FTBFX vs. VBTLX: Comparing Total Bond Index Funds

The Fidelity Total Bond Fund (FTBFX) is a mutual fund that seeks to provide stability and income by investing in a mix of high-quality bonds and other debt securities. The fund helps to reduce the risk of losing money if interest rates rise or the economy weakens.

FTBFX vs VBTLX: What Are the Differences?

  • FTBFX follows the Bloomberg Barclays U.S. Universal Bond Index, while VBTLX tracks the Bloomberg Barclays U.S. Aggregate Float Adjusted Index.
  • The Vanguard Total Bond Market Fund has an extremely low expense ratio of 0.05%. The expense ratio of the Fidelity Total Bond Fund is 0.45%.
  • The turnover rate of FTBFX is also higher than VBTLX. The turnover rate indicates how often a fund manager replaces the holdings in its portfolio. Both of these funds are considered to have high turnover rates.
  • It’s not free to buy VBTLX on Fidelity. There is a transaction cost of $75. You can invest in FTBFX as an alternative.

FTBFX vs VBTLX: How Are They Similar?

  • Both mutual funds pay out dividends on a monthly basis.
  • While the bond market is not an attractive vehicle for growth, it can be seen as a low-risk investment for many investors.

FTBFX vs VBTLX: Annual Return

Funds Fidelity® Total Bond Fund Vanguard Total Bond Market Index Fund Admiral Shares
1 month -1.89% -2.16%
3 months -1.84% -2.23%
6 months -2.56% -3.32%
1 year -1.57% -3.03%
3 years +4.99% +3.70%
5 years +3.92% +3.06%

Which is Better, FTBFX or VBTLX?

The two are designed for investors who want to maintain a relatively low risk level in their portfolios. It doesn’t hurt to just pick one and run with it.

If Fidelity is your current brokerage, it’s better to purchase FTBFX because there is no minimum initial investment. With VBTLX, you have to invest at least $2,500 into the fund and pay a $75 transaction fee.

Edgar W:

The returns on bonds are still not that great. If you are looking to stay in the market but looking for some stability and/or income I would shift investment into REIT’s and energy. They are decent hedges against inflation and give you a better yield than the current bond market will.

Tom L:

I’m in FTBFX and it lost 0.8% past 6 months but up 8.39% YTD so not too bad. You could go the individual bond route and hold to maturity to avoid the repricing.

Matthew S:

I’m putting very very little into bonds, and selling out of them in December after dividends are paid out.

Alex A:

Bonds are not necessarily meant for growth they serve to minimize risk in investing if you can handle the higher risk and investing long term then go all stocks.

Tanner D:

I don’t plan on any bond investing until after 50. Currently age 25. I am 100% vested in stocks and some ETFs.

Huy N:

FTBFX has 8.49% return and FXNAX had 7.23% return. I only buy 10% of bonds to protect me from economic downturn.

An H:

Interest rate is at all time low. Bond is a bad investment. I’d rather buy target date fund over bond. If you are young, 100% S&P 500 or 100% total stock market.

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Diego, a seasoned financial analyst in New York, brings a decade of expertise to guiding financial decisions. As a blogger for UseFidelity.com, he simplifies finance, offering insights on Fidelity Investments. Beyond numbers, he explores NYC's culture and enjoys capturing moments through his photography.

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