Choosing an ETF for Bond Exposure: Fidelity's FIGB vs. Vanguard's VGIT
Key Points
FIGB charges a much higher expense ratio but offers broader diversification and a slightly higher yield than VGIT.
VGIT has experienced a smaller drawdown and remains far more liquid with much greater assets under management.
Both funds hold primarily U.S. government bonds, but FIGB includes a wider mix of investment-grade sectors.
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The Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) and Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) differ most in cost, diversification, and liquidity, with FIGB offering a broader bond mix and higher yield but at a notably higher expense ratio and lower trading volume.
Both VGIT and FIGB are core U.S. bond funds suited to investors seeking income and relative stability, but their approaches and cost structures set them apart. This comparison unpacks which fund may appeal more, depending on an investor’s priorities around cost, risk, yield, and breadth of bond exposure.
Snapshot (cost & size)
| Metric | VGIT | FIGB |
|---|---|---|
| Issuer | Vanguard | Fidelity |
| Expense ratio | 0.03% | 0.36% |
| 1-yr return (as of 2026-04-09) | 4.7% | 5.9% |
| Dividend yield | 3.8% | 4.1% |
| Beta | 0.80 | 1.02 |
| AUM | $48.5 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.
VGIT is significantly more affordable, charging just 0.03% in annual expenses compared to FIGB’s 0.36%. FIGB’s slightly higher yield may appeal to income-focused investors, but the fee gap could outweigh that advantage for cost-conscious investors.
Performance & risk comparison
| Metric | VGIT | FIGB |
|---|---|---|
| Max drawdown (5 y) | -15.03% | -18.06% |
| Growth of $1,000 over 5 years | $1,018 | $1,026 |
What's inside
FIGB aims to provide diversified exposure across U.S. investment-grade bonds, holding about 180 securities as of its 5.1-year track record. Its top holdings include a substantial cash position, along with long-dated U.S. Treasury bonds reflecting a blend of maturities and sectors within the high-quality U.S. bond market.
By contrast, VGIT is more narrowly focused, investing in just 76 holdings, primarily intermediate-term U.S. Treasury notes and bonds. Its top positions are concentrated in recent Treasury issues, and the fund maintains a 100% allocation to government debt, offering minimal credit risk and a straightforward portfolio profile.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Bonds are a great complement to stocks in an investment portfolio, providing diversification, income, and stability. They often move in the opposite direction to stocks, softening the impact of equity market downturns, and offering higher, more consistent returns than cash to outpace inflation.
Although the Vanguard Intermediate-Term Treasury ETF (VGIT) and Fidelity Investment Grade Bond ETF (FIGB) are both bond-focused exchange-traded funds, each serves a different investment goal.
VGIT is for investors who prioritize maximum safety, as demonstrated by its lower five-year max drawdown, coupled with low volatility and cost. It’s a passively-managed fund that offers high liquidity thanks to its $48.5 billion in assets under management. The trade-off is its lower dividend yield and one-year return.
FIGB delivers a higher dividend yield and one-year return through an actively-managed fund. It offers more diversification through its broader range of bonds that include corporate bonds. But this also adds to its higher risk profile compared to VGIT, and its 0.36% expense ratio is substantially higher as well.
Ultimately, VGIT is for conservative, cost-conscious investors who emphasize capital preservation first. FIGB is for those who desire greater income and potential upside in exchange for higher fees and risk.
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