The Vanguard Total Bond Market ETF (BND) and Fidelity Total Bond ETF (FBND) offer core fixed-income exposure for investors seeking income and volatility protection. BND has a lower expense ratio at 0.03% compared to FBND’s 0.36%. FBND currently offers a higher dividend yield but carries more risk with lower-quality debt securities.

FBND, launched in 2014, holds 4459 assets with 67% rated AAA. It also invests up to 20% in riskier, higher-yield lower-quality debt. BND, with 7 more years in existence, holds 15,000 assets with a higher concentration of AAA-rated bonds at 72.45%.

Both BND and FBND are less volatile than stock-based funds, with prices tracking interest rate trends. Bond prices rise when interest rates fall and drop when rates rise, impacting volatility. Both funds focus on investment-grade bonds to reduce volatility, but FBND’s allocation to lower-quality bonds increases risk and yield potential.

Both ETFs provide monthly dividend payouts and are similar in nature. FBND may appeal to income-focused investors with its higher dividend yield and risk profile, while BND is more cost-effective and stable. Investors should weigh their preference for yield versus stability when choosing between the two funds.

Read more at Yahoo Finance: Looking For More Bond Exposure? These ETFs May Be Solid Options