BND vs IUSB

BNDAVanguard Total Bond Market ETF

IUSBAiShares Core Universal USD Bond ETF

In short

BND The whole taxable US investment-grade bond market in one ticker for three basis points. Vanguard's core bond workhorse since 2007, now a $100B-plus fund and the thing most people picture when they say 'bond fund.'

IUSB Most core bond funds stop at investment grade. IUSB keeps going, folding high-yield USD debt into the same wrapper across roughly 18,000 bonds, for 0.06% a year.

Stated mandate

BND The fund seeks to track a broad U.S. investment-grade bond benchmark. It uses passive sampling to provide diversified exposure to taxable, U.S. dollar-denominated bonds.

IUSB The Fund seeks to track an index of U.S.-dollar-denominated bonds spanning investment-grade and high-yield sectors.

Why people hold it

• BND Charges 0.03%, roughly a tenth of the typical core bond ETF's fee. Nothing in the category charges less; SPAB and SCHZ tie it, and even Vanguard's own VCRB on the same benchmark costs more.
• Tracks the Bloomberg U.S. Aggregate Float Adjusted Index about as tightly as the data allows, and trades heavily enough that spreads rarely become the story.
• Pays monthly, runs over $100B, and has been operating since 2007. One of the most durable implementations in the core bond group.

• IUSB 0.06% a year, a fraction of what the typical broad bond fund in its category charges, and iShares has run it since 2014.
• Roughly 18,000 bonds spanning investment-grade and high-yield sectors, so one ticker covers ground a plain Agg tracker leaves on the table.ishares.com
• Tracks its index closely, trades heavily, and sits on a multi-billion-dollar asset base. Income is paid monthly.
• Among the strongest implementations in a crowded field of nearly 200 core bond funds.

Worth knowing

• BND This is a bond index fund, not a cash sleeve. Prices move opposite interest rates, and the broad Aggregate carries real duration risk.
• Taxable, US dollar, investment grade only. No high yield, no municipals, no non-US bonds, so income comes from the safer end of the credit ladder.
• It samples the index rather than owning every bond in it, so holdings track the benchmark's shape instead of replicating it line for line.

• IUSB That high-yield sleeve is the trade-off: more credit risk than an investment-grade-only fund, and more movement when spreads widen.
• BND, SPAB and SCHZ charge 0.03%, half IUSB's fee, but they stay inside investment grade.
• Payouts land monthly, but the amount floats with the coupons underneath. Nothing about the income stream is fixed.

Full BND profile⁠

Full IUSB profile⁠