Vanguard Short-Term Bond ETF

BSV

Market cap $43.6B

Both ETFs charge a rock-bottom 0.03% expense ratio and focus on short-term, investment-grade bonds VCSH offers a higher yield and slightly better five-year risk-adjusted returns, while BSV holds a broader mix of government and corporate bonds BSV is larger by assets under management and trades with extremely high liquidity We're bullish on these 10 stocks ›

Both funds charge an identical low expense ratio, but BSV is much larger by assets under management (AUM). BSV holds a broader mix of government and investment-grade corporate bonds, while VGSH sticks to Treasuries only.

BSV charges a slightly lower expense ratio than IGSB and manages over three times the assets under management (AUM). IGSB delivered a marginally higher 1-year total return and yield, but both ETFs have similar sector exposures.

BSV holds a much larger asset base and offers slightly higher recent returns than SCHO. Both ETFs incorporate federally backed bonds, which are among the safest types.

BSV charges a lower expense ratio and offers a higher yield than SMB. BSV is larger and more liquid than SMB.

The Vanguard Short-Term Bond Index Fund ETF passively tracks the Bloomberg U.S. 1–5 Year Government/Credit Float Adjusted Index.

2025 capped off another strong year for fixed income ETFs, as ongoing market uncertainty pushed more investors into the safe confines of bonds. When it came to inflows, it was Vanguard that was well-represented with four funds cracking the top 10.

Vanguard Short-Term Bond ETF is upgraded from Hold to Buy, driven by its attractive defensive fixed-income profile post-Fed rate cuts. BSV offers a compelling balance of current income (3.84% dividend) and limited interest rate sensitivity, with a 2.6-year average duration. The ETF's portfolio is 70% US government bonds and 30% investment-grade corporates, providing strong credit quality and macro resilience.

The evolution of the exchange-traded fund (ETF) brought innovative products to the fixed income marketplace. These don't just cater to buy-and-hold investors fixated on the long-term investment horizon.

Vanguard Short-Term Bond ETF delivers similar returns and risk to ISTB but at a lower expense ratio. BSV holds just 30 bonds versus ISTB's nearly 7,000, leading to different sector exposures.