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 $137.6 billion iShares Core US Aggregate Bond ETF AGG, which gained 0.38%. The bottom performer was the $122.5 billion Vanguard Total International Bond Index Fund BNDX, which lost 0.21%.

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 $396.7 billion Vanguard Total Bond Market Index Fund rose 0.38% in August. The gain on the fund beat the 0.33% gain on the average fund in the intermediate core bond category, outperforming 66% of its peers. Over the past year, the Vanguard fund rose 1.82%, while the average fund in its category rose 1.80%. The fund, launched in April 2007, has climbed 4.08% over the past three years annualized and lost 0.30% annualized over the past five years.

iShares Core US Aggregate Bond ETF AGG

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

The $137.6 billion iShares Core US Aggregate Bond ETF rose 0.38% in August. The gain on the fund beat the 0.33% gain on the average fund in the intermediate core bond category, outperforming 69% of its peers. Over the past year, the iShares fund rose 1.89%, while the average fund in its category rose 1.80%. The fund, launched in September 2003, has climbed 4.08% over the past three years annualized and lost 0.28% 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 lost 0.21% in August, underperforming the average fund in the global bond-USD hedged category, which was unchanged. The $122.5 billion fund has gained 0.98% over the past year, while the average fund in its category is up 1.82%. The Vanguard fund, launched in May 2013, has climbed 3.78% over the past three years annualized and lost 0.01% annualized over the past five years.

iShares 0-3 Month Treasury Bond ETF SGOV

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

The iShares 0-3 Month Treasury Bond ETF gained 0.29% in August, underperforming the average fund in the ultrashort bond category, which rose 0.33%. The $104.9 billion fund has gained 3.78% over the past year, while the average fund in its category is up 3.98%. The iShares fund, launched in May 2020, has climbed 4.59% over the past three years annualized and gained 3.72% 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

In August, the Vanguard Short-Term Inflation-Protected Securities Index Fund rose 0.04%, while the average short-term inflation-protected bond fund was unchanged. The fund outperformed 66% of its peers. The $71.2 billion fund has climbed 2.20% over the past year, outperforming the average fund in its category, which rose 1.77%. The Vanguard fund, launched in October 2012, has climbed 5.02% over the past three years annualized and gained 3.07% annualized over the past five years.

Vanguard Short-Term Bond Index Fund BSV

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

The $70.6 billion Vanguard Short-Term Bond Index Fund rose 0.23% in August. The gain on the fund was shy of the 0.32% gain on the average fund in the short-term bond category, underperforming 77% of its peers. Over the past year, the Vanguard fund rose 2.14%, while the average fund in its category rose 2.92%. The fund, launched in April 2007, has climbed 4.50% over the past three years annualized and gained 1.68% annualized over the past five years.

Vanguard Intermediate-Term Corporate Bond Index Fund VCIT

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

In August, the Vanguard Intermediate-Term Corporate Bond Index Fund rose 0.22%, while the average corporate bond fund gained 0.40%. The fund underperformed 90% of its peers. The $69.8 billion fund has climbed 1.90% over the past year, performing roughly in line with the average fund in its category, which rose 1.87%. The Vanguard fund, launched in November 2009, has climbed 5.88% over the past three years annualized and gained 0.75% annualized over the past five years.

Vanguard Short-Term Corporate Bond Index Fund VCSH

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

The $52 billion Vanguard Short-Term Corporate Bond Index Fund rose 0.29% in August. The gain on the fund was shy of the 0.32% gain on the average fund in the short-term bond category, underperforming 51% of its peers. Over the past year, the Vanguard fund rose 2.78%, while the average fund in its category rose 2.92%. The fund, launched in November 2009, has climbed 5.47% over the past three years annualized and gained 2.38% annualized over the past five years.

Vanguard Intermediate-Term Bond Index Fund BIV

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

In August, the Vanguard Intermediate-Term Bond Index Fund rose 0.18%, while the average intermediate core bond fund gained 0.33%. The fund underperformed 93% of its peers. The $51.9 billion fund has climbed 1.04% over the past year, underperforming the average fund in its category, which rose 1.80%. The Vanguard fund, launched in April 2007, has climbed 4.47% over the past three years annualized and lost 0.18% annualized over the past five years.

Vanguard Intermediate-Term Treasury Index Fund VGIT

• Morningstar Medalist Rating
  : Gold
• Morningstar Category
  : Intermediate Government

In August, the Vanguard Intermediate-Term Treasury Index Fund rose 0.13%, while the average intermediate government fund gained 0.24%. The fund underperformed 67% of its peers. The $50.8 billion fund has climbed 0.71% over the past year, underperforming the average fund in its category, which rose 1.01%. The Vanguard fund, launched in November 2009, has climbed 3.73% over the past three years annualized and lost 0.16% annualized over the past five years.