Fidelity's FIGB or Vanguard's VGIT: Which Bond ETF Is the Better Buy Right Now?
Key Points
Vanguard Intermediate-Term Treasury ETF offers a significantly lower expense ratio of 0.03% compared to the 0.36% charged by Fidelity Investment Grade Bond ETF.
Fidelity Investment Grade Bond ETF provides broader exposure with 180 holdings and a higher trailing-12-month distribution yield of 4.1% than the Vanguard fund.
Fidelity Investment Grade Bond ETF has seen higher 1-year total returns but it has historically experienced a deeper maximum drawdown than the Treasury-focused Vanguard fund.
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Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) offers a broader, higher-yielding corporate and government mix, while Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) provides lower-cost, pure-play exposure to U.S. government debt.
Fixed-income investors often choose between the absolute safety of government bonds and the slightly higher yields of investment-grade corporate debt. While both FIGB and VGIT target high-quality bonds, they differ significantly in cost, credit risk, and portfolio breadth.
Snapshot (cost & size)
| Metric | VGIT | FIGB |
|---|---|---|
| Issuer | Vanguard | Fidelity |
| Expense ratio | 0.03% | 0.36% |
| 1-yr return (as of June 17, 2026) | 3.1% | 4.5% |
| Dividend yield | 3.9% | 4.1% |
| Beta | 0.17 | 0.25 |
| Assets under management (AUM) | $49.5 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, with an expense ratio nearly 12 times lower than its Fidelity counterpart. However, FIGB offers a higher distribution payout, with a 0.24 percentage point yield gap over the Vanguard fund.
Performance & risk comparison
| Metric | VGIT | FIGB |
|---|---|---|
| Max drawdown (5 yr) | (15.0%) | (18.1%) |
| Growth of $1,000 over 5 years (total return) | $1,003 | $1,007 |
What's inside
Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) is a fundamental fixed-income option that holds 180 positions, including a mix of U.S. Treasury notes and highly rated corporate debt. The fund was launched in 2021, its portfolio is categorized as 100% cash and others, and it has a trailing-12-month dividend of $1.76 per share.
Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) focuses exclusively on U.S. government debt with 76 holdings. This fund was launched in 2009, is classified as a fixed-income fund with no equity sector breakdown, and paid $2.27 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The eye-popping fee gap between these two funds comes down to one fundamental difference in how they are built. VGIT is a passive fund that simply tracks an index of intermediate-term U.S. Treasury bonds at negligible cost. FIGB is actively managed, meaning a team of portfolio managers makes ongoing decisions about which bonds to hold across government debt, corporate bonds, mortgage-backed securities, and asset-backed securities. That expertise costs money, which is why FIGB's expense ratio is more than 10 times higher.
Whether that premium is worth paying depends on what you expect from a bond fund. FIGB's broader mix has delivered a higher yield and stronger recent returns than VGIT's Treasury-only approach. But active management in fixed income carries a well-documented challenge: Over long periods, most actively managed bond funds struggle to consistently outperform passive alternatives after fees are accounted for.
VGIT's Treasury-only focus means zero credit risk and minimal volatility, making it the stronger choice for conservative investors who prioritize capital preservation above all else. FIGB is better for those who want a professionally managed, diversified bond portfolio and are comfortable paying for active oversight in exchange for broader exposure and higher income potential.
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