At a glance
VBND charges 0.41% a year, above the 0.05% average of the 7 funds most like it (the most expensive of 8). It has $523.0M in assets, the 8th largest of that group; it paid 4.5% of its price in distributions over the past 12 months, monthly. Over the past year it returned −1.1% with distributions reinvested, 7th of those 8 funds; over three years it returned +5.4% a year. At its worst it fell 15.4% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 35 months after the low. Its ten largest positions make up 19.9% of the fund, out of 179 in all.
The short version
Vident U.S. Bond Strategy ETF (VBND) is an actively managed bond fund. A quantitative model picks its mix of U.S. Treasuries, corporate bonds, mortgage-backed securities and loan-backed securities (CLOs), rather than weighting bonds by how much debt each issuer has outstanding. Its 0.41% expense ratio is far above the 0.03% charged by AGG and BND. Its three-year return to late October 2026 roughly matched theirs.
Price history
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VBND -1.1% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| VBND official prospectus, to Dec 31, 2024 | — | +1.52% | — | -0.24% | +1.27% | — |
| VBND price data to Oct 27, 2026 | -1.0% | -1.1% | +5.4% | -0.1% | — | +0.5% |
- Over the year to Oct 27, 2026, VBND returned -1.1%, 7th of 8 among similar funds.
- Its 5-year annualized return was -0.1%.
- Its worst full calendar year was 2022 (-14.2%); its best was 2023 (+8.2%).
- The deepest fall in its price history was 19% (Aug 3, 2021 to Oct 24, 2022), recovered by Oct 24, 2025.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -1.0% | — |
| 2025 | +7.3% | — |
| 2024 | +1.3% | +1.52% |
| 2023 | +8.2% | +7.79% |
| 2022 | -14.2% | -14.02% |
| 2021 | -0.4% | -0.59% |
| 2020 | — | +5.68% |
| 2019 | — | +9.48% |
| 2018 | — | -0.78% |
| 2017 | — | +2.85% |
| 2016 | — | +2.38% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Not in the price data, which starts Jun 2, 2020 |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 15.3% over that stretch · deepest drop along the way 15.4%, back to its old high 34.8 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.5600 | |
| 2025 | $1.8700 | -1.6% |
| 2024 | $1.9000 | +10.5% |
| 2023 | $1.7200 | +57.8% |
| 2022 | $1.0900 | +36.3% |
| 2021 | $0.8000 |
What's inside
As of Aug 31, 2026, the fund held 179 securities; the ten largest made up 19.94% of assets, and 10.08% sat in cash and money-market holdings.
| Holding | Weight | |
|---|---|---|
| US TREASURY N/B Bonds and notes | 2.01% | |
| US TREASURY N/B Bonds and notes | 2.01% | |
| US TREASURY N/B Bonds and notes | 2.01% | |
| US TREASURY N/B Bonds and notes | 2.00% | |
| US TREASURY N/B Bonds and notes | 1.99% | |
| US TREASURY N/B Bonds and notes | 1.99% | |
| US TREASURY N/B Bonds and notes | 1.99% | |
| US TREASURY N/B Bonds and notes | 1.99% | |
| US TREASURY N/B Bonds and notes | 1.98% | |
| US TREASURY N/B Bonds and notes | 1.98% | |
| US TREASURY N/B Bonds and notes | 1.98% | |
| US TREASURY N/B Bonds and notes | 1.98% | |
| US TREASURY N/B Bonds and notes | 1.96% | |
| US TREASURY N/B Bonds and notes | 1.96% | |
| US TREASURY N/B Bonds and notes | 1.96% |
By country
United States 89.25%Canada 3.96%Ireland 2.2%Singapore 0.67%Japan 0.51%By issuer
Companies 45.6%US Treasury 41.15%US government agencies 6.94%US government-sponsored enterprises 3.86%The bonds mature in 17.5 years on average (weighted by size), with an average coupon of 5.42%.
Source: N-PORT holdings report as of Aug 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Aug 31, 2026, investors added a net $21.7M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.34%, -1.35%, +0.43%.
How it works
VBND does not track an index. Its adviser, Vident Asset Management, picks bonds with the aim of current income and long-term growth. At least 80% of net assets go into debt traded mainly in the United States. That includes Treasuries, agency debt, mortgage-backed securities and investment-grade corporate bonds. It also includes capped amounts of riskier debt: high-yield ("junk") bonds up to 22% of the portfolio, inflation-protected Treasuries (TIPS) up to 17%, private credit up to 10% and dollar-denominated international bonds up to 22%. Market moves can push holdings past these caps for a time.
In every sector except private credit, a quantitative model scores bonds on yield, duration (how much a bond's price reacts to interest rates), creditworthiness and governance. Corporate issuers are screened for stronger leadership and governance. Foreign issuers must pass Vident's "Country Principles Score." Issues smaller than $500 million are skipped to help liquidity. The portfolio aims for an effective duration of five to nine years and an investment-grade average credit quality.
For mortgages, the fund may use the "to be announced" (TBA) market. That means agreeing to buy mortgage pools with set features and rolling that agreement forward each month instead of taking delivery. Private credit comes through funds such as business development companies (BDCs). The prospectus reports portfolio turnover of 168%.
What it really costs
- VBND charges 0.41% a year, versus an average of 0.05% for the similar funds below (8th of 8, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $42 in the first year and $518 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| VBND | $42 | $132 | $230 | $518 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
It spreads money across Treasuries, corporate bonds, agency debt and mortgages with an investment-grade average, so it could serve as the main bond holding, though it costs more than index-based core bond funds.
VBND could fill part of a portfolio's bond allocation, and it pays income monthly. Its trailing 12-month yield was 4.5% as of October 27, 2026. The fund launched in 2014, after the 2008 crisis. Its prospectus shows a 5.68% gain for 2020, the year of the COVID crash. Rising interest rates are its weak spot. It lost 14.02% in 2022, its worst calendar year. Its deepest drop, 19% from August 2021 to October 2022, took 36 months to recover. Someone who had to sell shares in late 2022 would have locked in a sizable loss.
Cost is another drag. The fund charges 0.41% a year, versus 0.03% for AGG and BND. In the SEC's standard example of $10,000 invested, that comes to about $42 in the first year and $518 over ten years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want one actively managed fund mixing Treasuries, corporate bonds, CLOs and mortgages, paying monthly, with a 4.5% trailing yield as of October 27, 2026.
- Those who prefer bonds chosen on yield, credit and governance scores rather than weighted by how much debt an issuer has outstanding.
- Investors open to limited high-yield, private credit and international bond exposure, capped at 22%, 10% and 22% of the portfolio.
Look elsewhere if
- Cost-focused investors: its 0.41% expense ratio ranks 8th of 8 similar funds, versus 0.03% for AGG and BND.
- Those expecting active management to beat the index funds: its 5.4% three-year annual return matched AGG and BND despite higher fees.
- Retirees who may need to sell during a rate-driven slump: it fell 19% from August 2021 to October 2022 and took 36 months to recover.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| VBND this fund | 17.5 yrs | 0.41% | $523.0M | -1.1% | +5.4% |
| IUSB iShares Core Total USD Bond Market ETF | 11.8 yrs | 0.06% | $43.00B | -0.3% | +5.1% |
| AGG iShares Core U.S. Aggregate Bond ETF | 12.4 yrs | 0.03% | $138.32B | -0.4% | +4.7% |
| BND Vanguard Total Bond Market ETF | 11.7 yrs | 0.03% | $397.11B | -0.4% | +4.7% |
| BIV Vanguard Intermediate-Term Bond ETF | 7.5 yrs | 0.03% | $52.45B | -0.7% | +5.1% |
| LQD iShares iBoxx $ Investment Grade Corporate … | 13 yrs | 0.14% | $32.04B | -2.3% | +5.2% |
| VCIT Vanguard Intermediate-Term Corporate Bond E… | 8.2 yrs | 0.03% | $72.04B | -0.6% | +7.1% |
| BSV Vanguard Short-Term Bond ETF | 2.9 yrs | 0.03% | $69.75B | +1.7% | +4.5% |
Questions investors ask
Does VBND pay monthly dividends?
Yes. VBND pays distributions every month. Over the 12 months to October 27, 2026, it paid about $1.90 per share, a trailing yield of 4.5%. The income comes mainly from interest on the fund's bonds, which had an average coupon of 5.42% as of August 31, 2026. Monthly amounts can change as rates and holdings change. The fund's 0.41% expense ratio is taken out before income reaches shareholders.
What's the difference between VBND and AGG?
The main differences are cost, size and approach. VBND charges 0.41% a year, versus 0.03% for AGG. VBND had $523 million in net assets, while AGG had about $138 billion. VBND is actively managed with a quantitative model and may hold junk bonds, CLOs and private credit within set limits. Its average maturity was 17.5 years, versus 12.4 for AGG. Over the three years to late October 2026, both returned about 5.4% a year.
How much does VBND cost per year?
VBND's expense ratio is 0.41%, according to its prospectus filed December 18, 2025. The SEC's standard example assumes $10,000 invested, a 5% yearly return and shares sold at the end of each period. On that basis, costs come to about $42 after one year, $132 after three years, $230 after five years and $518 after ten. That makes it the most expensive of eight similar bond funds, which average 0.05%.
What does VBND invest in?
VBND holds mostly U.S. government and corporate debt. As of August 31, 2026, its 179 holdings were about 46% corporate bonds, 41% U.S. Treasuries and 11% government agency and government-sponsored debt. By asset type, about 6% was in CDOs and CLOs and 6% in mortgage-backed securities. All ten of its largest positions were U.S. Treasury notes and bonds of about 2% each, adding up to 19.9% of assets. U.S. issuers made up about 89% of the fund.
Is VBND a good bond fund for retirees?
That depends on what a retiree values. VBND pays income monthly, had a 4.5% trailing yield as of October 27, 2026, and holds a mostly investment-grade mix. The trade-offs are cost and interest-rate risk. Its 0.41% expense ratio is far above the 0.03% charged by AGG and BND. It fell 19% from August 2021 to October 2022 and took 36 months to recover. Its 5.4% annual three-year return matched those cheaper funds but did not beat them.