Wealthy PotBND vs VGIT: The Whole Bond Market or Just Its Middle Treasuries?
Every bond in VGIT is also in BND. VGIT is the 3-to-10-year US Treasury slice of the bond market; BND is the whole investment-grade market, Treasuries plus corporate and mortgage bonds. Those shared Treasuries make up 20.8% of BND, by our calculation from the funds' SEC holdings filings. Both charge 0.03%. BND paid a little more income (a 5.07% SEC yield against 4.91% on 1 October 2026) and carries a little more interest-rate risk (5.7 years of duration against 4.9). In 2022 BND lost 13.15% and VGIT 10.67%. Over ten years to 30 September 2026, BND returned 1.13% a year and VGIT 0.88%.
Table of Contents
The Short Answer
- Overlap: 98.7% one way, 20.8% the other. All of VGIT's bonds appear in BND's filing; those bonds are about a fifth of BND.
- Same fee. 0.03% each, $39 on $10,000 over ten years in both prospectus examples.
- BND adds credit and mortgages. On its June 2026 filing BND was 48.1% Treasuries, 27.1% corporate bonds and about 19.8% agency mortgage-backed securities. VGIT is only Treasuries maturing in 3 to 10 years.
- Yield: 5.07% vs 4.91%. 30-day SEC yields on 1 October 2026. The 0.16-point gap is what BND's corporate and mortgage bonds and slightly longer duration were paying.
- Duration: 5.7 vs 4.9 years on 31 August 2026. VGIT fell less in 2022: -10.67% against -13.15%.
- Close over a decade. Ten years to 30 September 2026 at NAV: BND 1.13% a year, VGIT 0.88%.
- Tax: VGIT's income is all Treasury interest, which may be exempt from state income tax. About half of BND's holdings are Treasuries.
Overlap: All of VGIT Is Inside BND
Our Portfolio Overlap Checker matches US Treasuries bond by bond, by CUSIP. Each of the 103 holdings on VGIT's Form N-PORT for 31 May 2026 also appears on BND's filing for 30 June 2026. They make up 98.7% of VGIT, and the remaining 1.3% was cash. In BND, the same bonds add up to 20.8% of the fund.
| Overlap measure | Result |
|---|---|
| VGIT holdings also held by BND | 103 of 103 |
| Share of VGIT's weight in bonds BND also owns | 98.7% |
| Share of BND's weight in bonds VGIT also owns | 20.8% |
| Overlap (sum of the smaller weight in each shared bond) | 20.8% |
So owning both is not two separate bets. If you hold BND, you already own VGIT's bonds at about a fifth of the weight. Adding VGIT tilts your bond allocation toward intermediate Treasuries and away from corporate and mortgage bonds.
BND vs VGIT, Side by Side
| BND | VGIT | |
|---|---|---|
| Full name | Vanguard Total Bond Market ETF | Vanguard Intermediate-Term Treasury ETF |
| Index | Bloomberg U.S. Aggregate Float Adjusted Index | Bloomberg U.S. Treasury 3-10 Year Index |
| What it holds | Treasuries, corporates, agency mortgage-backed and other investment-grade dollar bonds, over 1 year to maturity | US Treasury notes and bonds maturing in 3 to 10 years (no TIPS or floating-rate notes) |
| Expense ratio | 0.03% | 0.03% |
| Number of bonds (31 Aug 2026) | 11,421 | 102 |
| Average duration (31 Aug 2026) | 5.7 years | 4.9 years |
| Average effective maturity (31 Aug 2026) | 8.2 years | 5.6 years |
| 30-day SEC yield (1 Oct 2026) | 5.07% | 4.91% |
| 2022 calendar return (NAV) | -13.15% | -10.67% |
| Worst quarter in prospectus chart | -5.94% (Q1 2022) | -5.31% (Q1 2022) |
| Portfolio turnover, latest fiscal year | 38% | 55% |
| Fund net assets, all share classes (31 Aug 2026) | $398.9 billion | $48.3 billion |
| Inception | 3 April 2007 | 19 November 2009 |
Where They Differ: Credit, Mortgages and Duration
Credit. VGIT holds only bonds issued by the US Treasury. BND's index takes in "government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities." About 27% of BND was corporate debt on its June 2026 filing. Corporate bonds carry credit risk, which the prospectus defines as "the chance that an issuer will default," and their prices can fall on "negative perceptions of an issuer's ability to make payments" even when rates stay put.
Mortgages. About a fifth of BND is agency mortgage-backed securities. These carry prepayment risk, which BND's prospectus describes as "borrowers repaying their debt early," so the fund loses "any price appreciation above the amount repaid." Borrowers usually do that when rates fall, which is when the fund would otherwise gain most. VGIT's Treasuries carry no prepayment risk.
Duration. BND reaches out to 30-year bonds, while VGIT stops at 10 years. That gives BND a duration of 5.7 years against VGIT's 4.9. As a rough, hypothetical rule of thumb, a one-point rise in rates would cut BND's price by about 5.7% and VGIT's by about 4.9%. Real moves differ because rates do not move evenly across maturities.
In practice the two funds sit close together. The yield difference was 0.16 points, the duration difference 0.8 years, and the fee identical. VGIT is the purer, slightly lower-risk version; BND is the broader one.
Returns: 2022 and the Decade
| Calendar year, total return at NAV | BND | VGIT |
|---|---|---|
| 2021 | -1.66% | -2.57% |
| 2022 | -13.15% | -10.67% |
| 2023 | 5.70% | 4.42% |
| 2024 | 1.34% | 1.32% |
| 2025 | 7.11% | 7.39% |
| Average annual return at NAV to 30 Sep 2026 | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| BND | -1.82% | 4.04% | -0.64% | 1.13% |
| VGIT | -1.88% | 3.50% | -0.43% | 0.88% |
VGIT's shorter duration helped in 2022. BND's extra yield helped in 2023 and over three years. Over five years they are within a quarter point, and over ten BND leads by 0.25 points a year. Compounding the five calendar years, $10,000 at the start of 2021 became about $9,800 in BND and $9,890 in VGIT by the end of 2025. That is our hypothetical arithmetic, with distributions reinvested and no taxes. Both funds also lost ground in the three months to 30 September 2026: BND -3.43% and VGIT -2.91% at NAV.
Past performance does not guarantee future results. This is educational information, not personalised investment advice.
The State Tax Angle
Both funds' dividends are taxed federally as ordinary income. At the state level, interest on US Treasury obligations is exempt under 31 U.S.C. § 3124: "Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State." Whether that exemption carries through a fund's dividends to you depends on your state's rules.
VGIT's income is Treasury interest, so it has the strongest case. BND's holdings were 48.1% Treasuries on its June 2026 filing, so only part of its income can qualify. We have not pulled either fund's tax-year percentage, so we do not quote one. In a taxable account in a high-tax state, this can narrow or reverse BND's 0.16-point yield edge. Inside an IRA or 401(k), it does not matter.
Which One Fits You
- One fund for the whole bond allocation: BND. It holds the broad market, including VGIT's bonds, for the same 0.03%.
- You want bonds to be the safe part, with no corporate credit: VGIT. Treasuries carry no default risk from a company, and VGIT fell less in 2022. It still has interest-rate risk, as -10.67% shows.
- Taxable account in a high-tax state: VGIT's all-Treasury income is likely worth more after state tax, subject to your state's rules.
- IRA or 401(k): state tax is out of the picture, so choose on breadth versus purity. A 401(k) menu may offer a total bond index fund rather than a Treasury fund; that is the BND choice.
- Holding both: works as a deliberate tilt toward Treasuries, but remember you already own VGIT's bonds inside BND.
- Money you need within a year or two: neither. See BND vs SGOV and SGOV vs VGSH for short-term options.
- Mutual fund instead of ETF: for BND, see BND vs VBTLX. For a non-Vanguard total bond fund, see AGG vs BND and BND vs FXNAX.
Sources & Methodology
Fees, index descriptions, turnover and quarterly extremes come from each fund's summary prospectus on SEC EDGAR. Yields, durations, maturities, bond counts and returns 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 SEC Form N-PORT filings.
- Vanguard Total Bond Market ETF (BND), Summary Prospectus dated 28 April 2026 (Form 497K)
- Vanguard Intermediate-Term Treasury ETF (VGIT), Summary Prospectus dated 19 December 2025, as supplemented 30 June 2026 (Form 497K)
- Vanguard BND profile and Vanguard VGIT profile
- BND Form N-PORT for 30 June 2026 and VGIT Form N-PORT for 31 May 2026, read by our Portfolio Overlap Checker
- 31 U.S.C. § 3124
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. Corporate bonds and agency mortgage pools are matched by issuer, but VGIT holds none, so they do not affect this pair.
This article is for general education only and is not investment, tax or legal advice. Both funds lose value when interest rates rise; BND fell 13.15% and VGIT 10.67% in 2022. The duration rule and 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 VGIT
Is VGIT safer than BND?
Somewhat. It holds only US Treasuries and has a shorter duration, 4.9 years against 5.7. It lost 10.67% in 2022 against BND's 13.15%, so it is not safe from rising rates.
Does BND already hold VGIT's bonds?
Yes. All 103 holdings on VGIT's May 2026 filing appear on BND's June 2026 filing, where they add up to 20.8% of BND.
Which pays more income?
BND, slightly. Its 30-day SEC yield was 5.07% against VGIT's 4.91% on 1 October 2026.
Do BND and VGIT have the same expense ratio?
Yes, 0.03% each.
Should I hold both BND and VGIT?
Only if you want to tilt toward intermediate Treasuries on purpose. BND already contains VGIT's bonds, so holding both mostly shifts weight away from corporate and mortgage bonds.
Is VGIT exempt from state tax?
Its income comes from Treasury interest, which federal law exempts from state income tax. Whether a fund's dividends keep that exemption depends on your state's rules. Federal tax still applies.
Which did better over ten years?
BND, by a small margin: 1.13% a year against 0.88% at NAV to 30 September 2026.
Cite This Page
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"BND vs VGIT: The Whole Bond Market or Just Its Middle Treasuries?" Wealthy Pot, 2026. https://wealthypot.com/bnd-vs-vgit/
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