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ETF Comparison

BND vs SHY: Which Is the Better Pick in 2026?

A head-to-head comparison of Vanguard Total Bond Market ETF and iShares 1-3 Year Treasury Bond ETF covering yield, cost, risk, and income potential.

Data updated July 21, 2026

Vanguard
ETFs116
Total AUM$4488B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is known for offering low-cost, passively managed ETFs that emphasize broad market exposure and long-term investing. The company operates 175 ETFs across diverse fund families including Index, Bond, Equity, Dividend, Income, International, Factor, and ESG strategies, serving investors with various goals from core portfolio building to specialized income generation. Notable for its scale and popular tickers like VB (total U.S. small-cap), BND (total bond market), and VBIAX (international bonds), Vanguard focuses on providing comprehensive, index-based investment solutions with an emphasis on cost efficiency and accessibility.

See our curated list of related YouTube videos on BND.

See all Vanguard ETFs
iShares
ETFs477
Total AUM$4543B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

iShares is one of the largest ETF providers globally, known for offering a broad, diversified lineup of exchange-traded funds across multiple asset classes and investment strategies. The company operates 215 funds spanning 15 distinct families, including popular offerings in dividend income, covered call strategies, bonds, equities, ESG-focused investments, and factor-based approaches, with widely-held tickers like AGG (bond), ACWI (global equity), and AOA (allocation). iShares is characterized by its comprehensive fund ecosystem that serves both core portfolio holdings and specialized investment strategies, making it a prominent player for investors seeking both traditional and alternative income-generating ETF solutions.

See our curated list of related YouTube videos on SHY.

See all iShares ETFs

Side-by-side snapshot

BNDSHY
Full nameVanguard Total Bond Market ETFiShares 1-3 Year Treasury Bond ETF
IssuerVanguardiShares
Last Close$72.68 as of July 21, 2026$81.95 as of July 21, 2026
Distribution yield4.04%3.49%
Distribution Safety Score™ 10070
Expense ratio0.03%0.15%
AUM$161B$25.4B
Distribution frequencyMonthlyMonthly
Underlying indexBloomberg U.S. Aggregate Float Adjusted IndexICE U.S. Treasury 1-3 Year Bond Index
ObjectiveTrack the Bloomberg U.S. Aggregate Float Adjusted Index for broad U.S. bond exposure.Tracks the ICE U.S. Treasury 1-3 Year Bond Index.
Asset classFixed IncomeFixed Income
Inception date04/03/200707/22/2002
Beta0.980.22
Last dividend$0.2445$0.2383
Ex-dividend date07/01/202607/01/2026

Bottom lineChoose BND if you want higher current income (4.04% vs 3.49% for SHY). Choose SHY if you want fixed-income ballast that steadies the portfolio when stocks fall.

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Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

BND has outpaced SHY over the trailing twelve months, posting a 3.47% total return against 2.31%. The picture flips over 10 years, though — SHY has compounded at 1.59% a year, ahead of BND at 1.40%. SHY has been the steadier holding, though — annualized volatility of 1.7% against 5.2% for BND. Figures are total returns: price change plus every distribution reinvested.

SymbolYTD1Y3Y5Y10YSince Apr 2007Volatility Sharpe Sortino Max drawdown
BND0.12%3.47%3.85%-0.34%1.40%3.00%5.2%-0.13-0.19-5.6%
SHY0.07%2.31%3.94%1.66%1.59%1.81%1.7%-0.37-0.52-1.0%

Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of July 20, 2026. YTD and 1Y are cumulative; longer windows are annualized. “Since Apr 2007” measures every fund from April 10, 2007 — the youngest fund's first trading day — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Quick verdict

BND (Vanguard Total Bond Market ETF) and SHY (iShares 1-3 Year Treasury Bond ETF) are both monthly-pay dividend ETFs, but they take different approaches.

BND offers the higher yield at 4.04% vs 3.49% for SHY. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

BND is cheaper with an expense ratio of 0.03% compared to 0.15%.

They track different benchmarks: BND is linked to Bloomberg U.S. Aggregate Float Adjusted Index while SHY tracks ICE U.S. Treasury 1-3 Year Bond Index, which means their performance drivers differ.

BND is the larger fund by assets ($161B), which generally means tighter spreads and better liquidity.

Who should choose each?

Choose BND

Vanguard Total Bond Market ETF

  • Want higher current income — BND yields 4.04% vs 3.49% for SHY.
  • Want fixed-income ballast that cushions equity drawdowns.
  • Want to keep costs low — a 0.03% expense ratio vs 0.15% for SHY.

Choose SHY

iShares 1-3 Year Treasury Bond ETF

  • Want fixed-income ballast that cushions equity drawdowns.
  • Prefer lower volatility — a beta of 0.2 vs 1.0 for BND.

Not sure? Use the income calculator and snapshot above to weigh these trade-offs against your own goals.

Deep dive

Yield & income

On a $10,000 investment, BND would generate roughly $33.67/month, while SHY would produce $29.08/month, at current distribution rates. Both pay monthly distributions.

BND yield4.04%
SHY yield3.49%
Monthly diff on $10K$4.58

Cost & efficiency

Over 10 years on $10,000, BND would cost approximately $30 in fees vs $150 for SHY (simplified, not compounded). The $120.00 difference may be offset by yield or performance.

BND ER0.03%
SHY ER0.15%

Strategy & risk

BND tracks Bloomberg U.S. Aggregate Float Adjusted Index with a bonds approach, while SHY tracks ICE U.S. Treasury 1-3 Year Bond Index. Beta is 0.98 for BND and 0.22 for SHY, indicating SHY is less volatile relative to the market.

BND beta0.98
SHY beta0.22

Fund details

BND is managed by Vanguard (launched 04/03/2007) with $161B in assets. SHY is managed by iShares (launched 07/22/2002) with $25.4B in assets.

BND AUM$161B
SHY AUM$25.4B
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Frequently asked questions

Is BND or SHY better for dividend income?

It depends on your goals. BND currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between BND and SHY?

BND (Vanguard Total Bond Market ETF) tracks Bloomberg U.S. Aggregate Float Adjusted Index with a bonds approach, while SHY (iShares 1-3 Year Treasury Bond ETF) tracks ICE U.S. Treasury 1-3 Year Bond Index. They are issued by Vanguard and iShares respectively.

Can I hold both BND and SHY?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Which has lower fees, BND or SHY?

BND has an expense ratio of 0.03% while SHY charges 0.15%. Lower fees mean more of your investment returns stay in your pocket over time.

How much income does $10,000 in BND vs SHY generate?

At current rates, $10,000 in BND would generate roughly $33.67 per month ($404.00 annually). The same in SHY would produce about $29.08 per month ($349.00 annually).

Which has performed better historically, BND or SHY?

BND has outpaced SHY over the trailing twelve months, posting a 3.47% total return against 2.31%. The picture flips over 10 years, though — SHY has compounded at 1.59% a year, ahead of BND at 1.40%. SHY has been the steadier holding, though — annualized volatility of 1.7% against 5.2% for BND. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

BND vs SHY — at a glance

Generated July 2026 from current fund data.

Overview

BND and SHY are both broad fixed-income ETFs tracking U.S. government and investment-grade debt, but they differ fundamentally in duration and composition. BND tracks the entire investment-grade bond market—treasuries, agencies, corporates, and mortgage-backed securities—while SHY focuses exclusively on short-term Treasury securities with one to three years to maturity. This structural difference drives their yield, interest-rate sensitivity, and role in a portfolio.

How they differ

The biggest difference is duration and credit exposure. BND holds the full spectrum of investment-grade bonds across all maturities, giving it a beta of 0.98 and meaningful exposure to corporate credit, mortgage risk, and longer-dated interest-rate moves. SHY holds only short-term Treasuries with a beta of 0.22, making it far less sensitive to rate changes and almost entirely free of credit risk.

Second, yield reflects that duration gap: BND yields 4.03% versus SHY's 3.49%, a 54-basis-point spread that compensates for duration risk. SHY's lower yield is the tradeoff for principal stability in a rising-rate environment.

Third, BND is roughly six times larger by assets under management ($158B versus $25.3B) and costs half as much to hold (0.03% versus 0.15% expense ratio), making it the institutional favorite for broad bond-market tracking.

Who each is best for

  • BND: Fits investors building a core fixed-income allocation who can tolerate moderate interest-rate risk and want maximum diversification across bond types and maturities. Works as a foundational bond holding for long-term portfolios.
  • SHY: Designed for investors prioritizing capital preservation and liquidity over yield, or those seeking to reduce portfolio duration without exiting fixed income entirely. Suits shorter time horizons or bond ladders focused on near-term maturities.

Key risks to know

  • Interest-rate duration risk in BND: With beta near 1.0, BND will decline meaningfully if rates rise sharply. SHY's beta of 0.22 provides much more price cushion in a higher-rate environment.
  • Credit spread widening in BND: Roughly 35% of BND's holdings are corporates and mortgage-backed securities. If credit spreads widen, BND's NAV will fall faster than SHY's all-Treasury composition would.
  • Reinvestment risk in SHY: The 3.49% yield relies partly on current short-term rates. If yields fall, reinvested distributions will compound at lower rates, reducing total return.
  • Maturity concentration in SHY: The 1–3 year bucket is a narrow slice of the yield curve. Economic shifts that flatten or steepen that specific segment pose more localized risk than BND's broad diversification.

Bottom line

If you want broad bond-market exposure with higher yield and minimal fees, BND's scale and low cost are compelling. If you're managing duration risk closely or prioritize near-term stability over yield, SHY's short-maturity focus and rate insensitivity fit a different need. Past performance doesn't predict future results; the choice depends on your rate outlook and how much duration risk fits your goals.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

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