HYG vs BND Stock Comparison: AI Score, Valuation, Performance and Upside
HYG and BND serve fundamentally different fixed income roles. HYG is an equity substitute for income — high yield bonds move with stocks in stress periods but provide 6-8% income in normal environments. BND is a portfolio ballast — providing diversification from equities with flight-to-safety Treasury bond appreciation during stock market crashes. For maximum bond income with equity-like risk, HYG; for classic fixed income diversification from equities, BND.
HYG vs BND — iShares High Yield Corporate Bond ETF (1,200+ junk bonds yielding 6-8% with credit spread exposure and equity-correlation in stress periods) versus Vanguard Total Bond Market ETF (10,000+ investment-grade bonds with Treasury-dominant, flight-to-safety characteristics at 0.03% expense ratio for classic portfolio ballast).
HYG holds the edge across 3 of 5 key metrics in this comparison. HYG has delivered stronger 1-year price return (+0.91% vs -0.86% for BND).
- prioritize bond income over capital preservation — 6-8% yield from HYG significantly exceeds investment-grade alternatives in favorable credit environments
- understand HYG's equity-like risk characteristics — high yield bonds fall with stocks in credit crises, making HYG a yield enhancement rather than portfolio ballast
- believe the current credit cycle provides adequate corporate health to support high yield debt service — default expectations remain low in benign economic environments
- are comfortable with 15-25% drawdowns during recessions and credit crises as part of the high-yield risk-return tradeoff
- want classic portfolio diversification from equities — BND's Treasury bond component typically rises when stocks fall, providing the 60/40 portfolio's risk-reduction benefit
- value capital preservation and high credit quality — BND's investment-grade bonds have minimal default risk vs HYG's high yield issuers
- use fixed income as a ballast stabilizer rather than income maximizer — BND's role is risk reduction, not yield enhancement
- are comfortable with BND's 6-7 year duration and significant price decline risk in rising rate environments in exchange for flight-to-safety appreciation during equity market crashes
| Metric | HYG | BND |
|---|---|---|
| ETF scorei | 24.5 | 24.4 |
| Latest closei | $76.98 | $71.20 |
| 1M returni | +0.09% | +1.80% |
| 3M returni | -2.70% | -1.37% |
| 6M returni | -1.73% | -1.44% |
| 1Y returni | +0.91% | -0.86% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | HYG | BND |
|---|---|---|
| 1Y ago | $10.67K (+6.7%) started 2025-11-03 | $10.29K (+2.9%) started 2025-11-03 |
| 5Y ago | $15.93K (+59.3%) started 2021-11-04 | $11.68K (+16.8%) started 2021-11-04 |
| 10Y ago | $30.18K (+201.8%) started 2016-11-04 | $16.2K (+62.0%) started 2016-11-04 |
Hypothetical — past performance does not guarantee future results.
| Metric | HYG | BND |
|---|---|---|
| Expense ratioi | 0.49% | 0.03% |
| Total assets (AUM)i | $16.78B | $389.05B |
| Dividend yieldi | 6.14% | 4.17% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.42 | 0.27 |
| 52-week change | 0.91% | -0.86% |
| Metric | HYG | BND |
|---|---|---|
| 1Y returni | +0.91% | -0.86% |
| 6M returni | -1.73% | -1.44% |
| 3M returni | -2.70% | -1.37% |
| 1M returni | +0.09% | +1.80% |
| 1Y Sharpe ratio | -0.90 | -1.33 |
| Betai | 0.42 | 0.27 |
| Dividend yieldi | 6.14% | 4.17% |
| 5Y CAGR | +3.06% | -0.42% |
Over the past year, HYG and BND have moved strongly in the same direction (correlation of 0.70), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | HYG | BND |
|---|---|---|---|
| 1Y | Growthi | +0.91% | -0.86% |
| CAGRi | +0.91% | -0.86% | |
| Volatilityi | 3.91% | 3.96% | |
| Sharpe ratioi | -0.90 | -1.33 | |
| Sortino ratioi | -1.20 | -1.74 | |
| Max drawdowni | 3.36% | 4.83% | |
| Current drawdowni | 3.15% | 3.04% | |
| Avg drawdowni | 0.65% | 1.48% | |
| Ulcer Indexi | 1.13% | 1.88% | |
| Max daily dropi | 0.93% | 0.84% | |
| Max wkly dropi | 1.67% | 1.65% | |
| 5Y | Growthi | +16.23% | -2.09% |
| CAGRi | +3.06% | -0.42% | |
| Volatilityi | 7.55% | 6.07% | |
| Sharpe ratioi | -0.16 | -0.78 | |
| Sortino ratioi | -0.22 | -1.06 | |
| Max drawdowni | 15.79% | 17.38% | |
| Current drawdowni | 3.15% | 3.04% | |
| Avg drawdowni | 3.63% | 7.31% | |
| Ulcer Indexi | 5.62% | 8.64% | |
| Max daily dropi | 3.35% | 1.62% | |
| Max wkly dropi | 6.34% | 3.50% | |
| 10Y | Growthi | +52.58% | +15.00% |
| CAGRi | +4.32% | +1.41% | |
| Volatilityi | 8.19% | 5.57% | |
| Sharpe ratioi | 0.01 | -0.53 | |
| Sortino ratioi | 0.01 | -0.71 | |
| Max drawdowni | 22.03% | 18.58% | |
| Current drawdowni | 3.15% | 3.86% | |
| Avg drawdowni | 2.44% | 4.95% | |
| Ulcer Indexi | 4.42% | 7.00% | |
| Max daily dropi | 5.50% | 5.44% | |
| Max wkly dropi | 12.87% | 8.05% |
| Category | HYG | BND |
|---|---|---|
| Fund name | iShares iBoxx $ High Yield Corporate Bond ETF | Vanguard Total Bond Market Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratioi | 0.49% | 0.03% |
| Total assets (AUM)i | $16.78B | $389.05B |
| Dividend yieldi | 6.14% | 4.17% |
- 6-8% yield premium over investment-grade bonds: HYG compensates for higher default risk with meaningfully higher income — significantly outperforming BND's yield in benign credit environments
- Lower duration than investment-grade: high yield bonds tend to have shorter maturities — less interest rate sensitivity than long-duration investment-grade bonds in HYG vs BND
- Credit spread tightening appreciation: when economic outlook improves, credit spreads compress and HYG's price appreciates alongside its high income
- Flight-to-safety benefits during equity crashes: US Treasury bonds in BND typically rise in value when stocks fall sharply — providing the classic 60/40 portfolio diversification benefit
- 10,000+ investment-grade bond diversification: BND's extensive diversification across Treasuries, agencies, and investment-grade corporates minimizes single-issuer default risk
- 0.03% expense ratio: BND is one of the cheapest bond ETFs — keeping almost all bond income for investors
- Default risk in recessions: high yield issuers default at much higher rates in recessions — HYG can lose 15-25% in credit crises even as Treasuries rally (no flight-to-safety benefit)
- Equity-like correlation in stress: high yield bonds fall with stocks in market crashes — providing no diversification benefit when investors most need it
- Liquidity risk: in severe market stress, high yield bond liquidity can deteriorate — ETF discounts to NAV widened significantly in March 2020's liquidity crunch
- Duration risk in rising rate environments: BND's 6-7 year effective duration means significant price declines when interest rates rise — BND lost ~13% in 2022 as rates spiked
- Lower yield than HYG: BND's 3.5-5% yield is significantly below HYG's 6-8% — income-focused investors accept lower yield for safety and Treasury bond diversification benefits
- Return of capital in MBS (mortgage-backed securities): BND's MBS component returns principal with each mortgage payment — reducing reinvestment opportunities in the bond portfolio
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