How the Largest Bond ETFs 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 $51.7 billion Vanguard Tax-Exempt Bond Index Fund VTEB, which gained 3.60%. The bottom performer was the $115.2 billion iShares 0-3 Month Treasury Bond ETF SGOV, which gained 0.35%.

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

The Vanguard Total Bond Market Index Fund gained 2.39% in October, performing roughly in line with the average fund in the intermediate core bond category, which rose 2.28%. The $389.1 billion fund has lost 0.08% over the past 12 months, while the average fund in its category is down 0.22%. The Vanguard fund, launched in April 2007, has climbed 5.41% over the past three years annualized and lost 0.16% annualized over the past five years.

iShares Core US Aggregate Bond ETF AGG

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

The iShares Core US Aggregate Bond ETF gained 2.43% in October, outperforming the average fund in the intermediate core bond category, which rose 2.28%. The $139.6 billion fund has lost 0.10% over the past 12 months, while the average fund in its category is down 0.22%. The iShares fund, launched in September 2003, has climbed 5.44% over the past three years annualized and lost 0.15% annualized over the past five years.

Vanguard Total International Bond Index Fund BNDX

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

The Vanguard Total International Bond Index Fund gained 1.47% in October, outperforming the average fund in the global bond-USD hedged category, which rose 1.38%. The $121.6 billion fund has lost 0.49% over the past 12 months, while the average fund in its category is up 0.19%. The Vanguard fund, launched in May 2013, has climbed 4.42% over the past three years annualized and gained 0.33% annualized over the past five years.

iShares 0-3 Month Treasury Bond ETF SGOV

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

The $115.2 billion iShares 0-3 Month Treasury Bond ETF rose 0.35% in October. The gain on the fund was shy of the 0.44% gain on the average fund in the ultrashort bond category, underperforming 82% of its peers. Over the past 12 months, the iShares fund rose 3.73%, while the average fund in its category rose 3.73%. The fund, launched in May 2020, has climbed 4.51% over the past three years annualized and gained 3.85% annualized over the past five years.

Vanguard Short-Term Inflation-Protected Securities Index Fund VTIP

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

The Vanguard Short-Term Inflation-Protected Securities Index Fund gained 1.39% in October, performing roughly in line with the average fund in the short-term inflation-protected bond category, which rose 1.42%. The $73 billion fund has gained 2.66% over the past 12 months, while the average fund in its category is up 2.15%. The Vanguard fund, launched in October 2012, has climbed 5.12% over the past three years annualized and gained 3.04% annualized over the past five years.

Vanguard Short-Term Bond Index Fund BSV

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

In October, the Vanguard Short-Term Bond Index Fund rose 1.22%, while the average short-term bond fund gained 0.95%. The fund outperformed 83% of its peers. The $69.5 billion fund has climbed 1.62% over the past 12 months, underperforming the average fund in its category, which rose 2.05%. The Vanguard fund, launched in April 2007, has climbed 4.67% over the past three years annualized and gained 1.87% annualized over the past five years.

Vanguard Intermediate-Term Corporate Bond Index Fund VCIT

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

The Vanguard Intermediate-Term Corporate Bond Index Fund gained 2.15% in October, outperforming the average fund in the corporate bond category, which rose 1.95%. The $68.6 billion fund has lost 0.53% over the past 12 months, while the average fund in its category is down 0.62%. The Vanguard fund, launched in November 2009, has climbed 7.11% over the past three years annualized and gained 0.87% annualized over the past five years.

iShares National Muni Bond ETF MUB

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Muni National Intermediate

In October, the iShares National Muni Bond ETF rose 3.52%, while the average muni national intermediate fund gained 3.50%. The fund underperformed 50% of its peers. The $54.5 billion fund has climbed 0.13% over the past 12 months, underperforming the average fund in its category, which rose 0.37%. The iShares fund, launched in September 2007, has climbed 4.14% over the past three years annualized and gained 0.64% annualized over the past five years.

Vanguard Tax-Exempt Bond Index Fund VTEB

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Muni National Intermediate

In October, the Vanguard Tax-Exempt Bond Index Fund rose 3.60%, while the average muni national intermediate fund gained 3.50%. The fund outperformed 65% of its peers. The $51.7 billion fund has climbed 0.10% over the past 12 months, underperforming the average fund in its category, which rose 0.37%. The Vanguard fund, launched in August 2015, has climbed 4.37% over the past three years annualized and gained 0.62% annualized over the past five years.

Vanguard Short-Term Corporate Bond Index Fund VCSH

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

The Vanguard Short-Term Corporate Bond Index Fund gained 1.18% in October, outperforming the average fund in the short-term bond category, which rose 0.95%. The $50.9 billion fund has gained 1.94% over the past 12 months, while the average fund in its category is up 2.05%. The Vanguard fund, launched in November 2009, has climbed 5.67% over the past three years annualized and gained 2.52% annualized over the past five years.