VCIT vs VTBNX
Vanguard Intermediate Term Corporate Bond ETF vs Vanguard Total Bond Market II Index Fund Institutional Shares
Quick Verdict
VTBNX has a lower expense ratio. VCIT delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | VCIT | VTBNX | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.02% | |
| AUM | $69.8B | $207.3B | |
| Dividend Yield | 4.87% | 3.79% | |
| Holdings | 2,271 | 15,623 | |
| YTD Return | -0.40% | -2.18% | |
| 1Y Return | +2.34% | -1.36% | |
| 3Y Return (annualized) | +6.52% | +0.83% | |
| 5Y Return (annualized) | +0.77% | -3.52% | |
| Volatility (annualized) | 6.0% | 6.3% | |
| Max Drawdown | -20.7% | -21.5% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Fixed Income | |
| Inception | Nov 19, 2009 | Feb 17, 2009 |
VCIT vs VTBNX Performance
Vanguard Intermediate Term Corporate Bond ETF (VCIT) is a ETF from Vanguard (US) and Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US). Over the past year VCIT returned +2.34% while VTBNX returned -1.36%. Year to date, VCIT is down 0.40% versus a loss of 2.18% for VTBNX.
Over three years, VCIT compounded at +6.52% per year against +0.83% for VTBNX; over five years the annualized figures are +0.77% and -3.52% respectively. Across the full 5-year window we track, VCIT has the edge at +1.75% annualized vs -3.52%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTBNX has been the more volatile fund, with annualized monthly volatility of 6.3% 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 -21.5% for VTBNX. 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 0.98. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
VCIT charges 0.03% per year while VTBNX charges 0.02%. On a $10,000 position that is $3 vs $2 annually, a gap of $1 per year that compounds over a long holding period. On income, VCIT currently yields 4.87% against 3.79% for VTBNX.
Holdings Overlap
VCIT and VTBNX share 233 holdings out of 12771 unique holdings combined, representing a 0.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VCIT | Weight in VTBNX | Difference |
|---|---|---|---|
| BAC V5.015 07/22/33 | 0.27% | 0.01% | 0.26% |
| JPM V4.912 07/25/33 | 0.25% | 0.02% | 0.23% |
| MS V5.25 04/21/34 MT | 0.19% | 0.01% | 0.18% |
| JPM V2.963 01/25/33 | Pro | Pro | Pro |
| WFC V5.605 04/23/36 | Pro | Pro | Pro |
| WFC V5.499 01/23/35 | Pro | Pro | Pro |
| ABBV 5.05 03/15/34 | Pro | Pro | Pro |
| AER 3.3 01/30/32 | Pro | Pro | Pro |
| JPM V5.717 09/14/33 | Pro | Pro | Pro |
| BAC V2.572 10/20/32 | Pro | Pro | Pro |
Frequently Asked Questions
Which is cheaper, VCIT or VTBNX?
VCIT has an expense ratio of 0.03% while VTBNX charges 0.02%. VTBNX is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VCIT or VTBNX?
Over the past year VCIT returned +2.34% vs -1.36% for VTBNX, so VCIT leads on 1-year performance. Over the longest common window we track (5 years), VCIT annualized +1.75% vs -3.52% for VTBNX. Past performance does not guarantee future results.
Which is riskier, VCIT or VTBNX?
VTBNX has been the more volatile fund at 6.3% annualized versus 6.0% for VCIT. Worst drawdown: VCIT -20.7% vs VTBNX -21.5%.
Should I hold both VCIT and VTBNX?
VCIT and VTBNX have a monthly-return correlation of 0.98, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between VCIT and VTBNX?
VCIT and VTBNX share 233 common holdings with a 0.8% weight overlap. Combined, they hold 12771 unique securities.
Which pays a higher dividend, VCIT or VTBNX?
VCIT yields 4.87% while VTBNX yields 3.79%, so VCIT currently pays the higher dividend yield.
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