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

2026-02-23 17:20:00 ET

It'd probably be safe to say that bonds have spent much of the past 20 years failing to present a real investment case.

Following the 2008 financial crisis, the Fed dropped interest rates to 0%. Short-term bond funds saw their yields drop to next to nothing. Longer-term bond funds were still able to produce yields of around 2%, but they were no longer the income generator they once were.

Any attempts to raise interest rates damaged share prices. This dynamic peaked in 2022, when inflation jumped to around 9%, the Fed was forced to aggressively raise rates, and the Vanguard Total Bond Market ETF (NASDAQ: BND) fell by nearly 20%.

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