what’s the difference between BND and FBND

The Vanguard Total Bond Market ETF (BND) and the Fidelity Total Bond ETF (FBND) are both bond ETFs that provide exposure to the fixed-income market, but they differ in their approach, performance, and investor appeal.

1. **Approach and Strategy**:
- **BND**: This ETF tracks the performance of the Bloomberg Barclays U.S. Aggregate Float Adjusted Index, which includes a wide range of investment-grade fixed-income securities, including U.S. Treasury bonds, corporate bonds, and mortgage-backed securities. It aims to replicate the index closely, providing broad exposure to the U.S. bond market.
- **FBND**: Fidelity Total Bond ETF is an actively managed fund that uses the Barclays U.S. Universal Bond Index as a guide for its sector allocation and duration exposure. This means the fund's managers have the discretion to adjust the portfolio to respond to market conditions and opportunities, potentially outperforming a passive index fund like BND.
2. **Performance and Yield**:
- **BND**: As of the latest data, BND has a dividend yield of approximately 2.99% and a net expense ratio of 0.03%. It has seen substantial growth, surpassing $100 billion in assets under management.
- **FBND**: FBND has a dividend yield of approximately 3.13% and a net expense ratio of 0.36%. Its performance can be influenced by the active management style, which aims to capitalize on market opportunities while also managing risk.
3. **Investor Appeal**:
- **BND**: Known for its low cost and broad exposure, BND is suitable for investors seeking a passive, low-maintenance investment in the bond market.
- **FBND**: The active management and potential for outperformance make FBND appealing to investors who are comfortable with a more aggressive approach and are willing to pay a slightly higher fee for the potential benefits.

In summary, BND is a passive, low-cost option for broad exposure to the U.S. bond market, while FBND offers an active management style with the potential for higher returns, albeit at a higher cost. The choice between the two ETFs depends on an investor's investment philosophy, risk tolerance, and the desired level of involvement in the management of their fixed-income investments.