Which Long-Term Bond ETF Is the Better Buy: State Street's SPLB or Vanguard's VGLT?

State Street SPDR Portfolio Long Term Corporate Bond ETF (NYSEMKT:SPLB) provides higher yield through corporate debt, while Vanguard Long-Term Treasury ETF (NASDAQ:VGLT) offers government-backed security at a slightly lower expense ratio.

Investors seeking long-dated fixed income exposure often choose between these two distinct paths. While both funds target the long end of the maturity curve with durations exceeding 10 years, SPLB takes on credit risk from corporations to generate income, whereas VGLT focuses on the safety of U.S. Treasury securities. This fundamental difference drives variations in yield and volatility.

Snapshot (cost & size)

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-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

VGLT is slightly more affordable with a 0.03% expense ratio compared to the 0.04% charged by SPLB, though both represent very low-cost options. However, SPLB offers a higher payout for the additional credit risk, yielding 5.5% versus 4.7% for the Vanguard fund.

Performance & risk comparison

What's inside

Vanguard Long-Term Treasury ETF focuses on U.S. government bonds with maturities typically between 10 and 25 years. It holds 102 securities and was launched in 2009. Vanguard Long-Term Treasury ETF has paid $2.52 per share over the trailing 12 months, which on its recent ~$53.75 share price works out to a 4.7% yield.

State Street SPDR Portfolio Long Term Corporate Bond ETF tracks the Bloomberg U.S. Long Term Corporate Bond Index, investing in U.S. dollar-denominated investment-grade corporate bonds with maturities of 10 years or more. It is highly diversified with 2,901 holdings, and no single position exceeds 0.35% of the portfolio. It was launched in 2009. State Street SPDR Portfolio Long Term Corporate Bond ETF has paid $1.20 per share over the trailing 12 months, which on its recent ~$21.75 share price works out to a 5.5% yield.

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What this means for investors

Long-term bond investing forces a choice that most investors underestimate: credit risk or interest rate risk. Neither is comfortable, and both of these funds delivered painful drawdowns during the rate-hiking cycle of 2022 through 2024. Understanding which risk you are taking on matters more than the fee difference between them, which amounts to one basis point.

SPLB holds nearly 3,000 investment-grade corporate bonds, all maturing in at least 10 years. That breadth reduces the impact of any single company struggling, but the fund still carries credit risk that Treasuries do not. In recessions, corporate bonds tend to fall harder as investors grow nervous about companies meeting their obligations.

VGLT holds only U.S. Treasury bonds with zero credit risk. But that purity comes at a cost: VGLT is among the most interest-rate-sensitive funds available, and its negative YTD return in 2026 reflects that vulnerability.

For investors who want maximum income from long-term bonds, SPLB's higher yield and stronger recent returns make it the more practical choice. For those who want the purest safe-haven bond holding as a counterweight to equity risk, VGLT is the more defensive option.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.