IGIB Offers Higher Yield and Broader Bond Exposure Than VGIT
Key Points
IGIB carries a slightly higher expense ratio but also offers a noticeably higher yield than VGIT.
IGIB’s portfolio is more diversified but more corporate-credit focused, while VGIT sticks to U.S. Treasury bonds.
IGIB’s risk profile is higher, with deeper drawdowns, but also delivered a higher five-year return.
- 10 stocks we like better than iShares Trust - iShares 5-10 Year Investment Grade Corporate Bond ETF ›
The iShares 5-10 Year Investment Grade Corporate Bond ETF (NASDAQ:IGIB) and the Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) differ most in credit risk and yield. IGIB is taking on more risk for a higher payout, while VGIT stays in safer U.S. Treasurys, although both have experienced drawdowns in the past five years.
IGIB and VGIT both target intermediate-term bonds, but their focus diverges: VGIT invests primarily in government-issued securities to maintain low credit risk. At the same time, IGIB holds a broad portfolio of investment-grade corporate bonds with maturities of 5 to 10 years.
Snapshot (cost & size)
| Metric | VGIT | IGIB |
|---|---|---|
| Issuer | Vanguard | iShares |
| Expense ratio | 0.03% | 0.04% |
| 1-yr return (as of 2026-03-24) | 4.40% | 6.19% |
| Dividend yield | 3.83% | 4.72% |
| Beta | 0.81 | 1.04 |
| AUM | $48.8 billion | $17.4 billion |
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.
Both ETFs are low-cost, with IGIB carrying a slightly higher expense ratio. In return for that slight cost uptick, IGIB provides a higher yield, which may appeal to those seeking more income from their bond allocation.
Performance & risk comparison
| Metric | VGIT | IGIB |
|---|---|---|
| Max drawdown (5 y) | (16.0%) | (20.6%) |
| Growth of $1,000 over 5 years | $1,010 | $1,074 |
What's inside
IGIB is a pure-play corporate bond fund that holds over 3,000 investment-grade bonds issued by large U.S. companies. The effective duration of the bonds in its portfolio is 5.96 years, with a weighted-average coupon of 4.86%. Its largest positions are in bonds issued by companies in the banking sector, accounting for 25% of assets, followed by consumer non-cyclical at 11.8%. The fund has a long track record of over 19 years and does not employ leverage or currency hedging.
By contrast, VGIT is anchored entirely in U.S. Treasury securities, with a narrower portfolio of 103 holdings. The fund has a 16-year history and maintains a pure government-backed credit profile. This makes VGIT less exposed to credit risk but also generally lower-yielding than IGIB.
For more guidance on ETF investing, check out the full guide at this link.
What does this mean for investors
Investors who are looking for stability and safety above all else will want to consider VGIT over a corporate bond fund like IGIB. VGIT’s lower risk profile, as noted by a marginally lower drawdown history, makes sense for an investor seeking a moderate yield and planning to park cash in the fund for a shorter time horizon.
IGIB’s higher yield could make sense for an investor planning to hold the fund for several years. However, the fund will likely experience greater price volatility during market drawdowns. If you are planning on parking money in this fund for a year or less, a Treasury bond fund is probably the safer choice given VGIT’s history of lower drawdowns than IGIB.
If the Federal Reserve cuts rates again, both funds could rise in value, given their intermediate bond duration. These funds can be held as supplementary holdings to blend the safety of Treasurys with the higher returns from corporate bonds.
Overall, the main factor here is whether an investor prioritizes price stability or yield.
Should you buy stock in iShares Trust - iShares 5-10 Year Investment Grade Corporate Bond ETF right now?
Before you buy stock in iShares Trust - iShares 5-10 Year Investment Grade Corporate Bond ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares 5-10 Year Investment Grade Corporate Bond ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $503,861!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,026,987!*
Now, it’s worth noting Stock Advisor’s total average return is 884% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of March 30, 2026.
John Ballard 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.
Recommended Articles
