VXF vs. IUSB: What’s The Difference?

The Vanguard Extended Market Index Fund ETF Shares (VXF) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and IUSB is a iShares N/A fund. So, what’s the difference between VXF and IUSB? And which fund is better?

VXF and IUSB have the same expense ratio: 0.06%. VXF also has a high exposure to the technology sector while IUSB is mostly comprised of AAA bonds. Overall, VXF has provided higher returns than IUSB over the past 6 years.

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

Summary

VXF IUSB
Name Vanguard Extended Market Index Fund ETF Shares iShares Core Total USD Bond Market ETF
Category Mid-Cap Growth N/A
Issuer Vanguard iShares
AUM 114.53B 14.49B
Avg. Return 15.47% 4.13%
Div. Yield 1.19% 2.1%
Expense Ratio 0.06% 0.06%

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 iShares Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.

VXF’s dividend yield is 0.91% lower than that of IUSB (1.19% vs. 2.1%). Also, VXF yielded on average 11.34% more per year over the past decade (15.47% vs. 4.13%). VXF and IUSB have the same expense ratio: 0.06%.

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Fund Composition

Holdings

VXF - 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%.

IUSB - Holdings

IUSB Bond Sectors Weight
AAA 58.32%
BBB 16.98%
A 12.27%
BB 4.33%
AA 3.36%
B 2.8%
Others 1.01%
Below B 0.92%
US Government 0.0%

IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.

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Risk Analysis

VXF IUSB
Mean Return 1.24 0
R-squared 85.73 0
Std. Deviation 18.04 0
Alpha -3.26 0
Beta 1.23 0
Sharpe Ratio 0.79 0
Treynor Ratio 10.92 0

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Alpha of -3.26 with a Treynor Ratio of 10.92 and a Beta of 1.23. Its Mean Return is 1.24 while VXF’s Standard Deviation is 18.04. Furthermore, the fund has a Sharpe Ratio of 0.79 and a R-squared of 85.73.

The iShares Core Total USD Bond Market ETF (IUSB) has a Treynor Ratio of 0 with a R-squared of 0 and a Mean Return of 0. Its Beta is 0 while IUSB’s Standard Deviation is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.

VXF’s Mean Return is 1.24 points higher than that of IUSB and its R-squared is 85.73 points higher. With a Standard Deviation of 18.04, VXF is slightly more volatile than IUSB. The Alpha and Beta of VXF are 3.26 points lower and 1.23 points higher than IUSB’s Alpha and Beta.

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Performance

Annual Returns

VXF vs. IUSB - Annual Returns

Year VXF IUSB
2020 32.19% 7.59%
2019 28.04% 9.26%
2018 -9.37% -0.38%
2017 18.1% 4.06%
2016 16.16% 3.78%
2015 -3.26% 0.46%
2014 7.55% 0.0%
2013 38.37% 0.0%
2012 18.48% 0.0%
2011 -3.61% 0.0%
2010 27.55% 0.0%

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 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.

Portfolio Growth

VXF vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VXF $10,000 $20,357 15.47%
IUSB $10,000 $12,704 4.13%

A $10,000 investment in VXF would have resulted in a final balance of $20,357. This is a profit of $10,357 over 6 years and amounts to a compound annual growth rate (CAGR) of 15.47%.

With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.

VXF’s CAGR is 11.34 percentage points higher than that of IUSB and as a result, would have yielded $7,653 more on a $10,000 investment. Thus, VXF outperformed IUSB by 11.34% annually.


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