The Vanguard Extended Market Index Fund ETF Shares (VXF) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between VXF and BIV? And which fund is better?
The expense ratio of VXF is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%). VXF also has a high exposure to the technology sector while BIV is mostly comprised of AAA bonds. Overall, VXF has provided higher returns than BIV over the past 11 years.
In this article, we’ll compare VXF vs. BIV. We’ll look at industry exposure and annual returns, as well as at their holdings and performance. Moreover, I’ll also discuss VXF’s and BIV’s fund composition, risk metrics, and portfolio growth and examine how these affect their overall returns.
Summary
| VXF | BIV | |
| Name | Vanguard Extended Market Index Fund ETF Shares | Vanguard Intermediate-Term Bond Index Fund ETF Shares |
| Category | Mid-Cap Growth | Intermediate-Term Bond |
| Issuer | Vanguard | Vanguard |
| AUM | 114.53B | 39.05B |
| Avg. Return | 15.47% | 5.31% |
| Div. Yield | 1.19% | 2.06% |
| Expense Ratio | 0.06% | 0.05% |
The Vanguard Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
VXF’s dividend yield is 0.87% lower than that of BIV (1.19% vs. 2.06%). Also, VXF yielded on average 10.16% more per year over the past decade (15.47% vs. 5.31%). The expense ratio of VXF is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%).
Fund Composition
Holdings
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| CrowdStrike Holdings Inc Class A | 0.63% |
| Marvell Technology Inc | 0.6% |
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
| BIV Bond Sectors | Weight |
| AAA | 54.51% |
| BBB | 25.24% |
| A | 16.97% |
| AA | 3.1% |
| Others | 0.15% |
| Below B | 0.03% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| VXF | BIV | |
| Mean Return | 1.24 | 0.35 |
| R-squared | 85.73 | 95.12 |
| Std. Deviation | 18.04 | 4.09 |
| Alpha | -3.26 | -0.07 |
| Beta | 1.23 | 1.33 |
| Sharpe Ratio | 0.79 | 0.89 |
| Treynor Ratio | 10.92 | 2.72 |
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Alpha of -3.26 with a Beta of 1.23 and a Sharpe Ratio of 0.79. Its Standard Deviation is 18.04 while VXF’s R-squared is 85.73. Furthermore, the fund has a Mean Return of 1.24 and a Treynor Ratio of 10.92.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Sharpe Ratio of 0.89 with a Standard Deviation of 4.09 and a Mean Return of 0.35. Its Beta is 1.33 while BIV’s Alpha is -0.07. Furthermore, the fund has a Treynor Ratio of 2.72 and a R-squared of 95.12.
VXF’s Mean Return is 0.89 points higher than that of BIV and its R-squared is 9.39 points lower. With a Standard Deviation of 18.04, VXF is slightly more volatile than BIV. The Alpha and Beta of VXF are 3.19 points lower and 0.10 points lower than BIV’s Alpha and Beta.
Performance
Annual Returns
| Year | VXF | BIV |
| 2020 | 32.19% | 9.71% |
| 2019 | 28.04% | 10.19% |
| 2018 | -9.37% | -0.09% |
| 2017 | 18.1% | 3.8% |
| 2016 | 16.16% | 2.86% |
| 2015 | -3.26% | 1.23% |
| 2014 | 7.55% | 7.0% |
| 2013 | 38.37% | -3.44% |
| 2012 | 18.48% | 7.02% |
| 2011 | -3.61% | 10.62% |
| 2010 | 27.55% | 9.55% |
VXF had its best year in 2013 with an annual return of 38.37%. VXF’s worst year over the past decade yielded -9.37% and occurred in 2018. In most years the Vanguard Extended Market Index Fund ETF Shares provided moderate returns such as in 2016, 2017, and 2012 where annual returns amounted to 16.16%, 18.1%, and 18.48% respectively.
The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXF | $10,000 | $44,130 | 15.47% |
| BIV | $10,000 | $17,492 | 5.31% |
A $10,000 investment in VXF would have resulted in a final balance of $44,130. This is a profit of $34,130 over 11 years and amounts to a compound annual growth rate (CAGR) of 15.47%.
With a $10,000 investment in BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
VXF’s CAGR is 10.16 percentage points higher than that of BIV and as a result, would have yielded $26,638 more on a $10,000 investment. Thus, VXF outperformed BIV by 10.16% annually.
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