VCIT vs VTBNX
Vanguard Intermediate Term Corporate Bond ETF vs Vanguard Total Bond Market II Index Fund Institutional Shares
Which is better, VCIT or VTBNX?
Long Term Mid Quality against Long Term High Quality.
VTBNX has a lower expense ratio. The two have moved almost in lockstep, correlation 0.98.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | VCIT | VTBNX |
|---|---|---|
| Expense Ratio | 0.03% | 0.02%Best |
| AUM | $70.0B | $207.3B |
| Dividend Yield | 4.89% | 4.16% |
| Holdings | 2,283 | 15,871 |
| YTD Price Return | -6.88% | -5.41% |
| 1Y Price Return | -7.34% | -5.80% |
| 3Y Price Return (annualized) | +1.52% | +0.37% |
| 5Y Price Return (annualized) | -3.79% | -3.97% |
| Volatility (annualized) | 7.7% | 6.4%Best |
| Max Drawdown | -22.1% | -20.8%Best |
| Fund Family | Vanguard (US) | Vanguard (US) |
| Category | Fixed Income | Fixed Income |
| Style | Long Term Mid Quality | Long Term High Quality |
| Inception | Nov 19, 2009 | Feb 17, 2009 |
Not shown on this pair: $10,000 over 5 years, Top 10 Weight.
A price return is not the return of a fund that pays its income out. The coupon or distribution never appears in the price, so the return rows carry no winner here. VCIT currently yields 4.89% and VTBNX 4.16%.
Volatility and max drawdown are measured over the window both funds cover: Oct 4, 2021 to Oct 1, 2026 (5 years).
VCIT vs VTBNX Performance
Vanguard Intermediate Term Corporate Bond ETF (VCIT) is an 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's price moved -7.34% and VTBNX's -5.80%, before the income each one paid out.
Over three years, VCIT compounded at +1.52% per year against +0.37% for VTBNX; over five years the annualized figures are -3.79% and -3.97% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VCIT has been the more volatile fund, with annualized monthly volatility of 7.7% compared with 6.4% for VTBNX. 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 -22.1% for VCIT and -20.8% for VTBNX. Drawdown depth is what each fund did in the worst stretch of the window measured above.
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 4.89% against 4.16% for VTBNX.
Structure and taxes
VTBNX is a mutual fund and VCIT is an ETF. A mutual fund prices once a day at net asset value and may carry a purchase minimum. An ETF trades through the day at whatever the market pays for it.
In a taxable account the difference that usually matters is distributions. An ETF can meet redemptions in kind, so it rarely has to sell holdings and rarely passes a capital gain to the people who held it; a mutual fund that sells holdings to meet redemptions can distribute a realised gain at year end to everyone still in the fund, whether or not they sold anything themselves. In a tax-deferred account that difference largely disappears. Both are descriptions of how the two wrappers work, not a recommendation.
Tax-loss harvesting works on either wrapper.
Holdings Overlap
We hold position weights for 1,364 holdings in VCIT and 12,623 in VTBNX, totalling 61.8% and 61.9% of the two funds. Neither is a share of a fund we can divide by, so no overlap percentage is shown here. Within what we can see, 1,113 positions appear in both.
1,113 positions in common, counted across the 1,364 positions we hold weights for in VCIT and 12,623 in VTBNX, against full books of 2,283 and 15,871.
Top Shared Holdings
| Stock | Weight in VCIT | Weight in VTBNX | Difference |
|---|---|---|---|
| BAC V5.015 07/22/33 | 0.27% | 0.01% | 0.26% |
| BA 6.528 05/01/34Boeing Co/The Corp. Note | 0.28% | 0.00% | 0.28% |
| JPM V4.912 07/25/33Jpmorgan Chase & Co 4.91% 25Jul2033 | 0.25% | 0.02% | 0.23% |
| JPM V5.35 06/01/34Jpmorgan Chase 5.35 06/01/2034 | 0.25% | 0.02% | 0.23% |
| PFE 4.75 05/19/33Pfizer Investment Enter Company Guar 05/33 4.75 | 0.26% | 0.01% | 0.25% |
| AMGN 5.25 03/02/33Amgen Inc 5.25 03/02/2033 | 0.24% | 0.02% | 0.22% |
| JPM V5.576 07/23/36Jpmorgan Chase & Co 5.58 07/23/2036 | 0.21% | 0.03% | 0.18% |
| VZ 2.355 03/15/32Verizon Communications Inc. 2.36% Mar 15/32 2.355% 3/15/2032 | 0.20% | 0.01% | 0.19% |
| C V6.174 05/25/34Citigroup Inc Var.Rt. Corp. Bonds | 0.19% | 0.01% | 0.18% |
| GS V3.102 02/24/33Goldman Sachs Group Inc (The) 3.102%/Var 02/24/2033 02/24/2033 | 0.19% | 0.01% | 0.18% |
You are not choosing between two funds in isolation.
Whichever of VCIT and VTBNX you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
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, by $1 a year on a $10,000 investment.
Which is riskier, VCIT or VTBNX?
VCIT has been the more volatile fund at 7.7% annualized versus 6.4% for VTBNX. Worst drawdown: VCIT -22.1% vs VTBNX -20.8%.
Should I hold both VCIT and VTBNX?
VCIT and VTBNX have a monthly-return correlation of 0.98, so they move almost identically. What is left to separate them is the fee and the index each one tracks. This is information, not a recommendation.
Which pays a higher dividend, VCIT or VTBNX?
VCIT yields 4.89% while VTBNX yields 4.16%, so VCIT currently pays the higher dividend yield.
Is it better to hold VTBNX or VCIT in a taxable account?
VCIT is an ETF and VTBNX is a mutual fund. An ETF can meet redemptions in kind, so it rarely distributes a capital gain to the people holding it. A mutual fund that sells holdings to meet redemptions can pass a realised gain to every holder at year end. In a tax-deferred account that difference largely disappears. This is information, not a recommendation.
Is VTBNX better than VCIT?
VTBNX has a lower expense ratio. The two have moved almost in lockstep, correlation 0.98. Which one suits a particular account depends on what it is for. This is information, not a recommendation.