Vanguard Says: This Bond ETF Could Beat U.S. Stocks for Years

Group 1: Market Performance - The U.S. stock market has had a challenging start in 2026, with the S&P 500 index down 0.1% year to date and the Nasdaq-100 index down 2.2% [1] - The Vanguard Total Bond Market ETF (NASDAQ: BND) has outperformed both indices, showing an increase of 0.8% year to date [1] Group 2: Investment Insights - Historically, U.S. bonds have not outperformed U.S. stocks over any 25-year period, according to Deutsche Bank Research Institute [2] - Vanguard's 2026 economic and market outlook is optimistic about bonds, projecting average annual returns of 3.8% to 4.8% for U.S. bonds over the next 10 years, compared to 4% to 5% for U.S. equities [5] - Vanguard emphasizes that high-quality U.S. bonds have the strongest risk-return profile among public investments for the next five to ten years, followed by U.S. value stocks and developed market international stocks [5] Group 3: Technology Sector Outlook - Vanguard suggests that while tech stocks may continue to perform well, there are increasing risks associated with this sector, indicating that more attractive investment opportunities are emerging elsewhere [6] - The forecast from Vanguard serves as a reminder of the importance of diversification, especially given the uncertainty surrounding the continuation of high growth in the tech-heavy stock market [6] Group 4: Bond Investment Strategy - Vanguard's outlook does not specify a particular bond fund but highlights the Vanguard Total Bond Market ETF as a suitable option for accessing high-quality U.S. bonds, which includes 11,444 investment-grade bonds [8]