The Bond Market Is Heating Up. Is VGSH or ISTB the Better Bang for Your Buck?
Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) and iShares Core 1-5 Year USD Bond ETF (NASDAQ:ISTB) differ primarily in their credit exposure and yield potential, as one sticks to government debt while the other ventures into corporate bonds. These funds serve as conservative anchors for a portfolio, but they differ in credit risk and duration. While the Vanguard fund tracks the Bloomberg US Treasury 1-3 Year Index for pure government exposure, the iShares fund follows the Bloomberg U.S. Universal 1-5 Year Index to capture a broader slice of the bond market. Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield. Continue reading