VDIGX vs VTBNX
Vanguard Dividend Growth Fund Investor Class vs Vanguard Total Bond Market II Index Fund Institutional Shares
Quick Verdict
VTBNX has a lower expense ratio. VTBNX delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | VDIGX | VTBNX | Winner |
|---|---|---|---|
| Expense Ratio | 0.20% | 0.02% | |
| AUM | $35.5B | $207.3B | |
| Dividend Yield | 23.36% | 3.79% | |
| Holdings | 55 | 15,623 | |
| YTD Return | -1.73% | -2.49% | |
| 1Y Return | -12.35% | -1.68% | |
| 3Y Return (annualized) | -3.05% | +0.72% | |
| 5Y Return (annualized) | -3.38% | -3.58% | |
| Volatility (annualized) | 16.1% | 6.3% | |
| Max Drawdown | -32.6% | -21.5% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Fixed Income | |
| Inception | May 15, 1992 | Feb 17, 2009 |
VDIGX vs VTBNX Performance
Vanguard Dividend Growth Fund Investor Class (VDIGX) is a mutual fund 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 VDIGX returned -12.35% while VTBNX returned -1.68%. Year to date, VDIGX is down 1.73% versus a loss of 2.49% for VTBNX.
Over three years, VDIGX compounded at -3.05% per year against +0.72% for VTBNX; over five years the annualized figures are -3.38% and -3.58% respectively. Across the full 5-year window we track, VDIGX has the edge at -3.38% annualized vs -3.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VDIGX has been the more volatile fund, with annualized monthly volatility of 16.1% compared with 6.3% for VTBNX. 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 -32.6% for VDIGX 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 0.54. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VDIGX charges 0.20% per year while VTBNX charges 0.02%. On a $10,000 position that is $20 vs $2 annually, a gap of $18 per year that compounds over a long holding period. On income, VDIGX currently yields 23.36% against 3.79% for VTBNX.
Holdings Overlap
VDIGX and VTBNX share 0 holdings out of 12775 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, VDIGX or VTBNX?
VDIGX has an expense ratio of 0.20% while VTBNX charges 0.02%. VTBNX is the cheaper option. On a $10,000 investment, that is $18 per year of difference.
Which performed better, VDIGX or VTBNX?
Over the past year VDIGX returned -12.35% vs -1.68% for VTBNX, so VTBNX leads on 1-year performance. Over the longest common window we track (5 years), VDIGX annualized -3.38% vs -3.58% for VTBNX. Past performance does not guarantee future results.
Which is riskier, VDIGX or VTBNX?
VDIGX has been the more volatile fund at 16.1% annualized versus 6.3% for VTBNX. Worst drawdown: VDIGX -32.6% vs VTBNX -21.5%.
Should I hold both VDIGX and VTBNX?
VDIGX and VTBNX have a monthly-return correlation of 0.54, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VDIGX and VTBNX?
VDIGX and VTBNX share 0 common holdings with a 0.0% weight overlap. Combined, they hold 12775 unique securities.
Which pays a higher dividend, VDIGX or VTBNX?
VDIGX yields 23.36% while VTBNX yields 3.79%, so VDIGX currently pays the higher dividend yield.
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