What is the difference between VGIT and VGSH regarding government bond duration?

VGIT focuses on intermediate-term US Treasury securities, while VGSH invests in short-term government bonds. Duration measures a bond fund's sensitivity to interest rate changes. Generally, intermediate-term bonds like those in VGIT carry higher duration, meaning their prices may fluctuate more than the short-term bonds in VGSH when interest rates move. Understanding this duration difference is crucial when comparing their potential volatility and income characteristics. It helps explain why VGIT often has a slightly higher yield, compensating for increased interest rate risk.

How do the expense ratios of these two Vanguard funds compare?

Both the Vanguard Intermediate-Term Treasury ETF and the Vanguard Short-Term Government Bond ETF have identical expense ratios of 0.03%. This low fee structure is consistent across both funds, meaning investors in either fund pay the same percentage annually for fund management. Since the fee difference is 0.00 percentage points, cost is not a differentiating factor in this comparison. This equal cost highlights that any performance or yield differences primarily stem from the underlying bond maturity profiles rather than fee burden, making it easier to compare their core financial attributes directly.

How do the dividend yields of VGIT and VGSH compare and how do distributions work?

VGIT offers a dividend yield of 3.99%, while VGSH yields 3.79%. The 0.20 percentage point difference reflects the higher interest rates typically associated with intermediate-term Treasuries. Both funds distribute income from their underlying bonds. ETF distributions are generally paid periodically from interest received by the fund. These yields are variable and depend on prevailing interest rates and the portfolio composition. Investors should note that higher yield often accompanies greater sensitivity to interest rate movements, which is evident in the distinction between the two maturity profiles.

What does the 'Index tracked' field being 'not available' imply for these funds?

For both VGIT and VGSH, the specific index they track is currently not available. This limits transparency regarding the exact methodology used to select securities. However, as Vanguard Treasury funds, they generally follow established benchmarks for intermediate and short-term US government bonds. Without index details, investors cannot verify replication accuracy or specific constituent rules. This absence does not negate the funds' role in providing Treasury exposure but prevents a detailed assessment of their tracking error or strict adherence to a particular benchmark definition, which is a consideration for transparency-focused investors.

Are there any overlaps in the top holdings of these two funds?

The top holdings and sector weights are not available for either the Intermediate-Term Treasury ETF or the Short-Term Government Bond ETF. Consequently, a direct comparison of the top ten holdings cannot be made, and no shared holdings are listed. While both funds invest in US Treasuries, the distinct maturity classifications suggest the underlying securities differ. The lack of holding data means investors cannot analyse portfolio overlap or concentration. This makes the maturity profile and fund category the primary observable differentiators for assessing how each fund's portfolio might behave in different interest rate environments.

Which fund is more suitable for capital preservation with lower interest rate risk?

VGSH, the Short-Term Government Bond ETF, is typically associated with goals requiring lower sensitivity to interest rate changes. Short-term bonds have less duration, meaning their market value is generally less volatile when interest rates rise compared to intermediate-term bonds. Investors prioritising capital preservation or needing funds accessible within a shorter timeframe might focus on this characteristic. VGSH offers a yield of 3.79% with $34.8 billion in net assets, providing high liquidity. The trade-off is a lower yield compared to VGIT's 3.99%, reflecting the compensation for the reduced interest rate risk in shorter maturities.

Which fund might align with income generation while accepting more interest rate fluctuation?

VGIT, the Intermediate-Term Treasury ETF, provides a higher dividend yield of 3.99% compared to VGSH. This aligns with goals focused on generating income from Treasury securities, accepting that intermediate-term bonds have higher duration risk. When interest rates fall, VGIT's price might rise more than VGSH's, and vice versa when rates rise. It has $39.7 billion in net assets, indicating very high liquidity. This fund suits investors who can tolerate greater price volatility in exchange for potentially higher income, reflecting the additional interest rate risk inherent in intermediate-term government bond exposure compared to short-term.

How do the net assets and liquidity compare between the two ETFs?

VGIT has $39.7 billion in net assets, while VGSH holds $34.8 billion. Both figures represent exceptionally high asset bases for government bond ETFs. This substantial scale typically contributes to high trading liquidity, allowing investors to buy or sell shares easily at tight bid-ask spreads. The difference of approximately $4.9 billion in net assets is not expected to significantly impact liquidity for most retail investors. Both funds launched on 19 November 2009, providing nearly 17 years of track record, which enhances their established presence and operational stability within the fixed-income ETF marketplace.

What is the importance of inception date for comparing these two Vanguard Treasury funds?

Both VGIT and VGSH have an inception date of 19 November 2009. This shared history means they have been subject to similar macroeconomic conditions, including varying interest rate cycles and monetary policy shifts over their lifespan. Comparing long-term performance or distribution consistency is valid from this common starting point. However, the data provided does not include historical performance returns. The identical inception date ensures that neither fund has a structural advantage in terms of track record length, making the maturity profile and associated yield the key differentiators rather than operational longevity.

What transparency limitations exist for these funds' portfolio analysis?

The main transparency limitation for both Vanguard Intermediate-Term Treasury ETF and Vanguard Short-Term Government Bond ETF is the unavailability of top holdings, sector weights, and specific index tracked details. Investors cannot perform a bottom-up analysis of specific bond issuances, maturity laddering, or issuer concentration. The sector weights, typically crucial for understanding government bond portfolios, are also missing. This requires reliance on the fund's stated category ('Intermediate Government' or 'Short Government') and general knowledge of Treasury bond markets rather than detailed, fund-specific portfolio data for granular risk assessment or overlap analysis.

How does the interest rate risk profile differ fundamentally between these two Treasury ETFs?

Interest rate risk is higher for intermediate-term bonds in VGIT compared to short-term bonds in VGSH. If interest rates rise, the price of VGIT's holdings typically falls more sharply than those in VGSH due to the longer time until maturity and reinvestment. Conversely, VGIT's price may increase more when rates fall. This fundamental difference in duration drives the yield disparity: VGIT's 3.99% versus VGSH's 3.79%. Investors must decide whether they seek the higher income from VGIT and accept the greater price volatility, or prefer the stability of VGSH with lower income.

What educational information should I take from this ETF comparison page?

This comparison page is for educational purposes only and does not constitute financial advice. It highlights factual data from FUND DATA, such as VGIT's 3.99% yield versus VGSH's 3.79%, identical 0.03% expense ratios, and their shared inception date. The key takeaway is understanding the trade-off between maturity and interest rate risk: intermediate-term Treasuries generally offer higher yield with more price fluctuation than short-term ones. The unavailability of holding details and index information is also noted. Always consider your personal risk tolerance and investment horizon when evaluating such products.

VGIT vs VGSH

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

This page compares the Vanguard Intermediate-Term Treasury ETF (VGIT) and the Vanguard Short-Term Government Bond ETF (VGSH). We examine their fees, holdings, dividends, and how each fund tracks its market segment. Both funds have an expense ratio of 0.03% and launched on Nov 19, 2009. Top holdings and sector weights are not available for either fund. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

VGIT

Metric

VGSH

0.03%

Expense Ratio

0.03%

3.99%

Dividend Yield

3.79%

$39.66B

Net Assets

$34.84B

104

Holdings

Nov 19, 2009

Inception Date

Nov 19, 2009

–

Index Tracked

–

Intermediate Government

Fund Category

Short 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

VGIT

Pros

The fund has a low 0.03% expense ratio which helps to keep costs manageable.
With $39.7 billion in net assets the fund offers very high trading liquidity.
It provides a 3.99% dividend yield from intermediate-term US Treasury securities.

Considerations

Interest rate risk is higher for intermediate-term bonds compared to short-term bonds.
The index tracked details are not available so methodology transparency is lacking.
Top holdings and sector weights are not available preventing detailed portfolio analysis.

VGSH

Pros

The fund charges a low 0.03% expense ratio which reduces investment costs.
Short-term bond exposure lowers duration risk during periods of rising interest rates.
With $34.8 billion in net assets the fund maintains excellent liquidity.

Considerations

The 3.79% dividend yield is lower than the intermediate-term Treasury ETF.
Index tracked information is not available making the replication strategy less clear.
Top holdings and sector weights are not available limiting portfolio transparency.

About VGIT and VGSH

VGIT (VGIT)

The Vanguard Intermediate-Term Treasury ETF (VGIT) is designed to track the performance of a market-weighted index composed of US government bonds with maturities between three and ten years. As an exchange-traded fund, it offers investors exposure to a diversified portfolio of 104 holdings, primarily consisting of fixed-income securities backed by the full faith and credit of the US government. This structure typically aims to provide a balance between yield potential and interest rate risk compared to shorter or longer-term treasury options. With a low expense ratio of 0.03%, it is often used by investors seeking stability and income within a broader portfolio. It is important to remember that while US government bonds are considered low credit risk, their market value can fluctuate based on changes in interest rates. Consequently, returns are not guaranteed, and values may rise or fall over time.

VGSH (VGSH)

The Vanguard Short-Term Government Bond ETF (VGSH) is an exchange-traded fund designed to help investors gain exposure to a market-weighted index of US government bonds with relatively short maturities. As part of the Vanguard family, it offers a widely recognised approach to bond investing, often characterised by low costs and transparency. The fund’s strategy focuses on shorter-duration government debt, which can be a key component of a diversified portfolio. Investors should note that, as with any investment, values can rise and fall. Interest rates, inflation, and economic conditions can affect both the capital value and the income generated by the fund. The stated expense ratio is 0.03%, and it reports net assets of USD 34.84 billion. It’s important to consider your own circumstances and risk tolerance when evaluating bonds and bond-based ETFs.

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VGIT vs VGSH

Fund Snapshot