Bond funds

Treasury bonds

Diversify your exposure to higher-yielding fixed income credit sectors and complement a core bond portfolio with Treasury bonds.

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OVERVIEW

The role of U.S. Treasuries in a fixed income strategy

Because Treasuries are backed by the full faith and credit of the U.S. government, investors often shift to them for capital preservation and stability during times of market volatility or recession risk. It's why they are often the backbone of diversified fixed income portfolios.

Vanguard research suggests that many investors are underallocated to Treasuries especially those clients whose advisors take a more active role in their fixed income allocations. This tendency is the result of a decade-plus of low inflation and historically low rates on Treasuries. Seeing extra yield, some investors invested in debt instruments with higher yields than those of comparable Treasuries. But those securities also carried increased credit risk. Revisiting allocations today and adding exposure to Treasuries could help advisors add value to portfolios.

Treasuries can be attractive for clients seeking high quality income in high-interest-rate environments. There are many ways to incorporate Treasury funds into a portfolio. One is to start with Treasuries at the core of the portfolio and build additional bond exposures around it, like corporate bonds, mortgage backed securities, emerging market debt, etc. 

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Why Treasuries?

Treasury bonds for portfolio duration targets

Interest rate sensitivity is one of the main drivers of fixed income portfolio return. Curve positioning can be a useful tool to reach a particular yield target. Our Treasury lineup offers you the benefits of low costs; easy access via a robust, secondary market; and a range of duration profiles. With products across the maturity spectrum, you'll be able to find one to help you match your investment horizon and/or express your views on the market without being overwhelmed by the options.

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Tailor your exposure to the yield curve with our Treasury ETFs

(hypothetical example)

This chart illustrates the yield curve exposure for each of our Treasury ETFs. It shows the distribution of investments across different maturities, highlighting key points where the exposure is concentrated. The chart helps to visualize how each ETF is positioned along the yield curve, providing insights into potential interest rate sensitivity and risk.

Source: Vanguard, as of January 31, 2025, and U.S. Department of the Treasury Daily Par Yield Curve Rates as of January 31, 2025.

The Maturity spectrum

Vanguard Treasury bond lineup

Vanguard Treasury ETFs and mutual funds are built to provide pure Treasury exposure at a low cost and with ample liquidity. A range of maturity-bucketed products can help fine-tune portfolio duration and yield curve positioning with current income backed by the full faith and credit of the U.S. government.

Treasury ETF lineup: 

VBIL

0–3 Month Treasury Bill ETF

Bloomberg U.S. Treasury Bills 0–3 Months Index

Product details
VGUS

Ultra-Short Treasury ETF

Bloomberg Short Treasury Index  

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VGSH

Short-Term Treasury ETF

Bloomberg U.S. Treasury 1–3 Year Index 

Product details
VGIT

Intermediate-Term Treasury ETF

Bloomberg U.S. Treasury 3–10 Year Index 

Product details
VGLT

Long-Term Treasury ETF

Bloomberg U.S. Long Treasury Index 

Product details
EDV

Extended Duration Treasury ETF

Bloomberg U.S. Treasury STRIPS 20–30 Year Equal Par Bond Index

Product details
VTG

Total Treasury ETF

Bloomberg U.S. Treasury Total Return Unhedged USD Index

Product details

Partner with a leader

Partner with a leader in fixed income indexing

Vanguard Treasury ETFs can provide investors with easier access to Treasuries than is possible from individual bonds. Vanguard Fixed Income Group is among the world's largest bond fund managers, overseeing a broad range of index and active strategies. Our Global Bond Index team is comprised of more than 40 fully dedicated investment professionals and has the advantage of more than five decades of fixed income bond management experience.1

Experienced and specialized investment professionals

Portfolio managers and traders work directly with internal risk management and credit research teams to evaluate issuers and individual bonds to optimize exposures relative to the benchmark. This process, which is exceedingly important in the vast universe of bond issuance, focuses on key benchmark characteristics, such as:

· Duration by maturity bucket and curve position.

· Sector and subsector weights.

· Credit quality.

· Issuer exposure (weightings in multiple offerings from a single issuer).

Vanguard's size and scale provide a number of benefits to investors, including:

Low expense ratios

Consistently low expense ratios and, on a relative basis, a larger number of bonds in portfolios, allowing for greater coverage across the bond market.

 

Best execution

Favorable new-deal allocations and best execution from bond dealers.

 

 

Primary issuances

Participation in primary issuances, allowing for a cost-effective way to obtain bonds that can be expensive to acquire in the secondary market.

 

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Disclosures and footnotes

1 Vanguard, as of December 31, 2024.

Notes:

  • For more information about Vanguard funds or Vanguard ETFs, contact your financial advisor to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
  • Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
  • All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
  • Diversification does not ensure a profit or protect against a loss.
  • Bond funds are subject to interest rate risk, which is the chance bond prices overall will decline because of rising interest rates, and credit risk, which is the chance a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer s ability to make such payments will cause the price of that bond to decline. 
  • U.S. government backing of Treasury or agency securities applies only to the underlying securities and does not prevent shareprice fluctuations. Unlike stocks and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest. Note that some or all of the income from the U.S. Treasury obligations held in the fund may be exempt from state or local taxes. 
  • The Extended Duration Treasury ETF is subject to interest rate risk and credit risk. Interest rate risk is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk is expected to be extremely high for the ETF because it invests mainly in zero coupon long-term bonds, which have prices that are very sensitive to interest rate changes. Because the ETF invests mainly in Treasury STRIPS with maturities ranging from 20 to 30 years, rising interest rates may cause the value of the ETF's investments to decline significantly. 
  • Bloomberg® and the Bloomberg Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited ( BISL ), the administrator of the index (collectively, Bloomberg ), and have been licensed for use for certain purposes by The Vanguard Group, Inc ( Vanguard ). 
  • The products are not sponsored, endorsed, sold or promoted by Bloomberg. Bloomberg does not make any representation or warranty,express or implied, to the owners of or counterparties to the products or any member of the public regarding the advisability of investing in securities generally or in the products particularly. The only relationship of Bloomberg to Vanguard and the products is the licensing of certain trademarks, trade names and service marks and of the Bloomberg Index, which is determined, composed and calculated by BISL without regard to Vanguard or the products. Bloomberg has no obligation to take the needs of Vanguard or the owners of the products into consideration in determining, composing or calculating the Bloomberg Index. Bloomberg is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the products to be issued. Bloomberg shall not have any obligation or liability, including, without limitation,to Vanguard customers, in connection with the administration, marketing or trading of the products.