Vanguard Short-Term Bond ETF (NYSEMKT:BSV) offers broad exposure to government and corporate debt with a lower expense ratio, while iShares 1-5 Year Investment Grade Corporate Bond ETF (NASDAQ:IGSB) focuses exclusively on corporate credit to provide higher distribution yields.
Both exchange-traded funds target the short end of the fixed-income spectrum, providing exposure to bonds maturing within one to five years. This duration range aims to provide a middle ground for investors, offering higher yields than cash while protecting against the price sensitivity found in long-term bonds.
Snapshot (cost & size)
|
Metric |
IGSB |
BSV |
|---|---|---|
|
Issuer |
iShares |
Vanguard |
|
Expense ratio |
0.04% |
0.03% |
|
1-yr return (as of June 3, 2026) |
4.70% |
3.70% |
|
Dividend yield |
4.60% |
4.00% |
|
Beta |
0.12 |
0.09 |
|
AUM |
$22.3 billion |
$69.9 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Cost-conscious investors may find BSV appealing for its 0.03% expense ratio, though IGSB is nearly as competitive at 0.04%. However, the iShares fund delivered a higher trailing-12-month distribution yield of 4.60%, compared to 4.00% for the Vanguard fund.
Performance & risk comparison
|
Metric |
IGSB |
BSV |
|---|---|---|
|
Max drawdown (5 yr) |
(9.50%) |
(8.50%) |
|
Growth of $1,000 over 5 years (total return) |
$1,127.0 |
$1,084.0 |
What’s inside
The Vanguard Short-Term Bond ETF targets a market-weighted index of government, high-quality corporate, and international dollar-denominated bonds. Its portfolio contains 3,187 holdings, featuring significant exposure to U.S. Treasury securities. Its largest positions include United States Treasury Note/Bond 3.88% 04/30/2031 at 1.61%, United States Treasury Note/Bond 3.50% 01/31/2028 at 1.16%, and United States Treasury Note/Bond 3.88% 03/31/2028 at 0.93%. Launched in 2007, the fund features no unique quirks and paid $3.11 per share over the trailing 12 months.
In contrast, the iShares 1-5 Year Investment Grade Corporate Bond ETF focuses exclusively on U.S. dollar-denominated investment-grade corporate bonds. It is far more granular than its competitor, holding 4,601 different issues to ensure that no single position represents more than 0.30% of the portfolio. Also launched in 2007, the fund has a trailing-12-month dividend of $2.39 per share and operates with no specific quirks. By excluding government debt, it assumes more credit risk in exchange for a higher yield profile.
For more guidance on ETF investing, check out the full guide at this link.
