FSTB vs VCSH

FSTB—Fidelity Short-Term Bond ETF

VCSHAVanguard Short-Term Corporate Bond ETF

In short

FSTB New wrapper, seasoned engine: FSTB is the exchange-traded share class of Fidelity's long-running Short-Term Bond Fund, holding mostly investment-grade debt of all types. That discretion costs more than the index crowd charges.

VCSH Corporate credit, kept short. VCSH tracks an index of investment-grade company bonds maturing in one to five years, at three basis points: you take company credit risk instead of government risk, with muted sensitivity to rate moves.

Stated mandate

FSTB The fund seeks high current income while preserving capital. It normally invests at least 80% of assets in investment-grade debt securities and related repurchase agreements.

VCSH The fund seeks to follow a market-weighted corporate bond index with a short-term dollar-weighted average maturity, using index sampling and investing at least 80% of assets in index bonds.

Why people hold it

• FSTB Not a fresh start in disguise: the ETF is a share class of Fidelity's existing Short-Term Bond Fund, so it plugs into a portfolio and team that predate the 2026 listing.fidelity.comsec.gov
• Broad mandate: normally 80%+ in investment-grade debt of all types plus repurchase agreements, seeking income while preserving capital, rather than tracking one corporate-bond index.fidelity.com
• Short-maturity by design, which mechanically dampens price swings from rate moves compared with longer-dated bond funds.fidelity.com

• VCSH A 0.03% expense ratio, versus a 0.12% median across its peer group. That is Treasury-index pricing for a fund doing corporate credit work.
• Running since 2009 and now a multi-billion-dollar fund that trades actively, which is one of the easier profiles to get in and out of in its category.
• Samples the Bloomberg U.S. 1-5 Year Corporate Bond Index with at least 80% of assets in index bonds, and its book lines up closely with that benchmark.vanguard.com
• Distributions land monthly, not quarterly, and it sits among the strongest implementations in its cost-and-tracking peer group.

Worth knowing

• FSTB At 0.21% a year it costs more than the short-corporate index heavyweights (VCSH and SCHJ at 0.03%, IGSB and SPSB at 0.04%) and more than the peer-group median.
• Our review puts it in the bottom quartile of a crowded short-term investment-grade field, mostly on cost and how it measures up against cheap index trackers.
• The ETF class listed in 2026, so its on-exchange history is short, trading is only moderate, and income arrives quarterly rather than monthly.

• VCSH These are company bonds, not government paper. Investment grade, but credit spreads can widen when markets get nervous, and Treasuries do not carry that risk.vanguard.com
• The one-to-five-year maturity band cuts both ways: smaller price swings when rates jump, and less duration to work with when rates fall.vanguard.com
• Index sampling means it holds a representative slice of the benchmark rather than every bond in it, so small differences from the index are normal.vanguard.com

Full FSTB profile⁠

Full VCSH profile⁠