BNDX vs SPAB

BNDXAVanguard Total International Bond ETF

SPABAState Street SPDR Portfolio Aggregate Bond ETF

In short

BNDX The international half of a global bond portfolio with the currency risk stripped out. BNDX tracks investment-grade bonds from outside the US and hedges them back to dollars, so you get foreign rates and credit without the FX rollercoaster.

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

BNDX Seeks to track a benchmark measuring the investment return of non-U.S.-dollar-denominated investment-grade bonds. It uses currency hedging and index sampling while maintaining broad exposure to major non-U.S. bond markets.

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

• BNDX Hedges its foreign bond exposure back to US dollars, so results track overseas rates and credit rather than swings in the euro or yen.vanguard.com
• Charges 0.07% a year, near the floor for index bond funds, and covers the ex-US ground its stablemate BND leaves out.
• Running since 2013, one of the largest and most actively traded bond ETFs around, and it distributes monthly.
• Uses index sampling to hold a broad spread of investment-grade debt across the major non-US bond markets, one of the stronger builds in its peer group.vanguard.com

• 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

• BNDX The hedge cuts both ways: it removes the lift from a falling dollar along with the drag from a rising one.
• Interest rates in Europe and Japan move this portfolio, and a currency hedge does nothing to soften that.
• No US bonds by mandate. It covers the ex-US slice of a bond allocation only.vanguard.com

• 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 BNDX profile⁠

Full SPAB profile⁠