Vanguard Intermediate-Term Corporate Bond ETF

VCIT

Market cap $59.7B

2025 capped off another strong year for fixed income ETFs, as ongoing market uncertainty pushed more investors into the safe confines of bonds. When it came to inflows, it was Vanguard that was well-represented with four funds cracking the top 10.

IGIB charges a slightly higher expense ratio than VCIT but offers a broader portfolio with nearly nine times as many holdings VCIT yields more and also delivered a higher one-year total return as of Dec. 18, 2025 Both ETFs posted similar five-year drawdowns, but IGIB's lower beta points to less price volatility These 10 Stocks Could Mint the Next Wave of Millionaires ›

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The Federal Reserve's year-end decision to cut interest rates by 25 basis points (0.25%), the third rate trim of 2025, marked a bid to further stimulate borrowing and investment amid a complex and shifting economic environment. While some of the usual impacts of a rate cut have yet to materialize—10-year Treasury yields have so far stayed unusually high, for example—other corners of the market should provide more predictable opportunities for investors.

More rate cuts are forecasted for 2026, which could bring further tightening in credit spreads for fixed income investors pondering whether they should opt for corporate bond options for added yield in lieu of or alongside Treasuries exposure.

With the potential of more rate cuts to look forward to in 2026, fixed income investors may question how they could attain additional yield in the new year. A Morningstar 2026 Global Outlook Report noted one particular corner of the bond market that could fill the yield void: intermediate bonds.

Many advisors and investors are contemplating or actively adjusting their portfolios for the new year. That's why the insights gathered from attendees at last week's VettaFi 2026 Market Outlook Symposium were so compelling.

With long end yields elevated, fixed income remains attractive across multiple segments. Rate cuts, corporate earnings, and stable credit markets are supportive to Vanguard's VGHY and VCIT.

Vanguard Canada has announced the largest fee cut in its history, lowering costs on 12 products in its ETF and mutual fund lineup. The reductions apply to roughly one-quarter of its Canadian products, including all asset allocation ETFs, all mutual funds, and several fixed income ETFs.

Corporate bonds typically appeal to those seeking higher yield potential relative to safer government debt, but current market uncertainty may keep fixed income investors from making the move. However, strong fundamentals are also underpinning corporate bonds, which only add to their appeal despite ongoing risks.