This is an intermediate-term Treasury ETF that tracks the Bloomberg US Treasury 3-10 Year Index. It holds only Treasuries issued by the US Department of the Treasury, so the issuer carries virtually no credit risk, and its mid-range maturities moderate interest rate sensitivity.

It suits conservative investors who want to avoid credit risk while earning stable interest income and taking a moderate level of interest rate exposure.

The ETF is managed by Vanguard using a passive (index-tracking) approach.

The fund holds the Treasuries in its index using a sampling approach, tracking the performance of the overall US intermediate-term Treasury market. It is market-cap weighted and centers on highly liquid Treasuries, and monthly rebalancing helps manage turnover and trading costs. Because it holds only Treasuries, the issuer carries virtually no credit risk.

• Holds only Treasuries, so credit risk is virtually nonexistent
• Fees are low relative to the category average

Assets under management (AUM) stand at $40.8B, and the expense ratio is 0.03% per year.

Compared with similar Treasury ETFs such as IEF and SCHR, there are differences in maturity range and fee level, while the Treasury-only structure keeps credit risk exposure equally low.

Treasury prices move with the direction of interest rates: bond prices tend to weaken when rates rise and strengthen when rates fall. Given its intermediate maturities, the fund has interest rate sensitivity between that of short-term and long-term Treasuries.

During periods of market volatility, when demand for safe assets grows, money tends to flow into Treasury ETFs, and the fund has seen steady inflows as a core bond allocation tool. The direction of fund flows can change depending on the interest rate environment.

Its very low-credit-risk Treasury structure and low fees are strengths, while price declines when rates rise and relatively low distribution income are weaknesses.

IEF, IEI, SCHR, and SPTI, shown in the table, are comparable products in the same US Treasury category, and they differ in tracked maturity range and fee level. For shorter maturities, consider the short-term Treasury ETF VGSH. For longer maturities and greater interest rate exposure, consider the long-term Treasury ETF VGLT. For a broad bond ETF that includes both Treasuries and corporate bonds, BND is also worth reviewing.

Here are the points to review before investing in VGIT. Treasury ETFs carry low issuer credit risk, but price swings tied to interest rate direction and maturity range, as well as currency effects, should be checked in advance.

When rates rise, bond prices fall, which can cause short-term unrealized losses. Because of its intermediate maturities, the fund is more sensitive to rate changes than short-term Treasuries, so it is worth reviewing the direction of interest rates.

It suits investors who want to avoid credit risk while keeping a moderate level of interest rate exposure, as a core bond asset. For lower rate sensitivity, VGSH can be an alternative, and for greater rate exposure, VGLT can be an alternative.