FLTR vs IGSB

FLTR—VanEck IG Floating Rate ETF

IGSBAiShares 1-5 Year Investment Grade Corporate Bond ETF

In short

FLTR One of the first corporate floating-rate note ETFs to list, back in April 2011. Coupons reset periodically, so rate sensitivity stays minimal, and its index can hold notes maturing anywhere from 6 months out to 30 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

FLTR The fund seeks to track the MVIS US Investment Grade Floating Rate Index before fees and expenses. The index comprises U.S.-dollar floating-rate notes from investment-grade corporate issuers.

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

• FLTR Floating coupons reset periodically, so the portfolio carries little interest-rate duration while staying in investment-grade corporate credit.vaneck.com
• Index rules run wide: USD notes from investment-grade corporate issuers, at least $300 million outstanding, 6 months to 30 years to maturity.marketvector.com
• 0.14% a year, a shade under the typical fee in its short-duration IG corporate group, spread across about 400 notes with monthly distributions.
• Has tracked its named index closely, and sits in the top quartile of its short-duration investment-grade corporate peer group.

• 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

• FLTR Rate duration is near zero, credit risk is not: these are corporate notes, and floating-rate issuance skews toward banks and financial firms.marketvector.com
• Plain short-term corporate funds cost far less (VCSH at 0.03%, IGSB at 0.04%), though they take on the rate duration this one sheds.
• Income floats. Coupons reset with short-term rates, so the monthly payout moves up and down with them.vaneck.com

• 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 FLTR profile⁠

Full IGSB profile⁠