Vanguard and iShares short-term corporate bond ETFs deliver similar risk-adjusted returns but differ in expense ratios and distribution yields.
Vanguard Short-Term Corporate Bond ETF (VCSH) and iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) target investment-grade debt with 1-5 year maturities, appealing to conservative investors seeking yield above cash. Both funds report nearly identical risk-adjusted returns, though IGSB holds a larger portfolio of 4,601 bonds versus VCSH’s $49.5 billion in assets.
VCSH undercuts IGSB on fees, charging a 0.03% expense ratio compared to 0.04%. IGSB, however, leads in trailing-12-month distribution yield at 4.60%. VCSH paid $2.39 per share in dividends over the same period, reflecting modest income differences.
The funds’ top holdings remain broadly diversified, with no single bond exceeding 0.31% of IGSB’s portfolio. Both exclude equities, focusing solely on U.S. dollar-denominated corporate debt.