Published on Apr 05, 2025 5 min read

Top Vanguard Bond Funds for Reliable Returns in 2025

Investing in bond funds can be a smart way to add stability and steady income to your portfolio. Vanguard is well-known for offering reliable and low-cost bond funds that suit various financial goals. Whether you are looking for short-term options or long-term growth, Vanguard has funds to match your needs. This guide will highlight some of the top Vanguard bond funds for 2025, helping you make informed decisions for achieving consistent and dependable returns.

What are bond funds?

Bond funds are a type of mutual fund that invests in different types of fixed income securities, such as government bonds and corporate bonds. This type of means gives investors the opportunity to diversify the portfolio and earn potential revenues through potential payments. Unlike individual bonds, which have a certain due date, the Bond Fund does not have a notice date and can give the ongoing return to investors.

Why choose Vanguard for bond fund investments?

Vanguard is known for its low-cost approach to investing, making it a popular choice among both beginner and experienced investors. The company offers a wide range of bond funds with varying levels of risk and potential returns, allowing investors to choose the best option for their financial goals and risk tolerance. Additionally, Vanguard's index funds have a history of outperforming actively managed funds over the long term, making it a reliable choice for investors seeking steady returns.

8 Top Vanguard Bond Funds for 2025

1. Vanguard Total Bond Market Index Fund (VBTLX)

The Vanguard Total bond market index fund (VBTLX) is a very popular alternative for investors seeking widespread performance for the bond market. The purpose of this fund is Bloomberg U.S. The agiget flood is to track the performance of the adjustable index, providing a benevolent mix of US government bonds, corporate bonds and hostage-supported securities.

With a low degree of expense of 0.05%, VBTLX is an effective and cost -effective alternative for those who want to increase the stability of the portfolio. The fund is particularly suitable for conservative investors or those who come close to retirement, as it emphasizes stable income and moderate risk.

2. Vanguard Short-Term Investment-Grade Fund (VFSTX)

For investors with a shorter investment time horizon or those looking for more stability in their portfolio, the Vanguard Short-Term Investment-Grade Fund (VFSTX) is an excellent option. This fund invests in high-quality, short-term bonds issued by U.S. corporations and government entities. It aims to provide steady income while minimizing interest rate risk.

With an expense ratio of just 0.20%, VFSTX is a low-cost option for conservative investors seeking reliable returns. Additionally, its short duration makes it less susceptible to changes in interest rates compared to longer-term bond funds.

3. Vanguard High-Yield Corporate Fund (VWEHX)

For investors with a higher risk tolerance and seeking potentially higher returns, the Vanguard High-Yield Corporate Fund (VWEHX) is worth considering. This fund invests in lower-rated, high-yield corporate bonds that offer higher yields but also carry more credit risk.

While VWEHX has a slightly higher expense ratio of 0.23%, it has historically outperformed its peers and the broader bond market. However, investors should be aware of the potential for greater volatility and default risk associated with investing in lower-rated bonds.

4. Vanguard Intermediate-Term Investment-Grade Fund (VFICX)

The Vanguard Intermediate-Term Investment-Grade Fund (VFICX) offers a balanced approach for investors seeking both income and potential growth. The fund invests in high-quality, intermediate-term bonds issued by U.S. corporations and government entities.

With an expense ratio of 0.15%, VFICX is a low-cost option that provides moderate risk and steady returns. This fund may be suitable for long-term investors looking to diversify their portfolio with a mix of stocks and bonds.

5. Vanguard Short-Term Treasury Fund (VFISX)

The Vanguard Short-Term Treasury Fund (VFISX) is a great choice for investors seeking minimal risk and stable returns.

With an expense ratio of 0.10%, VFISX is a low-cost option for those looking to preserve their capital while earning a modest return. However, investors should be aware that this fund may not keep pace with inflation in the long term.

6.Vanguard Inflation-Protected Securities Fund (VIPSX)

For investors seeking protection against inflation, the Vanguard Inflation-Protected Securities Fund (VIPSX) can be an excellent addition to their portfolio. With an expense ratio of 0.10%, VIPSX offers a low-cost option for diversifying your portfolio and protecting your purchasing power in the long term.

7. Vanguard Emerging Markets Government Bond Fund (VGOVX)

For investors looking to add international exposure to their bond portfolio, the Vanguard Emerging Markets Government Bond Fund (VGOVX) is a top choice. This fund invests in government debt issued by emerging market countries, providing diversification and potential for higher returns.

With an expense ratio of 0.45%, VGOVX is a relatively low-cost option for accessing this niche asset class. However, investors should be aware of the potential for volatility and currency risk associated with investing in emerging markets.

8. Vanguard Convertible Securities Fund (VCVSX)

For investors seeking a unique hybrid between stocks and bonds, the Vanguard Convertible Securities Fund (VCVSX) can be an excellent option. This fund invests in convertible bonds, which offer fixed income payments with the potential for capital appreciation if the issuing company's stock price rises.

With an expense ratio of 0.42%, VCVSX offers investors a way to potentially benefit from both bond and equity markets. However, these types of securities can be more complex and carry higher risk than traditional bonds, so it may not be suitable for all investors.

Final Thoughts

Vanguard's diverse range of mutual funds provides options to suit nearly every investment goal, from stable income generation to capital appreciation and global diversification. Each fund comes with its own set of advantages and risks, making it essential for investors to carefully assess their financial objectives, risk tolerance, and time horizon before making a choice. With their low expense ratios and strong track record, Vanguard funds remain a reliable option for building a balanced and diversified portfolio.