How Does BND's Broad Bond Exposure Compare to VGIT's Lower Risk?

Core Insights - The Vanguard Intermediate-Term Treasury ETF (VGIT) and Vanguard Total Bond Market ETF (BND) provide exposure to the bond market but differ in bond grade and investment strategy [1] Cost & Size - Both VGIT and BND have an expense ratio of 0.03% - VGIT has a one-year return of 2.53% while BND has a return of 2.19% - VGIT's dividend yield is 3.79% compared to BND's 3.86% - Assets Under Management (AUM) for VGIT is $39.17 billion and for BND is $389.22 billion [2][3] Performance & Risk Comparison - VGIT has a maximum drawdown of -15.04% over five years, while BND has -17.93% - Growth of $1,000 over five years is $867 for VGIT and $850 for BND [4] Portfolio Composition - BND tracks the broad U.S. investment-grade bond market with around 15,000 securities, providing balanced exposure across Treasuries, mortgage-backed securities, and investment-grade corporates - VGIT primarily invests in intermediate-term U.S. Treasury securities, holding 104 AAA-rated bonds, the highest rating available [5] Risk Considerations - Approximately 72% of BND's holdings are AAA-rated bonds, but it also includes at least 12% of A and BBB-rated bonds, indicating slightly higher risk due to potential issuer default as bond ratings decline [8] - Bonds are generally less volatile than stocks, leading to lower expected dividend yields and returns [9]