IGSB vs. VGSH: Short-Term Bond ETF Showdown for Income Investors

Sarah Sidlow, The Motley Fool

Mon, June 22, 2026 astatine 8:20 AM CDT 4 min read

The iShares 1-5 Year Investment Grade Corporate Bond ETF (NASDAQ:IGSB) offers higher income potential, portion the Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) provides greater superior preservation and somewhat little fees.

Both funds service arsenic blimpish gathering blocks for a fixed-income portfolio, targeting maturities successful the one- to five-year range. However, they disagree importantly successful recognition quality. The iShares money focuses connected investment-grade firm debt, whereas the Vanguard money concentrates connected the information of U.S. Treasury securities.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The Vanguard money is marginally much affordable with a 0.03% disbursal ratio. However, the iShares money offers a higher payout, yielding 4.60% compared to 3.9% for the Vanguard fund, reflecting the other hazard premium associated with firm credit.

Performance & hazard examination

What's wrong

The Vanguard Short-Term Treasury ETF aims to present a accordant income watercourse portion maintaining a unchangeable marketplace worth by allocating superior to top-tier, investment-grade indebtedness issued by the U.S. government. Its portfolio consists of 91 holdings, with a dollar-weighted mean duration typically spanning 1 to 3 years. The money predominantly holds U.S. Treasury notes and bonds, providing precocious recognition prime and liquidity. This money was launched successful 2009 and has a trailing-12-month dividend of $2.25 per share.

Meanwhile, the iShares 1-5 Year Investment Grade Corporate Bond ETF replicates the show of high-quality firm indebtedness securities denominated successful U.S. dollars. It is importantly much diversified than its Vanguard counterpart with astir 4,600 holdings, and nary azygous presumption exceeds 0.31% of the full portfolio. This money was launched successful 2007 and has paid $2.39 per stock implicit the trailing 12 months. While IGSB covers a somewhat broader maturity scope of 1 to 5 years, its absorption connected firm issuers alternatively than authorities backing mostly results successful higher output imaginable alongside accrued recognition sensitivity.