Vanguard Total Bond Market ETF vs Fidelity Investment Grade Bond ETF: Which Bond Fund Is the Better Buy?
Key Points
Vanguard Total Bond Market ETF offers a significantly lower expense ratio and much greater diversification than Fidelity Investment Grade Bond ETF.
Fidelity Investment Grade Bond ETF has a slightly higher dividend yield but has seen marginally lower total returns over the last year.
Vanguard Total Bond Market ETF manages nearly $400 billion in assets, providing far superior liquidity compared to the Fidelity fund.
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The Vanguard Total Bond Market ETF (NASDAQ:BND) provides broad exposure to the entire U.S. investment-grade market, while the Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) focuses on a curated selection of high-quality debt.
Both funds provide core fixed income exposure for investors seeking safety and income. However, they differ significantly in scale, cost, and the breadth of their underlying portfolios. This analysis breaks down how these two debt-focused instruments compare in terms of risk, returns, and daily trading efficiency.
Snapshot (cost & size)
| Metric | FIGB | BND |
|---|---|---|
| Issuer | Fidelity | Vanguard |
| Share price | $41.62 (as of 2026-10-01) | $71.20 (as of 2026-10-01) |
| Expense ratio | 0.36% | 0.03% |
| 1-yr total return (as of 2026-10-01) | (2.3%) | (1.8%) |
| Dividend yield | 4.29% | 4.19% |
| Beta | 1.02 | 0.98 |
| AUM | $643.6 million | $398.9 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is substantially more affordable with an expense ratio of 0.03%, compared to 0.36% for the Fidelity fund. While the Fidelity fund offers a slightly higher yield of 4.29%, the cost savings of the Vanguard fund are significant.
Performance & risk comparison
| Metric | FIGB | BND |
|---|---|---|
| Max drawdown (5 yr) | (18.1%) | (18.6%) |
| Growth of $1,000 over 5 years (total return) | $971 | $969 |
What's inside
The Vanguard provides a fixed income portfolio with no equity sector breakdown, holding 11,421 securities. Its largest positions are highly diversified, with no single position exceeding 0.5% of the portfolio. It was launched in 2007. BND has paid $2.93 per share over the trailing 12 months, which, on its recent ~$71.20 share price, works out to a 4.1% yield.
The Fidelity fund is also a fixed-income fund with no equity sector breakdown, containing 1,036 holdings. Its largest positions include Cash at 5.69%, and U.S. Treasury notes at 4.27% and 3.95%. It was launched in 2021. FIGB has paid $1.74 per share over the trailing 12 months, which, at its recent ~$41.62 share price, works out to a 4.2% yield.
For more guidance on ETF investing, check out the full guide at this link.
BND is the better buy
Vanguard offers roughly 0.3% in lower expense, which more than offsets the minor advantage FIGB has in dividend yield. Plus, it's more diversified across over 11,000 holdings and assets under management.
Both funds have also delivered almost identical five-year returns, which builds the case for buying the Vanguard over Fidelity. BND is working across a more diversified range of assets, yet still manages to deliver nearly the same result, which is a benefit.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Total Bond Market ETF. The Motley Fool has a disclosure policy.
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