Investors weigh higher corporate bond yields against lower-risk Treasury exposure in short-duration fixed-income funds.
The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) offers a 4.6% yield, outpacing the Schwab Short-Term U.S. Treasury ETF (SCHO), which yields 3.9%. IGSB focuses on corporate debt, while SCHO holds U.S. government bonds, appealing to risk-averse investors seeking stability.
SCHO, launched in 2010, holds 97 securities with a 0.03% expense ratio and a trailing-12-month dividend of $0.94 per share. IGSB, established in 2007, is more diversified with 4,601 holdings and a 0.04% expense ratio. Both target short maturities but differ in credit risk and sector exposure.
Investors prioritizing safety may favor SCHO’s government-backed assets, while those seeking higher income might opt for IGSB’s corporate debt focus despite slightly higher costs.