GOVT vs VGIT: Which ETF Is Better in 2026?
A metric-by-metric comparison of iShares U.S. Treasury Bond ETF (GOVT) and Vanguard Intermediate-Term Treasury Index Fund ETF Shares (VGIT) — both US Bonds - Government funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
GOVT and VGIT compete directly — both are US Bonds - Government funds chasing the same job in a portfolio. That makes this a genuine either/or: the index each tracks, what it costs, and how it has handled drawdowns are what separate them, not the broad exposure they give you.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VGIT scores higher: 57.2 (Grade C) versus 56.7 for GOVT. That doesn't make GOVT a bad fund; it means VGIT currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| GOVT | VGIT | |
|---|---|---|
| Category | US Bonds - Government | US Bonds - Government |
| Expense ratio | 0.05% | 0.03% |
| Fund size (AUM) | $43.7B | $50.4B |
| Dividend yield | 3.57% | 3.85% |
| 1-year return | +2.29% | +2.13% |
| 3-year return | +9.00% | +11.16% |
| Volatility | 3.59% | 3.36% |
| Max drawdown | -4.92% | -4.34% |
| Sharpe ratio | -0.76 | -0.86 |
| ETFValuer score | 56.7 | 57.2 |
| Grade | C | C |
| Overall rank | #307 | #295 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
On cost, the two are essentially tied — GOVT charges 0.05% a year versus VGIT's 0.03%. A difference this small (about $2.00 a year on a $10,000 position) isn't a reason to choose one fund over the other.
What GOVT's Fees Cost You
GOVT charges an expense ratio of 0.05% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, VGIT returned +11.16% versus +9.00% for GOVT — a gap of about 2.2 percentage points. On risk, VGIT has held up better historically, with a shallower max drawdown (-4.34% vs. -4.92%). GOVT currently has the better risk-adjusted return (Sharpe ratio of -0.76 vs. -0.86), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), GOVT and VGIT show a high correlation of 0.907 — closely related, but not identical. Holding both would add very little diversification: when one falls, the other almost always falls with it. Treat these as alternatives to each other, not as complements in the same portfolio.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.907 | High — closely related, but not identical |
| R-squared | 82.3% | 82.3% of GOVT's daily moves are explained by VGIT's |
| Tracking error (annualised) | 2.22% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | GOVT +2.90% · VGIT +3.56% | VGIT ahead by 0.66 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, GOVT finished as much as +1.6 points ahead of VGIT at the best extreme and -3.5 points at the worst — a 5.1-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
GOVT and VGIT share no companies among their top 10 reported holdings. That points to genuinely different exposure, so holding both is more likely to diversify than to duplicate. Full portfolios may still overlap further down the list.
Based on the top 10 holdings in each fund's most recent SEC N-PORT-P filing.
Which One Should You Pick?
Lean GOVT if…
- You care about return per unit of risk — its Sharpe ratio of -0.76 beats -0.86
Lean VGIT if…
- You want the lower running cost — 0.03% vs 0.05%, about $2 a year less on a $10,000 position
- You weight recent results heavily — it returned 11.2% over 3 years against 9.0%
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is GOVT or VGIT better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VGIT scores higher: 57.2 (Grade C) versus 56.7 for GOVT. That doesn't make GOVT a bad fund; it means VGIT currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, GOVT or VGIT?
VGIT currently has the lower expense ratio (0.03% vs. 0.05%).
Can I hold both GOVT and VGIT?
You can, though the benefit is limited. At a correlation of 0.91, GOVT and VGIT fall together far more often than not, so owning both adds complexity and a second expense ratio without much real diversification. Most investors are better served picking one.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.