What are corporate bond ETFs?
Corporate bond ETFs hold bonds, which are loans to companies. Each bond pays interest and returns its face value at maturity, the date it comes due. The large funds spread money across thousands of bonds: VCIT holds 2,333, LQD 3,165 and USIG 11,503. The biggest single position is 0.29% of VCIT (Amazon) and 0.18% of LQD (Anheuser-Busch InBev). Bonds from SpaceX (Space Exploration Technologies) rank among the largest positions in all five of the biggest funds, VCIT, VCSH, LQD, IGSB and IGIB. Bank of America, Meta and T-Mobile appear near the top of several.
Most of the large funds track indexes, and many limit themselves to investment-grade bonds, meaning bonds from borrowers that rating agencies judge likely to repay. They differ mainly by maturity. VCSH, IGSB and SPSB hold short-term bonds. VCIT, IGIB, SCHI and SPIB hold intermediate-term ones. VCLT holds long-term bonds, and LQD and USIG are not limited to one maturity range. FLOT holds floating-rate bonds, whose interest resets as rates change. BSCR holds bonds maturing in 2027 and IBDT in 2028. PULS and SRLN aim for income and capital preservation rather than tracking an index. SRLN holds senior loans, which are company loans that rank first for repayment. None of the 80 funds is leveraged or inverse.
Most are cheap to own. The median expense ratio, the yearly fee taken from assets, is 0.15%, and fees run from 0.03% to 0.88%. VCIT, VCSH, SCHI, VCLT and SPBO charge 0.03%. LQD charges 0.14%, while USIG, another iShares fund not limited to one maturity range, charges 0.04%. SRLN charges 0.70%.
Money is concentrated in a few funds. As of November 2, 2026, the 80 funds held about $379 billion, and 52.3% of it sat in the five largest: VCIT, VCSH, LQD, IGSB and IGIB. VCIT alone held about $72 billion.
The largest corporate bond ETFs, side by side
Swipe the table to see all 5 funds.
| VCIT | VCSH | LQD | IGSB | IGIB | |
|---|---|---|---|---|---|
| Net assets | $72.04B | $51.74B | $32.04B | $23.46B | $18.72B |
| Expense ratio | 0.03% | 0.03% | 0.14% | 0.04% | 0.04% |
| Holdings | 2,333 | 3,064 | 3,165 | 4,722 | 3,018 |
| In the 10 largest | 2.61% | 1.94% | 1.59% | 1.48% | 1.97% |
| Biggest holding | Amazon.com Inc (0.29%) | Bank of America Corp (0.23%) | Anheuser-busch Co/inbev (0.18%) | Eagle Funding Luxco Sarl (0.29%) | Meta Platforms Inc (0.22%) |
| Yield | 4.99% | 4.54% | 4.86% | 4.67% | 5.07% |
| 1-year return | -0.6% | +1.9% | -2.3% | +1.5% | -1.0% |
| 3 years, a year | +7.1% | +5.7% | +5.2% | +5.4% | +6.4% |
| 5 years, a year | +0.9% | +2.5% | -1.0% | +2.5% | +0.9% |
| Worst drop, past year | -5.1% | -1.6% | -6.0% | -1.6% | -5.0% |
| Launched | 2009 | 2009 | 2002 | 2007 | 2007 |
The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Nov 2, 2026.
Head to head
VCIT vs VCSH
Vanguard's two largest corporate bond funds barely overlap. They share one bond and 0.1% of assets, because VCSH holds short-term bonds and VCIT intermediate-term ones. Both charge 0.03% and spread money thinly: the ten largest holdings make up 2.61% of VCIT and 1.94% of VCSH. As of November 2, 2026, VCIT yielded 4.99% and VCSH 4.54%. Over the prior year, VCIT returned -0.6% with a worst drop of 5.1%, while VCSH returned 1.9% and fell at most 1.6%. VCSH may suit investors who value steadier prices, and VCIT those who accept bigger swings for more income.
VCIT vs LQD
LQD's index is not restricted to intermediate maturities, so it can hold longer bonds than VCIT, which targets an intermediate average maturity. They share 13.3% of assets. LQD charges 0.14% and VCIT 0.03%. Their ten largest holdings make up 1.59% and 2.61% of assets. Over the year to November 2, 2026, LQD returned -2.3% with a worst drop of 6%, against -0.6% and 5.1% for VCIT. In the 2022 bear market, LQD fell 21.1% and VCIT 17.1%. LQD may suit investors who want a wider maturity mix in one fund, and VCIT those who want intermediate bonds at a lower fee.
VCSH vs IGSB
Both hold short-term corporate bonds. IGSB's index covers investment-grade bonds maturing in one to five years, and VCSH targets a short average maturity. They share 19.7% of assets. IGSB holds 4,722 bonds to VCSH's 3,064, and its ten largest make up 1.48% of assets against 1.94%. IGSB charges 0.04% and VCSH 0.03%. Results have been close: over the year to November 2, 2026, VCSH returned 1.9% and IGSB 1.5%, with the same worst drop of 1.6%. In the 2022 bear market they fell 7.7% and 7.6%. Both may suit investors who want short-term bonds with small price swings.
How much do the largest corporate bond ETFs overlap?
Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.
| Funds | Assets in common | Shared holdings | |
|---|---|---|---|
| VCIT and IGIB | 30.3% | 382 | |
| VCSH and IGSB | 19.7% | 342 | |
| LQD and IGIB | 14.4% | 217 | |
| VCIT and LQD | 13.3% | 193 | |
| LQD and IGSB | 8% | 126 | |
| VCSH and LQD | 7.1% | 102 | |
| VCIT and VCSH | 0.1% | 1 | |
| VCSH and IGIB | 0.1% | 1 | |
| VCIT and IGSB | 0% | 0 | |
| IGSB and IGIB | 0% | 0 |
From each fund’s full holdings in its latest N-PORT report.
How have corporate bond ETFs performed?
The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).
Best-performing corporate bond ETFs over the past year
| # | Fund | Net assets | Cost | 1 mo | YTD | 1 yr | 3 yr |
|---|---|---|---|---|---|---|---|
| 1 | BBCB JPMorgan BetaBuilders USD Investment Grade Corpor… | $52.1M | 0.04% | +3.5% | +6.5% | +5.8% | +8.8% |
| 2 | FLTR VanEck IG Floating Rate ETF | $3.00B | 0.14% | +0.3% | +3.6% | +4.6% | +5.9% |
| 3 | FLRN SPDR Bloomberg Investment Grade Floating Rate ETF | $2.97B | 0.15% | +0.3% | +3.5% | +4.4% | +5.3% |
| 4 | LQDH iShares Interest Rate Hedged Corporate Bond ETF | $537.1M | 0.24% | +0.3% | +3.5% | +4.4% | +7.3% |
| 5 | FLOT iShares Floating Rate Bond ETF | $10.32B | 0.15% | +0.3% | +3.4% | +4.3% | +5.3% |
| 6 | IGBH iShares Interest Rate Hedged Long-Term Corporate … | $222.0M | 0.14% | +0.2% | +3.5% | +4.2% | +7.6% |
| 7 | PULS PGIM Ultra Short Bond ETF | $18.71B | 0.15% | +0.4% | +3.3% | +4.1% | +5.2% |
| 8 | BSCQ Invesco BulletShares 2026 Corporate Bond ETF | $3.45B | 0.1% | +0.3% | +3.1% | +4.0% | +5.6% |
| 9 | IBDR iShares iBonds Dec 2026 Term Corporate ETF | $3.40B | 0.1% | +0.4% | +3.1% | +3.9% | +5.5% |
| 10 | FLUD Franklin Ultra Short Bond ETF | $531.7M | 0.15% | +0.4% | +2.9% | +3.8% | +5.0% |
Funds with at least $25 million in net assets; leveraged and inverse funds left out. Past returns don’t predict future returns.
How corporate bond ETFs did in past market crashes
| Fund | 2008 crash | 2020 crash | 2022 drop |
|---|---|---|---|
| VCIT | not yet launched | -10.5% | -17.1% |
| VCSH | not yet launched | -7.2% | -7.7% |
| LQD | -6.8% | -12.3% | -21.1% |
| IGSB | +0.3% | -7.1% | -7.6% |
| IGIB | +0.4% | -10.5% | -17.1% |
| S&P 500 (SPY) | -55.2% | -33.7% | -24.5% |
Total return from the stock market’s peak to its low in each fall, distributions reinvested.
What drives corporate bond ETFs?
Corporate bond prices respond to two main forces. The first is interest rates. When rates rise, older bonds paying less interest lose value, and bonds with longer to run lose more. The second is credit, the risk that a company cannot repay. Lenders want extra yield over Treasury bonds to take that risk, and this gap is called the credit spread. The spread widens when a recession threatens profits or borrowers pile on debt, and bond prices fall. Company earnings matter mostly for whether borrowers can keep paying, since bondholders do not share in growth.
Past downturns show both forces at work. In the 2008 financial crisis, the S&P 500 fell 55.2%, LQD lost 6.8%, and IGSB and IGIB gained 0.3% and 0.4%. VCIT and VCSH did not launch until 2009. In the 2020 Covid crash, the S&P 500 fell 33.7%. LQD fell 12.3%, VCIT and IGIB 10.5% each, and VCSH and IGSB about 7%, a sign that worries about borrowers can hit bonds and stocks at once. In the 2022 bear market, when interest rates rose sharply, LQD fell 21.1% and VCIT and IGIB 17.1%, not far from the S&P 500's 24.5%. Short-term VCSH and IGSB fell 7.7% and 7.6%.
Corporate bond ETFs with the lowest expense ratios
| # | Fund | Expense ratio | On $10,000 | Net assets |
|---|---|---|---|---|
| 1 | VCIT Vanguard Intermediate-Term Corporate Bond ETF | 0.03% | $3 a year | $72.04B |
| 2 | VCSH Vanguard Short-Term Corporate Bond ETF | 0.03% | $3 a year | $51.74B |
| 3 | SCHI Schwab 5-10 Year Corporate Bond ETF | 0.03% | $3 a year | $11.60B |
| 4 | VCLT Vanguard Long-Term Corporate Bond ETF | 0.03% | $3 a year | $9.56B |
| 5 | SPBO SPDR Portfolio Corporate Bond ETF | 0.03% | $3 a year | $2.00B |
Ordinary funds with at least $10 million in net assets. The median ordinary corporate bond ETF charges 0.15% a year; leveraged and inverse funds usually charge more.
Do corporate bond ETFs pay dividends?
80 of the 80 ordinary corporate bond ETFs with a page here paid distributions over the last 12 months, with a median yield of 4.86%.
| Highest yields | Yield | Net assets |
|---|---|---|
| BBCB JPMorgan BetaBuilders USD Investment Grade Co… | 12.77% | $52.1M |
| LQDW iShares Investment Grade Corporate Bond BuyWr… | 12.38% | $318.2M |
| BNDS Infrastructure Capital Bond Income ETF | 8.58% | $97.9M |
| SRLN SPDR Blackstone Senior Loan ETF | 7.35% | $5.21B |
| BBHY JPMorgan BetaBuilders USD High Yield Corporat… | 7.19% | $622.6M |
Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets. Some of these yields come from selling options, which gives up some of the gains.
How to choose a corporate bond ETF
- How long the bonds run. Maturity drives risk. In the year to November 2, 2026, short-term VCSH and IGSB fell at most 1.6%, intermediate VCIT 5.1% and long-term VCLT 9.2%. VCIT yielded 4.99% against VCSH's 4.54%, a trade-off between income and swings.
- What each fund charges. VCIT, VCSH, SCHI, VCLT and SPBO charge 0.03% a year. IGSB, IGIB, USIG, SPIB and SPSB charge 0.04%. LQD charges 0.14%, PULS and FLOT 0.15%, and SRLN 0.70%. The median across all 80 funds is 0.15%.
- How spread out, and how big. USIG holds 11,503 bonds, and its ten largest make up 0.72% of assets. SRLN's ten largest make up 17.06%. Size varies too: VCIT has about $72 billion, BBCB about $52 million. Bigger funds usually cost less to trade.
- Index rules or a manager's goals. Most large funds track indexes weighted by the market value of bonds outstanding, so the most indebted companies get the most weight. PULS and SRLN aim for income and capital preservation instead. PULS holds mortgage and consumer-loan securities.
- Fixed, floating or a set end date. FLOT holds floating-rate bonds, whose interest resets as rates move. Its worst drop was 0.4% in the year to November 2, 2026. BSCR and IBDT hold bonds maturing in 2027 and 2028, so their rate risk shrinks each year.
- Option-income versions work differently. LQDW pairs investment-grade corporate bond exposure with call options it writes. This gives others the gains above a set price in return for upfront cash. It yielded 12.38% as of November 2, 2026, but gives up upside when bonds rally.
What are the risks of corporate bond ETFs?
- Long bonds fall hardest when rates rise. Long-term VCLT had volatility, a measure of price swings, of 8.2% and a worst drop of 9.2% in the year to November 2, 2026. VCSH's figures were 2% and 1.6%. In the 2022 bear market, LQD fell 21.1%.
- Credit fears can hit alongside stocks. Rating agencies can downgrade companies, and companies can default. In the 2020 Covid crash, LQD fell 12.3% and VCIT 10.5% while the S&P 500 dropped 33.7%. These funds can lose money at the same time as stocks.
- Weak returns can last for years. Over the five years to November 2, 2026, LQD returned -1% and VCLT -3.4%, while VCIT and IGIB returned 0.9%. After a rate shock like 2022's, bond funds can take years to recover.
- SRLN is more concentrated and costly. SRLN holds senior loans, which are company loans first in line for repayment. Its ten largest, led by Hologic at 2.17%, make up 17.06% of assets, against 2.61% for VCIT. It charges 0.70% a year.
- Option-income funds cap the upside. LQDW writes call options, contracts that hand others the gains above a set price in return for cash. That helped lift its yield to 12.38% as of November 2, 2026, but it still bears most losses when prices fall.
List of all corporate bond ETFs, by size
| # | Fund | Net assets | Cost | Yield | YTD | 1 yr | 5 yr |
|---|---|---|---|---|---|---|---|
| 1 | VCIT Vanguard Intermediate-Term Corporate Bond ETF | $72.04B† | 0.03% | 4.99% | -1.3% | -0.6% | +0.9% |
| 2 | VCSH Vanguard Short-Term Corporate Bond ETF | $51.74B† | 0.03% | 4.54% | +1.0% | +1.9% | +2.5% |
| 3 | LQD iShares iBoxx $ Investment Grade Corporate Bond E… | $32.04B | 0.14% | 4.86% | -2.5% | -2.3% | -1.0% |
| 4 | IGSB iShares 1-5 Year Investment Grade Corporate Bond … | $23.46B | 0.04% | 4.67% | +0.6% | +1.5% | +2.5% |
| 5 | IGIB iShares 5-10 Year Investment Grade Corporate Bond… | $18.72B | 0.04% | 5.07% | -1.8% | -1.0% | +0.9% |
| 6 | PULS PGIM Ultra Short Bond ETF | $18.71B | 0.15% | 4.77% | +3.3% | +4.1% | +4.4% |
| 7 | USIG iShares Broad USD Investment Grade Corporate Bond… | $17.85B | 0.04% | 4.92% | -1.3% | -0.9% | 0.0% |
| 8 | SCHI Schwab 5-10 Year Corporate Bond ETF | $11.60B | 0.03% | 5.15% | -1.7% | -1.8% | +0.8% |
| 9 | SPIB SPDR Portfolio Intermediate Term Corporate Bond E… | $11.57B | 0.04% | 4.57% | -0.3% | 0.0% | +1.6% |
| 10 | SPSB SPDR Portfolio Short Term Corporate Bond ETF | $10.63B | 0.04% | 4.41% | +1.5% | +2.3% | +2.9% |
Questions investors ask about corporate bond ETFs
What is the largest corporate bond ETF?
VCIT, the Vanguard Intermediate-Term Corporate Bond ETF, is the largest. It had about $72 billion in net assets as of November 2, 2026. Vanguard's short-term fund, VCSH, is next at about $51.7 billion, followed by iShares' LQD at about $32.0 billion. With IGSB and IGIB, these five hold 52.3% of the roughly $379 billion in US-listed corporate bond ETFs. LQD, launched in July 2002, is the oldest of the large funds.
What is the cheapest corporate bond ETF?
Several funds charge the lowest fee, 0.03% a year. They include Vanguard's VCIT, VCSH and VCLT, Schwab's SCHI and SPDR's SPBO. IGSB, IGIB and USIG from iShares, and SPIB and SPSB from SPDR, charge 0.04%. The median across the 80 funds is 0.15%, and the priciest charges 0.88%. Fees are close at the low end. Maturity, which shapes how much a fund swings, is often the bigger difference.
VCIT vs VCSH: what is the difference?
The main difference is maturity. VCSH holds short-term corporate bonds and VCIT intermediate-term ones, so they share just 0.1% of assets. Both are Vanguard index funds charging 0.03%. As of November 2, 2026, VCIT yielded 4.99% and VCSH 4.54%. VCIT also swung more. Over the prior year its worst drop was 5.1%, against 1.6% for VCSH. In the 2022 bear market VCIT lost 17.1% and VCSH 7.7%.
Do corporate bond ETFs pay dividends?
Yes. All 80 corporate bond ETFs pay distributions, funded mainly by interest on their bonds. The median yield, meaning yearly payouts as a share of the price, was 4.86% as of November 2, 2026. VCIT yielded 4.99% and VCSH 4.54%. Much higher yields usually mean a different strategy. BBHY, which holds high-yield (lower-rated) bonds, yielded 7.19%. Senior-loan fund SRLN yielded 7.35%, and LQDW, which writes call options, 12.38%. These payouts are mostly interest, which is generally taxed as ordinary income.
Do corporate bond ETFs own SpaceX?
Yes, but as a lender rather than an owner. Bonds issued by Space Exploration Technologies, SpaceX's corporate name, rank among the largest positions in VCIT (0.27% of assets), VCSH (0.22%), IGIB (0.20%), LQD (0.17%) and IGSB (0.15%). Holding a company's bonds means collecting interest and getting the loan repaid. It brings no share of the company's growth and no stake in its stock. Each position is also a small slice of a fund holding thousands of bonds.
How many corporate bond ETFs are there?
This guide covers 80 US-listed corporate bond ETFs, which held about $379 billion as of November 2, 2026. Five of them, VCIT, VCSH, LQD, IGSB and IGIB, held 52.3% of that money. The group runs from broad index funds such as USIG, with 11,503 bonds, to narrower ones. These include floating-rate FLOT, senior-loan SRLN, and BSCR and IBDT, which hold bonds maturing in 2027 and 2028. None is leveraged or inverse.
What corporate bond ETFs does Vanguard offer?
Vanguard's three largest corporate bond ETFs split the market by maturity. VCSH holds short-term bonds, VCIT intermediate-term and VCLT long-term. Each charges 0.03% a year and is a share class of a Vanguard index mutual fund. VCIT, at about $72 billion as of November 2, 2026, is the largest corporate bond ETF overall. Longer bonds meant bigger swings: over the prior year, the worst drops were 1.6% for VCSH, 5.1% for VCIT and 9.2% for VCLT.
Are corporate bond ETFs a good investment?
They may suit investors who want income with smaller swings than stocks, but they can still lose money. In the 2008 crisis the S&P 500 fell 55.2%, while LQD lost 6.8%. In the 2022 bear market, though, rising rates pushed LQD down 21.1%, and its five-year return to November 2, 2026 was -1%. Short-term funds such as VCSH and IGSB fell 7.7% and 7.6% in 2022, but yielded less than LQD's 4.86%.
Is there a Vanguard, Fidelity or Schwab corporate bond ETF?
Yes. Vanguard offers 5: VCIT (Vanguard Intermediate-Term Corporate Bond ETF), VCSH (Vanguard Short-Term Corporate Bond ETF), VCLT (Vanguard Long-Term Corporate Bond ETF) and 2 more. Fidelity offers 2: FLTB (Fidelity Limited Term Bond ETF), FCOR (Fidelity Corporate Bond ETF). Schwab offers 2: SCHI (Schwab 5-10 Year Corporate Bond ETF), SCHJ (Schwab 1-5 Year Corporate Bond ETF).
