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This Vanguard ETF Holds More Assets Than Its iShares Rival. Is It a Better Buy?
The Motley Fool· 2025-12-01 17:09
Core Insights - The Vanguard Short-Term Corporate Bond ETF (VCSH) and the iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) offer similar yields and risk profiles but differ in cost, diversification, and portfolio strategy [1][2]. Cost & Size Comparison - VCSH has an expense ratio of 0.03%, while IGSB has a slightly higher expense ratio of 0.04% [3]. - Both ETFs provide a dividend yield of 4.3% [3]. - VCSH has assets under management (AUM) of $46.8 billion, which is significantly larger than IGSB's AUM of $21.8 billion [3]. Performance & Risk Metrics - Over a five-year period, the maximum drawdown for VCSH is -9.47%, while IGSB's is -9.46%, indicating similar risk profiles [4]. - The growth of $1,000 invested over five years is the same for both ETFs, resulting in a value of $963 [4]. Portfolio Composition - IGSB holds approximately 4,435 securities, indicating a broad diversification strategy, while VCSH has a more concentrated portfolio with 2,554 holdings [5]. - The average maturity of VCSH's holdings is three years, reflecting its short-term focus [5]. Investment Considerations - Both ETFs are suitable for investors looking for corporate bond exposure, but individual corporate bonds may offer more control over maturity and selection [7]. - The larger AUM of VCSH may appeal to some investors, but the cost advantage of VCSH is more significant for passive investors [8].