USIG vs VCEB

USIGAiShares Broad USD Investment Grade Corporate Bond ETF

VCEBAVanguard ESG U.S. Corporate Bond ETF

In short

USIG Most investment-grade corporate bond funds hand you one slice of the maturity curve. USIG takes the whole thing, thousands of US dollar corporate bonds from short-dated to long, for four basis points 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

USIG The fund seeks to track an index of U.S. dollar-denominated investment-grade corporate bonds.

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

• USIG Costs 0.04% a year, against a category median near 0.19%. CORP, which tracks the same ICE BofA US Corporate Index, charges 0.41%.
• One ticker, the full USD investment-grade corporate curve: thousands of bonds, short to long. Slice funds like IGSB (1-5 year) and IGIB (5-10 year) each cover one segment.ishares.com
• Running since 2007, it has tracked its index with very little drift and is one of the more actively traded funds in its category.
• Interest lands monthly, and this is a multi-billion-dollar fund that ranks among the strongest implementations in its peer group.

• 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

• USIG Owning the whole curve means long-dated bonds ride along, so the price swings more when rates move than a short-maturity slice such as IGSB.
• This is corporate credit, not Treasuries. Investment grade at purchase, but prices can fall when spreads widen or an issuer is downgraded.ishares.com
• VCIT edges it on fee at 0.03%, though that fund stays in intermediate maturities rather than the full curve.

• 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 USIG profile⁠

Full VCEB profile⁠