FIGB Offers Higher Yield Than IEI With Broader Bond Mix but Lower 1-Year Return
Expense ratios, risk, and bond mix set these ETFs apart—explore how their distinct profiles could shape your fixed income approach.
The iShares 3-7 Year Treasury Bond ETF (IEI 0.04%) and Fidelity Investment Grade Bond ETF (FIGB 0.11%) differ in both cost and portfolio makeup, with FIGB delivering a higher yield and broader credit exposure but at a higher ongoing fee and with more pronounced historical drawdowns.
IEI is designed for investors seeking exposure to intermediate-term U.S. Treasury bonds, offering a straightforward government-backed profile. In contrast, FIGB targets those looking for a single fund solution to investment-grade U.S. bonds, including both government and high-quality corporate issuers. This comparison highlights how these differences play out in cost, performance, risk, and holdings.
Snapshot (cost & size)
| Metric | IEI | FIGB |
|---|---|---|
| Issuer | iShares | Fidelity |
| Expense ratio | 0.15% | 0.36% |
| 1-yr return (as of 1/30/2026) | 2.7% | 2.2% |
| Dividend yield | 3.5% | 4.15% |
| Beta | 0.71 | 1.01 |
| AUM | $17.7 billion | $354.6 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
IEI is more affordable, charging a lower annual fee than FIGB, but FIGB may appeal to those prioritizing a higher payout.
Performance & risk comparison
| Metric | IEI | FIGB |
|---|---|---|
| Max drawdown (4 y) | -10.86% | -15.62% |
| Growth of $1,000 over 4 years | $941 | $881 |
What’s inside
FIGB casts a wider net across investment-grade fixed income, holding 689 different bonds as of its nearly five-year mark. Its portfolio covers both government and top-tier corporate debt. This approach gives FIGB a broader credit profile than pure Treasuries, potentially supporting its higher yield but also introducing additional credit risk.
IEI, in contrast, sticks exclusively to U.S. Treasury bonds, currently holding 84 government issues. This narrow focus offers maximum U.S. government credit quality and interest rate sensitivity, with no exposure to corporate risk or sector tilts. Neither fund applies leverage, currency hedging, or other structural quirks.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Investing in bond ETFs is a good strategy for diversifying your portfolio, generating recurring income, and reducing overall risk, especially during periods of economic or market uncertainty. FIGB and IEI are both solid choices to that end, though they offer different makeups. The safer of the two is likely IEI, as it invests exclusively in U.S. Treasury bonds, which are as close to guaranteed as you can get when investing. IEI’s focus on intermediate-term bonds, meanwhile, offers something of a sweet spot in terms of interest rate sensitivity — these bonds will be less exposed to interest rate risk than long-term bills, but more exposed to risk than shorter-term bills.
FIGB offers a bit more variety, with nearly 700 holdings and a wider focus that includes both government and corporate debt. According to Yahoo! Finance, about 50% of its holdings are government debt, providing a solid foundation of bonds backed by the “full faith and credit” of the U.S. government. Its corporate bonds are also very high-quality, which means that while their interest rates may be higher than those of Treasury bonds, they are also very unlikely to result in default. Interestingly, over the last four years, FIGB has returned slightly less than IEI, while also incurring a larger maximum drawdown. And while it does boast a slightly higher dividend yield, its expense ratio is also more than double that of IEI’s.
