BND vs IEF: Correlation
How closely do Vanguard Total Bond Market ETF (BND) and iShares 7-10 Year Treasury Bond ETF (IEF) trade together? Their weekly returns over three years give a correlation of 0.99, which is very strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are BND and IEF?
On 3 years of weekly data the BND/IEF correlation comes out at 0.99, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.98 over 1 year against 0.99 over 3. The 5-year figure is 0.98, and annualized covariance runs at 33.3 %².
IEF is one of the assets that tracks BND most closely: it ranks #2 out of the 33 assets we track against BND. Twelve-month performance is nearly a tie, at +2.3% for BND and +0.9% for IEF. The rolling one-year correlation stayed in a tight band between 0.96 and 0.99 over the past three years, which points to a structural rather than episodic relationship.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
BND vs IEF: side by side
| BND (Vanguard Total Bond Market ETF) | IEF (iShares 7-10 Year Treasury Bond ETF) | |
|---|---|---|
| 1-year return | +2.3% | +0.9% |
| 5-year return | -1.3% | -7.9% |
| Volatility (ann.) | 5.2% | 6.5% |
| Beta vs S&P 500 | 0.06 | 0.04 |
| Max drawdown (3Y) | -4.7% | -6.9% |
| Dividend yield | – | 3.96% |
| Expense ratio | – | 0.15% |
| Assets under management | – | $47.2B |
| Sector / category | ETF · Bonds | ETF · Bonds |
On the fund side, IEF sits in the Long Government category at iShares, with $47.2B under management, a 0.15% expense ratio, a 3.96% trailing dividend yield.
Year-by-year returns
| Year | BND | IEF |
|---|---|---|
| 2022 | -13.1% | -15.2% |
| 2023 | +5.7% | +3.6% |
| 2024 | +1.4% | -0.6% |
| 2025 | +7.1% | +8.0% |
| 2026 | +0.2% | -0.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are BND and IEF good diversifiers for each other?
No. With a correlation of 0.99, BND and IEF move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between BND and IEF?
Using weekly returns as of 2026-08-27: 0.99 over 3 years, with 0.98 over the last year and 0.98 over 5 years.
Is IEF a good diversifier for BND?
No. With a correlation of 0.99, BND and IEF move nearly in lockstep, so holding both adds very little diversification.
What does a correlation of 0.99 mean?
On the −1 to +1 scale, 0.99 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/bnd-vs-ief.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/bnd-vs-ief/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: BND correlations · IEF correlations
