Better U.S. Treasury Bond ETF: Vanguard Long-Term Treasury Fund vs. iShares 20+ Year Treasury Bond ETF

Both the Vanguard Long-Term Treasury ETF (NASDAQ:VGLT) and the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) focus on U.S. Treasury bonds with long maturities, appealing to investors seeking interest rate sensitivity and government-backed credit quality. This comparison highlights their key differences in cost, performance, construction, and quirks.

Snapshot (cost & size)

Beta reflects price volatility compared to the S&P 500.

VGLT looks more affordable with a much lower expense ratio, and it edges out TLT with a slightly higher yield (4.4% vs. 4.3%, based on the most recent data). Cost-conscious investors may find the difference in annual fees particularly notable over the long term.

Performance & risk comparison

What's inside

VGLT tracks a portfolio of U.S. Treasury bonds with maturities spanning 10 to 25 years, aiming to provide high and sustainable income. It holds 96 securities, with its largest positions in United States Treasury notes/bonds. The fund has a 16-year track record as of Nov. 3, 2025 and incorporates an ESG screen, which may appeal to investors mindful of environmental, social, and governance criteria.

TLT, by contrast, targets only Treasury bonds with maturities greater than 20 years, resulting in a slightly narrower focus. Its portfolio consists of 46 holdings, all within the U.S. Treasury bond universe. TLT does not apply any ESG screens or other notable constraints.

For more guidance on ETF investing, check out the full guide at this link.

Foolish take

Both the Vanguard Long-Term Treasury ETF (VGLT) and the iShares 20+ Year Treasury Bond ETF (TLT) offer exposure to long-term U.S. Treasury bonds, but deciding which to invest in is about their different pros and cons.

VGLT offers a much lower expense ratio, and a broader range of long-term U.S. Treasury bonds, since it can hold bonds with maturities of 20 years or more, while also including those with shorter remaining terms.

In contrast, TLT targets the longest-maturing bonds, those with maturities greater than 20 years. As a result, its number of holdings is nearly half that of VGLT. But its focus in this area has led to greater assets under management (AUM), which provides deeper liquidity. Its AUM of $49.7 billion is far higher than VGLT's AUM of $14.3 billion.

As a result, VGLT is better for investors seeking low fees and long-term cost efficiency. TLT is better for investors who frequently trade bonds and want high liquidity.

Glossary

ETF: Exchange-Traded Fund; a fund that trades on stock exchanges and holds a basket of securities.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges its investors.
Dividend yield: Annual dividends paid by a fund divided by its current share price, expressed as a percentage.
Beta: A measure of an investment's volatility compared to the overall market, often the S&P 500.
AUM: Assets Under Management; the total market value of assets a fund manages on behalf of investors.
Max drawdown: The largest observed loss from a fund's peak value to its lowest point over a specific period.
ESG screen: A set of criteria evaluating environmental, social, and governance factors to include or exclude certain investments.
Securities: Financial instruments, such as stocks or bonds, that can be traded in markets.
Portfolio: A collection of financial assets held by an individual or fund.
Treasury bond: A long-term debt security issued by the U.S. government, paying periodic interest and returning principal at maturity.
Maturity: The length of time until a bond's principal amount is repaid to investors.
Yield: The income return on an investment, typically expressed as an annual percentage rate.

Robert Izquierdo 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.