Better Bond ETF: Fidelity's FIGB vs. iShares' IEI
Key Points
Fidelity Investment Grade Bond ETF charges a higher expense ratio but delivers a modestly higher yield than iShares 3-7 Year Treasury Bond ETF.
FIGB includes a broader mix of investment-grade bonds, resulting in slightly higher risk and a deeper historical drawdown.
IEI focuses solely on intermediate Treasuries, while FIGB holds more securities and allocates significantly to cash and other high-grade sectors.
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The Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) offers broader bond exposure and a higher yield than iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI), but comes with a higher fee, more volatility, and a deeper historical drawdown.
Both funds target high-quality U.S. bonds, but IEI zeroes in on intermediate-term Treasuries, while FIGB takes a wider approach by including various investment-grade sectors and a notable cash allocation. This comparison looks at cost, returns, risk, and portfolio makeup to help investors weigh which ETF may better fit their needs.
Snapshot (cost & size)
| Metric | IEI | FIGB |
|---|---|---|
| Issuer | IShares | Fidelity |
| Expense ratio | 0.15% | 0.36% |
| 1-yr return (as of 2026-04-09) | 4.3% | 5.9% |
| Dividend yield | 3.6% | 4.1% |
| Beta | 0.69 | 1.02 |
| AUM | $18.7 billion | $450.9 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
IEI is more affordable on fees, charging 0.15% annually, while FIGB costs 0.36%. FIGB compensates with a slightly higher yield, offering a 4.1% payout compared to IEI's 3.6%.
Performance & risk comparison
| Metric | IEI | FIGB |
|---|---|---|
| Max drawdown (5 y) | -13.88% | -18.06% |
| Growth of $1,000 over 5 years | $1,025 | $1,026 |
What's inside
FIGB takes a diversified approach with 180 holdings spanning U.S. investment-grade bond sectors. Its largest positions include the Fidelity Cash Central Fund (11.94%), U.S. Treasury bonds 4.75% (3.95%), and U.S. Treasury notes 4.25% (3.87%). The fund has a 5.1-year track record, and there are no leverage, ESG, or currency hedging quirks noted.
IEI, on the other hand, is strictly focused on intermediate U.S. Treasury bonds, with 83 holdings in U.S. Treasury Notes with various maturities. This pure-Treasury approach results in lower risk and less yield, but also less exposure to other bond sectors or cash. Neither fund tracks an explicit index or features notable structural twists.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
In comparing the Fidelity Investment Grade Bond ETF (FIGB) and iShares 3-7 Year Treasury Bond ETF (IEI), the choice comes down to whether you prioritize higher income and broader diversification or maximum safety and lower costs.
FIGB is far more expensive with a 0.36% expense ratio, but it delivers a greater dividend yield, broader diversification thanks to its wider range of bonds, and a higher one-year return. It’s also an actively-managed fund aiming to outperform the broader investment-grade bond market, which contributes to its higher cost.
IEI is passively-managed, but that keeps its cost lower than FIGB. Because it focuses on U.S. Treasuries, IEI delivers maximum safety with regards to capital preservation and volatility, as demonstrated by its lower beta. The fund also sports a far larger AUM of $18.7 billion, providing much greater level of liquidity.
FIGB is for investors who seeks a higher income payout and is comfortable with more volatility and higher fees. IEI is for the conservative investor who prioritizes capital preservation, liquidity, and lower costs.
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