BND vs VTEB
Vanguard Total Bond Market ETF vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VTEB delivered stronger 1-year returns. BND offers more diversification with 10790 holdings.
Side-by-Side Comparison
| Metric | BND | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.03% | |
| AUM | $159.8B | $46.0B | |
| Dividend Yield | 3.94% | 3.34% | |
| Holdings | 17,528 | 9,952 | |
| YTD Return | -0.26% | +0.57% | |
| 1Y Return | +2.01% | +5.15% | |
| 3Y Return (annualized) | +3.97% | +3.20% | |
| 5Y Return (annualized) | -0.25% | +0.58% | |
| Volatility (annualized) | 4.6% | 4.9% | |
| Max Drawdown | -19.6% | -17.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Tax Preferred | |
| Inception | Apr 3, 2007 | Aug 21, 2015 |
BND vs VTEB Performance
Vanguard Total Bond Market ETF (BND) is a ETF from Vanguard (US) and Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US). Over the past year BND returned +2.01% while VTEB returned +5.15%. Year to date, BND is down 0.26% versus a gain of 0.57% for VTEB.
Over three years, BND compounded at +3.97% per year against +3.20% for VTEB; over five years the annualized figures are -0.25% and +0.58% respectively. Across the full 11-year window we track, VTEB has the edge at +1.27% annualized vs +0.69%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTEB has been the more volatile fund, with annualized monthly volatility of 4.9% 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 -17.0% for VTEB. 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 0.85. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
BND charges 0.03% per year while VTEB charges 0.03%. On a $10,000 position that is $3 vs $3 annually. On income, BND currently yields 3.94% against 3.34% for VTEB.
Holdings Overlap
BND and VTEB share 0 holdings out of 14323 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, BND or VTEB?
BND has an expense ratio of 0.03% while VTEB charges 0.03%. They cost the same. On a $10,000 investment, that is $0 per year of difference.
Which performed better, BND or VTEB?
Over the past year BND returned +2.01% vs +5.15% for VTEB, so VTEB leads on 1-year performance. Over the longest common window we track (11 years), BND annualized +0.69% vs +1.27% for VTEB. Past performance does not guarantee future results.
Which is riskier, BND or VTEB?
VTEB has been the more volatile fund at 4.9% annualized versus 4.6% for BND. Worst drawdown: BND -19.6% vs VTEB -17.0%.
Should I hold both BND and VTEB?
BND and VTEB have a monthly-return correlation of 0.85, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between BND and VTEB?
BND and VTEB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 14323 unique securities.
Which pays a higher dividend, BND or VTEB?
BND yields 3.94% while VTEB yields 3.34%, so BND currently pays the higher dividend yield.
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