The Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) and the iShares 5-10 Year Investment Grade Corporate Bond ETF (NASDAQ:IGIB) differ in their underlying credit risk and yield potential -- one holds government-backed debt, while the other focuses on investment-grade corporate bonds. Both funds target the middle of the yield curve to balance income and interest rate risk. But whereas VGIT prioritizes the safety and liquidity of government obligations for more conservative portfolios, IGIB tracks corporate debt, which offers higher yields.
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
VGIT is the slightly cheaper option, with a 0.03% expense ratio compared to IGIB's 0.04%. IGIB, however, offers a dividend yield that's a full percentage point higher than VGIT. Growth of $1,000 over 5 years (total return) Launched in 2009, VGIT focuses on sovereign debt, primarily holding U.S.
Treasury bonds with maturities between three and 10 years. This sovereign focus provides a consistent income stream while carrying a moderate level of interest rate sensitivity. The fund holds 103 positions, and its largest holdings include the U.S.
Treasury Note/Bond 4.63% 02/15/2035 at 1.9%, the U.S. Treasury Note/Bond 4.38% 05/15/2034 at 1.9%, and the U.S. Treasury Note/Bond 4.25% 11/15/2034 at 1.9%.
IGIB focuses on high-quality corporate debt securities with maturities ranging from five to 10 years. The portfolio includes 3,023 holdings, ensuring that no single fixed income position exceeds 0.23% of total assets. This broad diversification helps mitigate the default risk of any individual corporation.
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