VCLT vs ZTEN

VCLTAVanguard Long-Term Corporate Bond ETF

ZTENBF/M 10-Year Investment Grade Corporate Bond Etf

In short

VCLT The long end of investment-grade credit, held plain. VCLT tracks an index of corporate bonds with 10+ years left to run, costs three cents per $100 a year, and pays monthly. Maximum rate sensitivity, minimum toll.

ZTEN Most corporate bond funds smear across a maturity range. ZTEN parks on one point of the curve: investment-grade corporates with roughly nine and a half to ten and a half years left, held in even slices and refreshed monthly.

Stated mandate

VCLT VCLT seeks to follow a market-weighted corporate bond index with long-term average maturity. It uses passive index sampling, maintains maturity consistent with the index, and normally invests at least 80% of assets in index bonds.

ZTEN The fund seeks to track, before fees and expenses, the price and yield performance of the ICE 10-Year US Target Maturity Corporate Index.

Why people hold it

• VCLT 0.03% a year against a 0.19% median for investment-grade corporate bond funds. On a position held for years, that gap is real money.
• The pure long lane: the Bloomberg U.S. 10+ Year Corporate Bond Index, while cohort leaders like VCIT, IGIB and IGSB sit short or intermediate.
• A multi-billion-dollar fund that trades actively, so entering and exiting rarely means fighting the spread.
• Boringly mechanical, which is the point: index sampling, at least 80% of assets in index bonds, monthly distributions, running since 2009.

• ZTEN Precision instead of a range: it targets bonds within about six months either side of the 10-year mark, so the exposure stays a 10-year exposure rather than drifting shorter.fminvest.com
• Even weighting across holdings, which keeps the biggest serial borrowers from swallowing the portfolio the way they can in size-weighted corporate indexes.fminvest.com
• 0.15% a year, below the typical investment-grade corporate ETF fee, with income paid monthly.
• Roughly 300 developed-market investment-grade bonds under the hood, so any single issuer stumble lands as a small slice, not a headline.

Worth knowing

• VCLT Long maturities swing hard when rates move. This is one of the most rate-sensitive corners of investment-grade credit.
• Corporate credit only, roughly 300 bonds. No Treasuries and no short-maturity ballast to cushion a rough stretch.
• Sampling means it holds a representative slice of the index rather than every bond in it.

• ZTEN The broad index giants cost a fraction of this. VCIT and IGIB run in the low single-digit basis points, but they spread across a maturity band instead of one target year.
• Launched in 2024, still a small fund and thinly traded, so spreads can be wider than in the mega-funds and hurried orders can print away from fair value.
• Ten-year paper swings more with rates than short-dated corporate funds like IGSB. That is the price of sitting further out on the curve.

Full VCLT profile⁠

Full ZTEN profile⁠