Back to Basics: FBND versus BND

Fidelity has been touting the performance of their total bond fund, showing impressive charts in ads. As is my want, let's test these results and compare the Fidelity Total Bond Fund ETF (FBND) to the Vanguard Total Bond Fund ETF (BND).

First the fund companies' own published comparable results, in their own words:

Fidelity's FBND "Snapshot"

Quarter-End Average Annual Total Returns AS OF 09/30/2019

                NAV Return Market Return

1 Year +9.67%          +9.62%
3 Year +3.36%          +3.25%
5 Year     -- --
10 Year -- --
Life         +3.59%          +3.50%

Life as of NAV inception date: 10/06/2014   Life market returns are as of the first day the ETF traded on an exchange, which may occur a few days after the NAV inception date. Market returns are based on the closing price on the listed exchange at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times.
Gross Expense Ratio: 0.36%

Vanguard BND ETF "Profile"

Performance
Total Bond Market ETF
Average annual returns
as of 09/30/2019
Total Bond Market ETF

1-yr         3-yr         5-yr       10-yr        Since inception 04/03/2007
10.91% 4.16% 3.06% 3.52% 4.23%

Given Fidelity's own published results, one wonders why advertise them?

Using Yahoo daily historical data, let's do our own analysis.

Frankly, there is little difference between ETFs. Beginning with the FBND start date 10/9/2014 until 12/3/2019, using continuously compounded daily returns, $1000 in BND has grown to $1180.72 while FNBD has grown to $1191.54 over the same period.

Note, ALL these returns are highly period dependent. Given today's results, Fidelity would be happy to advertise the FBND ETF return.

Quick note on yield or distribution claims. They are not relevant. What is relevant to investors, including income investors, is ONLY the "Total Return". Total returns are the source of growth, dividends, "distributions" or withdrawals of any kind. Total return is the number that income investors and all investors must pay attention to.

Feel free to post comments.

Disclaimer: Posts are for education only and not investment advice, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors.