VGIT vs IEI: Treasury Tactics in Turbulent Times

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iShares 3-7 Year Treasury Bond ETF (IEI +0.12%) and Vanguard Intermediate-Term Treasury ETF (VGIT +0.13%) both target U.S. Treasuries in the intermediate maturity range, but differ on cost, yield, and subtle portfolio focus.

Both the iShares 3-7 Year Treasury Bond ETF (IEI +0.12%) and the Vanguard Intermediate-Term Treasury ETF (VGIT +0.13%) aim to give investors exposure to U.S. Treasury bonds with moderate interest rate risk. While they share a similar investment universe, their approaches and fee structures create some meaningful differences worth considering for those comparing the two.

The Ledger: Cost and Size

Metric VGIT IEI
1-yr return (as of Oct. 31, 2025) 2.3% 2.6%
Beta 0.80 0.17

Beta reflects price volatility compared to the S&P 500.

VGIT’s 0.03% fee is a lean operator, no fat on the bones. IEI’s 0.15% is a man with a taste for fine whiskey and high rent. VGIT’s 3.8% yield isn’t just a number-it’s a promise, if you know where to look. IEI’s 3.4%? A polite nod and a half-empty glass.

The Dance of Risk and Reward

Metric VGIT IEI
Max drawdown (5 y) -15.52% -14.21%
Growth of $1,000 over 5 years $861 $901

The Anatomy of Holdings

IEI’s portfolio is a tight little alley-3 to 7 years, 82 holdings, and a fondness for Treasury Notes that sleep like hibernating bears. Its top three positions? A love triangle of 0.04%, 0.04%, and 0.03%. Sector allocation? Cash and others. A man with no enemies and no friends.

VGIT, now-this one’s got reach. Three to ten years, 76 holdings, and a bond named T that tips its hat at 1.00%. It’s got an ESG screen, too-a moral compass in a market full of ghosts. Not everyone needs it, but some do. Like a trench coat in a rainstorm.

For more guidance on ETF investing, check out the full guide at this link.

Foolish Take

VGIT and IEI are both hired guns in the Treasury business, but they wear their badges differently. VGIT is the steady hand on the wheel, low-cost and efficient. IEI is a sharper blade, precise but costly. One’s a long-term lover; the other, a fling with a price tag.

VGIT’s 0.03% fee is a whisper in a crowded room. Its broader maturity range isn’t just strategy-it’s survival. Investors who want a bedrock in their portfolio, something that doesn’t ask questions, will find comfort here. It’s the kind of fund that says, “I’m here for the long haul.”

IEI’s 3-7 year window is a clean cut, no frills. It’s for the type who likes their risks measured, their maturities neat as a button. The iShares name carries weight, and for some, that’s worth the extra fee. It’s the suit tailored to fit, even if the tailor’s rates are steep.

Both funds are built to steady your portfolio, but they speak different languages. VGIT is the old friend who knows your vices and still shows up. IEI is the new colleague who knows your résumé and charges accordingly. Choose wisely. The market doesn’t forgive indecision.

Glossary

ETF: A fund that trades on stock exchanges and holds a basket of assets, like stocks or bonds. Think of it as a gang of misfits wearing the same suit.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs. A tax on competence.
Dividend yield: The annual income from dividends, expressed as a percentage of the investment’s price. A paycheck with a wink.
Beta: A measure of an investment’s volatility compared to the overall market, often the S&P 500. A ghost in the machine.
AUM: The total market value of assets that a fund manages on behalf of investors. A number that makes men important.
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a specific period. The kind of drop that makes your spine ache.
Holdings: The individual securities or assets that make up a fund’s portfolio. The cards a player keeps close to the chest.
Sector allocation: The distribution of a fund’s investments across different industry sectors or asset categories. A map drawn in the dark.
Average maturity: The weighted average time until the bonds in a fund’s portfolio mature. A countdown with a pause button.
ESG screen: A filter that selects investments based on environmental, social, and governance criteria. A conscience in a spreadsheet.

And remember, folks-the market doesn’t care if you’re right or wrong. It only cares if you’re still playing. 🎩

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2025-11-20 22:03