Which Is the Better Intermediate-Term Bond ETF, Vanguard's VCIT or iShares' Treasury-Focused IEI?

Robert Izquierdo, The Motley Fool

Sun, June 28, 2026 astatine 3:12 PM CDT 5 min read

Choosing betwixt the Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT) and iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI) involves balancing higher income imaginable from firm recognition against the information and little volatility of U.S. authorities treasuries.

Both exchange-traded funds negociate sensitivity to involvement complaint changes by targeting middle-range maturities, yet they supply entree to fundamentally antithetic segments of the fixed-income market. The prime betwixt them often hinges connected an capitalist penchant for the information of authorities backing versus the perchance higher yields recovered successful firm debt.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The Vanguard money is the much affordable option, featuring a 0.03% disbursal ratio compared to 0.15% for the iShares fund. This 0.12 percent constituent quality whitethorn power semipermanent compounding.

Additionally, the Vanguard money provides a higher payout for income-seeking investors, maintaining a dividend output that is 1.15 percent points higher than IEI arsenic of June 17, 2026. The Vanguard money besides manages importantly much assets nether absorption (AUM).

Performance & hazard examination

What's wrong

The iShares 3-7 Year Treasury Bond ETF is simply a fixed-income money that replicates the show of an scale composed of U.S. authorities Treasury securities. It targets bonds with remaining maturities betwixt 3 and 7 years, a scope that typically offers little volatility than longer-term debt. With 82 holdings, its largest positions see Treasury Note 4.38% 11/30/2030 astatine 2.91%, Treasury Note 4.00% 02/28/2030 astatine 2.31%, and Treasury Note 1.38% 11/15/2031 astatine 2.27%. This iShares money was launched successful 2007 and paid $4.26 per stock implicit the trailing 12 months.

In contrast, the Vanguard Intermediate-Term Corporate Bond ETF aims to supply a higher income watercourse by investing successful investment-grade firm debt. Its portfolio of 343 holdings focuses connected securities with dollar-weighted mean maturities of 5 to 10 years, which mostly results successful higher involvement complaint sensitivity than the shorter-dated iShares fund. The money is highly diversified, ensuring that nary azygous presumption exceeds 0.31% of the portfolio. Launched successful 2009, the Vanguard money has a trailing-12-month dividend of $3.95 per stock and carries much recognition hazard than its government-focused counterpart.