Vanguard made headlines in 2025 for several reasons — some positive, others less so.
In February, the firm announced sweeping fee reductions across 168 share classes in 87 mutual funds and exchange-traded funds (ETFs), a move expected to save investors more than $350 million this year.
Less welcome news came earlier in January, when the Securities and Exchange Commission fined Vanguard to the tune of $106 million. This was as a result of improper tax-related disclosures tied to capital gains distributions in its target retirement funds.
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But one development that may have flown under the radar for many investors was the quiet, but meaningful expansion of Vanguard’s fixed income lineup.
While Vanguard is best known for equity products like its S&P 500 and total U.S. market index funds, fixed income is playing a growing role. The firm now offers 122 bond mutual funds and ETFs, accounting for roughly a third of its total lineup of 360 products.
“Over the past few years, Vanguard has strategically deepened its focus on aligning with client preferences, particularly recognizing the significant advantages of the ETF structure,” says Perryne Desai, senior manager for investment product strategy at Vanguard. “To ensure a comprehensive and robust fixed income offering, we have thoughtfully expanded our lineup.”
What began as a handful of core bond funds offering aggregate market exposure has grown into a customizable fixed income suite. Investors can now choose based on geography, credit quality, maturity, tax treatment, and whether they prefer the predictability of index tracking or the flexibility of active management.
“This expansion has been driven by the introduction of active fixed income ETFs, which are underpinned by our world-class investment team and rigorous investment process,” Desai says. “On the index side, we have diligently filled any remaining gaps, providing clients with a fully integrated and versatile range of options to meet their diverse investment needs.”
Here are seven of the best Vanguard bond mutual funds and ETFs to buy today:
| Fund | Expense ratio |
| Vanguard Total Bond Market Index Fund Admiral Shares (ticker: VBTLX) | 0.04% |
| Vanguard Total International Bond Index Fund Admiral Shares (VTABX) | 0.10% |
| Vanguard Total World Bond ETF (BNDW) | 0.05% |
| Vanguard Long-Term Corporate Bond Index Fund Admiral Shares (VLTCX) | 0.06% |
| Vanguard New York Tax-Exempt Bond ETF (MUNY) | 0.09% |
| Vanguard 0-3 Month Treasury Bill ETF (VBIL) | 0.07% |
| Vanguard Core Bond ETF (VCRB) | 0.10% |
Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
“Vanguard’s bond fund lineup covers a wide range of bond types, including government bonds, corporate bonds, municipal bonds and international bonds,” says Wes Moss, managing partner and chief investment strategist at Capital Investment Advisors. “This breadth of options allows investors to create a well-diversified bond portfolio tailored to their specific investment goals and risk tolerance.”
For broad bond exposure, it’s hard to beat VBTLX. This bond mutual fund holds more than 11,300 government Treasurys, mortgage-backed securities (MBS) and investment-grade corporate bonds by tracking the Bloomberg U.S. Aggregate Float Adjusted Index. It currently pays a 4.5% 30-day SEC yield and has intermediate interest rate sensitivity, with an average duration of 5.8 years.
Vanguard Total International Bond Index Fund Admiral Shares (VTABX)
“VTABX offers diversification benefits by including investment-grade bonds issued by governments and corporations outside the United States and thus provides exposure to international bonds denominated in various currencies,” says Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors. This fund is a great complement for U.S.-centric VBTLX.
VTABX tracks more than 6,600 government and corporate bonds from both international developed and emerging markets represented by the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index. It is also currency hedged to mitigate the volatility from fluctuations in currency exchange rates. Investors can expect a 3% 30-day SEC yield against a 0.1% expense ratio.
Vanguard Total World Bond ETF (BNDW)
“As with most things Vanguard, they are widely known as the low-cost fund provider when compared to their peers,” Moss says. “When you keep your investment fees lower, you can improve total returns.” A great example is BNDW, which offers exposure to the global investment-grade bond market at a low 0.05% expense ratio. The ETF currently pays a 4% 30-day SEC yield.
BNDW uses a “fund of funds” structure, holding 50% each of ETFs equivalent to VBTLX and VTABX. This approach gives you exposure to more than 17,900 bonds worldwide with an average duration of 6.4 years. As an ETF, there’s also no $3,000 minimum investment requirement typical of Vanguard’s mutual funds. Investors can buy BNDW at the price of about $68 per share, or lower with fractional trading.
Vanguard Long-Term Corporate Bond Index Fund Admiral Shares (VLTCX)
“Investors need to understand the two main types of risk inherent in fixed income investing before selecting a bond fund,” says Chris Tidmore, senior manager at Vanguard’s Investment Advisory Research Center. “Bond funds with long-term maturities are more sensitive to changes in interest rates, while a lower credit quality in the underlying bonds also impacts the riskiness of a particular fund.”
VLTCX carries elevated interest rate and credit risk, placing it on the higher end of the fixed income risk spectrum. About 43.7% of the portfolio is invested in “BBB”-rated corporate bonds and a significant portion of the fund is allocated to longer-term maturities, with durations of more than 25 years making up 37% of holdings. The fund currently offers a 6.1% 30-day SEC yield and charges a low 0.06% expense ratio.
[READ: 5 Great Fixed-Income Funds to Buy for 2025]
Vanguard New York Tax-Exempt Bond ETF (MUNY)
“Another question to ask when considering bond funds for your portfolio is whether you’re investing outside of an individual retirement account or other tax-advantaged retirement account,” Tidmore says. “If you’re in a high tax bracket and investing outside of your retirement account, a tax-exempt bond fund could help reduce tax exposure.” New York residents can use MUNY for this role.
MUNY’s income distributions are exempt from federal income tax, the federal alternative minimum tax and New York state income tax for in-state residents. “Vanguard’s municipal bond lineup now totals 24 funds, including six index ETFs, two active ETFs, 12 active mutual funds, one index mutual fund and three money market funds, offering a versatile selection for all investor needs,” Dessai says.
Vanguard 0-3 Month Treasury Bill ETF (VBIL)
“VBIL provides clients with the safety and stability of short-term Treasurys, offering high liquidity and access to Vanguard’s world-class indexing capabilities at a minimal cost,” Dessai explains. “Many investors are leveraging this ETF as part of their cash tiering strategies, ensuring they have a secure and flexible foundation for their portfolios.” VBIL can be a good alternative to a money market fund.
VBIL’s share price steadily inches upward throughout each month before dropping on the ex-distribution date, which reflects the coming payout. It currently delivers a 4.2% 30-day SEC yield, which closely aligns with the federal funds rate, and charges a low 0.07% expense ratio. However, note that while this ETF’s price has very low volatility, it is not fixed like the net asset value of a money market fund.
Vanguard Core Bond ETF (VCRB)
“VCRB offers a high-quality core bond product with risk-controlled active management by a talented and specialized team, all for a mere 0.1% expense ratio,” Dessai says. “It can serve as either the centerpiece or the sole holding of a bond portfolio, or as a foundational building block to be paired with other products to achieve specific interest rate and credit risk targets.”
This ETF holds more than 1,900 bonds averaging a 4.8% 30-day SEC yield with a duration of six years. Unlike passively managed funds like VBTLX, VCRB’s team tactically adjusts the portfolio by analyzing sector allocation, duration positioning, yield curve structure and credit quality, all with the goal of outperforming its benchmark over time. The ETF has attracted about $2.8 billion in assets so far.
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7 Best Vanguard Bond Funds to Buy originally appeared on usnews.com
Update 05/28/25: This story was published at an earlier date and has been updated with new information.
