GIGB vs VCEB

GIGBAGoldman Sachs Access Investment Grade Corporate Bond ETF

VCEBAVanguard ESG U.S. 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.

VCEB Vanguard took its plain-vanilla corporate bond playbook and ran it through an ESG screen. Investment-grade U.S. company debt, roughly 300 bonds, monthly income, 0.12% a year: cheap even by unscreened standards, and rare in a thin niche.

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.

VCEB The fund seeks to track the Bloomberg MSCI U.S. Corporate SRI Select Index. Its mandate covers U.S. dollar-denominated, investment-grade, fixed-rate, taxable corporate bonds with maturities exceeding one year and ESG screening.

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.

• VCEB Costs 0.12% a year versus a 0.19% median for investment-grade corporate bond funds. Cheap for a screened portfolio, not just cheap for a screened one.
• Roughly 300 U.S. dollar-denominated, fixed-rate investment-grade corporates with maturities beyond a year, and income lands monthly.
• The portfolio does what the prospectus says it does, tracking the Bloomberg MSCI U.S. Corporate SRI Select Index. One of the stronger implementations in its peer group.vanguard.com
• Vanguard-run and already a fund with billions in assets, real staying power for a screened bond product that only launched in 2020.

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.

• VCEB The SRI screen drops issuers a broad corporate index holds, so sector and issuer mix can drift from the unscreened market.vanguard.com
• Vanguard's unscreened corporate bond funds cost less: VCIT charges 0.03%. The screen is what the extra buys.
• Bonds run well past one year to maturity, so prices move with rates. Trading is moderate, and spreads can run wider than the category's busiest names.

Full GIGB profile⁠

Full VCEB profile⁠