How the Largest Bond ETFs in the US Performed

Each month, we check in on the performance of the largest US bond exchange-traded funds.

When evaluating ETFs, investors should focus on long-term returns across multiple years and market cycles. However, short-term returns can provide valuable information about biases within strategies.

Out of the 10 largest US bond ETFs, the top performer last month was the $49.8 billion State Street SPDR Bloomberg 1-3 Month T-Bill ETF BIL, which gained 0.31%. The bottom performer was the $72 billion Vanguard Intermediate-Term Corporate Bond Index Fund VCIT, which lost 2.97%.

Here’s more about the performance of the largest bond ETFs.

Vanguard Total Bond Market Index Fund BND

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Intermediate Core Bond

In September, the Vanguard Total Bond Market Index Fund fell 2.56%, while the average intermediate core bond fund lost 2.64%. The fund outperformed 77% of its peers. The $398.8 billion fund has dropped 1.82% over the past year, performing roughly in line with the average fund in its category, which fell 1.88%. The Vanguard fund, launched in April 2007, has climbed 4.04% over the past three years annualized and lost 0.64% annualized over the past five years.

iShares Core US Aggregate Bond ETF AGG

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Intermediate Core Bond

In September, the iShares Core US Aggregate Bond ETF fell 2.62%, while the average intermediate core bond fund lost 2.64%. The fund outperformed 68% of its peers. The $135.7 billion fund has dropped 1.86% over the past year, performing roughly in line with the average fund in its category, which fell 1.88%. The iShares fund, launched in September 2003, has climbed 4.05% over the past three years annualized and lost 0.64% annualized over the past five years.

Vanguard Total International Bond Index Fund BNDX

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Global Bond-USD Hedged

The $123 billion Vanguard Total International Bond Index Fund fell 1.31% in September. The loss on the fund edged out the 1.60% loss on the average fund in the global bond-USD hedged category, outperforming 69% of its peers. Over the past year, the Vanguard fund fell 0.92%, while the average fund in its category fell 0.45%. The fund, launched in May 2013, has climbed 3.90% over the past three years annualized and lost 0.07% annualized over the past five years.

iShares 0-3 Month Treasury Bond ETF SGOV

• Morningstar Medalist Rating
  : Neutral
• Morningstar Category
  : Ultrashort Bond

The $112.3 billion iShares 0-3 Month Treasury Bond ETF rose 0.30% in September. The gain on the fund beat the 0.06% gain on the average fund in the ultrashort bond category, outperforming 87% of its peers. Over the past year, the iShares fund rose 3.74%, while the average fund in its category rose 3.61%. The fund, launched in May 2020, has climbed 4.54% over the past three years annualized and 3.78% annualized over the past five.

Vanguard Short-Term Inflation-Protected Securities Index Fund VTIP

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Short-Term Inflation-Protected Bond

In September, the Vanguard Short-Term Inflation-Protected Securities Index Fund fell 0.89%, while the average short-term inflation-protected bond fund lost 1.01%. The fund outperformed 75% of its peers. The $73.2 billion fund has climbed 1.33% over the past year, outperforming the average fund in its category, which rose 0.66%. The Vanguard fund, launched in October 2012, has climbed 4.77% over the past three years annualized and 2.89% annualized over the past five.

Vanguard Intermediate-Term Corporate Bond Index Fund VCIT

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Corporate Bond

The $72 billion Vanguard Intermediate-Term Corporate Bond Index Fund fell 2.97% in September. The loss on the fund was worse than the 2.70% loss on the average fund in the corporate bond category, underperforming 83% of its peers. Over the past year, the Vanguard fund fell 2.23%, while the average fund in its category fell 2.17%. The fund, launched in November 2009, has climbed 5.74% over the past three years annualized and 0.33% annualized over the past five.

Vanguard Short-Term Bond Index Fund BSV

• Morningstar Medalist Rating
  : Bronze
• Morningstar Category
  : Short-Term Bond

In September, the Vanguard Short-Term Bond Index Fund fell 1.06%, while the average short-term bond fund lost 1.00%. The fund underperformed 62% of its peers. The $71 billion fund has climbed 0.77% over the past year, underperforming the average fund in its category, which rose 1.46%. The Vanguard fund, launched in April 2007, has climbed 4.27% over the past three years annualized and 1.52% annualized over the past five.

Vanguard Intermediate-Term Bond Index Fund BIV

• Morningstar Medalist Rating
  : Neutral
• Morningstar Category
  : Intermediate Core Bond

The $52.1 billion Vanguard Intermediate-Term Bond Index Fund fell 2.95% in September. The loss on the fund was worse than the 2.64% loss on the average fund in the intermediate core bond category, underperforming 87% of its peers. Over the past year, the Vanguard fund fell 2.62%, while the average fund in its category fell 1.88%. The fund, launched in April 2007, has climbed 4.29% over the past three years annualized and lost 0.54% annualized over the past five years.

Vanguard Short-Term Corporate Bond Index Fund VCSH

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Short-Term Bond

The $51.7 billion Vanguard Short-Term Corporate Bond Index Fund fell 1.20% in September. The loss on the fund was worse than the 1.00% loss on the average fund in the short-term bond category, underperforming 72% of its peers. Over the past year, the Vanguard fund rose 1.13%, while the average fund in its category rose 1.46%. The fund, launched in November 2009, has climbed 5.23% over the past three years annualized and 2.17% annualized over the past five.

State Street SPDR Bloomberg 1-3 Month T-Bill ETF BIL

• Morningstar Medalist Rating
  : Neutral
• Morningstar Category
  : Ultrashort Bond

The $49.8 billion State Street SPDR Bloomberg 1-3 Month T-Bill ETF rose 0.31% in September. The gain on the fund beat the 0.06% gain on the average fund in the ultrashort bond category, outperforming 91% of its peers. Over the past year, the State Street fund rose 3.66%, while the average fund in its category rose 3.61%. The fund, launched in May 2007, has climbed 4.46% annualized over the past three years and 3.66% annualized over the past five.