What Is VCIT? Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares
Last updated September 2026
Short answer
VCIT is Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares, an ETF that tracks the Bloomberg U.S. 5-10 Year Corporate Bond Index at a 0.03% expense ratio. VCIT lends money to large investment-grade companies for five to ten years and passes the interest to you. The 4.78% distribution is not free money: it is payment for two specific risks. Credit risk, that a borrower deteriorates or defaults, and duration risk, that rates rise and the bonds you already hold become worth less. Understanding which of those you are being paid for is most of what there is to know about this fund.
VCIT is issued by Vanguard and tracks the Bloomberg U.S. 5-10 Year Corporate Bond Index. It charges a 0.03% expense ratio, holds approximately $69.4B in assets under management, yields about 4.78%, and launched in 2009.
What you are being paid for
The yield on a corporate bond fund sits above Treasuries for a reason: companies can default and governments issuing their own currency generally do not. That gap is the credit spread, and it widens when the economy looks shaky, which is precisely when the fund's price falls.
The second risk is duration. At five to ten years, VCIT is meaningfully sensitive to rate moves. When rates rise, the fixed payments on bonds already in the portfolio become less attractive, so their prices drop. Nothing has defaulted; the fund simply repriced. This surprises people who think of bonds as the safe part of a portfolio.
Where VCIT sits between Treasuries and high yield
There is a spectrum. Treasury funds carry rate risk and essentially no credit risk. High-yield funds carry substantial credit risk and pay for it. VCIT sits in the middle: investment-grade issuers, so default is uncommon, at an intermediate maturity that accepts real rate sensitivity.
That middle position is why it is often used as a core bond holding rather than a satellite. It is also why it is not a cash substitute. If you need the money inside a couple of years, a short-duration fund fits the job better.
The bottom line on VCIT
VCIT tracks the Bloomberg U.S. 5-10 Year Corporate Bond Index at 0.03%, holds about $69.4B, distributes roughly 4.78%, and has traded since 2009. You are paid for credit risk and duration risk, in that order. IGIB is the closest same-category comparison at 0.04%.
VCIT holdings: top 10
Approximate weights as of August 2026. Each ticker links to its individual stock guide in Walnut.
| Rank | Ticker | Company | % of VCIT |
|---|
How do I invest in VCIT?
There are three common ways to get VCIT exposure. Buy shares (or fractional shares) of VCIT directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic portfolio in Walnut, so VCIT sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. VCIT trades like a stock during market hours, so you buy it the same way you would any listed share.
New to buying funds? See how to buy an ETF, step by step.
Is VCIT a good buy?
Whether VCIT is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks the Bloomberg U.S. 5-10 Year Corporate Bond Index, so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is VCIT a buy?
The bottom line on VCIT
VCIT gives you the Bloomberg U.S. 5-10 Year Corporate Bond Index exposure in one ticker at a 0.03% expense ratio. Most investors use it as a core holding and layer more concentrated thematic portfolios on top.
More on VCIT
Whether VCIT is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is VCIT a buy?
VCIT yields 4.78% as of August 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see VCIT dividend: yield and schedule.
New to funds like VCIT? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.
Wondering how VCIT fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in VCIT with AI
Connect the broker you already use and ask Walnut's AI how VCIT fits what you actually hold: what it overlaps with, what it leaves you exposed to, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is VCIT?
+
VCIT is the Vanguard Intermediate-Term Corporate Bond ETF. It holds investment-grade corporate bonds with five to ten years to maturity, tracking the Bloomberg U.S. 5-10 Year Corporate Bond Index. It charges 0.03%, holds about $69.4B, and launched in 2009.
Why does VCIT yield about 4.78%?
+
Because you are taking two risks that Treasuries do not ask you to take in the same measure. Credit risk, that an issuer deteriorates or defaults, and duration risk, that rising rates reduce the value of bonds already held. The yield is the compensation for both.
Can VCIT lose money?
+
Yes, and the most common way surprises people. When interest rates rise, the fixed payments on bonds already in the portfolio become less attractive, so their prices fall and the fund's value drops even though nothing defaulted. Credit stress is the second route.
VCIT vs IGIB: what is the difference?
+
They compete directly. VCIT charges 0.03% and holds about $69.4B; IGIB, the iShares 5-10 Year Investment Grade Corporate Bond ETF, charges 0.04% and holds about $18.5B. Both target intermediate investment-grade corporate credit, so cost, tracking and spread are what separate them.
Is VCIT safer than a high-yield bond fund?
+
On credit, yes. VCIT holds investment-grade issuers, where defaults are uncommon; high-yield funds hold below-investment-grade borrowers and pay a higher yield for the added default risk. On interest-rate risk the picture is different, and an intermediate fund like VCIT is quite rate-sensitive.
Is VCIT a good place for money I need soon?
+
Not really. At five to ten years' maturity it carries real price sensitivity to rates, so the value can be down when you need it. Money needed inside a couple of years generally belongs in a short-duration or ultra-short fund instead.
How often does VCIT pay?
+
Monthly, which is the norm for bond funds because the interest they collect arrives on a rolling basis. The payout moves with prevailing rates and the portfolio's turnover, so the current yield is not a fixed promise.
How is VCIT taxed?
+
Its distributions are interest income, generally taxed at ordinary income rates rather than the lower qualified-dividend rates that apply to most stock dividends. That treatment is why corporate bond funds are often held inside tax-advantaged accounts. This is not tax advice.
Should I hold VCIT or Treasuries?
+
It depends which risk you want to be paid for. Treasuries remove credit risk almost entirely and yield less. VCIT accepts investment-grade credit risk in exchange for a higher yield. Many portfolios hold both, for different reasons.
What is VCIT's expense ratio?
+
VCIT has an expense ratio of 0.03% per year as of August 2026, charged by Vanguard and deducted from the fund's value rather than billed to you separately. On a $10,000 position that is roughly $3 a year. Fees compound over time, so on a long-term holding the expense ratio is one of the few return drivers you control. It is worth comparing against other funds that track the Bloomberg U.S. 5-10 Year Corporate Bond Index before you choose.
How do I compare VCIT to similar ETFs?
+
Put a few fields side by side: the expense ratio (fees compound over decades), the index or strategy it tracks, the top holdings and how much they overlap with what you already own, the dividend yield, and the AUM, liquidity, and bid-ask spread that affect trading costs. For index funds, tracking error (how closely it follows its index) and tax efficiency matter too. VCIT's figures are above; the full method is in Walnut's guide on how to compare ETFs.
Related ETFs
Walnut is informational, not investment advice. Holdings weights and fund statistics on this page are approximations stamped to August 2026; verify current figures against Vanguard's fund page or your broker before investing.