Vanguard Bond ETFs Compared: Should You Buy VCIT's Yield or VGIT's Stability in This Economic Environment?
Explore how these two popular funds fit different portfolio goals and why their holdings set them apart for income and stability seekers.
Overview
Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT) offers higher income by holding investment-grade corporate debt, while Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) prioritizes safety through a portfolio of U.S. government-backed securities.
Both funds target the intermediate section of the yield curve, but they serve different roles in a portfolio. While VCIT captures the credit premium of the corporate world, VGIT acts as a more traditional hedge against equity market volatility by sticking strictly to government obligations.
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.
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Originally published at www.fool.com.