GIGB vs LQDB

GIGBAGoldman Sachs Access Investment Grade Corporate Bond ETF

LQDBAiShares BBB Rated Corporate Bond ETF

In short

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.

LQDB Most investment-grade bond funds blend AAA through BBB. LQDB keeps only the BBB rung, the biggest and lowest-rated slice of the IG market, in one index fund of roughly 1,700 bonds that pays monthly.

Stated mandate

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.

LQDB The fund seeks to track an index containing U.S. dollar-denominated corporate bonds rated BBB.

Why people hold it

• 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.

• LQDB Pure-play BBB. It tracks an index of dollar-denominated BBB corporate bonds only, with no A or AAA paper watering down the credit exposure.ishares.com
• 0.15% a year, under the median fee in its investment-grade corporate peer group.
• Roughly 1,700 bonds behind one ticker, with income paid monthly rather than quarterly.
• Tracking has hugged the benchmark closely, one of the cleaner index implementations in its group.

Worth knowing

• 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.

• LQDB BBB is the last rung before high yield, so this concentrates the most downgrade-sensitive slice of investment grade instead of spreading across the ratings ladder.
• Small asset base and light trading volume, so bid-ask spreads can run wider than on the giant core bond ETFs.
• Broad IG funds like VCIT and USIG charge a few basis points, so the BBB-only tilt costs more than plain-vanilla corporate exposure.

Full GIGB profile⁠

Full LQDB profile⁠