The iShares 3-7 Year Treasury Bond ETF (IEI) and Fidelity Investment Grade Bond ETF (FIGB) differ in cost, yield, and portfolio makeup. IEI focuses on intermediate-term U.S. Treasury bonds, while FIGB offers a single fund solution to investment-grade U.S. bonds, including government and high-quality corporate issuers.

IEI has a lower expense ratio (0.15%) compared to FIGB (0.36%), with a 1-year return of 2.7% versus 2.2% for FIGB. IEI has a dividend yield of 3.5%, while FIGB offers a higher yield at 4.15%. The beta for IEI is 0.71 and 1.01 for FIGB, with AUM of $17.7 billion and $354.6 million respectively.

FIGB holds 689 different bonds, covering government and top-tier corporate debt, supporting its higher yield but introducing additional credit risk. IEI exclusively holds U.S. Treasury bonds, offering maximum credit quality and interest rate sensitivity with no exposure to corporate risk or sector tilts.

For ETF investors, choosing between IEI and FIGB depends on preferences for cost, yield, and risk exposure. IEI offers a safer option with exclusive U.S. Treasury bond holdings, while FIGB provides a broader credit profile with a mix of government and corporate debt.

Considerations for investing in Fidelity Investment Grade Bond ETF include its variety of nearly 700 holdings, focus on government and corporate debt, and slightly higher dividend yield. Over the last four years, FIGB has returned slightly less than IEI, with a larger maximum drawdown and higher expense ratio.

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The Motley Fool recommends diversifying portfolios with bond ETFs like IEI and FIGB, highlighting the different makeups of each fund. IEI offers a safe option with U.S. Treasury bonds, while FIGB provides a broader mix of government and corporate debt, offering a slightly higher yield but with additional risk.

Read more at Yahoo Finance: FIGB Offers Higher Yield Than IEI With Broader Bond Mix but Lower 1-Year Return