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May 15, 2024 · Vanguard Total World Bond ETF : 0.05%: Vanguard Ultra-Short Bond ETF : 0.10%: Vanguard High-Yield Tax-Exempt Fund Investor Shares : 0.17%: Vanguard Core-Plus Bond Fund...
May 1, 2024 · Top 10 Best-Performing Vanguard ETFs for May 2024. Vanguard ETFs have low investment minimums, relatively low expense ratios and and offer instant diversification. By Alana Benson....
- Alana Benson
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Dec 9, 2023 · The Vanguard Total Bond Market ETF is a great way to get that bond exposure. With an expense ratio of just 0.03%, it's one of the least expensive options on the market for a total bond market fund.
May 2, 2024 · Vanguard has an expansive offering of low-fee mutual funds and ETFs and $0 fees on online stock and ETF trades. Read our expert review for more pros, cons and services.
- Introduction
- Bnd Review – Fund Composition
- Bnd Review – Analysis
- Bnd Review – Performance
- Bnd vs. Other Funds
- Conclusion
In this BND review, I will take a closer look at Vanguard’s most renowned bond ETF. We will look at the fund’s composition in terms of credit quality and fixed income maturity and also go over some key facts and figures. In the second half of this review, we’ll focus more on BND’s performance and analyze some potential risks as well.
Within the following section, we will look at BND’s composition. What’s the distribution of credit quality in the fund and how long until most of its holdings mature?
Volatility
BND has 3.71 percent annual volatility(1.07 percent monthly). Bond fund volatility tends to be far less than the corresponding total stock market funds at all times. This makes sense since these fixed-income holdings are meant to stabilize portfolio growth or smooth the transition to retirement where there is little use for huge swings in portfolio value.
Drawdown
Over the years, BND experiences drawdowns of up to -4.0 percent. Major drawbacks occurred in 2008/2009, when the financial crisis hit the banks of the world and the U.S. in particular, again in 2013/2014 and the latest in 2017. The current stock market drawdown (2020) isn’t much reflected in either fund. Certainly the statements about volatility and maximum drawdown are only true for the time period examined above. It would be foolish to say either the negative levels will never be higher or...
Of course, performance and overall returns are the key indicators of every investor’s successin a fund. Since we’ve discussed many of the key composition facts above, now it’s going to be easier to see how these impact returns. The following is a $10,000 dollar backtest invested in BND early in 2008. The annual returns are:
BND vs. TLT
TLT’s compound annual growth rate ( CAGR) of 7.87 percent is significantly higher than BND’s at just 4.19 percent in terms of performance. However, TLT is also much more volatile than BND at 3.72 percent with an annual volatility of 14.18 percent. This also leads TLT to experience much higher maximum drawdowns than BND. While examining the differences between BND and TLT, it is important to bear in mind that the two funds have different objectives. And each of them fulfills its goal in specif...
BND vs. BNDX
Overall, with a compound annual growth rate ( CAGR) of 4.57% vs. 4.16%, BNDX performs better than BND. Also, BNDX is less volatile than BND, and has lower drawdowns. Only U.S. bonds with mostly high credit ratings make up BND. BNDX consists of international bonds with different credit ratings, from AAA to BBB. Both provide their target bond markets with excellent exposure, at very low fees. BND holds far higher rated bonds than BNDX in terms of the credit rating. In contrast, BNDX also yields...
BND vs. BIV
BND comprises U.S. bonds with maturities ranging from 1-30 + years. On the other hand, only between 3-15 years BIV is made up of bonds with maturities. Overall, with a compound annual growth rate ( CAGR) of 5.31 percent vs. 4.19 percent, BIV performs better than BND. But BIV is also more volatile than BND, as well as experiencing higher drawdowns. BND and BIV provide excellent visibility to their target bond markets, at very low fees. As for credit rating, BND holds higher-rated bonds than BI...
Vanguard’s Total Bond ETF (BND) is still among the best in the industry. While other funds have come and gone and some have yielded higher returns than BND, none have achieved the same level of diversification through thousands of holdings. And true full exposure to the entire U.S. bond market does not have to be pricey: just recently Vanguard redu...
Jan 5, 2023 · This has become an increasingly popular way to invest, as the investment firm Vanguard recently noted. In the past five years investment in bond ETFs has more than doubled. As of June 2022, firms held more than $1.2 trillion in these funds, and on a daily basis anywhere from $40 billion to $60 billion worth of trading occurs.
Feb 14, 2024 · The remaining funds on the list favor different types of bonds (corporate bonds, floating-rate securities). Those funds with long durations, such as Vanguard Long-Term Bond ETF and Vanguard Long ...
