VRIG vs XHLF

VRIGBInvesco Variable Rate Investment Grade ETF

XHLFABondBloxx Bloomberg Six Month Target Duration US Treasury ETF

In short

VRIG Most funds in the cash corner just roll Treasury bills. VRIG is the active floating-rate alternative: securitized and corporate paper whose coupons reset with short-term rates, built for current income with very low duration.

XHLF Most cash-parking funds pick a maturity bucket. XHLF picks a number: it blends Treasury bills to an average duration of about six months, resets to that target monthly, and charges three basis points to do it.

Stated mandate

VRIG The actively managed ETF seeks current income while maintaining low portfolio duration as its primary objective; capital appreciation is secondary.

XHLF The Fund seeks to track the investment results of an index composed of U.S. Treasury securities.

Why people hold it

• VRIG Coupons reset as short-term rates move, which is how the fund keeps portfolio duration low while pursuing current income. Rate swings move floaters less than fixed-coupon bonds.invesco.com
• Active, not an index clone. Managers range across floating-rate securitized, corporate and agency paper, with at least 80% of net assets in investment-grade variable rate instruments.invesco.com
• Pays income monthly and spreads the work across roughly 400 positions instead of a short stack of bills.
• Trading since 2016, so the strategy has a track record covering both rising and falling short-term rates, and it stays actively traded on the screen.

• XHLF Costs 0.03% a year, against a typical short-Treasury peer near 0.14%. In cash-like funds, where returns come from bills everyone owns, fee is the main lever.
• Tracks an index built to hold an average duration of roughly six months, rebalanced monthly, so exposure stays anchored instead of drifting as bills mature.bondbloxxetf.com
• Sits in the gap between 0-3 month bill funds and one-year funds. Its sibling XONE targets a one-year duration at the same 0.03%, so the two can be mixed to dial in duration.
• US Treasury bills only, no credit bets hiding in the portfolio, run in a multi-billion-dollar fund that has stayed close to its index.

Worth knowing

• VRIG It charges 0.30% a year, against 0.19% for the typical fund in its short-duration group and 0.06% to 0.08% for bill trackers like VBIL and ICSH. Active credit work costs more.
• This is credit, not Treasury bills. The 80% investment-grade floor leaves room for lower-rated and fixed-rate holdings, and securitized paper can move when markets get stressed.invesco.com
• Floating coupons cut both ways. When short-term rates fall, the interest the portfolio collects resets lower with them.invesco.com

• XHLF Six months of duration is not zero. Prices move a touch more when yields shift than in 0-3 month bill funds such as BIL or CLIP.
• Income rides whatever Treasury bills happen to pay, and distributions arrive on an irregular rhythm rather than a fixed amount or schedule.
• Volume is moderate next to the largest bill ETFs, so spreads can be a bit wider, which matters more on big tickets than small ones.

Full VRIG profile⁠

Full XHLF profile⁠