Fidelity's FIGB vs iShares' IEI: Which Bond ETF Wins?
Key Points
Fidelity Investment Grade Bond ETF offers a higher dividend yield than iShares 3-7 Year Treasury Bond ETF but carries a higher expense ratio.
iShares 3-7 Year Treasury Bond ETF maintains a lower beta and a smaller maximum drawdown, indicating a less volatile historical profile.
While the iShares fund focuses exclusively on government debt, the Fidelity fund provides broader diversification through corporate and government bonds.
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The Fidelity Investment Grade Bond ETF (NYSEMKT:FIGB) offers a yield-seeking approach via corporate and government debt, while the iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI) provides a lower-cost, pure-play on intermediate U.S. Treasuries.
Fixed-income investors often choose between the absolute safety of government debt and the slightly higher yields of investment-grade corporate bonds. This comparison examines how the Fidelity fund offers a diversified bond portfolio compared with the iShares fund's focused Treasury strategy.
Snapshot (cost & size)
| Metric | IEI | FIGB |
|---|---|---|
| Issuer | iShares | Fidelity |
| Share price | $116.55 (as of 2026-08-20) | $42.30 (as of 2026-08-20) |
| Expense ratio | 0.15% | 0.36% |
| 1-yr return (as of 2026-09-02) | 0.68% | 1.61% |
| Dividend yield | 3.75% | 4.14% |
| Beta | 0.67 | 1.02 |
| AUM | $17.7B | $519.7M |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares fund is more affordable, with an expense ratio 0.21 percentage points lower than the Fidelity fund. However, the Fidelity fund provides a higher payout, with a yield 0.4 percentage points higher than iShares.
Performance & risk comparison
| Metric | IEI | FIGB |
|---|---|---|
| Max drawdown (5 yr) | (14.6%) | (18.1%) |
| Growth of $1,000 over 5 years (total return) | $1,004 | $987 |
What's inside
The Fidelity Investment Grade Bond ETF serves as a broad fixed-income solution, holding 979 positions across a wide range of highly rated debt instruments. Its largest positions include U.S. Treasury notes maturing in 2031 at 4.40% and 2036 at 3.85%, along with significant cash equivalents. It was launched in 2021.
Fidelity Investment Grade Bond ETF has paid $1.75 per share over the trailing 12 months, which, on its recent ~$42.30 share price, works out to a 4.1% yield.
The iShares 3-7 Year Treasury Bond ETF maintains a much narrower focus, holding 85 positions exclusively in U.S. government Treasury securities with remaining maturities between three and seven years. Its top holdings include Treasury notes maturing in late 2030 at 2.93% and early 2030 at 2.33%. It was launched in 2007.
iShares 3-7 Year Treasury Bond ETF has paid $4.31 per share over the trailing 12 months, which, at its recent ~$116.55 share price, works out to a 3.7% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy?
These ETFs approach bond investing differently, with the iShares focused purely on Treasuries while the Fidelity ETF gives you a balanced exposure across government and corporate bonds. This allows Fidelity's FIGB to offer a higher dividend yield, which favors investors who prioritize maximum passive income generation.
Unless income is a top priority, investors may be better off with iShares' IEI. It doesn't sacrifice much yield (about 0.4 percentage points lower than FIGB) in exchange for offering a smoother ride. The iShares' IEI has a lower beta (volatility) and a shallower drawdown over the past five years.
Moreover, the iShares makes up for its lower yield with an expense ratio that is about 0.2 percentage points lower than Fidelity's FIGB. Overall, iShares looks like the winner.
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
