While Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT) and iShares 5-10 Year Investment Grade Corporate Bond ETF (NASDAQ:IGIB) share identical yields and similar maturity profiles, the iShares fund offers significantly broader diversification across corporate issuers.
Investors seeking steady income from high-quality corporate debt often land on these two giants. Both target bonds with five- to 10-year maturities, providing a middle ground on the yield curve. While their performance and costs are nearly indistinguishable, their internal construction reveals different approaches to portfolio depth and diversification within the investment-grade bond space.
Snapshot (cost & size)
The Vanguard fund is slightly more affordable with a 0.03% expense ratio. However, both ETFs currently offer a 4.75% dividend yield, making the marginal cost difference the primary differentiator for long-term income seekers.
Performance & risk comparison
What’s inside
The iShares 5-10 Year Investment Grade Corporate Bond ETF — IGIB — mirrors high-quality, U.S. dollar-denominated corporate debt with intermediate maturities. Its portfolio is exceptionally broad, containing 2,938 holdings, which ensures that no single corporate issuer significantly impacts overall performance; its largest positions include a variety of investment-grade issues with no single holding exceeding 0.45% of total assets. Launched in 2007, the fund paid $2.55 per share over the trailing 12 months, providing a highly diversified entry point into the corporate bond market.
The Vanguard Intermediate-Term Corporate Bond ETF — VCIT — similarly focuses on investment-grade corporate debt but maintains a more concentrated pool of 2283 holdings. Its largest positions are also well-dispersed, with no single issue representing more than 0.31% of the fund’s assets under management (AUM). Launched in 2009, this fund has a trailing-12-month dividend of $3.95 per share. Both funds provide exposure to the same maturity range.