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 $98.8 billion iShares 0-3 Month Treasury Bond ETF SGOV, which gained 0.33%. The bottom performer was the $137 billion iShares Core US Aggregate Bond ETF AGG, which lost 1.31%. 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 lost 1.26% in July, performing roughly in line with the average fund in the intermediate core bond category, which fell 1.26%. The $397.9 billion fund has gained 2.64% over the past 12 months, while the average fund in its category is up 2.71%. The Vanguard fund, launched in April 2007, has climbed 3.73% over the past three years annualized and lost 0.42% 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 lost 1.31% in July, performing roughly in line with the average fund in the intermediate core bond category, which fell 1.26%. The $137 billion fund has gained 2.70% over the past 12 months, while the average fund in its category is up 2.71%. The iShares fund, launched in September 2003, has climbed 3.73% over the past three years annualized and lost 0.40% 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 1.14% in July, falling further than the average fund in the global bond-USD hedged category, which fell 1.01%. The $123.3 billion fund has gained 1.23% over the past 12 months, while the average fund in its category is up 2.38%. The Vanguard fund, launched in May 2013, has climbed 3.90% over the past three years annualized and lost 0.05% annualized over the past five years.

iShares 0-3 Month Treasury Bond ETF SGOV

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

In July, the iShares 0-3 Month Treasury Bond ETF rose 0.33%, while the average ultrashort bond fund gained 0.30%. The fund outperformed 60% of its peers. The $98.8 billion fund has climbed 3.87% over the past 12 months, underperforming the average fund in its category, which rose 4.17%. The iShares fund, launched in May 2020, has climbed 4.65% over the past three years annualized and 3.66% annualized over the past five.

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 0.16% in July, outperforming the average fund in the short-term inflation-protected bond category, which rose 0.13%. The $71.1 billion fund has gained 3.48% over the past 12 months, while the average fund in its category is up 3.14%. The Vanguard fund, launched in October 2012, has climbed 5.05% over the past three years annualized and 3.07% annualized over the past five.

Vanguard Short-Term Bond Index Fund BSV

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

In July, the Vanguard Short-Term Bond Index Fund fell 0.09%, while the average short-term bond fund lost 0.06%. The fund underperformed 60% of its peers. The $69.8 billion fund has climbed 2.97% over the past 12 months, underperforming the average fund in its category, which rose 3.54%. The Vanguard fund, launched in April 2007, has climbed 4.49% over the past three years annualized and 1.61% annualized over the past five.

Vanguard Intermediate-Term Corporate Bond Index Fund VCIT

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

The $69.4 billion Vanguard Intermediate-Term Corporate Bond Index Fund fell 1.27% in July. Its loss edged out the 1.50% loss on the average fund in the corporate bond category, outperforming 81.00% of its peers. Over the past 12 months, the Vanguard fund rose 3.01%, while the average fund in its category rose 2.52%. The fund, launched in November 2009, has climbed 5.60% over the past three years annualized and 0.64% annualized over the past five.

Vanguard Intermediate-Term Bond Index Fund BIV

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

The $52.5 billion Vanguard Intermediate-Term Bond Index Fund fell 1.18% in July. Its loss edged out the 1.26% loss on the average fund in the intermediate core bond category, outperforming 84% of its peers. Over the past 12 months, the Vanguard fund rose 2.41%, while the average fund in its category rose 2.71%. The fund, launched in April 2007, has climbed 4.23% over the past three years annualized and lost 0.28% annualized over the past five years.

Vanguard Short-Term Corporate Bond Index Fund VCSH

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

In July, the Vanguard Short-Term Corporate Bond Index Fund fell 0.13%, while the average short-term bond fund lost 0.06%. The fund underperformed 69% of its peers. The $51.8 billion fund has climbed 3.59% over the past 12 months, performing roughly in line with the average fund in its category, which rose 3.54%. The Vanguard fund, which launched in November 2009, has climbed 5.40% over the past three years annualized and 2.31% annualized over the past five.

Vanguard Intermediate-Term Treasury Index Fund VGIT

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

The Vanguard Intermediate-Term Treasury Index Fund lost 0.75% in July, falling less than the average fund in the intermediate government category, which fell 1.05%. The $50.4 billion fund has gained 2.09% over the past 12 months, while the average fund in its category is up 1.99%. The Vanguard fund, launched in November 2009, has climbed 3.61% over the past three years annualized and lost 0.24% annualized over the past five years.