VGIT Versus FIGB: A Straight Tradeoff Between Cost and Yield

Overview

• Vanguard’s VGIT charges a 0.03% expense ratio and holds only U.S. Treasuries, offering government‑backed credit and lower price swings.
• Fidelity’s FIGB charges 0.36% and mixes investment‑grade corporate and government debt to deliver a slightly higher trailing yield and one‑year return.
• VGIT is far larger and more liquid with about $48.6 billion in assets and 76 issues, while FIGB has roughly $498.6 million in AUM and 180 holdings.
• FIGB has shown higher short‑term returns but also higher volatility and deeper drawdowns, reflecting corporate credit sensitivity rather than interest‑rate exposure alone.
• For core bond allocations this means a clear tradeoff: choose lower ongoing costs and credit safety with VGIT or accept higher fees and downside risk for modestly greater income with FIGB, which can affect retirees and income investors who rely on steady payouts.