Long-term Treasury ETF comparison: VGLT has a fee advantage
Vanguard’s long-term Treasury ETF VGLT has an expense ratio of 0.03%, lower than iShares TLT’s 0.15%. The two ETFs have similar dividend yields of around 4.6%, but VGLT posted higher returns over the past 12 months and showed lower volatility. Investors considering long-term holdings should check expense ratios and interest-rate sensitivity.
The expense ratio of Vanguard Long-Term Treasury ETF (VGLT) is 0.03%, while that of iShares 20+ Year Treasury Bond ETF (TLT) is 0.15%, indicating that VGLT is more cost-effective for long-term investors.
The two ETFs have similar dividend yields of around 4.6%.
The report said VGLT delivered stronger performance over the past 12 months and showed relatively lower price volatility.
The two funds invest primarily in U.S. Treasury bonds with maturities of 20 years or longer, and have similar maturity profiles and interest-rate exposure.
The comparison highlighted that differences in management fees may affect total returns.
The report concluded that ETFs with lower management fees are more cost-effective for investors using a long-term buy-and-hold strategy.
Investors were advised to compare the holding period, interest-rate sensitivity, and distribution rate before selecting a product.
Before selecting a product, investors should directly check data on the management fee rate, dividend yield, and price volatility.
Sources: The Motley Fool
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