Better ETF: Vanguard BSV vs. iShares ISTB

Core Insights - The article compares two leading short-term bond ETFs: Vanguard Short-Term Bond ETF (BSV) and iShares Core 1-5 Year USD Bond ETF (ISTB), highlighting their differences in cost, portfolio concentration, and sector exposure [2][3] Cost and Size Comparison - BSV has a lower expense ratio of 0.03% compared to ISTB's 0.06%, making it more cost-effective for investors [4][5] - BSV has significantly higher assets under management (AUM) at $65.6 billion, while ISTB has $4.7 billion [4][10] - Both funds have the same 1-year return of 1.6%, but ISTB offers a slightly higher dividend yield of 4.1% compared to BSV's 3.8% [4][5] Performance and Risk Analysis - Over a five-year period, BSV experienced a max drawdown of 8.50%, while ISTB had a max drawdown of 9.33% [6] - The growth of a $1,000 investment over five years is $951 for BSV and $945 for ISTB, indicating a marginally better performance for BSV [6] Portfolio Composition - BSV holds a concentrated portfolio of just 30 bonds, with a significant focus on communication services (69%) [7] - ISTB, in contrast, has a diversified portfolio with nearly 7,000 bonds, primarily in utilities (99%) [8] - BSV's largest positions include Citigroup, JPMorgan Chase, and Bank of America, while ISTB's top holdings are U.S. Treasury notes [7][8] Investor Implications - BSV is more suitable for cost-conscious investors seeking high liquidity due to its lower fees and larger AUM [10] - ISTB offers broader diversification and a better dividend yield, making it appealing for investors looking for stability and income [11]