Vanguard Total International Bond ETF

BNDX

Market cap $74.7B

2025 capped off another strong year for fixed income ETFs, as ongoing market uncertainty pushed more investors into the safe confines of bonds. When it came to inflows, it was Vanguard that was well-represented with four funds cracking the top 10.

The Vanguard Total International Bond ETF (BNDX) is rated a Buy, uniquely positioned to exploit a temporary arbitrage from U.S. and international rate spreads. BNDX offers a 4.39% yield, monthly income, and avoids NAV erosion, with broad diversification and USD-hedging reducing FX volatility. The ETF's heavy Eurozone exposure and positive carry from interest rate differentials create an attractive, asymmetrical risk-return profile.

The rate-cutting cycle is bringing more investors to international bonds to not only diversify, but gain attractive yields. That's especially the case when considering emerging markets (EM) debt.

U.S. bonds are outperforming after years of volatility, with 10-year Treasury yields falling as inflation pressures moderate even with some prices still elevated.

In the World Series of ETF inflows, the Vanguard S&P 500 ETF (VOO) could do what the Los Angeles Dodgers just did in professional baseball: go back to back with another $100 billion in inflows for a second consecutive year.

Ohio-based Prosperity Capital bought 381,763 shares of BNDX for an estimated $18.9 million in the third quarter. The transaction marked a new position for Prosperity, which didn't report BNDX holdings in the second quarter.

As noted by TMX VettaFi Head of Research Todd Rosenbluth, fixed income ETFs are having a banner year amid record inflows. The Vanguard Total Bond Market ETF (BND) and Vanguard Total International Bond ETF (BNDX) were two of the top funds responsible for the $325 billion in net inflows (as of October 15).

Connecticut-based wealth manager Apella Capital reported selling 219,555 shares of the Vanguard Total International Bond ETF (BNDX) for an estimated $10.8 million in the third quarter.

With $1.01 trillion of net inflows for the year, ETFs are sure to break the 2024 record of $1.1 trillion, likely in November. However, with $325 billion of new money as of October 15, fixed income ETFs have already hit a new milestone for the year.

Unconventional approaches still lead to good results.