UFIV vs VGIT

UFIVBUS Treasury 5 Year Note ETF

VGITAVanguard Intermediate-Term Treasury ETF

In short

UFIV One bond, one ticker. UFIV holds the most recently auctioned 5-year Treasury note and rolls into the new one at each auction, pinning you to a single point on the curve instead of a blended bucket of maturities.

VGIT The middle of the Treasury curve, priced like an afterthought. VGIT holds government bonds maturing in 3 to 10 years for 0.03% a year, a quarter of what the typical Treasury fund in its peer group charges.

Stated mandate

UFIV The fund seeks results that generally correspond to the performance of its benchmark, the Bloomberg US Treasury Bellwether 5Y Total Return USD Unhedged Index.

VGIT Seeks to track a market-weighted Treasury bond index while maintaining an intermediate-term dollar-weighted average maturity.

Why people hold it

• UFIV Single-security design: it owns the current on-the-run 5-year Treasury note and rolls automatically at each new auction, so the exposure stays at the 5-year tenor.fminvest.com
• Aims to pay dividends at least monthly, a more frequent cadence than the semiannual coupons on the underlying note.fminvest.com
• Tracks its Bloomberg 5Y Treasury bellwether index tightly, which is the whole job when the benchmark is effectively one bond.

• VGIT Charges 0.03% a year against a 0.12% median for Treasury funds in its peer group. In bonds, where the coupon does the work, that fee gap is most of the argument.
• Plain index work: it follows the Bloomberg U.S. Treasury 3-10 Year Bond Index with very little slippage, one of the tighter implementations in its Treasury peer group.vanguard.com
• Running since 2009 and now a multi-billion-dollar fund that trades actively, so spreads stay tight. Interest lands monthly.
• The portfolio is U.S. government paper only, a few dozen issues. No corporate borrowers to underwrite, no credit research required.vanguard.com

Worth knowing

• UFIV 0.15% a year sits at the category median, but broad intermediate Treasury baskets like SPTI and SCHR charge 0.03%.
• One holding means no spread across maturities: the price tracks the 5-year yield in both directions, with duration parked near five years.fminvest.com
• A small, thinly traded fund, so bid-ask spreads carry more weight at the moment of the trade than they do in the giant Treasury ETFs.

• VGIT Intermediate maturities cut both ways. A 3 to 10 year book reprices more when yields move than a bill fund does, so the ride is bumpier than cash-like Treasury products.
• Treasuries only means no corporate credit premium in the yield. Income comes strictly from government coupons, and the monthly payout drifts with rates.

Full UFIV profile⁠

Full VGIT profile⁠