The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Vanguard Short-Term Bond Index Fund ETF Shares (BSV) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and BSV is a Vanguard Short-Term Bond fund. So, what’s the difference between VXUS and BSV? And which fund is better?
The expense ratio of VXUS is 0.03 percentage points higher than BSV’s (0.08% vs. 0.05%). VXUS also has a high exposure to the financial services sector while BSV is mostly comprised of AAA bonds. Overall, VXUS has provided higher returns than BSV over the past ten years.
In this article, we’ll compare VXUS vs. BSV. We’ll look at holdings and annual returns, as well as at their portfolio growth and performance. Moreover, I’ll also discuss VXUS’s and BSV’s fund composition, risk metrics, and industry exposure and examine how these affect their overall returns.
|NameVanguard Total International Stock Index Fund ETF SharesVanguard Short-Term Bond Index Fund ETF Shares|
|Category||Foreign Large Blend||Short-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 Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.
VXUS’s dividend yield is 0.96% higher than that of BSV (2.44% vs. 1.48%). Also, VXUS yielded on average 6.13% more per year over the past decade (8.41% vs. 2.27%). The expense ratio of VXUS is 0.03 percentage points higher than BSV’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%.
|BSV Bond Sectors||Weight|
BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), 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 Mean Return of 0.56 and a Beta of 0.99. Its Alpha is 0.31 while VXUS’s Treynor Ratio is 5.14. Furthermore, the fund has a Standard Deviation of 15.12 and a R-squared of 98.39.
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Treynor Ratio of 3.33 with a Beta of 0.38 and a Standard Deviation of 1.33. Its Alpha is 0.21 while BSV’s R-squared is 78.38. Furthermore, the fund has a Sharpe Ratio of 0.98 and a Mean Return of 0.16.
VXUS’s Mean Return is 0.40 points higher than that of BSV and its R-squared is 20.01 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than BSV. The Alpha and Beta of VXUS are 0.10 points higher and 0.61 points higher than BSV’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 2019 was the strongest year for BSV, returning 4.92% on an annual basis. The poorest year for BSV in the last ten years was 2013, with a yield of 0.17%. Most years the Vanguard Short-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2018, 2016, and 2012, when gains were 1.34%, 1.42%, and 1.98% 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 BSV, the end total would have been $11,931. This equates to a $1,931 profit over 9 years and a compound annual growth rate (CAGR) of 2.27%.
VXUS’s CAGR is 6.13 percentage points higher than that of BSV and as a result, would have yielded $7,384 more on a $10,000 investment. Thus, VXUS outperformed BSV by 6.13% annually.
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