Why the Vanguard Total Bond Market ETF Is a Good Choice to Diversify Your Portfolio

2026-02-05 04:45:00 ET

There's an old saying in the investing world: "You can eat well or sleep well."

The underlying premise of that quip is simple. If your goal is to get rich, buy stocks. But if you want peace of mind, buy bonds. Stock investments are meant to generate relatively big returns and build wealth over the long term -- but they come with a higher risk of losing you money instead. Bond investments are intended to keep your money safe (or at least, safer than stocks) and deliver reliable interest income.

For retail investors who want to diversify some of their portfolio out of stocks, the Vanguard Total Bond Market ETF (NASDAQ: BND) can be a good choice as a core bond holding. It has an ultra-low expense ratio of just 0.03%, and offers easy access to a diversified portfolio of more than 11,000 high-quality U.S. government bonds and investment-grade corporate bonds.

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