CAFX vs VCIT

CAFXCCongress Intermediate Bond ETF

VCITAVanguard Intermediate-Term Corporate Bond ETF

In short

CAFX A boutique manager's active take on the boring middle of the bond market: Congress buys investment-grade paper itself, keeps average maturity inside ten years, and pays out monthly.

VCIT Vanguard's corporate-bond workhorse: a broad basket of investment-grade company debt at three basis points, undercutting every other top-graded fund in its peer group. Running since 2009, paying monthly.

Stated mandate

CAFX The Fund seeks to maximize total return through active management of a portfolio invested primarily in debt securities and similar instruments.

VCIT The Fund seeks to track a market-weighted corporate bond index with an intermediate-term dollar-weighted average maturity.

Why people hold it

• CAFX Actively managed rather than index-tracking: the mandate is to maximize total return from U.S.-dollar investment-grade bonds, benchmarked to the Bloomberg U.S. Intermediate Government/Credit Index.
• The prospectus pins dollar-weighted average maturity to a zero-to-ten-year band, so the interest-rate lane is defined by document, not by manager mood.
• 0.35% a year puts it around the middle of the broad bond-fund pack on cost, unusual for active management, and income lands monthly.

• VCIT Charges 0.03% a year, roughly a sixth of the category's typical fee and a notch below the 0.04% carried by peers USIG, SPIB, IGIB and IGSB.
• Hugs its market-weighted corporate bond index closely, with index-matching among the tightest in its peer group. You get the market, not a manager's hunches.
• A multi-billion-dollar fund and one of the most actively traded in investment-grade corporate credit, which keeps spreads tight and large orders drama-free.
• Pays monthly, and the coupons come from pure corporate credit rather than a blend watered down with government paper.

Worth knowing

• CAFX The index heavyweights in this category charge 0.03% (BND, SPAB, SCHZ). Active selection here starts each year with that fee gap behind it.
• Launched in 2024, so the live record is short and the fund still sits in the lower half of a crowded aggregate-bond field.
• Shares trade thinly. Spreads and order type matter more here than with the giant core bond ETFs.

• VCIT Intermediate maturities mean real rate sensitivity: when yields rise, share prices fall, and there is no maturity date to sit and wait for.
• All corporate borrowers, so downgrades and defaults are part of the deal in a way they are not for a Treasury fund.
• Market weighting sizes positions by debt outstanding, so the companies that borrow the most get the biggest slots.

Full CAFX profile⁠

Full VCIT profile⁠