SLQD vs VCSH

SLQDAiShares 0-5 Year Investment Grade Corporate Bond ETF

VCSHAVanguard Short-Term Corporate Bond ETF

In short

SLQD iShares' liquid investment-grade corporate universe, trimmed to bonds maturing inside five years, for 0.06% a year. You keep the corporate credit; you shed most of the long-bond rate swings.

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

SLQD The fund seeks to track an index of U.S. dollar-denominated, investment-grade corporate bonds with remaining maturities of less than five years.

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

• SLQD Charges 0.06% a year, under a third of the typical investment-grade corporate bond fund in its group.ishares.com
• Tracks an index of dollar-denominated investment-grade corporates maturing in under five years, screened for liquid issues. Credit stays on, duration comes off.ishares.com
• Thousands of bonds in one billion-dollar-plus wrapper, with income paid monthly.
• Running since 2013 and one of the stronger implementations in the investment-grade corporate group.

• 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

• SLQD The window starts at zero years, so it holds paper close to maturity and reacts less to rate moves than intermediate peers like VCIT or IGIB. That cuts both ways.
• This is corporate credit, not Treasuries. Short maturities soften rate risk, they do not remove issuer risk.
• Monthly payouts float with prevailing rates and the bonds rolling through the portfolio. No fixed coupon at the fund level.

• 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 SLQD profile⁠

Full VCSH profile⁠