The BSV ETF Offers Lower Costs and Larger Scale Than the ISTB ETF

By Cory Renauer – Apr 12, 2026 at 9:49AM ESTKey PointsBSV is less expensive to own and manages much more in assets than ISTBISTB delivered a higher 1-year return and slightly higher yield compared to BSVBoth funds stick to short-term bonds but differ in portfolio breadth and minor risk metricsThe Vanguard Short-Term Bond ETF (BSV 0.06%) charges half the expense ratio of the iShares Core 1-5 Year USD Bond ETF (ISTB 0.08%) and has much higher assets under management (AUM), while ISTB beats BSV in terms of dividend yield and one-year performance.Both BSV and ISTB aim to provide diversified exposure to short-term bonds, appealing to investors seeking stability and modest income. This comparison looks at their costs, returns, risk levels, portfolio makeup, and trading profiles to help clarify which fund may better fit different fixed-income strategies.Snapshot (cost & size)MetricISTBBSVIssuerISharesVanguardExpense ratio0.06%0.03%1-yr return (as of 2026-04-10)5.4%4.7%Dividend yield4.2%3.9%AUM$4.7 billion$70.0 billionThe 1-yr return represents total return over the trailing 12 months.BSV is more affordable, with an expense ratio of 0.03% versus ISTB’s 0.06%, and ISTB’s yield is modestly higher by 0.3 percentage points, which may appeal to those prioritizing income.Performance & risk comparisonMetricISTBBSVMax drawdown (5 y)-9.37%-8.53%Growth of $1,000 over 5 years$1,099$1,088What's insideBSV tracks a broad mix of investment-grade short-term bonds, including U.S. government, high-quality corporate, and select international issues, with 30 holdings and a 19-year track record. Its largest positions are United States Treasury Note/Bond 3.50% 02/28/2031 (2.23%), United States Treasury Note/Bond 3.50% 01/31/2028 (1.16%), and United States Treasury Note/Bond 3.75% 01/31/2031 (0.99%).ISTB, by contrast, casts a much wider net, with over 7,000 holdings. Its top holdings are Treasury Note 10/31/2030 (1.02%), Treasury Note 02/28/2030 (1.00%), and Treasury Note 09/30/2030 (0.98%). Both funds avoid leverage, currency hedging, or other notable quirks.For more guidance on ETF investing, check out the full guide at this link.What it means for investorsAround 52% of ITIB’s portfolio is invested in U.S. Treasuries. Less than half is supplied by a diverse list of corporate debt issuers. At 0.54% of the portfolio, JPMorgan Chase (JPM 0.15%) is its largest source of corporate bonds. The BSV ETF also provides steady income with a combination of short-maturity U.S. Treasuries, debt backed by government agencies, and investment-grade corporate debt. The BSV ETF has 11.95% of its portfolio in BBB-rated securities. The rest have a higher rating or are backed by the U.S. Government.Returns from both funds over the past five years have been disappointing. A $1,000 investment in ISTB five years ago has generated a $99 return. The same investment in the BSV ETF produced a $88 return. Those positive returns are only possible because of accumulated dividend payments. IBIT and BSV investors have seen their principal decline by 5.6% and 4.8%, respectively, over the past five years. Read NextApr 12, 2026 •By David DierkingThe Best AI ETF to Invest $2,000 in Right NowApr 12, 2026 •By Reuben Gregg BrewerThe 3 Highest-Yielding Dividend Kings in AprilApr 12, 2026 •By Robert IzquierdoComparing Bond ETFs: Vanguard's BSV vs. iShares' IGSBApr 12, 2026 •By Sean Williams11 Words From the March Fed Minutes That May Come Back to Haunt Wall StreetApr 12, 2026 •By Robert IzquierdoChoosing an ETF for Bond Exposure: Fidelity's FIGB vs. Vanguard's VGITApr 12, 2026 •By Robert IzquierdoBetter Bond ETF: Fidelity's FIGB vs. iShares' IEIAbout the AuthorCory Renauer is a contributing Motley Fool healthcare analyst covering pharmaceuticals, biotechnology, and medical devices. Previously, Cory was a laboratory technician for the American Red Cross. He holds a bachelor’s degree in biology from Oakland University.TMFang4applesX@coryrenauerStocks MentionediShares Trust - iShares Core 1-5 Year Usd Bond ETFNASDAQ: ISTB$48.41(-0.08%)-$0.04Vanguard Bond Index Funds - Vanguard Short-Term Bond ETFNYSEMKT: BSV$78.27(-0.06%)-$0.05*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.