The Vanguard Growth Index Fund ETF Shares (VUG) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and BNDX is a Vanguard N/A fund. So, what’s the difference between VUG and BNDX? And which fund is better?
The expense ratio of VUG is 0.04 percentage points lower than BNDX’s (0.04% vs. 0.08%). VUG also has a high exposure to the technology sector while BNDX is mostly comprised of A bonds. Overall, VUG has provided higher returns than BNDX over the past ten years.
In this article, we’ll compare VUG vs. BNDX. We’ll look at performance and portfolio growth, as well as at their holdings and fund composition. Moreover, I’ll also discuss VUG’s and BNDX’s industry exposure, risk metrics, and annual returns and examine how these affect their overall returns.
Summary
| VUG | BNDX | |
| Name | Vanguard Growth Index Fund ETF Shares | Vanguard Total International Bond Index Fund ETF Shares |
| Category | Large Growth | N/A |
| Issuer | Vanguard | Vanguard |
| AUM | 165.53B | 116.41B |
| Avg. Return | 17.58% | 4.63% |
| Div. Yield | 0.57% | 0.94% |
| Expense Ratio | 0.04% | 0.08% |
The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% 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%.
VUG’s dividend yield is 0.37% lower than that of BNDX (0.57% vs. 0.94%). Also, VUG yielded on average 12.95% more per year over the past decade (17.58% vs. 4.63%). The expense ratio of VUG is 0.04 percentage points lower than BNDX’s (0.04% vs. 0.08%).
Fund Composition
Holdings
| VUG Holdings | Weight |
| Apple Inc | 10.13% |
| Microsoft Corp | 9.52% |
| Amazon.com Inc | 6.88% |
| Facebook Inc Class A | 3.89% |
| Alphabet Inc Class A | 3.43% |
| Alphabet Inc Class C | 3.22% |
| Tesla Inc | 2.44% |
| NVIDIA Corp | 2.21% |
| Visa Inc Class A | 1.78% |
| PayPal Holdings Inc | 1.6% |
VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.
Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.
| 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
| VUG | BNDX | |
| Mean Return | 1.44 | 0 |
| R-squared | 92.48 | 0 |
| Std. Deviation | 14.76 | 0 |
| Alpha | 1.81 | 0 |
| Beta | 1.04 | 0 |
| Sharpe Ratio | 1.13 | 0 |
| Treynor Ratio | 16.13 | 0 |
The Vanguard Growth Index Fund ETF Shares (VUG) has a Sharpe Ratio of 1.13 with a Beta of 1.04 and a Mean Return of 1.44. Its R-squared is 92.48 while VUG’s Treynor Ratio is 16.13. Furthermore, the fund has a Alpha of 1.81 and a Standard Deviation of 14.76.
The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Treynor Ratio of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while BNDX’s Beta is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.
VUG’s Mean Return is 1.44 points higher than that of BNDX and its R-squared is 92.48 points higher. With a Standard Deviation of 14.76, VUG is slightly more volatile than BNDX. The Alpha and Beta of VUG are 1.81 points higher and 1.04 points higher than BNDX’s Alpha and Beta.
Performance
Annual Returns
| Year | VUG | BNDX |
| 2020 | 40.16% | 4.6% |
| 2019 | 37.26% | 7.88% |
| 2018 | -3.32% | 2.94% |
| 2017 | 27.8% | 2.4% |
| 2016 | 6.13% | 4.67% |
| 2015 | 3.32% | 1.08% |
| 2014 | 13.62% | 8.83% |
| 2013 | 32.38% | 0.0% |
| 2012 | 17.03% | 0.0% |
| 2011 | 1.87% | 0.0% |
| 2010 | 17.11% | 0.0% |
VUG had its best year in 2020 with an annual return of 40.16%. VUG’s worst year over the past decade yielded -3.32% and occurred in 2018. In most years the Vanguard Growth Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.62%, 17.03%, and 17.11% 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 |
| VUG | $10,000 | $29,615 | 17.58% |
| BNDX | $10,000 | $13,695 | 4.63% |
A $10,000 investment in VUG would have resulted in a final balance of $29,615. This is a profit of $19,615 over 7 years and amounts to a compound annual growth rate (CAGR) of 17.58%.
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%.
VUG’s CAGR is 12.95 percentage points higher than that of BNDX and as a result, would have yielded $15,920 more on a $10,000 investment. Thus, VUG outperformed BNDX by 12.95% annually.
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