BND vs VNQ
Vanguard Total Bond Market ETF vs Vanguard Real Estate ETF
Quick Verdict
BND has a lower expense ratio. VNQ delivered stronger 1-year returns. BND offers more diversification with 10790 holdings.
Side-by-Side Comparison
| Metric | BND | VNQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.13% | |
| AUM | $159.8B | $38.2B | |
| Dividend Yield | 3.94% | 3.52% | |
| Holdings | 17,528 | 144 | |
| YTD Return | -0.43% | +12.08% | |
| 1Y Return | +1.98% | +13.61% | |
| 3Y Return (annualized) | +4.25% | +9.82% | |
| 5Y Return (annualized) | -0.27% | +2.12% | |
| Volatility (annualized) | 4.6% | 21.4% | |
| Max Drawdown | -19.6% | -75.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Apr 3, 2007 | Sep 23, 2004 |
BND vs VNQ Performance
Vanguard Total Bond Market ETF (BND) is a ETF from Vanguard (US) and Vanguard Real Estate ETF (VNQ) is a ETF from Vanguard (US). Over the past year BND returned +1.98% while VNQ returned +13.61%. Year to date, BND is down 0.43% versus a gain of 12.08% for VNQ.
Over three years, BND compounded at +4.25% per year against +9.82% for VNQ; over five years the annualized figures are -0.27% and +2.12% respectively. Across the full 19-year window we track, VNQ has the edge at +4.08% annualized vs +0.68%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VNQ has been the more volatile fund, with annualized monthly volatility of 21.4% compared with 4.6% for BND. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -19.6% for BND and -75.8% for VNQ. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.41. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
BND charges 0.03% per year while VNQ charges 0.13%. On a $10,000 position that is $3 vs $13 annually, a gap of $10 per year that compounds over a long holding period. On income, BND currently yields 3.94% against 3.52% for VNQ.
Holdings Overlap
BND and VNQ share 1 holdings out of 10933 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in BND | Weight in VNQ | Difference |
|---|---|---|---|
| NNN | 0.00% | 0.47% | 0.47% |
Frequently Asked Questions
Which is cheaper, BND or VNQ?
BND has an expense ratio of 0.03% while VNQ charges 0.13%. BND is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, BND or VNQ?
Over the past year BND returned +1.98% vs +13.61% for VNQ, so VNQ leads on 1-year performance. Over the longest common window we track (19 years), BND annualized +0.68% vs +4.08% for VNQ. Past performance does not guarantee future results.
Which is riskier, BND or VNQ?
VNQ has been the more volatile fund at 21.4% annualized versus 4.6% for BND. Worst drawdown: BND -19.6% vs VNQ -75.8%.
Should I hold both BND and VNQ?
BND and VNQ have a monthly-return correlation of 0.41, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between BND and VNQ?
BND and VNQ share 1 common holdings with a 0.0% weight overlap. Combined, they hold 10933 unique securities.
Which pays a higher dividend, BND or VNQ?
BND yields 3.94% while VNQ yields 3.52%, so BND currently pays the higher dividend yield.
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