Vanguard's VCIT or Fidelity's FIGB: Which Bond ETF Is the Better Buy Right Now?
Key Points
Vanguard Intermediate-Term Corporate Bond ETF provides a significantly lower expense ratio of 0.03% compared to the 0.36% charged by Fidelity Investment Grade Bond ETF.
Vanguard Intermediate-Term Corporate Bond ETF offers a higher trailing-12-month dividend yield.
Fidelity Investment Grade Bond ETF has exhibited lower price volatility with a beta of 0.25 and a shallower maximum drawdown.
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Deciding between Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT) and Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) involves weighing the advantages of Vanguard's exceptionally low costs against Fidelity's lower volatility profile.
Both ETFs provide exposure to high-quality debt, but they serve different roles in a fixed income portfolio. While VCIT targets a specific five- to 10-year maturity range for corporate bonds, FIGB offers a broader, multi-sector approach to the investment-grade market, including government debt issues. This comparison explores how these two funds approach the fixed income market, providing investors with different levels of yield, expense, and price sensitivity.
Snapshot (cost & size)
| Metric | VCIT | FIGB |
|---|---|---|
| Issuer | Vanguard | Fidelity |
| Expense ratio | 0.03% | 0.36% |
| 1-yr return (as of June 12, 2026) | 5.50% | 4.20% |
| Dividend yield | 4.80% | 4.10% |
| Beta | 0.33 | 0.25 |
| AUM | $68.7 billion | $498.6 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. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is the more affordable option, featuring an expense ratio of 0.03% that sits well below the 0.36% charged by the Fidelity fund. Additionally, VCIT has offered a higher payout recently, maintaining a yield gap of 0.69 percentage points.
Performance & risk comparison
| Metric | VCIT | FIGB |
|---|---|---|
| Max drawdown (5 yr) | (20.50%) | (18.10%) |
| Growth of $1,000 over 5 years (total return) | $1,057 | $1,010 |
What's inside
The Fidelity Investment Grade Bond ETF acts as a broad-market tool for high-quality debt. Its portfolio of 180 holdings features a mix of government and corporate issues. Launched in 2021, the fund has a trailing-12-month dividend of $1.76 per share. Its exposure is primarily categorized as cash and others at 100% of the reported sector breakdown, which may reflect the liquid nature of its underlying bond instruments.
In contrast, the Vanguard Intermediate-Term Corporate Bond ETF focuses strictly on the corporate side of the investment-grade market. Launched in 2009, this fund is much more diversified with 343 holdings, and its top holdings blurb indicates that no single position exceeds 0.31% of the total assets under management (AUM). Over the trailing 12 months, it has paid $3.95 per share in dividends. While it lacks the government bond mix found in the Fidelity fund, its focus on intermediate-term maturities provides a specific five- to 10-year sensitivity to interest rates. As a specialized fixed income fund, it does not provide an equity-style sector breakdown, focusing instead on its corporate bond mandate.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Bond investing often presents a familiar tension: Higher income usually means accepting more risk, and lower risk usually means accepting less income. VCIT and FIGB sit on opposite sides of that trade-off in an interesting way.
VCIT holds exclusively investment-grade corporate bonds and delivers a higher yield at a dramatically lower cost. But the catch is that nearly half of VCIT's portfolio sits in BBB-rated bonds, the lowest rung of investment-grade credit. In a recession, those bonds can fall sharply as investors grow nervous about companies' ability to service their debt.
FIGB offers greater stability through a broader blend of government and corporate bonds, reflected in its lower volatility and shallower historical drawdown. That smoother ride comes from active management, but you’re going to pay 12 times the annual fee that VCIT charges.
For income-focused investors who understand the credit risk in BBB-rated corporate bonds and want to maximize yield at the lowest possible cost, VCIT is the stronger choice. FIGB is better for those who prioritize stability and are comfortable paying a meaningful premium for active management that keeps volatility in check.
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