VTBNX vs VUG
Vanguard Total Bond Market II Index Fund Institutional Shares vs Vanguard Growth ETF
Quick Verdict
VTBNX has a lower expense ratio. VUG delivered stronger 1-year returns. VTBNX offers more diversification with 8098 holdings.
Side-by-Side Comparison
| Metric | VTBNX | VUG | Winner |
|---|---|---|---|
| Expense Ratio | 0.02% | 0.03% | |
| AUM | $206.7B | $223.2B | |
| Dividend Yield | 3.73% | 0.47% | |
| Holdings | 15,623 | 155 | |
| YTD Return | -2.49% | +10.98% | |
| 1Y Return | -1.68% | +16.82% | |
| 3Y Return (annualized) | +0.43% | +24.53% | |
| 5Y Return (annualized) | -3.56% | +13.10% | |
| Volatility (annualized) | 6.3% | 16.5% | |
| Max Drawdown | -21.5% | -51.4% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Feb 17, 2009 | Jan 26, 2004 |
VTBNX vs VUG Performance
Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US) and Vanguard Growth ETF (VUG) is a ETF from Vanguard (US). Over the past year VTBNX returned -1.68% while VUG returned +16.82%. Year to date, VTBNX is down 2.49% versus a gain of 10.98% for VUG.
Over three years, VTBNX compounded at +0.43% per year against +24.53% for VUG; over five years the annualized figures are -3.56% and +13.10% respectively. Across the full 5-year window we track, VUG has the edge at +11.31% annualized vs -3.56%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VUG has been the more volatile fund, with annualized monthly volatility of 16.5% 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 -21.5% for VTBNX and -51.4% for VUG. 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 0.56. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTBNX charges 0.02% per year while VUG charges 0.03%. On a $10,000 position that is $2 vs $3 annually, a gap of $1 per year that compounds over a long holding period. On income, VTBNX currently yields 3.73% against 0.47% for VUG.
Holdings Overlap
VTBNX and VUG share 0 holdings out of 8244 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, VTBNX or VUG?
VTBNX has an expense ratio of 0.02% while VUG charges 0.03%. VTBNX is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VTBNX or VUG?
Over the past year VTBNX returned -1.68% vs +16.82% for VUG, so VUG leads on 1-year performance. Over the longest common window we track (5 years), VTBNX annualized -3.56% vs +11.31% for VUG. Past performance does not guarantee future results.
Which is riskier, VTBNX or VUG?
VUG has been the more volatile fund at 16.5% annualized versus 6.3% for VTBNX. Worst drawdown: VTBNX -21.5% vs VUG -51.4%.
Should I hold both VTBNX and VUG?
VTBNX and VUG have a monthly-return correlation of 0.56, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTBNX and VUG?
VTBNX and VUG share 0 common holdings with a 0.0% weight overlap. Combined, they hold 8244 unique securities.
Which pays a higher dividend, VTBNX or VUG?
VTBNX yields 3.73% while VUG yields 0.47%, so VTBNX currently pays the higher dividend yield.
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