The Vanguard TTL Bond Mktetf (NYSE: BND) is an Exchange Traded Fund (ETF) that tracks various bonds. The ETF includes a variety of fixed income bonds, including treasury bonds, investment grade bonds, and municipal bonds. The inconsistent performance of risk markets caused BND's performance to also be inconsistent in the past fiscal year. Interest rate levels also drive the value of the bonds that BND holds.
In the past fiscal year, BND has seen inconsistent growth, as riskier, higher-returning assets (such as stocks) have seen growth, but have struggled to fully recover from the recession. In the current fiscal year, BND's performance will hinge upon equities growth and the amount of debt issuance.
In general, as interest rates rise, bond prices fall (and vice-versa) due to discounting. From this, BND's performance is dependent on the interest rate levels. Interest rate levels are determined by the Federal Reserve, who control money supply in the U.S.
Equity securities, such as stocks and stock market indices, typically garner a higher return than bonds at the cost of a higher risk of losing money. From this, investors would rather buy equities than bonds in low-risk environments (such as growth periods in the U.S. economy), and would rather buy bonds than equities during high-risk environments (such as recessions).