.25%
201413.19%1.96%
201333.03%1.37%
201215.19%5.74%
20111.16%2.94%
201014.45%5.51%

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 VCSH, returning 6.85% on an annual basis. The poorest year for VCSH in the last ten years was 2018, with a yield of 0.91%. Most years the Vanguard Short-Term Corporate Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2016, and 2011, when gains were 2.45%, 2.63%, and 2.94% respectively.

Portfolio Growth

VTV vs. VCSH - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTV$10,000$28,97612.07%
VCSH$10,000$13,5693.12%

A $10,000 investment in VTV would have resulted in a final balance of $28,976. This is a profit of $18,976 over 10 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

With a $10,000 investment in VCSH, the end total would have been $13,569. This equates to a $3,569 profit over 10 years and a compound annual growth rate (CAGR) of 3.12%.

VTV’s CAGR is 8.96 percentage points higher than that of VCSH and as a result, would have yielded $15,407 more on a $10,000 investment. Thus, VTV outperformed VCSH by 8.96% annually.


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