Bond ETF Comparisons Highlight Cost‑Yield Tradeoffs

Recent analyses compare the Vanguard Short-Term Bond ETF (BSV) with two iShares rivals, the Core 1-5 Year USD Bond ETF (ISTB) and the 1-5 Year Investment Grade Corporate Bond ETF (IGSB). All three target short-term, high-quality bonds aimed at investors seeking stability and modest income, but they differ in costs, yields, scale, and portfolio construction.

BSV stands out for its lower expense ratio of 0.03% and large asset base of about $70 billion in assets under management, making it a highly liquid option. ISTB charges 0.06% with $4.7 billion in assets, while IGSB charges 0.04% and manages $21.9 billion. These fee and size differences position BSV as the lowest-cost and largest of the group.

On performance and income, the iShares products currently lead. As of April 2026, ISTB shows a 1-year total return of 5.4% and a dividend yield of 4.2%, compared with BSV’s 4.7% return and 3.9% yield. IGSB posts a 6.1% 1-year return and a 4.5% dividend yield versus BSV’s 4.4% return and 3.9% yield over a similar period.

Risk metrics over five years show modest differences. ISTB’s maximum drawdown over that span is -9.37%, slightly deeper than BSV’s -8.53%. IGSB’s five-year max drawdown is reported at (9.49%), again larger than BSV’s (8.53%). Five-year growth of a $1,000 investment reaches $1,099 in ISTB and $1,088 in BSV, and $1,132 in IGSB versus $1,089 in BSV, largely driven by dividend payments despite declines in principal.

Portfolio composition helps explain these patterns. BSV tracks a broad index with about 30 holdings, heavily weighted to U.S. Treasuries and investment-grade corporate debt, with 11.95% in BBB-rated securities and the remainder in higher-rated or government-backed bonds. ISTB holds over 7,000 bonds, roughly 52% in U.S. Treasuries and the rest in diversified corporates, with JPMorgan Chase as its largest corporate issuer at 0.54% of assets. IGSB holds more than 4,500 investment-grade corporate bonds, with top positions such as Eagle Funding Luxco, T-Mobile USA, and Goldman Sachs Group, providing broader corporate credit exposure.

Another set of comparisons focuses on intermediate-term core bond exposure, contrasting Vanguard’s Intermediate-Term Treasury ETF (VGIT) with Fidelity’s Investment Grade Bond ETF (FIGB). Both are positioned as core U.S. bond funds for investors seeking income and relative stability, but they diverge on cost, diversification, and liquidity.

VGIT charges an expense ratio of 0.03% and has $48.5 billion in assets under management, while FIGB’s expense ratio is 0.36% with $450.9 million in assets. Over the 12 months to April 9, 2026, VGIT delivered a 4.7% total return with a 3.8% dividend yield, versus FIGB’s 5.9% return and 4.1% yield. The higher yield and return from FIGB are offset by its much higher fee and smaller asset base.

Risk figures over five years show VGIT experiencing a maximum drawdown of -15.03%, compared with -18.06% for FIGB. The growth of a $1,000 investment over that period is similar, at $1,018 for VGIT and $1,026 for FIGB, indicating comparable long-term total return despite different risk and fee profiles. VGIT’s beta is cited at 0.80, lower than FIGB’s 1.02, reflecting lower volatility relative to equities.

Portfolio details underline the funds’ distinct roles. VGIT holds 76 securities, all intermediate-term U.S. Treasury notes and bonds, maintaining a 100% allocation to government debt and offering minimal credit risk. FIGB, with about 180 holdings and a 5.1-year track record, spans U.S. investment-grade sectors and includes a significant cash position via the Fidelity Cash Central Fund, along with long-dated Treasury bonds and notes among its largest positions.

FIGB is also evaluated against the iShares 3-7 Year Treasury Bond ETF (IEI), which concentrates solely on intermediate U.S. Treasuries. IEI’s expense ratio is 0.15%, with $18.7 billion in assets, a 1-year return of 4.3%, and a 3.6% dividend yield. FIGB’s cost and yield figures remain 0.36% and 4.1%, with a 5.9% 1-year return.

Over five years, IEI’s maximum drawdown is -13.88%, less severe than FIGB’s -18.06%. A $1,000 investment grows to $1,025 in IEI and $1,026 in FIGB over that period, again showing similar total returns despite higher volatility and fees for FIGB. IEI reports a beta of 0.69, indicating lower volatility than FIGB’s 1.02. IEI holds 83 Treasury issues with no exposure to other sectors, while FIGB’s 180 holdings cover multiple investment-grade segments and cash, delivering broader diversification alongside higher income and risk.