How Does BlackRock's IGIB Bond ETF Compare to Vanguard's?

Core Insights - The article compares two bond ETFs, iShares 5-10 Year Investment Grade Corporate Bond ETF (IGIB) and Vanguard Total Bond Market ETF (BND), highlighting their differing portfolios and risk profiles [2][4]. Cost and Size - IGIB has an expense ratio of 0.04% and assets under management (AUM) of $18.11 billion, while BND has a lower expense ratio of 0.03% and a significantly larger AUM of $389.22 billion [3]. - The one-year return for IGIB is 5.55%, compared to BND's 4.19%, and IGIB offers a higher dividend yield of 4.57% versus BND's 3.83% [3]. Performance and Risk Comparison - Over the past five years, IGIB experienced a maximum drawdown of -20.61%, while BND had a drawdown of -17.91% [5]. - An investment of $1,000 in IGIB would have grown to $881, while the same investment in BND would have grown to $853 over five years [5]. Underlying Holdings - IGIB focuses on investment-grade corporate debt with maturities of 5 to 10 years, holding 2,979 assets, primarily A- and BBB-rated bonds [6]. - BND tracks the broad U.S. investment-grade bond market with a diverse portfolio of 15,000 securities, including Treasuries and mortgage-backed securities, with at least 72% of its weight in AAA-rated bonds [7][9]. Investment Implications - Investors must consider their volatility preference when choosing between IGIB and BND, as both have similar one-year returns and have experienced a decline of around 12% in the last five years [8]. - BND's allocation to higher-rated bonds makes it less risky, with half of its holdings in U.S. government bonds, while IGIB has less than one percent in AAA-rated bonds [10].