FIIG vs VCIT

FIIGCFirst Trust Intermediate Duration Investment Grade Corporate ETF

VCITAVanguard Intermediate-Term Corporate Bond ETF

In short

FIIG A bond picker's fund in the most indexed corner of the market: no benchmark to hug, around 300 investment-grade corporate bonds, monthly income, and a 0.49% fee that tells you a human is doing the choosing.

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

FIIG The fund seeks current income and long-term capital appreciation while normally investing at least 80% of its assets in investment-grade corporate debt securities.

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

Why people hold it

• FIIG No published index to follow. The managers choose issuers and maturities inside a mandate of at least 80% investment-grade corporate debt.ftportfolios.com
• About 300 bonds spread out single-issuer risk, and the portfolio has stayed closely aligned with the mandate in its own filings.
• Income is paid monthly rather than quarterly, and the fund has grown to a few hundred million in assets since launch.

• 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

• FIIG The fee is the headline: 0.49% a year, against index peers like VCIT and SPIB at 0.03% and 0.04%. Bond picking here carries a real toll.
• Intermediate-duration corporates react to both interest rates and credit spreads, and with a 2023 launch this one has a short history.
• Trading is moderate rather than heavy, so order size and timing matter more here than in the giant index funds.

• 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 FIIG profile⁠

Full VCIT profile⁠