Reliability by Design or Active Management: IGIB vs. FIGB
Key Points
IGIB carries a much lower expense ratio and a slightly higher yield compared to FIGB
FIGB has a lower beta, signaling less sensitivity to equity markets, but has underperformed IGIB on 1-year returns.
Both ETFs are ultra-diversified, but IGIB holds far more bonds and has significantly greater assets under management
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The iShares 5-10 Year Investment Grade Corporate Bond ETF (NASDAQ:IGIB) and the FIDELITY INVESTMENT GRADE BOND ETF (NYSEMKT:FIGB) differ most on cost, yield, and portfolio size. IGIB is more affordable, offers a higher payout, and manages a much larger pool of assets than FIGB.
Both IGIB and FIGB target U.S. investment-grade bonds, but there are notable distinctions in their structure and recent performance. This comparison highlights how these two core bond ETFs stack up on fees, returns, risk, and portfolio construction to help investors decide which approach may better fit their needs.
Snapshot (cost & size)
| Metric | IGIB | FIGB |
|---|---|---|
| Issuer | IShares | Fidelity |
| Expense ratio | 0.04% | 0.36% |
| 1-yr return (as of 2026-02-06) | 8.89% | 6.22% |
| Dividend yield | 4.58% | 4.13% |
| Beta | 1.06 | 1.01 |
| AUM | $17.82 billion | $354.59 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
IGIB looks more affordable with a much lower expense ratio than FIGB, and it also offers a slightly higher dividend yield, which may appeal to cost-conscious investors seeking income.
Performance & risk comparison
| Metric | IGIB | FIGB |
|---|---|---|
| Max drawdown (4 y) | -16.16% | -15.02% |
| Growth of $1,000 over 4 years | $940 | $892 |
What's inside
FIGB is designed for core fixed-income exposure, holding 180 U.S. investment-grade bonds across a mix of sectors. Its largest holdings are individual corporate bond issues, such as debt issued by JPMorgan Chase and Morgan Stanley, with each position accounting for roughly 1.5% to 1.7% of assets. While the fund is fully invested in fixed-income instruments, its relatively larger top positions result in higher issuer concentration than in broader bond ETFs.
IGIB, by contrast, holds a much broader portfolio of nearly 3,000 investment-grade corporate bonds. Its largest positions, including cash balances and diversified corporate bond issues, each represent well under 1% of assets, resulting in significantly lower issuer-level concentration. This level of diversification, combined with IGIB's much larger assets under management, may reduce concentration risk compared to FIGB.
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What this means for investors
Investors often rely on investment-grade bond ETFs for stability, especially when their portfolios are tested. The difference between the iShares 5–10 Year Investment Grade Corporate Bond ETF and the Fidelity Investment Grade Bond ETF lies in how stability is constructed when credit and rate conditions shift.
IGIB is designed for consistency. It owns thousands of bonds, charges less, and tends to move with the broad investment-grade market as interest rates and corporate borrowing conditions change. In contrast, FIGB, on the other hand, is more selective. With a smaller lineup of bonds and active management, the result depends more on Fidelity’s choices, which can help at times but also bring more concentration and a higher fee.
For investors, IGIB is suitable when you want your bond allocation to provide steady, reliable performance without frequent oversight. FIGB is appropriate if you prefer letting a manager take the wheel in exchange for a different outcome. Ultimately, the decision comes down to whether you prefer a portfolio segment that quietly absorbs shocks or one that relies on manager judgment during periods of uncertainty.
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Eric Trie has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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