ETF Versus

BND vs TIP

Vanguard Total Bond Market Index Fund vs iShares TIPS Bond ETF

Last updated: 2026-04-02

BND Vanguard

Vanguard Total Bond Market Index Fund (BND) is an exchange-traded fund issued by Vanguard that provides exposure to the broad U.S. investment-grade bond market. It charges a very low expense ratio of 0.03%. The fund offers an attractive dividend yield of 3.93%. Launched in 2007, the fund has a 19-year track record.

AUM: $150.4B ER: 0.03% Yield: 3.93% Since: Apr 3, 2007
TIP

iShares TIPS Bond ETF (TIP) is an exchange-traded fund that provides exposure to us tips securities. It charges a moderate expense ratio of 0.18%. The fund offers an attractive dividend yield of 2.80%. Launched in 2003, the fund has a 23-year track record.

AUM: $13.9B ER: 0.18% Yield: 2.80% Since: Dec 4, 2003

Quick Verdict

BND is significantly cheaper at 0.03% vs 0.18% expense ratio, saving you approximately $297 per $10,000 invested over 10 years. Both funds have delivered similar 1-year returns (-0.0% vs -0.1%), tracking closely. Income investors may prefer BND for its higher yield (3.9% vs 2.8%).

Key Metrics

Metric BND TIP
Expense Ratio 0.03% 0.18%
Dividend Yield 3.9% 2.8%
Fund Family Vanguard N/A
Category US Aggregate Bond US TIPS

Performance Chart

Indexed to 100 at start (5-year comparison)

80 85 90 95 100 105 2021-04 2022-06 2023-09 2024-12 2026-04
BND -13.3%
TIP -11.9%

Performance Comparison

Period BND TIP Difference
1 Month -1.63% -1.08% -0.55%
3 Months -0.84% +0.46% -1.30%
6 Months -1.20% -0.62% -0.58%
YTD -0.84% +0.46% -1.30%
1 Year -0.03% -0.08% +0.05%
3 Years -0.73% +0.04% -0.77%
5 Years -13.29% -11.85% -1.44%

Fee Impact Over Time

Estimated fee cost difference assuming 8% annual returns

Investment Period BND Fees TIP Fees You Save
$10.000 10 years $60 $357 $297
$10.000 20 years $258 $1.529 $1.271
$10.000 30 years $835 $4.912 $4.076
$50.000 10 years $299 $1.786 $1.486
$50.000 30 years $4.176 $24.558 $20.382
$100.000 30 years $8.352 $49.116 $40.764

Risk Metrics

Based on 5 years of daily returns

Metric BND TIP
Annualized Volatility 6.0% 6.5%
Max Drawdown -21.7% -22.0%
Sharpe Ratio -1.19 -1.06

Dividend Comparison

Metric BND TIP
Annual Dividend (per share) $2.88 $3.80
Dividend Yield 3.92% 3.44%
Distribution Frequency Monthly Monthly

Which One Should You Choose?

Choose BND if...

you want the lowest fees and plan to buy and hold long-term. Over decades, the expense ratio difference compounds significantly.

Choose BND if...

you prioritize dividend income and want higher regular distributions from your portfolio.

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