Vanguard Short-Term Corporate Bond ETF

VCSH

Market cap $40.9B

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 ›

The Vanguard Short-Term Corporate Bond ETF delivers a higher yield and slightly better recent returns than the VanEck Short Muni ETF. The VanEck Short Muni ETF offers tax-exempt income and holds hundreds of municipal bonds, while the Vanguard Short-Term Corporate Bond ETF focuses on investment-grade corporates.

Vanguard Short-Term Corporate Bond Index Fund ETF Shares remains a Hold as yield curve steepening favors rotation into longer-dated bonds. Short-term yields have tightened following Fed rate cuts to 3.50-3.75%, making long-dated corporate yields appear more attractive. Macro trends—persistent inflation, rising unemployment, and durable GDP growth—suggest the Fed may continue rate easing, supporting a shift out the curve.

Both ETFs focus on short-term bonds, but SCHO holds mainly U.S. government bonds while VCSH holds primarily corporate bonds. Schwab's ETF holds significantly more higher-rated bonds than Vanguard's fund.

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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.