2 ETFs to Consider Amid Record Inflows for Fixed Income

As noted by TMX VettaFi Head of Research Todd Rosenbluth, fixed income ETFs are having a banner year amid record inflows. The Vanguard Total Bond Market ETF (BND) and Vanguard Total International Bond ETF (BNDX) were two of the top funds responsible for the $325 billion in net inflows (as of October 15).

Investors poured $15 billion into BND — Vanguard’s all encompassing, core bond option that tracks the Bloomberg U.S. Aggregate Float Adjusted Index. It covers a wide swath of bond issues. Therefore, it can serve as an investor’s core fixed income exposure in a 60/40 stock-bond portfolio or other derivations of an asset split.

Those looking for an active variant of BND can opt for the Vanguard Core Bond ETF (VCRB). Because of its active management component, it comes attached with an expense ratio of 10 basis points compared to BND’s three basis points. However, with that extra premium for active management, it also adds a 30-day SEC yield of 4.42% (as of October 17) versus BND’s 4.11%.

Also among the fixed income leaders in inflows so far this year is BNDX. Take that as a current sign of the times. BNDX took in just over $9 billion in inflows. That proves that international assets are garnering more attention this year as the U.S. dollar continues its descent. The fund comes with seven basis points and tracks the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index. BNDX includes primarily investment-grade debt issues from developed markets with a smattering of emerging market (EM) bonds. Those wanting a heavier tilt towards EM should look at the Vanguard Emerging Markets Government Bond Index Fund ETF (VWOB).

A More Active 2026

Rosenbluth forecasted that 2026 could see active fixed income ETFs continuing to attract investor capital. 2025 has been a record year for active ETF launches. Indeed, the fixed income space launched its fair share of new funds. Vanguard is proving that it can adapt to the times by increasing its efforts to inject more active funds into the ETF marketplace.

Vanguard released the Vanguard Short Duration Bond ETF (VSDB), Vanguard Multi-Sector Income Bond ETF (VGMS), and the Vanguard Government Securities Active ETF (VGVT) earlier this year.  The newest addition to the fixed income lineup is the Vanguard High-Yield Active ETF (VGHY), which is their first high yield active ETF. They now boast an active ETF lineup of nine funds that includes the aforementioned VCRB.

All funds leverage the expertise and experience of the Vanguard Fixed Income Group. The portfolio managers have the ability to adjust the holdings according to current market conditions. This makes active ETFs flexible fixed income options. This can be beneficial in the current market environment, where uncertainty still looms as the end of 2025 draws closer.

For more news, information, and strategy, visit the Fixed Income Content Hub.