7 Best Vanguard Bond Funds to Buy
There’s no inherent advantage to sticking with a single fund manager, but some of the largest providers offer enough value to make loyalty worthwhile. Vanguard is one of them.
Nowhere is this more evident than in the firm’s bond lineup. Vanguard offers 127 bond mutual funds and exchange-traded funds (ETFs), accounting for just over one-third of its 365 total 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 of investment product strategy at Vanguard. “To ensure a comprehensive and robust fixed-income offering, we have thoughtfully expanded our lineup.”
[Sign up for stock news with our Invested newsletter.]
The breadth is a major draw. Investors can choose from short-, intermediate- or long-term bonds; government, corporate or high-yield credit; and, for those concerned with taxes, both nationally diversified municipal bond funds and state-specific options.
Costs are another strength. Vanguard’s institutional share class bond funds, while generally out of reach for retail investors, carry expense ratios as low as 0.02% — just $2 annually on a $10,000 investment. Retail-accessible funds aren’t far behind, with some bond mutual funds and ETFs priced as low as 0.03%.
Neither of these perks has come at the expense of sophistication. Despite its passive indexing roots, Vanguard has steadily expanded its roster of actively managed bond funds in recent years. “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.
Active management can add more value in fixed income, where the market is less transparent, trading is decentralized and security selection plays a greater role in returns. Even here, though, Vanguard has kept costs well below competitors, with active bond funds often rivaling the fees of index-based peers.
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 Short-Term Treasury Index Fund Admiral Shares (VSBSX) | 0.06% |
| Vanguard Long-Term Corporate Bond Index Fund Admiral Shares (VLTCX) | 0.06% |
| Vanguard Mortgage-Backed Securities Index Fund Admiral Shares (VMBSX) | 0.06% |
| Vanguard Inflation-Protected Securities Fund Admiral Shares (VAIPX) | 0.10% |
| Vanguard Tax-Exempt Bond Index Fund Admiral Shares (VTEAX) | 0.07% |
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.”
Most of these bond varieties can be captured by allocating to VBTLX. This is one of Vanguard’s most diversified bond funds. It owns over 11,000 Treasurys, investment-grade corporate bonds and mortgage-backed securities (MBS), averaging out to an intermediate duration of 5.8 years. VBTLX currently pays a 4.2% 30-day SEC yield with monthly distributions and charges a low 0.04% expense ratio.
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 Vanguard bond fund is basically the international counterpart to VBTLX.
It is highly diversified, holding more than 6,500 foreign government and investment-grade corporate bonds. Importantly, VTABX is currency hedged, meaning fluctuations in foreign exchange rates are neutralized. This feature is key for U.S. investors, as it ensures returns reflect bond performance rather than swings in exchange rates. VTABX currently pays a 3% 30-day SEC yield with a 0.10% expense ratio.
Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX)
“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.”
Each of these levers can be adjusted to create a desired risk-and-return profile. For example, investors who want to minimize both interest rate sensitivity and credit risk may look to VSBSX. This Vanguard bond fund holds short-term U.S. Treasurys with an average duration of just 1.9 years, offering stability while still paying a 3.6% 30-day SEC yield after its 0.06% expense ratio.
Vanguard Long-Term Corporate Bond Index Fund Admiral Shares (VLTCX)
VLTCX is in many ways the polar opposite of VSBSX. On the credit quality front, it invests in investment-grade corporate bonds, which, while still considered relatively safe, carry more risk than U.S. Treasurys. The fund also focuses on bonds with maturities longer than 10 years, giving it an average duration of 12.1 years. As with most Vanguard Admiral Shares funds, VLTCX requires a $3,000 minimum investment.
The trade-off for investors is clear. Compared to VSBSX, VLTCX is generally more suitable for those seeking higher income potential, though with greater exposure to both interest rate risk and credit risk. It currently delivers a 5.5% 30-day SEC yield but is less tax efficient, since corporate bond income is fully taxable at both the federal and state levels. The expense ratio is 0.06%.
[READ: 5 Great Fixed-Income Funds to Buy for 2025]
Vanguard Mortgage-Backed Securities Index Fund Admiral Shares (VMBSX)
MBS are a common component of broad aggregate bond funds like VBTLX, but investors can also access them directly through VMBSX. This fund focuses on agency-backed MBS issued by the Government National Mortgage Association, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. for a 0.06% expense ratio.
Agency backing means the securities are guaranteed by these government-related entities, reducing the risk of default on the underlying mortgages. By prioritizing agency-backed securities, VMBSX offers a more conservative profile versus other MBS funds that may also hold non-agency or commercial MBS. VMBSX currently pays a 4.1% 30-day SEC yield and has a 0.06% expense ratio.
Vanguard Inflation-Protected Securities Fund Admiral Shares (VAIPX)
Most bond funds are vulnerable to inflation. Rising prices erode the real value of coupon payments, and inflation is often accompanied by interest rate hikes as central banks attempt to slow it. Higher rates push down bond prices, creating a double drag on returns. One exception is Treasury inflation-protected securities (TIPS), which have their principal value tied to the consumer price index.
When inflation occurs, the principal amount for TIPS rises, and because coupon payments are calculated as a percentage of principal, the coupons increase as well. This structure helps preserve purchasing power in inflationary environments. TIPS exposure can be accessed through VAIPX, which charges a 0.1% expense ratio. However, the fund requires a high $50,000 minimum investment.
Vanguard Tax-Exempt Bond Index Fund Admiral Shares (VTEAX)
“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.” For this role, Vanguard offers VTEAX at a 0.07% expense ratio.
VTEAX invests in a nationally diversified portfolio of municipal bonds, which pay interest that is exempt from federal income taxes. The fund currently offers a 3.6% 30-day SEC yield. Vanguard also offers state-specific municipal bond funds for New York and California. For residents of those states, the income is exempt from both federal and state taxes, providing an additional layer of tax efficiency.
More from U.S. News
7 Best Vanguard Funds to Buy and Hold
8 Top-Rated Income Funds to Buy in 2025
7 Best Vanguard Bond Funds to Buy originally appeared on usnews.com
Update 09/24/25: This story was published at an earlier date and has been updated with new information.