Stocks generally provide higher returns than bonds, but bonds serve a crucial role in diversifying portfolios and reducing volatility, particularly during market downturns. Government bonds, issued by the U.S. government, are widely regarded as low-risk investments, whereas corporate bonds, issued by businesses, offer slightly higher returns but come with increased risk. A major drawback of total bond funds like the Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ :BND ) is their composition. Approximately 25% of BND is allocated to corporate bonds , while 50% is invested in government bonds . This blend reduces the overall risk mitigation that bonds can offer in a portfolio. A superior alternative for many investors may be the Vanguard Intermediate-Term Treasury Index Fund ETF Shares (NASDAQ :VGIT ) . Given that BND includes corporate bonds, its risk-adjusted returns decline when paired with a broad U.S. equity market fund. VGIT, with its treasury-only holdings, exhibits a lo...