The iShares 1-5 Year Investment Grade Corporate Bond ETF (NASDAQ:IGSB) offers higher income potential, while the Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) provides greater capital preservation and slightly lower fees.
Both funds serve as conservative building blocks for a fixed-income portfolio, targeting maturities in the one- to five-year range
However, they differ significantly in credit quality. The iShares fund focuses on investment-grade corporate debt, whereas the Vanguard fund concentrates on the safety of U.S. Treasury securities.
Snapshot (cost & size) The Vanguard fund is marginally more affordable with a 0.03% expense ratio. However, the iShares fund offers a higher payout, yielding 4.60% compared to 3.9% for the Vanguard fund, reflecting the extra risk premium associated with corporate credit. Performance & risk comparison What’s inside The Vanguard Short-Term Treasury ETF aims to deliver a consistent income stream while maintaining a stable market value by allocating capital to top-tier, investment-grade debt issued by the U.S. government.