DFSD vs IGSB

DFSD—Dimensional Short Duration Fixed Income ETF

IGSBAiShares 1-5 Year Investment Grade Corporate Bond ETF

In short

DFSD Dimensional's front-of-the-curve bond fund: actively run, rules-driven, and priced at 0.17%, under half the typical bond ETF fee. Mostly investment-grade paper maturing inside five years.

IGSB Corporate credit with the rate risk dialed down: roughly 4,700 investment-grade bonds, none maturing past five years, for four basis points. iShares has run it since 2007.

Stated mandate

DFSD The fund seeks to maximize total returns by investing across the universe of fixed-income securities.

IGSB The fund seeks to track an index containing U.S. dollar-denominated investment-grade corporate bonds with remaining maturities from one through five years.

Why people hold it

• DFSD At 0.17%, it costs less than half the 0.36% median fee among bond ETFs in its peer group, and that price buys active management, not index tracking.
• Lives at the short end: primarily investment-grade bonds maturing within five years, measured against a 1-5 year US corporate and government benchmark.aaii.com
• Spread across well over a thousand bond positions, so one issuer's trouble barely registers at the portfolio level.
• A multi-billion-dollar fund that trades actively, which tends to keep spread costs modest on everyday-sized orders.

• IGSB Four basis points a year, a fraction of the typical investment-grade corporate bond fund's fee and level with the cheapest tier of its peer group.
• One-to-five-year maturities mean prices move less when rates move than long-dated corporate funds. Same corporate credit, shorter leash.ishares.com
• Thousands of individual bonds tracking the ICE BofA 1-5 Year US Corporate Index, with income paid monthly.ishares.com
• Trading since 2007, actively traded, and one of the strongest builds in the investment-grade corporate group on cost, portfolio and execution.

Worth knowing

• DFSD Cheap for active, but plain-vanilla index bond funds like BND and SCHZ run 0.03%. The gap is what you pay for the security selection.
• Short maturities cut interest-rate sensitivity in both directions: less damage when yields rise, less lift when they fall.aaii.com
• Payouts follow an irregular schedule rather than a fixed monthly rhythm, so income timing isn't something to set a calendar by.

• IGSB Short maturities cut both ways: less price damage when rates rise, less lift when they fall.
• These are company bonds, not Treasuries. Investment grade, but credit spreads can widen and prices move with them.
• Only the front of the curve. Sibling IGIB runs 5-10 years and USIG spans broad maturities, both at the same fee.

Full DFSD profile⁠

Full IGSB profile⁠