BND vs SPAB

BNDAVanguard Total Bond Market ETF

SPABAState Street SPDR Portfolio Aggregate 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.'

SPAB A 2007-vintage core bond fund priced at 0.03%: roughly 8,500 US investment-grade bonds in one ticket, at the same rock-bottom fee the household names charge for the same index.

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.

SPAB The fund seeks to track the price and yield performance of the Bloomberg U.S. Aggregate Bond Index before fees and expenses, providing broad exposure to U.S.-dollar-denominated investment-grade bonds.

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.

• SPAB 0.03% a year against a 0.36% median for its peer group, and the same ticket price as AGG, SCHZ and BBAG on the identical index.
• Roughly 8,500 dollar-denominated investment-grade bonds in one line item, tracking the Bloomberg U.S. Aggregate Bond Index. Diversification you could not assemble bond by bond.ssga.com
• Trades actively and has tracked its index closely, putting it among the stronger implementations in the core-bond group.
• Running since 2007, now a multi-billion-dollar fund, and it pays monthly rather than quarterly.

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.

• SPAB Bond prices move opposite yields. When rates rise the index falls and the fund follows it down; a 0.03% fee cannot cushion that.
• AGG, SCHZ and BBAG hold the same declared index at the same 0.03%. Picking among them comes down to spreads and platform, not the portfolio.
• Investment grade and US dollar only by mandate: high yield and foreign-currency debt sit outside the remit.ssga.com

Full BND profile⁠

Full SPAB profile⁠