ETF Versus

BND vs TIP

Vanguard Total Bond Market Index Fund vs iShares TIPS Bond ETF

Last updated: 2026-04-10

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 3.92%. Launched in 2007, the fund has a 19-year track record.

AUM: $152.0B ER: 0.03% Yield: 3.92% Since: Apr 3, 2007
TIP iShares

iShares TIPS Bond ETF (TIP) is an exchange-traded fund issued by iShares that provides exposure to us tips securities. It charges a moderate expense ratio of 0.18%. The fund offers an attractive dividend yield of 2.79%. Launched in 2003, the fund has a 23-year track record.

AUM: $14.0B ER: 0.18% Yield: 2.79% 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 (2.2% vs 2.9%), 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 iShares
Category US Aggregate Bond US TIPS

Performance Chart

Indexed to 100 at start (5-year comparison)

80 85 90 95 100 105 2021-04 2022-07 2023-10 2025-01 2026-04
BND -13.3%
TIP -11.5%

Performance Comparison

Period BND TIP Difference
1 Month -0.29% -0.05% -0.24%
3 Months -0.73% +0.75% -1.48%
6 Months -1.29% -0.70% -0.59%
YTD -0.49% +1.05% -1.54%
1 Year +2.18% +2.85% -0.67%
3 Years -0.40% +0.42% -0.82%
5 Years -13.25% -11.46% -1.79%

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 -1.04

Dividend Comparison

Metric BND TIP
Annual Dividend (per share) $2.89 $3.09
Dividend Yield 3.92% 2.79%
Distribution Frequency Monthly Quarterly

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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