Vanguard Short-Term Corporate Bond ETF

VCSH

Market cap $40.2B

Looking for consistent income in retirement beyond Social Security? Need more frequent payouts than the quarterly dividends that come from many stocks and exchange-traded funds (ETFs)?

VCSH costs slightly less and offers a marginally higher dividend yield than IGSB IGSB holds thousands more bonds than VCSH, and has a much lower beta. Both ETFs have nearly identical five-year drawdowns and similar recent total returns These 10 Stocks Could Mint the Next Wave of Millionaires ›

More rate cuts are forecasted for 2026, which could bring further tightening in credit spreads for fixed income investors pondering whether they should opt for corporate bond options for added yield in lieu of or alongside Treasuries exposure.

Costs are nearly identical, but iShares 1-5 Year Investment Grade Corporate Bond ETF offers a slightly higher yield than Vanguard Short-Term Corporate Bond ETF Both ETFs delivered the same 1-year return and nearly identical risk profiles, with minimal drawdowns over five years VCSH uses a sampling approach that reports fewer line items, while IGSB fully replicates the index and lists more individual bonds, resulting in wider reported holdings. Both remain broadly diversified These 10 Stocks Could Mint the Next Wave of Millionaires ›

Both funds offer nearly identical yields and performance over the past year. iShares 1-5 Year Investment Grade Corporate Bond ETF holds far more bonds but at a slightly higher fee.

IGSB offers broader diversification, with almost double the number of holdings as VCSH. Both ETFs deliver similar yields and nearly identical recent returns, but IGSB's expense ratio is just slightly higher.

Corporate bonds typically appeal to those seeking higher yield potential relative to safer government debt, but current market uncertainty may keep fixed income investors from making the move. However, strong fundamentals are also underpinning corporate bonds, which only add to their appeal despite ongoing risks.

Bought 165,923 shares in VCSH, with a transaction value of $13,262,225 for Q3 2025 Post-trade, holds 165,923 shares valued at $13.26 million as of Q3 2025 VCSH is now the fund's 4th-largest holding; the fund reported 94 total positions as of Q3 2025

Vanguard Short-Term Corporate Bond ETF offers low-cost access to high-quality, short-duration corporate bonds, balancing yield and interest rate risk. VCSH benefits from monthly coupon income, price appreciation from falling yields, and tightening credit spreads, with optimized sampling keeping costs and tracking error low. Recent macro indicators—falling 2-year yields, a steepening 10Y–3M curve, and stable investment-grade spreads—create a supportive environment for VCSH.

Elected officials' continued debate about the budget on Capitol Hill could spur additional interest rate cuts. Given these current market forces, fixed income investors may want to reposition their portfolios to attain corporate bond exposure.