BND vs IAU: Vanguard Total Bond Market ETF vs iShares Gold Trust Comparison
Compare BND (Vanguard Total Bond Market ETF) and IAU (iShares Gold Trust) by expense ratio, dividend yield, holdings, and more.
Key Differences
- 1Expense ratio: BND 0.03% vs IAU 0.25% (BND is 0.22%p cheaper)
- 2Dividend yield: BND 3.25% vs IAU 0%
- 3Holdings: BND 11,000 vs IAU 1
- 4Issuer: BND (Vanguard) vs IAU (BlackRock(iShares))
Conclusion
BND has an overall advantage with lower expense ratio (0.03% vs 0.25%), higher dividend yield (3.25% vs 0%). However, IAU also offers Lower expense ratio than GLD, making it worth considering depending on your portfolio goals.
| Category | BND | IAU |
|---|---|---|
| Fund Name | Vanguard Total Bond Market ETF | iShares Gold Trust |
| Current Price | ... | ... |
| Category | Bonds & Commodities | Bonds & Commodities |
| Expense Ratio | 0.03% | 0.25% |
| Dividend Yield | 3.25% | 0% |
| Holdings | 11000 | 1 |
BND Top Holdings
- 1. U.S. Treasury Bonds
- 2. MBS
- 3. Corporate Bonds
- 4. Government Agency Bonds
- 5. Municipal Bonds
IAU Top Holdings
- 1. Physical Gold
BND Features
- •Total US bond market
- •Ultra-low cost (0.03%)
- •Monthly dividend payments
- •Stable income
IAU Features
- •Gold investing
- •Inflation hedge
- •Safe-haven asset
- •Low cost
Pros & Cons
BND
Advantages
- ✓ One of the most popular bond ETFs alongside AGG
- ✓ Very low expense ratio
- ✓ Broad diversification
Disadvantages
- ⚠ Rising interest rate risk
- ⚠ Disadvantaged in inflationary environment
- ⚠ Low returns
IAU
Advantages
- ✓ Lower expense ratio than GLD
- ✓ Inflation defense
- ✓ Portfolio diversification
Disadvantages
- ⚠ No interest income
- ⚠ Storage costs
- ⚠ Disadvantaged during dollar strength
Investment Strategy
Best For: BND
Stocks:bonds = 60:40 or age-adjusted ratio; alternative to AGG
Best For: IAU
Allocate 5-10% of portfolio to gold; alternative to GLD
Detailed Analysis
BND (Vanguard Total Bond Market ETF) and IAU (iShares Gold Trust) Both belong to the Bonds & Commodities category, covering a similar investment area but with different strategies. BND: Vanguard Total Bond Market ETF (BND) is an exchange-traded fund that provides investors with exposure to bonds, gold, and other commodities. It carries an expense ratio of 0.03%. The fund offers a dividend yield of approximately 3.25%. The portfolio holds 11000 securities. With an expense ratio of 0.03% and dividend yield of 3.25%, its top holdings include U.S. Treasury Bonds, MBS, Corporate Bonds. Key features include Total US bond market, Ultra-low cost (0.03%), with One of the most popular bond ETFs alongside AGG being a major advantage. IAU: iShares Gold Trust (IAU) is an exchange-traded fund that provides investors with exposure to bonds, gold, and other commodities. It carries an expense ratio of 0.25%. The portfolio holds 1 securities. With an expense ratio of 0.25% and dividend yield of 0%, top holdings include Physical Gold. Notable features are Gold investing, Inflation hedge, with Lower expense ratio than GLD as a core strength. In terms of expense ratio, BND is 0.22%p cheaper, which can lead to significant cost savings through compounding over long-term investment. Over 20 years with a $100,000 investment, this difference can amount to thousands of dollars.
Investment Recommendation
BND is suitable for Stocks:bonds = 60:40 or age-adjusted ratio; alternative to AGG, while IAU is suitable for Allocate 5-10% of portfolio to gold; alternative to GLD. Since both ETFs are in the same category, choosing one for your portfolio is more efficient. Base your decision on expense ratio, liquidity, and issuer preference. For beginners, we recommend a core-satellite strategy: choose a low-cost, well-diversified ETF as your core holding, and allocate the rest to satellite positions.
Key Summary
Both BND and IAU are excellent ETFs for their respective investment objectives. The key is to choose based on your investment goals, time horizon, and risk tolerance. Rather than focusing on a single metric (dividend yield, fees, etc.), evaluate from a holistic portfolio perspective. Use our rebalancing calculator to easily determine the optimal asset allocation including both ETFs.
BND vs IAU Investment Guide
Both BND and IAU are popular US ETFs, but they differ in investment strategy and portfolio role. BND has an expense ratio of 0.03%, while IAU charges 0.25%, giving BND a cost advantage. In terms of dividend yield, BND offers 3.25% while IAU offers 0%, making BND the better choice for income investors.
When choosing between the two, consider your investment goals, time horizon, and risk tolerance. If long-term growth is your priority, favor the ETF with lower fees and broader diversification. If you need steady cash flow, the higher-yielding ETF may be more suitable. You can also hold both in your portfolio for a complementary approach.
Regardless of which ETF you choose, maintaining your target allocation through regular rebalancing is key to long-term performance. Review your portfolio quarterly or semi-annually, and adjust if weights have drifted significantly. Our rebalancing calculator can automatically determine the buy/sell quantities for each holding.
5 Things to Check When Comparing ETFs
Expense Ratio: Even a 0.1% difference in fees can translate to thousands of dollars over long-term investing. When two ETFs track a similar index, the lower-cost option has the edge.
Tracking Index & Holdings: Even ETFs in the same category may track different indices. Review the top holdings and sector weights to find the best fit for your investment goals.
Dividend Policy: Compare dividend frequency (monthly vs quarterly), yield, and dividend growth rate. Monthly dividend ETFs may be preferable if you need regular cash flow.
Trading Volume & Liquidity: Sufficient daily trading volume ensures you can buy and sell at fair prices. Low-volume ETFs may have wider bid-ask spreads, increasing your trading costs.
Portfolio Role: Determine whether the ETF serves as a core or satellite holding in your portfolio, and size your position accordingly.