VGIT Offers Lower Costs While FIGB Provides Broader Exposure
Key Points
FIGB carries a much higher expense ratio but offers a slightly higher dividend yield than VGIT.
VGIT has experienced a smaller maximum drawdown and better four-year risk-adjusted returns.
FIGB holds more positions and provides broader sector exposure.
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The key differences between Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) and Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) are cost, yield, portfolio breadth, and historical risk -- VGIT is cheaper and steadier, while FIGB offers a modestly higher payout and broader bond exposure.
Both VGIT and FIGB target investors seeking core U.S. fixed income exposure, but they approach it differently. VGIT focuses solely on intermediate-term U.S. Treasury bonds, while FIGB covers a broader swath of high-grade U.S. bond sectors. This comparison unpacks how each fund stacks up across cost, performance, risk, and portfolio construction.
Snapshot (cost & size)
| Metric | VGIT | FIGB |
|---|---|---|
| Issuer | Vanguard | Fidelity |
| Expense ratio | 0.03% | 0.36% |
| 1-yr return (as of 2026-02-10) | 1.7% | 2.8% |
| Dividend yield | 3.8% | 4.1% |
| AUM | $44.6 billion | $354.6 million |
| Beta | 0.82 | 1.01 |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months.
VGIT is significantly more affordable, with an expense ratio of just 0.03% compared to FIGB’s 0.36%. FIGB offers a slightly higher dividend yield of 4.1% versus VGIT’s 3.8%, which may appeal to income-focused investors willing to pay higher fees.
Performance & risk comparison
| Metric | VGIT | FIGB |
|---|---|---|
| Max drawdown (4 y) | (13.4%) | (15.6%) |
| Growth of $1,000 over 4 years | $1,056 | $1,050 |
What's inside
The Fidelity Investment Grade Bond ETF invests across 707 positions in high-grade U.S. bonds, including corporates and government debt. The fund has operated for 4.9 years and is currently concentrated in government bonds, accounting for 45% of the portfolio. Top holdings include U.S. Treasury notes/bonds, with corporate and securitized bonds making up about 22% of the portfolio. The fund’s sector exposure and broader reach may suit those seeking more diversification beyond Treasuries.
VGIT, by contrast, holds 102 positions exclusively in U.S. Treasury securities, focusing on intermediate maturities of three to 10 years. Its top holdings are United States Treasury Note/Bond issues, reinforcing a pure government exposure. This narrower mandate means VGIT may offer more stability, but less credit diversification than FIGB.
For more guidance on ETF investing, check out the complete guide at this link.
What this means for investors
For investors looking for a quality intermediate-term bond fund in 2026, both VGIT and FIGB are solid. They both delivered returns over the last four years with minimal drawdowns for a bond fund.
Two key factors to consider for FIGB are its broader diversification and the longer average duration of its bonds. Bonds with longer durations until maturity can fluctuate more to interest rate swings. With FIGB having an average duration of 5.9 years, it could outperform this year if interest rates come down. By contrast, VGIT’s average duration is 4.9 years.
But VGIT’s slightly higher return over the last four years is noteworthy. It delivered a higher return than FIGB with less volatility, as noted by its lower beta. This makes it a compelling option for investors who plan to hold for the long term.
With the Federal Reserve pivoting to a dovish monetary policy, there could be more rate cuts this year. This benefits bond investors who are locking in higher rates and yields now. VGIT is a good choice for investors seeking the stability and safety of U.S. Treasuries, while FIGB could benefit from an improving economy, given its allocation to corporate bonds.
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