VGIT vs IEI: The maturity gap that changes your rate exposure

Seena Hassouna, The Motley Fool

Sat, April 25, 2026 astatine 10:23 AM CDT 4 min read

The Vanguard Intermediate-Term Treasury ETF (NASDAQ:VGIT) and iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI) some absorption connected U.S. Treasury bonds successful the intermediate range, but VGIT features a little interest and higher assets nether management, portion IEI delivers a narrower maturity set and marginally amended risk-adjusted returns.

Both VGIT and IEI are designed for investors seeking vulnerability to intermediate-duration U.S. Treasury bonds, offering comparative information and mean income. This examination breaks down cost, yield, performance, risk, and portfolio creation to assistance clarify wherever each money fits and which whitethorn entreaty depending connected your preferences.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

VGIT looks much affordable with a notably little disbursal ratio, portion besides offering a somewhat higher dividend output compared to IEI.

IEI tracks U.S. Treasury bonds with maturities betwixt 3 and 7 years, holding 83 issues arsenic of precocious April 2026. Its apical positions are Treasury Note 05/15/2029 (2.96%), Treasury Note 11/30/2030 (2.95%), and Treasury Note 02/28/2030 (2.30%). The money is astir 2 decades aged and, arsenic a fixed income ETF, does not interruption down by equity sector. There are nary unsocial quirks oregon overlays, truthful its absorption remains connected intermediate Treasuries wrong that circumstantial maturity window.

VGIT besides targets U.S. Treasury bonds but spans a somewhat broader maturity scope (three to 10 years), holding 76 securities. Its largest positions see United States Treasury Note/Bond 4.63% 02/15/2035 (1.96%), 4.38% 05/15/2034 (1.95%), and 4.25% 11/15/2034 (1.91%). Like IEI, VGIT contains lone authorities debt, with nary assemblage oregon recognition surprises, and some ETFs debar leverage oregon currency hedging.

VGIT and IEI are adjacent capable that astir investors astir apt don't deliberation hard astir the difference. Both clasp lone U.S. Treasuries, some skip leverage and currency hedging, and some onshore successful the intermediate space. But the maturity spread matters much than it looks. IEI caps retired astatine 7 years; VGIT runs to 10. That other agelong means VGIT carries much duration — successful plain terms, it moves much erstwhile rates shift. In a falling-rate environment, that's a tailwind. When rates rise, it hurts more. VGIT besides costs little and yields somewhat more, truthful if you're comfy with that added complaint sensitivity, you're being compensated for it, nevertheless modestly. IEI's tighter set makes it a cleaner acceptable if you privation intermediate vulnerability without guessing however acold retired connected the curve you're really sitting. The close telephone depends little connected which money looks amended connected insubstantial and much connected wherever this sits successful your broader portfolio. If you're already carrying equity hazard oregon longer-duration bonds elsewhere, IEI's tighter set keeps your fixed income anchor predictable. If Treasuries are doing heavier lifting successful your allocation — providing ballast against a complaint chopped — VGIT's other duration gives you much of that vulnerability without leaving authorities indebtedness entirely.