BND vs VTBNX
Vanguard Total Bond Market ETF vs Vanguard Total Bond Market II Index Fund Institutional Shares
Quick Verdict
VTBNX has a lower expense ratio. BND delivered stronger 1-year returns. BND offers more diversification with 17,437 holdings.
Side-by-Side Comparison
| Metric | BND | VTBNX | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.02% | |
| AUM | $160.9B | $207.3B | |
| Dividend Yield | 4.02% | 3.79% | |
| Holdings | 17,437 | 14,920 | |
| YTD Return | -0.22% | -3.01% | |
| 1Y Return | +1.64% | -2.30% | |
| 3Y Return (annualized) | +4.39% | +0.25% | |
| 5Y Return (annualized) | -0.32% | -3.60% | |
| Volatility (annualized) | 4.6% | 6.3% | |
| Max Drawdown | -19.6% | -21.5% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Fixed Income | |
| Inception | Apr 3, 2007 | Feb 17, 2009 |
BND vs VTBNX Performance
Vanguard Total Bond Market ETF (BND) is a ETF from Vanguard (US) and Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US). Over the past year BND returned +1.64% while VTBNX returned -2.30%. Year to date, BND is down 0.22% versus a loss of 3.01% for VTBNX.
Over three years, BND compounded at +4.39% per year against +0.25% for VTBNX; over five years the annualized figures are -0.32% and -3.60% respectively. Across the full 5-year window we track, BND has the edge at +0.69% annualized vs -3.60%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTBNX has been the more volatile fund, with annualized monthly volatility of 6.3% 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 -21.5% for VTBNX. 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 1.00. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
BND charges 0.03% per year while VTBNX charges 0.02%. On a $10,000 position that is $3 vs $2 annually, a gap of $1 per year that compounds over a long holding period. On income, BND currently yields 4.02% against 3.79% for VTBNX.
Holdings Overlap
BND and VTBNX share 1091 holdings out of 12819 unique holdings combined, representing a 9.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in BND | Weight in VTBNX | Difference |
|---|---|---|---|
| T 4.25 08/15/35 | 0.39% | 0.36% | 0.03% |
| T 4 02/15/34 | 0.40% | 0.33% | 0.07% |
| T 4 02/28/30 | 0.34% | 0.32% | 0.02% |
| T 3.875 08/15/33 | Pro | Pro | Pro |
| T 2.875 05/15/32 | Pro | Pro | Pro |
| T 2.75 08/15/32 | Pro | Pro | Pro |
| T 3.375 05/15/33 | Pro | Pro | Pro |
| T 1.125 02/15/31 | Pro | Pro | Pro |
| T 3.75 04/30/27 | Pro | Pro | Pro |
| T 0.625 05/15/30 | Pro | Pro | Pro |
Frequently Asked Questions
Which is cheaper, BND or VTBNX?
BND has an expense ratio of 0.03% while VTBNX charges 0.02%. VTBNX is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, BND or VTBNX?
Over the past year BND returned +1.64% vs -2.30% for VTBNX, so BND leads on 1-year performance. Over the longest common window we track (5 years), BND annualized +0.69% vs -3.60% for VTBNX. Past performance does not guarantee future results.
Which is riskier, BND or VTBNX?
VTBNX has been the more volatile fund at 6.3% annualized versus 4.6% for BND. Worst drawdown: BND -19.6% vs VTBNX -21.5%.
Should I hold both BND and VTBNX?
BND and VTBNX have a monthly-return correlation of 1.00, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between BND and VTBNX?
BND and VTBNX share 1091 common holdings with a 9.7% weight overlap. Combined, they hold 12819 unique securities.
Which pays a higher dividend, BND or VTBNX?
BND yields 4.02% while VTBNX yields 3.79%, so BND currently pays the higher dividend yield.
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