IGIB vs VCIT

IGIBAiShares 5-10 Year Investment Grade Corporate Bond ETF

VCITAVanguard Intermediate-Term Corporate Bond ETF

In short

IGIB A precision tool, not a catch-all: IGIB owns only the 5-to-10-year slice of the US investment-grade corporate market, about 3,000 bonds deep, for 0.04% a year. Trading since 2007.

VCIT Vanguard's corporate-bond workhorse: a broad basket of investment-grade company debt at three basis points, undercutting every other top-graded fund in its peer group. Running since 2009, paying monthly.

Stated mandate

IGIB The fund seeks to track an index of U.S. dollar-denominated investment-grade corporate bonds with remaining maturities of five to ten years.

VCIT The Fund seeks to track a market-weighted corporate bond index with an intermediate-term dollar-weighted average maturity.

Why people hold it

• IGIB Four basis points a year (0.04%), a fraction of the typical fund in its investment-grade corporate group, and it has tracked its ICE BofA index closely.
• A maturity dial, not a grab bag: this is the 5-10 year rung, with sibling IGSB covering 1-5 years at the same 0.04% fee.ishares.com
• About 3,000 bonds spread issuer risk thin, and income is paid monthly.
• A multi-billion-dollar fund that has been trading since 2007 and changes hands actively.

• VCIT Charges 0.03% a year, roughly a sixth of the category's typical fee and a notch below the 0.04% carried by peers USIG, SPIB, IGIB and IGSB.
• Hugs its market-weighted corporate bond index closely, with index-matching among the tightest in its peer group. You get the market, not a manager's hunches.
• A multi-billion-dollar fund and one of the most actively traded in investment-grade corporate credit, which keeps spreads tight and large orders drama-free.
• Pays monthly, and the coupons come from pure corporate credit rather than a blend watered down with government paper.

Worth knowing

• IGIB Five-to-ten-year bonds move more with interest rates than short-dated credit such as IGSB's 1-5 year band. That duration is the point, and the trade-off.
• Pure corporate credit, no Treasuries in the mix, so company credit risk rides along with the rate risk.ishares.com
• VCIT sits a basis point lower at 0.03% in the same intermediate-corporate lane.

• VCIT Intermediate maturities mean real rate sensitivity: when yields rise, share prices fall, and there is no maturity date to sit and wait for.
• All corporate borrowers, so downgrades and defaults are part of the deal in a way they are not for a Treasury fund.
• Market weighting sizes positions by debt outstanding, so the companies that borrow the most get the biggest slots.

Full IGIB profile⁠

Full VCIT profile⁠