Expense ratios, portfolio breadth, and volatility set these two bond ETFs apart for investors seeking cost efficiency and diversification.
- Vanguard Total Bond Market ETF offers much lower costs and deeper liquidity than FIDELITY INVESTMENT GRADE BOND ETF
- Both ETFs have nearly identical one-year returns and similar maximum drawdowns, but BND has lower price volatility
- BND holds a broader mix of bond sectors, while FIGB is 100% allocated to cash and other assets
Vanguard Total Bond Market ETF (NASDAQ:BND) stands out for its ultra-low expenses and massive scale, while FIDELITY INVESTMENT GRADE BOND ETF (NYSEMKT:FIGB) offers a slightly higher yield with a more concentrated portfolio.
Both funds serve as core bond allocations, aiming to deliver broad exposure to U.S. investment-grade bonds. BND tracks a comprehensive market-weighted index for maximum diversification, while FIGB is 100% allocated to cash and other assets. Here’s how they stack up for investors comparing NASDAQ:BND and NYSEMKT:FIGB.
Snapshot (cost & size)
| Metric | FIGB | BND |
|---|---|---|
| Issuer | Fidelity | Vanguard |
| Expense ratio | 0.36% | 0.03% |
| 1-yr return (as of Dec. 11, 2025) | 1.3% | 1.4% |
| Dividend yield | 4.1% | 3.8% |
| Beta | 1.02 | 0.27 |
| AUM | $301.4 million | $379.8 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
BND is far more affordable with a 0.03% expense ratio compared to FIGB’s 0.36%, making it a cost-effective choice for long-term investors. While FIGB offers a slightly higher dividend yield, BND’s lower fees may appeal to those focused on cost minimization.
Performance & risk comparison
| Metric | FIGB | BND |
|---|---|---|
| Max drawdown (5 y) | (18.10%) | (18.23%) |
| Growth of $1,000 over 5 years | $874 | $842 |
Over the past five years, both funds experienced similar maximum drawdowns, with BND slightly deeper at 18.23% versus FIGB’s 18.10%. FIGB’s cumulative five-year performance edges BND, but the difference is modest.
What's inside
Vanguard Total Bond Market ETF holds 346 securities and has been operating for over 18 years. Its portfolio is broadly diversified across communication services (49%), cash and others (15%), and technology (10%), with top positions like Morgan Stanley (MS +2.16%) and The Boeing Co (BA +3.47%) each representing a small fraction of the fund. This broad mix may help reduce issuer and sector risk.
FIDELITY INVESTMENT GRADE BOND ETF, by contrast, is more concentrated with 180 holdings, allocating 100% to cash and other sectors. Its largest positions include Gsinc 3.8% 03/15/30 (%GS0930), Jpmorgan 4.493%/var 3/24/31 (%JPPM31), and Morgan Stanl 4.431/var 1/23/30 (%MS130), each making up over 1.5% of assets. Neither fund comes with unusual structural quirks or overlays.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
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Glossary
ETF: Exchange-traded fund; a fund that trades on stock exchanges and holds a basket of assets.
Expense ratio: Annual fee as a percentage of assets, covering fund operating costs.
Dividend yield: Annual income from dividends as a percentage of the fund's price.
Beta: A measure of a fund's volatility compared to the overall market, typically the S&P 500.
AUM: Assets under management; the total market value of assets a fund manages.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a period.
Market-weighted index: An index where each security's weight is based on its market value relative to the total index.
Issuer: The company or institution that creates and manages the ETF.
Securities: Financial instruments, such as bonds or stocks, held within a fund.
Portfolio diversification: Spreading investments across various assets to reduce risk.
Core bond allocation: The main portion of a portfolio invested in bonds for stability and income.
