For those looking for dependable income through high-quality corporate bonds, mid-term options often catch their attention. The iShares 5-10 Year Investment Grade Corporate Bond ETF and Vanguard Intermediate Term Corporate Bond ETF focus on bonds maturing in the 5 to 10-year range, aiming to strike a balance between interest rate sensitivity and yield.
While both IGIB and VCIT offer similar exposure to intermediate corporate bonds, they primarily differ in terms of how diversified they are and a slight cost difference of just 1 basis point. In this discussion, we’ll weigh whether the larger aspect of the Vanguard Fund or the broader diversification from the iShares Fund fits better into your investment strategy.
Overview (cost and size)
| metric | VCIT | IGIB |
|---|---|---|
| Provider | vanguard | ishares |
| expense ratio | 0.03% | 0.04% |
| 1-year returns (as of May 18, 2026) | 5.8% | 5.9% |
| dividend yield | 4.7% | 4.7% |
| beta | 0.33 | 0.34 |
| assets | ~$68.1 billion | ~$18 billion |
Beta indicates the volatility relative to the S&P 500, calculated over a five-year period. One year’s return compounds into the total return for the next 12 months. Dividend yield reflects the trailing 12-month distribution yield.
When it comes to cost, the Vanguard fund slightly edges out with an expense ratio of 0.03%, compared to iShares’ 0.04%. Interestingly, both currently boast a dividend yield of 4.7% over the trailing 12 months.
Performance and risk comparison
| metric | VCIT | IGIB |
|---|---|---|
| Maximum drawdown (5 years) | (20.6%) | (20.6%) |
| $1,000 growth in 5 years (total return) | $1,061 | $1,069 |
Contents
The iShares 5-10 Year Investment Grade Corporate Bond ETF primarily deals with US dollar-denominated investment-grade corporate bonds that have 5 to 10 years left until maturity. Established in 2007, it boasts a well-diversified portfolio with around 3,000 holdings, where even the largest positions make up less than 0.25% of total assets under management. The fund has provided a distribution of $2.53 per share over the past year.
The Vanguard Intermediate-Term Corporate Bond ETF also concentrates on high-quality corporate bonds and features a dollar-weighted average maturity between 5 and 10 years. Launched in 2009, it contains bonds from 2,235 companies, thus being more focused than its iShares counterpart, yet its top holdings represent under 0.37% of its total. With $68.1 billion in assets under management, it has distributed $3.94 per share over the last 12 months.
Investor Implications
Both the iShares 5-10 Year Investment Grade Corporate Bond ETF and the Vanguard Intermediate Term Corporate Bond ETF could serve as valuable options for those looking to diversify, maintain a level of safety, or receive consistent income. They hold corporate bonds with maturities of five to ten years, a central point in bond maturity dates, and deliver dividend yields around 4.7%. In contrast, the average yield of the S&P 500 is just about 1%, and they distribute payments monthly, which many find handy for covering bills and other expenses.
The key distinction lies in their assets under management and the level of concentration within their portfolios. VCIT is nearly four times larger than IGIB but is also more focused with roughly 1,000 fewer bonds. Although both maintain low expense ratios, the costs have slightly decreased over time. If liquidity is your priority, VCIT’s larger AUM might be appealing. On the flip side, if concentration risk is a concern, IGIB could be preferable. Ultimately, both funds are solid options for investors aiming to enhance their corporate bond exposure within a diversified portfolio.
