VGIT vs XFIV

VGITAVanguard Intermediate-Term Treasury ETF

XFIVABondBloxx Bloomberg Five Year Target Duration US Treasury ETF

In short

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.

XFIV Most "intermediate" Treasury funds sort bonds by maturity and let their interest-rate sensitivity wander. XFIV pins it down: two duration buckets, blended every month, to hold the portfolio near the five-year point on the curve.

Stated mandate

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

XFIV The Fund seeks to track an index of U.S. Treasury securities with duration between 4 and 6 years.

Why people hold it

• 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

• XFIV Duration is the product, not a byproduct. The index blends two buckets of 4-to-6 year Treasuries and rebalances monthly to hold an average duration near five years.sec.gov
• 0.05% a year, a third of the typical fee among intermediate Treasury funds.
• Nothing to underwrite but Uncle Sam. Government paper only, no credit or mortgage detours, and it holds up as one of the stronger implementations in its peer group.
• Pays monthly, part of a 2022 BondBloxx suite spanning eight duration targets from six months to twenty years.prnewswire.com

Worth knowing

• 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.

• XFIV Cheap, not the floor: SPTI and SCHR charge 0.03% for broad intermediate Treasury exposure.
• Five years of duration cuts both ways: roughly a 5% price move for every 1 point shift in rates, in either direction.
• Moderately traded rather than a volume giant, and the duration target is only reset at each monthly rebalance, so it can drift in between.sec.gov

Full VGIT profile⁠

Full XFIV profile⁠