FLOT vs IGSB

FLOT—iShares Floating Rate Bond ETF

IGSBAiShares 1-5 Year Investment Grade Corporate Bond ETF

In short

FLOT The oddball in the short-corporate aisle: FLOT owns bonds whose coupons reset with short-term rates, so interest-rate sensitivity stays near zero while the credit stays investment grade. Running since 2011.

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

FLOT The fund seeks to track an index of U.S. dollar-denominated, investment-grade floating-rate bonds, offering exposure to corporate debt while seeking to reduce interest-rate risk and generate income.

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

• FLOT Coupons reset periodically instead of sitting fixed, which keeps interest-rate sensitivity very low. Rate swings move it far less than fixed-coupon bond funds.ishares.com
• Investment-grade paper only, with maturities from one month to five years, spread across about 600 holdings. No junk, no long bonds.ishares.com
• Pays monthly, trades actively, and has tracked its Bloomberg floating-rate note index closely. A multi-billion-dollar fund with a record going back to 2011.

• 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

• FLOT At 0.15% it sits right at the median for its short-corporate cohort, but fixed-coupon peers like VCSH (0.03%) and SPSB (0.04%) charge a fraction of that.
• The float cuts both ways: income follows short-term rates, so the monthly payout shrinks when those rates fall.ishares.com
• Low rate sensitivity is not credit protection. This is corporate debt, and prices can slip when credit spreads widen.

• 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 FLOT profile⁠

Full IGSB profile⁠