BND vs VOO: Which ETF Is Better in 2026?
A metric-by-metric comparison of Vanguard Total Bond Market Index Fund (BND) and Vanguard S&P 500 ETF (VOO) — both US Bonds - Broad / US Large Cap Blend funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
This is a cross-asset comparison rather than a like-for-like one. BND is a fixed-income fund and VOO is an equity fund, so they are not competing for the same slot — most portfolios hold some of each. The useful question is not which is better but what mix of the two suits your time horizon and tolerance for drawdowns.
ETFValuer's model scores VOO at 76.0 (Grade B+) and BND at 59.2 (Grade C), but read that gap carefully: the score blends return, risk-adjusted performance, cost and drawdown across a single ranking of all funds, so an asset class with structurally lower expected returns will always score below one with higher returns and higher risk. It is a useful comparison between US Large Cap Blend funds and between US Bonds - Broad funds — not a verdict that one of these two belongs in your portfolio and the other doesn't. Most investors hold both, in a ratio set by how long they have to recover from a bad year.
Head-to-Head: Every Metric
| BND | VOO | |
|---|---|---|
| Category | US Bonds - Broad | US Large Cap Blend |
| Expense ratio | 0.03% | 0.03% |
| Fund size (AUM) | $397.9B | $1.67T |
| Dividend yield | 3.95% | 0.80% |
| 1-year return | +2.99% | +17.89% |
| 3-year return | +11.64% | +67.91% |
| Volatility | 3.72% | 12.62% |
| Max drawdown | -5.59% | -18.69% |
| Sharpe ratio | -0.54 | 1.02 |
| ETFValuer score | 59.2 | 76.0 |
| Grade | C | B+ |
| Overall rank | #258 | #39 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
On cost, the two are essentially tied — BND charges 0.03% a year versus VOO's 0.03%. A difference this small (about $0.00 a year on a $10,000 position) isn't a reason to choose one fund over the other.
What BND's Fees Cost You
BND charges an expense ratio of 0.03% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, VOO returned +67.91% versus +11.64% for BND — a gap of about 56.3 percentage points. On risk, BND has held up better historically, with a shallower max drawdown (-5.59% vs. -18.69%). VOO currently has the better risk-adjusted return (Sharpe ratio of 1.02 vs. -0.54), meaning it delivered more return per unit of volatility taken on. Comparing these returns directly is misleading, though — a bond fund losing less in a selloff and an equity fund gaining more in a rally are both doing exactly what they were built to do. Judge each against its own role.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), BND and VOO show a very low correlation of 0.196 — essentially unrelated. These funds move largely on their own schedules. Combining them is a real diversification decision rather than a redundant one, which is the case where owning both can genuinely reduce portfolio volatility.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.196 | Very low — essentially unrelated |
| R-squared | 3.8% | 3.8% of BND's daily moves are explained by VOO's |
| Tracking error (annualised) | 14.81% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | BND +3.73% · VOO +19.14% | VOO ahead by 15.40 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, BND finished as much as +7.8 points ahead of VOO at the best extreme and -33.8 points at the worst — a 41.7-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
BND and VOO share no companies among their top 10 reported holdings. That points to genuinely different exposure, so holding both is more likely to diversify than to duplicate. Full portfolios may still overlap further down the list.
Based on the top 10 holdings in each fund's most recent SEC N-PORT-P filing.
Which One Should You Pick?
Lean BND if…
- Current income matters to you — it yields 3.95% against 0.80%
- It has been the calmer ride (3.7% volatility vs 12.6%) with a shallower worst-case fall (-5.6% vs -18.7%)
Lean VOO if…
- You care about return per unit of risk — its Sharpe ratio of 1.02 beats -0.54
- You weight recent results heavily — it returned 67.9% over 3 years against 11.6%
- You want the deeper, more liquid market ($1671B in assets vs $398B) and the tighter spread (0.065% vs 0.069%)
These two are not really substitutes, so "both, in some proportion" is often the right answer rather than picking one. Model the blend with the Portfolio Blender.
Frequently Asked Questions
Is BND or VOO better?
ETFValuer's model scores VOO at 76.0 (Grade B+) and BND at 59.2 (Grade C), but read that gap carefully: the score blends return, risk-adjusted performance, cost and drawdown across a single ranking of all funds, so an asset class with structurally lower expected returns will always score below one with higher returns and higher risk. It is a useful comparison between US Large Cap Blend funds and between US Bonds - Broad funds — not a verdict that one of these two belongs in your portfolio and the other doesn't. Most investors hold both, in a ratio set by how long they have to recover from a bad year.
Which has the lower expense ratio, BND or VOO?
VOO currently has the lower expense ratio (0.03% vs. 0.03%).
Can I hold both BND and VOO?
Yes, and it may be worth doing. BND and VOO correlate at only 0.20 over the past 3.0 years, so they behave differently enough that holding both is a genuine diversification decision rather than a redundant one. Size each to the role you want it to play.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.