The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between VXUS and BIV? And which fund is better?
The expense ratio of VXUS is 0.03 percentage points higher than BIV’s (0.08% vs. 0.05%). VXUS also has a high exposure to the financial services sector while BIV is mostly comprised of AAA bonds. Overall, VXUS has provided higher returns than BIV over the past ten years.
In this article, we’ll compare VXUS vs. BIV. We’ll look at annual returns and performance, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss VXUS’s and BIV’s industry exposure, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||Vanguard Total International Stock Index Fund ETF Shares||Vanguard Intermediate-Term Bond Index Fund ETF Shares|
|Category||Foreign Large Blend||Intermediate-Term Bond|
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.
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%.
VXUS’s dividend yield is 0.38% higher than that of BIV (2.44% vs. 2.06%). Also, VXUS yielded on average 3.09% more per year over the past decade (8.41% vs. 5.31%). The expense ratio of VXUS is 0.03 percentage points higher than BIV’s (0.08% vs. 0.05%).
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|Taiwan Semiconductor Manufacturing Co Ltd||1.62%|
|Tencent Holdings Ltd||1.41%|
|Alibaba Group Holding Ltd Ordinary Shares||1.26%|
|Samsung Electronics Co Ltd||1.05%|
|ASML Holding NV||0.86%|
|Roche Holding AG||0.81%|
|Toyota Motor Corp||0.67%|
|LVMH Moet Hennessy Louis Vuitton SE||0.61%|
VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.
ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.
|BIV Bond Sectors||Weight|
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.
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The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Sharpe Ratio of 0.4 with a R-squared of 98.39 and a Standard Deviation of 15.12. Its Mean Return is 0.56 while VXUS’s Treynor Ratio is 5.14. Furthermore, the fund has a Beta of 0.99 and a Alpha of 0.31.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Standard Deviation of 4.09 with a Alpha of -0.07 and a Mean Return of 0.35. Its R-squared is 95.12 while BIV’s Beta is 1.33. Furthermore, the fund has a Sharpe Ratio of 0.89 and a Treynor Ratio of 2.72.
VXUS’s Mean Return is 0.21 points higher than that of BIV and its R-squared is 3.27 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than BIV. The Alpha and Beta of VXUS are 0.38 points higher and 0.34 points lower than BIV’s Alpha and Beta.
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VXUS had its best year in 2017 with an annual return of 27.52%. VXUS’s worst year over the past decade yielded -14.42% and occurred in 2018. In most years the Vanguard Total International Stock Index Fund ETF Shares provided moderate returns such as in 2010, 2016, and 2020 where annual returns amounted to 0.0%, 4.72%, and 11.32% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VXUS would have resulted in a final balance of $19,315. This is a profit of $9,315 over 9 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in BIV, the end total would have been $14,434. This equates to a $4,434 profit over 9 years and a compound annual growth rate (CAGR) of 5.31%.
VXUS’s CAGR is 3.09 percentage points higher than that of BIV and as a result, would have yielded $4,881 more on a $10,000 investment. Thus, VXUS outperformed BIV by 3.09% annually.
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