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VXUS vs. BNDX: What’s The Difference?

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Total International Bond Index Fund ETF Shares (BNDX) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and BNDX is a Vanguard N/A fund. So, what’s the difference between VXUS and BNDX? And which fund is better?

VXUS and BNDX have the same expense ratio: 0.08%. VXUS also has a high exposure to the financial services sector while BNDX is mostly comprised of A bonds. Overall, VXUS has provided higher returns than BNDX over the past ten years.

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

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Summary

VXUSBNDX
NameVanguard Total International Stock Index Fund ETF SharesVanguard Total International Bond Index Fund ETF Shares
CategoryForeign Large BlendN/A
IssuerVanguardVanguard
AUM404.73B116.41B
Avg. Return8.41%4.63%
Div. Yield2.44%0.94%
Expense Ratio0.08%0.08%

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 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%.

VXUS’s dividend yield is 1.50% higher than that of BNDX (2.44% vs. 0.94%). Also, VXUS yielded on average 3.78% more per year over the past decade (8.41% vs. 4.63%). VXUS and BNDX have the same expense ratio: 0.08%.

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Fund Composition

Holdings

VXUS - Holdings

VXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.62%
Tencent Holdings Ltd1.41%
Alibaba Group Holding Ltd Ordinary Shares1.26%
Nestle SA1.1%
Samsung Electronics Co Ltd1.05%
ASML Holding NV0.86%
Roche Holding AG0.81%
Toyota Motor Corp0.67%
LVMH Moet Hennessy Louis Vuitton SE0.61%
Novartis AG0.6%

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%.

BNDX - Holdings

BNDX Bond SectorsWeight
A29.19%
AA26.79%
AAA21.59%
BBB19.41%
Others1.57%
Below B1.45%
B0.0%
BB0.0%
US Government0.0%

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.

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Risk Analysis

VXUSBNDX
Mean Return0.560
R-squared98.390
Std. Deviation15.120
Alpha0.310
Beta0.990
Sharpe Ratio0.40
Treynor Ratio5.140

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a R-squared of 98.39 with a Sharpe Ratio of 0.4 and a Treynor Ratio of 5.14. Its Mean Return is 0.56 while VXUS’s Alpha is 0.31. Furthermore, the fund has a Standard Deviation of 15.12 and a Beta of 0.99.

The Vanguard Total International Bond Index Fund ETF Shares (BNDX) has a Standard Deviation of 0 with a Beta of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while BNDX’s R-squared is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Alpha of 0.

VXUS’s Mean Return is 0.56 points higher than that of BNDX and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than BNDX. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than BNDX’s Alpha and Beta.

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Performance

Annual Returns

VXUS vs. BNDX - Annual Returns

YearVXUSBNDX
202011.32%4.6%
201921.58%7.88%
2018-14.42%2.94%
201727.52%2.4%
20164.72%4.67%
2015-4.28%1.08%
2014-4.17%8.83%
201315.16%0.0%
201218.22%0.0%
20110.0%0.0%
20100.0%0.0%

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 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

VXUS vs. BNDX - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VXUS$10,000$14,1878.41%
BNDX$10,000$13,6954.63%

A $10,000 investment in VXUS would have resulted in a final balance of $14,187. This is a profit of $4,187 over 7 years and amounts to a compound annual growth rate (CAGR) of 8.41%.

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%.

VXUS’s CAGR is 3.78 percentage points higher than that of BNDX and as a result, would have yielded $492 more on a $10,000 investment. Thus, VXUS outperformed BNDX by 3.78% annually.


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