Wealthy PotBND vs BNDX: US Bonds, or Hedged International Bonds Alongside Them?
BND and BNDX share no bonds. BND holds US dollar bonds; BNDX holds bonds issued in other currencies, with the currency risk hedged back to the dollar. Our overlap checker scores them at 6.3%, but that is issuers they have in common, such as the European Investment Bank, not the same bonds. BND costs 0.03% and BNDX 0.07%. On 1 October 2026, BND's 30-day SEC yield was 5.07% and BNDX's 3.83%. In 2022 they fell almost the same amount: -13.15% and -12.87%. Owning both duplicates nothing. The real question is whether you want an international slice in your bonds at all.
Table of Contents
The Short Answer
- Different bond markets. BND tracks investment-grade US dollar bonds over one year to maturity. BNDX tracks investment-grade bonds "issued in currencies other than the U.S. dollar," from developed and emerging markets.
- BNDX is hedged. Its prospectus says it hedges its foreign currency exposure, mainly with currency forward contracts. You get foreign interest rates without most of the swings in the euro or the yen.
- Overlap: 6.3%. That figure counts issuers both funds hold. No individual bond can be in both, because one index is dollar-only and the other excludes dollars.
- Fees: 0.03% vs 0.07%. The prospectus examples come to $39 and $90 on $10,000 over ten years.
- Yield: 5.07% vs 3.83%. 30-day SEC yields on 1 October 2026.
- Similar risk, different drivers. Average duration on 31 August 2026 was 5.7 years for BND and 6.5 years for BNDX. Both lost about 13% in 2022.
- Ten years to 30 September 2026: BND 1.13% a year, BNDX 1.30%, both at NAV.
Overlap: 6.3%, and No Bond in Common
Our Portfolio Overlap Checker puts BND and BNDX at 6.3%, across 220 shared names. The checker matches US Treasuries bond by bond, but it matches corporate, agency and foreign issuers by name. So the 6.3% means "the same borrower," not "the same bond."
The largest shared names show what that looks like. The European Investment Bank is 0.33% of BND and 1.05% of BNDX. Germany's development bank KfW is 0.20% and 1.11%. BND owns their dollar bonds and BNDX owns their euro and other non-dollar bonds. The rules make a true match impossible: BND's index covers dollar-denominated bonds, and BNDX's index covers bonds "issued in currencies other than the U.S. dollar."
The filings are a month apart: BND's Form N-PORT is for 30 June 2026 and BNDX's for 31 July 2026. On BND's filing, US Treasuries made up 48.1% of the fund, corporate bonds 27.1% and agency mortgage-backed securities about 19.8%. BNDX is mostly foreign government debt. Vanguard's largest country weights for BNDX on 31 August 2026 were France 11.9%, Japan 10.8%, Germany 10.1%, the United Kingdom 8.1%, Italy 7.6% and Canada 7.1%.
BND vs BNDX, Side by Side
| BND | BNDX | |
|---|---|---|
| Full name | Vanguard Total Bond Market ETF | Vanguard Total International Bond ETF |
| Index | Bloomberg U.S. Aggregate Float Adjusted Index | Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged) |
| What it holds | US dollar investment-grade bonds: Treasuries, corporates, mortgage-backed | Non-dollar investment-grade bonds, mostly foreign governments, currency-hedged |
| Expense ratio | 0.03% | 0.07% |
| Cost example, $10,000 over 10 years | $39 | $90 |
| Number of bonds (31 Aug 2026) | 11,421 | 6,796 |
| Average duration (31 Aug 2026) | 5.7 years | 6.5 years |
| Average effective maturity (31 Aug 2026) | 8.2 years | 8.2 years |
| Average coupon (31 Aug 2026) | 3.9% | 2.8% |
| 30-day SEC yield (1 Oct 2026) | 5.07% | 3.83% |
| 2022 calendar return (NAV) | -13.15% | -12.87% |
| Worst quarter in prospectus chart | -5.94% (Q1 2022) | -5.16% (Q2 2022) |
| Fund net assets, all share classes (31 Aug 2026) | $398.9 billion | $123.0 billion |
| Inception | 3 April 2007 | 31 May 2013 |
BNDX's bonds also carry a lower average coupon, 2.8% against 3.9%. The 1.24-point gap in SEC yield is a real difference in the income each fund reports. It is not the whole story on total return, because the currency hedge has its own gains and costs that flow through the fund's price.
What the Currency Hedge Does
Without a hedge, a US investor in euro bonds earns the bond return plus or minus whatever the euro does against the dollar. Over short periods, currency moves can be larger than the bond return itself. BNDX removes most of that. In its prospectus words, it hedges "to minimize the currency risk associated with investing in bonds denominated in currencies other than the U.S. dollar," and it does so "primarily through the use of foreign currency exchange forward contracts."
The prospectus also shows what the hedge changed. To 31 December 2025, the hedged index BNDX tracks returned 3.03% over one year, -0.12% a year over five years and 2.25% a year over ten. The same bond market unhedged, the Bloomberg Global Aggregate Index ex USD, returned 8.85%, -3.59% and 0.56%. The unhedged version did much better over the one year and much worse over five and ten years. The hedged version moved more like a US bond fund, which is the point.
So BNDX is not a currency bet. Its risks are mainly interest rates in Europe, Japan, the UK and Canada, plus credit and the cost of hedging. Those rates do not always move with US rates, which is the diversification case for holding it next to BND. The prospectus also flags derivatives risk and that the fund "could become nondiversified" by tracking its index, given how large a few governments are in it.
Returns: 2022 and the Decade
| Calendar year, total return at NAV | BND | BNDX |
|---|---|---|
| 2021 | -1.66% | -2.20% |
| 2022 | -13.15% | -12.87% |
| 2023 | 5.70% | 8.87% |
| 2024 | 1.34% | 3.68% |
| 2025 | 7.11% | 3.00% |
| Average annual total return at NAV | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| BND, to 30 Sep 2026 | -1.82% | 4.04% | -0.64% | 1.13% |
| BNDX, to 30 Sep 2026 | -0.92% | 3.90% | -0.06% | 1.30% |
| BND, to 31 Dec 2025 (prospectus) | 7.11% | n/a | -0.40% | 2.00% |
| BNDX, to 31 Dec 2025 (prospectus) | 3.00% | n/a | -0.19% | 2.12% |
Over ten years the two finished within about 0.2 points a year of each other on both dates. Compounding the five calendar years above, $10,000 in BND at the start of 2021 would have been about $9,800 at the end of 2025 and $10,000 in BNDX about $9,910. That is our arithmetic, distributions reinvested, no taxes, and a hypothetical illustration. The point is not which won. They took turns: BNDX led in 2023 and 2024, BND in 2025.
The bad news is shared. Both lost about 13% in 2022 when rates rose around the world at once. International bonds spread interest-rate risk across countries; they did not avoid it that year.
Past performance does not guarantee future results. This is educational information, not personalised investment advice.
Which One, or Both?
- You want one simple bond fund: BND. It is cheaper, its yield was higher on 1 October 2026, and its bonds are in the same currency as your spending.
- You want the bond side as diversified as the stock side: hold both, in a split you choose and keep. Neither prospectus suggests a ratio, so treat any split you read elsewhere as a convention, not a rule.
- Taxable account: both pay income taxed federally as ordinary income. About 48% of BND was US Treasuries on its June 2026 filing, and Treasury interest is exempt from state income tax under 31 U.S.C. § 3124, subject to your state's rules for fund dividends. BNDX holds almost no US Treasuries, so expect no such break. Holding either in an IRA or 401(k) avoids the yearly tax question.
- 401(k) menu: plans often offer a total US bond index fund and sometimes a total international bond index fund. The same comparison applies. Vanguard sells mutual fund versions of both: VBTLX for BND, and Admiral Shares (VTABX, 0.10%) for BNDX.
- Fidelity or Schwab account: BND and BNDX are ETFs and trade there without a fund minimum. If you would rather use the broker's own US bond index fund, see BND vs FXNAX.
- You want less rate risk, not more countries: neither fund solves that. Look at shorter Treasuries, compared in BND vs VGIT and BND vs SGOV.
Sources & Methodology
Fees, index descriptions, hedging language, calendar returns and returns to 31 December 2025 come from each fund's summary prospectus on SEC EDGAR. Yields, durations, bond counts, country weights and returns to 30 September 2026 come from Vanguard's own fund data, read on 5 October 2026, with Vanguard's as-of dates. Overlap and BND's sector mix come from the funds' SEC Form N-PORT filings.
- Vanguard Total Bond Market ETF (BND), Summary Prospectus dated 28 April 2026 (Form 497K)
- Vanguard Total International Bond ETF (BNDX), Summary Prospectus dated 27 February 2026 (Form 497K)
- Vanguard BND profile and Vanguard BNDX profile
- BND Form N-PORT for 30 June 2026 and BNDX Form N-PORT for 31 July 2026, read by our Portfolio Overlap Checker
- 31 U.S.C. § 3124 for the state tax exemption on Treasury interest
How the overlap was computed. For every holding both funds report, the checker takes the smaller of the two weights and adds them up. Treasuries are matched by individual bond (CUSIP). Corporate, agency, supranational and foreign government holdings are matched by issuer, which is why two funds with no bond in common still score 6.3%.
This article is for general education only and is not investment, tax or legal advice. Bond funds lose money when rates rise, and both of these lost about 13% in 2022. BNDX also carries derivatives and foreign-market risks that BND does not. The compounding figures are hypothetical illustrations. All figures were checked on 5 October 2026 and yields change daily. Confirm current figures with Vanguard before acting.
FAQ: BND vs BNDX
Is BNDX currency hedged?
Yes. Its prospectus says the fund "seeks to hedge its foreign currency exposure," mainly with currency forward contracts, so that its returns follow a US-dollar-hedged index.
Do BND and BNDX overlap?
Not bond for bond. Our checker shows 6.3%, which counts issuers both funds lend to, such as the European Investment Bank. BND holds only dollar bonds and BNDX only non-dollar bonds.
Why does BNDX yield less than BND?
Its SEC yield was 3.83% against BND's 5.07% on 1 October 2026, and its bonds carry a lower average coupon, 2.8% against 3.9% on 31 August 2026. The hedge also affects total return in ways the SEC yield does not show, which is why the two funds' long-run returns have been closer than their yields.
Should I hold both BND and BNDX?
It is a common choice and duplicates nothing. Holding BND alone is also reasonable. The decision is whether you want foreign interest-rate exposure in your bond allocation.
Which did better in 2022?
Almost a tie. BND returned -13.15% and BNDX -12.87% at NAV.
Which is cheaper?
BND, at 0.03% a year against BNDX's 0.07%. On $10,000 that is about $3 against $7 a year.
Which has more interest-rate risk?
BNDX, slightly. Its average duration was 6.5 years against BND's 5.7 years on 31 August 2026.
Cite This Page
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"BND vs BNDX: US Bonds, or Hedged International Bonds Alongside Them?" Wealthy Pot, 2026. https://wealthypot.com/bnd-vs-bndx/
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