iShares or Vanguard: Which Intermediate Corporate Bond ETF Is the Better Buy for Income Investors?
Both funds hold 2,000+ investment-grade bonds with matching 4.9% yields and virtually identical five-year returns. Vanguard edges ahead with a lower 0.03% expense ratio.
Overview
The iShares 5-10 Year Investment Grade Corporate Bond ETF(NASDAQ:IGIB) and Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT) offer highly similar exposure to investment-grade corporate bonds with five- to 10-year maturities.
These funds target the "belly" of the yield curve, providing higher interest payments than short-term bonds while avoiding the extreme price sensitivity often found in long-term debt. Investors may use these ETFs to anchor the core fixed-income portion of a diversified portfolio with high-quality corporate credit from industrial, utility, and financial companies.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.