IEI Offers Lower Risk While IGIB Delivers a Higher Yield
Key Points
IGIB carries a much lower expense ratio and a higher dividend yield than IEI
IEI has delivered less return and lower volatility, with a milder drawdown over five years
IGIB invests in a much broader set of corporate bonds, while IEI holds a compact portfolio of Treasuries
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The iShares 5-10 Year Investment Grade Corporate Bond ETF (NASDAQ:IGIB) stands out for its lower cost and higher yield, while the iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI) offers lower volatility and a more conservative Treasury-only approach.
Both IGIB and IEI are popular bond ETFs from iShares, but they serve different roles. IGIB focuses on intermediate-term investment-grade corporate bonds, while IEI targets U.S. Treasuries with slightly shorter maturities. This comparison highlights the key differences in cost, risk, and portfolio construction for investors considering these two fixed income funds.
Snapshot (cost & size)
| Metric | IGIB | IEI |
|---|---|---|
| Issuer | IShares | IShares |
| Expense ratio | 0.04% | 0.15% |
| 1-yr return (as of 2026-04-10) | 9.12% | 4.41% |
| Dividend yield | 4.7% | 3.6% |
| AUM | $17.7 billion | $18.8 billion |
The 1-yr return represents total return over the trailing 12 months.
IEI comes with a notably higher expense ratio, costing nearly four times as much as IGIB. IGIB not only looks more affordable, but it also delivers a higher dividend yield, which may appeal to income-focused investors.
Performance & risk comparison
| Metric | IGIB | IEI |
|---|---|---|
| Max drawdown (5 y) | (20.62%) | (13.88%) |
| Growth of $1,000 over 5 years | $1,086 | $1,025 |
What's inside
IEI holds a concentrated portfolio of just eighty-three U.S. Treasury bonds with maturities between three and seven years, making it a pure-play on government debt. The fund has existed for over nineteen years, and its largest positions are Treasury notes maturing in 2029, 2030, and 2031. This simplicity could suit investors who want maximum credit safety and direct interest rate exposure without corporate risk.
IGIB, by contrast, invests in nearly 3,000 investment-grade corporate bonds, offering broad exposure to major U.S. companies and financial institutions. Its largest corporate bond holdings each make up less than a quarter of a percent of the overall fund. IGIB’s corporate tilt brings higher yield and credit risk, but also greater diversification across issuers.
For more guidance on ETF investing, check out the full guide at this link.
What it means for investors
The iShares 5-10 Year Investment Grade Corporate Bond ETF gives investors a lot of diversification among bond issuers. The largest bond issue it holds makes up about 0.25% of the portfolio. Plus, the top issuer, JPMorgan Chase (NYSE:JPM) is responsible for just 2.3% of overall portfolio.
The iShares 3-7 Year Treasury Bond ETF doesn’t offer investors any diversification. It’s entirely invested in U.S. Treasureies that expire between 2029 and 2033.
Investors seeking stability that comes with treasuries backed by the government haven’t given up much when it comes to returns provided by these two ETF. Over the past five years the iShares 5-10 Year Investment Grade Corporate Bond ETF produced a total return of just 8.37%, which isn’t anything to write home about.
In addition to stability that comes with Treasuries, the IEI tends to move independently of the stock market. With exposure to corporate debt, the IGIB is a little more likely to follow the overall stock market.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
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