VTBNX vs VWO
Vanguard Total Bond Market II Index Fund Institutional Shares vs Vanguard FTSE Emerging Markets ETF
Quick Verdict
VTBNX has a lower expense ratio. VWO delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | VTBNX | VWO | Winner |
|---|---|---|---|
| Expense Ratio | 0.02% | 0.06% | |
| AUM | $207.3B | $122.0B | |
| Dividend Yield | 3.79% | 2.39% | |
| Holdings | 15,623 | 6,334 | |
| YTD Return | -2.70% | +10.18% | |
| 1Y Return | -1.68% | +20.99% | |
| 3Y Return (annualized) | +0.65% | +18.45% | |
| 5Y Return (annualized) | -3.62% | +7.14% | |
| Volatility (annualized) | 6.3% | 20.1% | |
| Max Drawdown | -21.5% | -68.3% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Feb 17, 2009 | Mar 4, 2005 |
VTBNX vs VWO Performance
Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US) and Vanguard FTSE Emerging Markets ETF (VWO) is a ETF from Vanguard (US). Over the past year VTBNX returned -1.68% while VWO returned +20.99%. Year to date, VTBNX is down 2.70% versus a gain of 10.18% for VWO.
Over three years, VTBNX compounded at +0.65% per year against +18.45% for VWO; over five years the annualized figures are -3.62% and +7.14% respectively. Across the full 5-year window we track, VWO has the edge at +4.98% annualized vs -3.62%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VWO has been the more volatile fund, with annualized monthly volatility of 20.1% 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 -21.5% for VTBNX and -68.3% for VWO. 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 0.68. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTBNX charges 0.02% per year while VWO charges 0.06%. On a $10,000 position that is $2 vs $6 annually, a gap of $4 per year that compounds over a long holding period. On income, VTBNX currently yields 3.79% against 2.39% for VWO.
Holdings Overlap
VTBNX and VWO share 1 holdings out of 16711 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 VTBNX | Weight in VWO | Difference |
|---|---|---|---|
| LOGG3:BV | 0.00% | 0.01% | 0.01% |
Frequently Asked Questions
Which is cheaper, VTBNX or VWO?
VTBNX has an expense ratio of 0.02% while VWO charges 0.06%. VTBNX is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, VTBNX or VWO?
Over the past year VTBNX returned -1.68% vs +20.99% for VWO, so VWO leads on 1-year performance. Over the longest common window we track (5 years), VTBNX annualized -3.62% vs +4.98% for VWO. Past performance does not guarantee future results.
Which is riskier, VTBNX or VWO?
VWO has been the more volatile fund at 20.1% annualized versus 6.3% for VTBNX. Worst drawdown: VTBNX -21.5% vs VWO -68.3%.
Should I hold both VTBNX and VWO?
VTBNX and VWO have a monthly-return correlation of 0.68, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTBNX and VWO?
VTBNX and VWO share 1 common holdings with a 0.0% weight overlap. Combined, they hold 16711 unique securities.
Which pays a higher dividend, VTBNX or VWO?
VTBNX yields 3.79% while VWO yields 2.39%, so VTBNX currently pays the higher dividend yield.
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