What distinguishes corporate bonds from US Treasury bonds?

Corporate bonds are debt securities issued by companies, while US Treasury bonds are backed by the government. VCLT focuses on long-term corporate debt, exposing investors to issuer credit risk. Conversely, VGLT holds US Treasuries, which carry negligible default risk but remain sensitive to interest rate fluctuations. Both funds provide long-duration exposure, meaning their market values can fluctuate significantly when interest rates change. Investors typically choose corporate bonds for higher potential income despite greater risk, whereas Treasuries offer safety with lower yields. These structural differences define the primary risk profile for each fund.

How do ETFs distribute income, and does the yield guarantee returns?

VCLT and VGLT distribute income primarily as quarterly dividends to reflect the interest payments from their underlying bonds. The dividend yield indicates current income based on recent distributions, not a guaranteed future return. A 5.74% yield for VCLT suggests the fund is passing on higher coupon payments from corporate issuers. In contrast, VGLT's 4.82% yield reflects government-issued coupons. Yields also fluctuate inversely with fund prices, so rising yields might follow a decline in share value. Distributions are taxable events, so they impact net portfolio performance differently compared to price appreciation.

How long are 'long-term' bonds, and what duration means?

Long-term bonds generally have maturities of ten years or more. VCLT and VGLT both focus on this segment, offering higher yields compared to short-term alternatives. Their longer duration makes them highly sensitive to changes in interest rates; a percentage change in rates can cause a significant shift in the fund's net asset value. This characteristic results in higher volatility than intermediate or short-term bond funds. Investors often select these funds for higher income potential, provided they can tolerate greater price swings. The extended maturity means the impact of rate moves persists longer.

What are the expense ratios of VCLT and VGLT?

Both VCLT and VGLT have a low expense ratio of 0.03%. This means a $10,000 investment incurs an annual fund fee of $3 for either option. Because the costs are identical, fee differentials do not make one cheaper than the other; any performance gap would reflect market returns. For context, this figure is very low, especially for actively managed funds. This 0.03% expense ratio is a key feature for both VCLT and VGLT. A $10,000 investment would pay $3 annually in management fees.

How do expense ratios affect the returns over time?

Since both VCLT and VGLT have an identical expense ratio of 0.03%, the annual fee drag is identical. A $10,000 investment in either fund would incur roughly $3 in management costs each year. Over a 10-year horizon, this equates to approximately $30 in costs, assuming the investment size remains constant. Since the fee structure is the same, investors should focus on the different sources of risk and return (corporate versus government bonds) rather than fees. Differences in performance will stem from the assets held, not the expense ratio. This is particularly important for long-term investors.

What does it mean if VCLT has a higher yield than VGLT?

VCLT's higher dividend yield of 5.74% versus VGLT's 4.82% reflects the additional credit risk in corporate bonds. Companies pay higher coupons to attract investors, compensating for the potential of issuer default. In contrast, VGLT invests in US Treasuries, which are considered nearly default-free, resulting in lower yields. The yield gap represents the compensation investors receive for holding riskier corporate debt. However, it is vital to remember that the higher current yield does not guarantee superior total returns, particularly if corporate credit conditions deteriorate or interest rates rise sharply.

Which investing goals are typically associated with these funds?

VCLT is typically associated with investors seeking maximum current income from long-term bonds. This goal suits portfolios prioritising income over safety, as VCLT accepts greater credit risk to achieve its higher yield. Conversely, VGLT is often linked to goals of capital preservation and lower risk. It provides high-quality, government-backed exposure for investors wanting the safety of US Treasuries. Both are generally used for long-term asset allocation within a diversified portfolio. Neither fund is designed for short-term trading or principal stability, as both carry significant interest rate risk.

What is the overlap between the holdings of VCLT and VGLT?

There is no overlap between the top-10 holdings listed for VCLT and VGLT. This is because VCLT exclusively tracks a corporate bond index, while VGLT exclusively holds US Treasury securities. An investor holding both funds would have distinct exposures: one to business sector credit risk and the other to government sovereign debt. This lack of overlap ensures that each fund contributes a unique role in a portfolio, allowing investors to deliberately balance risk sources.

What do I learn about VCLT and VGLT holdings from data gaps?

For VCLT, sector weightings are not publicly available, which obscures the specific industry concentrations within its corporate portfolio. For VGLT, the absence of detailed sector weightings limits the ability to analyse specific duration buckets or maturity spreads. These information gaps require investors to rely on broader categories: VCLT for corporate credit risk and VGLT for Treasury risk. Without detailed portfolio transparency, it is difficult to assess how concentrated each fund's holdings might be in certain sectors or maturities, affecting the overall risk assessment.

What factors affect the dividend yields for VCLT and VGLT?

A 5.74% dividend yield on VCLT indicates a higher level of credit risk, as corporate bond coupons are typically elevated to compensate for potential issuer default. VGLT's 4.82% yield reflects the relatively lower returns offered by government-issued debt. Since top-10 holdings are not disclosed for either fund, investors cannot pinpoint if a few high-yield issuers are driving this figure. The yield also fluctuates inversely with price, so a rising yield might signal market concerns over future interest rates or deteriorating credit quality in the corporate bond market.

Are VCLT and VGLT comparable in terms of fund size?

Both funds are large and liquid. VGLT has $10.4 billion in net assets, while VCLT holds $8.8 billion. Both assets exceed billions, providing robust liquidity for retail and institutional investors. Fund size can influence liquidity, and larger funds typically allow for tighter bid-ask spreads, making them easier to trade. This scale often suggests the funds are well-established and widely held. Investors generally consider a fund of this magnitude to have a lower risk of liquidation due to insufficient scale.

What does the same launch date for both funds signify?

VCLT and VGLT were both launched on November 19, 2009, providing investors with more than a decade of operational history. This extended timeline allows for a longer track record of how each fund has tracked its respective index across various economic cycles, including periods of changing interest rates. For beginners, a decade-long history provides confidence that the fund structure is robust and has weathered significant market stress, unlike newer funds which may still be developing operational efficiency and track records.

VCLT vs VGLT

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

This page compares the Vanguard Long-Term Corporate Bond ETF (VCLT) and the Vanguard Long-Term Treasury ETF (VGLT), covering their identical expense ratios, dividend yields, net assets, shared inception date, and lack of overlapping top-10 holdings. We examine how each fund tracks its respective market: VCLT with corporate bonds and VGLT with US Treasuries. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

VCLT

Metric

VGLT

0.03%

Expense Ratio

0.03%

5.74%

Dividend Yield

4.82%

$8.82B

Net Assets

$10.43B

2,861

Holdings

103

Nov 19, 2009

Inception Date

Nov 19, 2009

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Index Tracked

–

Long-Term Bond

Fund Category

Long Government

Both funds charge the same annual fee.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

VCLT

Pros

The fund's expense ratio is a low 0.03%, minimising costs.
With $8.8bn in assets, it offers robust market liquidity.
Launched in 2009, the fund has a long operational track record.

Considerations

Specific index tracking details are currently unavailable for verification.
A 5.74% yield indicates higher credit risk in corporate bonds.
Lack of public sector weightings obscures portfolio concentration risks.

VGLT

Pros

A 0.03% expense ratio ensures minimal ongoing management fees.
Assets of $10.4bn provide strong scale and liquidity.
Established in 2009, it has a stable decade-long history.

Considerations

Index tracking methodology is not disclosed in available data.
A 4.82% yield is lower than its corporate bond peer.
Absent sector weights make it hard to assess specific risks.

About VCLT and VGLT

VCLT (VCLT)

The Vanguard Long-Term Corporate Bond ETF aims to track the investment results of an index composed of long-duration corporate bonds. It provides exposure to investment-grade corporate debt with maturities typically exceeding ten years. With a low expense ratio of 0.03%, this ETF offers a cost-efficient way for investors to gain access to the corporate bond market. It holds a diversified portfolio of over 2,800 bonds, managed by Vanguard. While the fund does not have a specified market cap as it is an ETF, its net assets stand at approximately USD 8.82 billion. Investors should note that while the fund offers a dividend yield of 5.74%, bond prices are sensitive to interest rate changes, meaning the value can fluctuate significantly. This fund is designed for those seeking long-term fixed-income exposure rather than short-term capital gains.

VGLT (VGLT)

The Vanguard Long-Term Treasury ETF, traded under the ticker VGLT, is an exchange-traded fund designed to provide investors with exposure to US government bonds with longer maturities. As a part of the Vanguard Scottsdale Funds family, it aims to track the performance of long-term Treasury securities issued by the United States government. This fund falls into the 'Long Government' category, reflecting its focus on bonds with significant time to maturity. Investors should be aware that while these bonds are generally considered lower risk due to the backing of the US government, their prices can fluctuate significantly in response to changes in interest rates. The fund offers a relatively low expense ratio, enhancing potential net returns, and pays out income from the underlying Treasury securities. It's essential to understand that bond ETF values can rise and fall, and past performance does not guarantee future results.

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VCLT vs VGLT

Fund Snapshot