VGMS vs. BND

Last updated Jun 24, 2026

VGMS (Vanguard Multi-Sector Income Bond ETF) and BND (Vanguard Total Bond Market ETF) are both exchange-traded funds - VGMS is a Multisector Bonds fund actively managed by Vanguard, while BND is a Total Bond Market fund tracking the Bloomberg U.S. Aggregate Float Adjusted Index. VGMS is actively managed, while BND is passively managed. Over the past year, VGMS returned 6.52% vs 4.23% for BND. A 0.79 correlation means they provide meaningful diversification when combined. VGMS charges 0.30%/yr vs 0.03%/yr for BND.

Performance

VGMS vs. BND - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Multi-Sector Income Bond ETF (VGMS) and Vanguard Total Bond Market ETF (BND). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VGMS achieves a 1.48% return, which is significantly higher than BND's 0.49% return.

VGMS

• 1D: 0.17%
• 1M: 0.73%
• YTD: 1.48%
• 6M: 1.55%
• 1Y: 6.52%
• 3Y*: —
• 5Y*: —
• 10Y*: —

BND

• 1D: 0.11%
• 1M: 0.64%
• YTD: 0.49%
• 6M: 0.57%
• 1Y: 4.23%
• 3Y*: 3.96%
• 5Y*: 0.05%
• 10Y*: 1.56%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VGMS vs. BND - Yearly Performance Comparison

	2026 (YTD)	2025
VGMS Vanguard Multi-Sector Income Bond ETF	1.48%	5.51%
BND Vanguard Total Bond Market ETF	0.49%	4.58%

Correlation

The correlation between VGMS and BND is 0.81, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.81
Correlation (All Time) Calculated using the full available price history since Jun 11, 2025	0.79

The correlation between VGMS and BND has been stable across timeframes, ranging from 0.79 to 0.81 - a consistent structural relationship.

Return for Risk

VGMS vs. BND — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VGMS

VGMS Risk / Return Rank: 66
VGMS Sharpe Ratio Rank: 65
VGMS Sortino Ratio Rank: 70
VGMS Omega Ratio Rank: 69
VGMS Calmar Ratio Rank: 58
VGMS Martin Ratio Rank: 69

BND

BND Risk / Return Rank: 32
BND Sharpe Ratio Rank: 32
BND Sortino Ratio Rank: 33
BND Omega Ratio Rank: 30
BND Calmar Ratio Rank: 33
BND Martin Ratio Rank: 32

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VGMS vs. BND - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Multi-Sector Income Bond ETF (VGMS) and Vanguard Total Bond Market ETF (BND). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VGMS	BND	Difference
Sharpe ratio: Return per unit of total volatility	2.01	1.14	+0.87
Sortino ratio: Return per unit of downside risk	2.99	1.70	+1.29
Omega ratio: Gain probability vs. loss probability	1.39	1.20	+0.19
Calmar ratio: Return relative to maximum drawdown	2.66	1.59	+1.07
Martin ratio: Return relative to average drawdown	12.04	4.52	+7.52

VGMS vs. BND - Sharpe Ratio Comparison

The current VGMS Sharpe Ratio is 2.01, which is higher than the BND Sharpe Ratio of 1.14. The chart below compares the historical Sharpe Ratios of VGMS and BND, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VGMS vs. BND - Drawdown Comparison

The maximum VGMS drawdown since its inception was -2.46%, smaller than the maximum BND drawdown of -18.58%. Use the drawdown chart below to compare losses from any high point for VGMS and BND.

Drawdown Indicators

	VGMS	BND	Difference
Max Drawdown Largest peak-to-trough decline	-2.46%	-18.58%	+16.12%
Max Drawdown (1Y) Largest decline over 1 year	-2.46%	-2.68%	+0.22%
Max Drawdown (3Y) Largest decline over 3 years	—	-5.92%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-17.91%	—
Max Drawdown (10Y) Largest decline over 10 years	—	-18.58%	—
Current Drawdown Current decline from peak	-0.18%	-2.15%	+1.97%
Average Drawdown Average peak-to-trough decline	-0.30%	-3.06%	+2.76%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.54%	0.94%	-0.40%

Volatility

VGMS vs. BND - Volatility Comparison

Vanguard Multi-Sector Income Bond ETF (VGMS) and Vanguard Total Bond Market ETF (BND) have volatilities of 1.06% and 1.08%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VGMS	BND	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.06%	1.08%	-0.02%
Volatility (6M) Calculated over the trailing 6-month period	2.64%	2.77%	-0.13%
Volatility (1Y) Calculated over the trailing 1-year period	3.27%	3.74%	-0.47%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.24%	6.03%	-2.79%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.24%	5.53%	-2.29%

VGMS vs. BND - Expense Ratio Comparison

VGMS has a 0.30% expense ratio, which is higher than BND's 0.03% expense ratio.

Dividends

VGMS vs. BND - Dividend Comparison

VGMS's dividend yield for the trailing twelve months is around 5.14%, more than BND's 3.96% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
BND Vanguard Total Bond Market ETF	3.96%	3.86%	3.67%	3.09%	2.60%	2.12%	2.38%	2.72%	2.81%	2.54%	2.51%	2.57%
VGMS Vanguard Multi-Sector Income Bond ETF	5.14%	2.94%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both VGMS and BND in my portfolio?

VGMS and BND have a correlation of 0.81, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VGMS or BND?

BND has higher volatility (1.08%) compared to VGMS (1.06%). In terms of maximum drawdown, VGMS dropped -2.46% vs BND's -18.58%.

Which ETF is better, VGMS or BND?

On 1-year performance, VGMS leads with 6.52% vs 4.23% for BND. On fees, BND is cheaper at 0.03% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VGMS or BND?

Over the 1-year period, VGMS has performed better with a 6.52% return vs 4.23%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VGMS or BND?

BND is cheaper with a 0.03% expense ratio, compared with 0.30% for VGMS.

Which ETF pays a higher dividend yield, VGMS or BND?

VGMS has the higher dividend yield at 5.14%, compared with 3.96% for BND.

What is the main difference between VGMS and BND?

VGMS is categorized as Multisector Bonds, while BND is Total Bond Market. Their fees differ too: 0.30% for VGMS and 0.03% for BND.

Which has better risk-adjusted returns?

VGMS currently has the higher Sharpe Ratio (2.01 vs 1.14), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.