FLCO vs GIGB

FLCOBFranklin Investment Grade Corporate ETF

GIGBAGoldman Sachs Access Investment Grade Corporate Bond ETF

In short

FLCO Most investment-grade corporate ETFs hand you the index and get out of the way. FLCO is the active take: Franklin's bond team picks roughly 220 corporates against the Bloomberg investment-grade benchmark, and pays income monthly.

GIGB Most investment-grade corporate bond funds just buy the biggest borrowers. Goldman's index screens the market on liquidity and fundamentals first, then spreads the money across roughly 1,600 bonds for 0.08% a year.

Stated mandate

FLCO The Fund seeks a high level of current income consistent with prudent investing while also seeking preservation of capital.

GIGB The Fund seeks to track the FTSE Goldman Sachs Investment Grade Corporate Bond Index, which measures U.S.-dollar-denominated investment-grade corporate bonds meeting liquidity and fundamental screening criteria.

Why people hold it

• FLCO Active, not an index clone: the managers choose sectors, issuers and maturities, with the Bloomberg U.S. Corporate Investment Grade Index as the yardstick.
• Built around cash flow: the stated objective is a high level of current income with preservation of capital, and distributions land monthly.
• About 220 bonds, against the thousands inside broad index trackers. A curated slice of the corporate market rather than the whole haystack.
• Trading since 2016, and what it actually holds lines up closely with the investment-grade corporate mandate in its filings.

• GIGB Costs 0.08% a year, well under the typical investment-grade corporate bond ETF's 0.19%.
• The index screens US dollar investment-grade corporates for liquidity and fundamentals rather than simply following who borrowed the most.gsam.com
• Tracks that index about as tightly as passive bond funds get, and holds roughly 1,600 bonds so no single issuer carries the load.
• Pays monthly, matching how corporate bond coupons tend to land in a portfolio.

Worth knowing

• FLCO At 0.35% a year it sits above the typical fee in the investment-grade corporate group, where index heavyweights like VCIT and USIG charge a small fraction of that.
• Mid-sized and moderately traded, so spreads can be wider than at the category's largest, most active tickers.
• Active means results hinge on the team's credit and duration calls, not just the benchmark. Investment-grade corporates still carry interest rate and credit risk.

• GIGB Cheap, but not the cheapest shelf: VCIT, USIG and SPIB run at 0.03% to 0.04%. You are paying a few basis points for the screening.
• Broad-maturity corporate credit moves on two levers, interest rates and credit spreads, so it swings more than short-dated bond funds.
• A mid-sized, moderately traded fund rather than a giant, so trading spreads can run wider than the largest names in the category.

Full FLCO profile⁠

Full GIGB profile⁠