Vanguard Total Bond Market ETF (BND)
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- Finance
Broad exposure to U.S. investment-grade bonds. 0.03% expense ratio. Includes government, corporate, and mortgage-backed bonds.
B+Best for Portfolio Stability
BND holds over 10,000 U.S. bonds — government, investment-grade corporate, and mortgage-backed securities — at a 0.03% expense ratio. The fund pays monthly distributions at approximately 3.5% yield. BND fell about 13% in 2022 when interest rates rose sharply (the worst bond year in decades), but in typical equity bear markets it provides meaningful stability — during the 2020 COVID crash, BND rose slightly while stocks fell 34%. Best suited to tax-advantaged accounts where its ordinary income distributions aren't taxed annually.
Pros
- ~3.5% monthly yield — highest income distribution in this comparison
- Provides portfolio stability during equity crashes when held alongside stocks
- 0.03% expense ratio for access to 10,000+ bonds
Cons
- Fell 13% in 2022 — bond funds are not risk-free when rates rise sharply
- Interest income taxed as ordinary income — less efficient in taxable accounts
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