VCIT vs VDIGX
Vanguard Intermediate Term Corporate Bond ETF vs Vanguard Dividend Growth Fund Investor Class
Quick Verdict
VCIT has a lower expense ratio. VCIT delivered stronger 1-year returns. VCIT offers more diversification with 2019 holdings.
Side-by-Side Comparison
| Metric | VCIT | VDIGX | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.22% | |
| AUM | $67.3B | $36.4B | |
| Dividend Yield | 4.77% | 1.87% | |
| Holdings | 2,253 | 55 | |
| YTD Return | -0.43% | -0.21% | |
| 1Y Return | +2.34% | -8.99% | |
| 3Y Return (annualized) | +5.82% | -3.09% | |
| 5Y Return (annualized) | +0.84% | -2.76% | |
| Volatility (annualized) | 6.0% | 16.1% | |
| Max Drawdown | -20.7% | -32.6% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | May 15, 1992 |
VCIT vs VDIGX Performance
Vanguard Intermediate Term Corporate Bond ETF (VCIT) is a ETF from Vanguard (US) and Vanguard Dividend Growth Fund Investor Class (VDIGX) is a mutual fund from Vanguard (US). Over the past year VCIT returned +2.34% while VDIGX returned -8.99%. Year to date, VCIT is down 0.43% versus a loss of 0.21% for VDIGX.
Over three years, VCIT compounded at +5.82% per year against -3.09% for VDIGX; over five years the annualized figures are +0.84% and -2.76% respectively. Across the full 5-year window we track, VCIT has the edge at +1.75% annualized vs -2.76%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VDIGX has been the more volatile fund, with annualized monthly volatility of 16.1% compared with 6.0% for VCIT. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -20.7% for VCIT and -32.6% for VDIGX. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.56. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VCIT charges 0.03% per year while VDIGX charges 0.22%. On a $10,000 position that is $3 vs $22 annually, a gap of $19 per year that compounds over a long holding period. On income, VCIT currently yields 4.77% against 1.87% for VDIGX.
Holdings Overlap
VCIT and VDIGX share 0 holdings out of 2066 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VCIT or VDIGX?
VCIT has an expense ratio of 0.03% while VDIGX charges 0.22%. VCIT is the cheaper option. On a $10,000 investment, that is $19 per year of difference.
Which performed better, VCIT or VDIGX?
Over the past year VCIT returned +2.34% vs -8.99% for VDIGX, so VCIT leads on 1-year performance. Over the longest common window we track (5 years), VCIT annualized +1.75% vs -2.76% for VDIGX. Past performance does not guarantee future results.
Which is riskier, VCIT or VDIGX?
VDIGX has been the more volatile fund at 16.1% annualized versus 6.0% for VCIT. Worst drawdown: VCIT -20.7% vs VDIGX -32.6%.
Should I hold both VCIT and VDIGX?
VCIT and VDIGX have a monthly-return correlation of 0.56, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VCIT and VDIGX?
VCIT and VDIGX share 0 common holdings with a 0.0% weight overlap. Combined, they hold 2066 unique securities.
Which pays a higher dividend, VCIT or VDIGX?
VCIT yields 4.77% while VDIGX yields 1.87%, so VCIT currently pays the higher dividend yield.
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