Corporate Bond ETFs
Corporate bond ETFs hold debt issued by large companies with investment-grade credit ratings (BBB- and above). They typically yield more than US Treasuries — the difference is called the credit spread, which compensates investors for taking on corporate default risk. Available across short-term (1-3 years), intermediate (5-10 years), and long-term (20+ years) maturities.
Maturity Ladder
Vanguard Short-Term Corp Bond
Vanguard
iShares 1-5 Year Inv Grade Corp
iShares
Vanguard Intermediate Corp Bond
Vanguard
iShares 5-10 Year Inv Grade Corp
iShares
Vanguard Long-Term Corp Bond
Vanguard
iShares Investment Grade Corp Bond
iShares
Frequently Asked Questions
What is an investment-grade corporate bond?▼
A bond issued by a corporation that has been rated BBB- or higher by Standard & Poor's (or Baa3+ by Moody's). Investment-grade ratings indicate the issuer is considered financially stable enough that default risk is low, though still higher than US Treasuries.
How is LQD different from AGG?▼
LQD holds only investment-grade corporate bonds, so it has higher yield and credit risk than AGG. AGG is broader — it includes Treasuries and mortgage-backed securities alongside corporates — which makes it more diversified but lower-yielding.
Why do corporate bonds yield more than Treasuries?▼
The extra yield is called the credit spread. It compensates investors for taking on the risk that the issuer could default. Credit spreads widen during recessions (because defaults rise) and narrow in good times.
Other Fixed Income Categories
Treasury yields and ETFs from 1-month bills to 30-year bonds.
Sovereign bond ETFs covering developed-market governments outside the US.
Total-market bond ETFs spanning Treasuries, corporates, and mortgages.
Below-investment-grade corporate debt with elevated yields.
Treasuries whose principal adjusts with CPI inflation.
State and local government debt — federal-tax-exempt income.
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