VCLT vs IGLB: Which Long-Term Corporate Bond ETF Offers Investors Better Long-Term Prospects?

Both the iShares 10+ Year Investment Grade Corporate Bond ETF (IGLB) and the State Street SPDR Portfolio Long Term Corporate Bond ETF (SPLB) offer similar low-cost exposure to long-dated investment-grade corporate debt. These ETFs are popular choices for investors seeking long-term income and portfolio diversification, as they target high-quality corporate issues with maturities exceeding 10 years.

Although their portfolios have significant overlap, subtle differences in liquidity, scale, and diversification may sway an investor's preference. Both funds charge minimal annual fees of just 0.04%. The iShares ETF has a slightly lower distribution yield of 5.5%, compared to the State Street ETF's 5.6%, indicating a minimal yield gap.

The iShares ETF contains 3,815 holdings and is highly diversified, with no single issue exceeding 0.27% of assets. It was launched in 2009 and has paid $2.61 per share over the trailing 12 months, resulting in a 5.5% yield. The State Street ETF, also focusing on long-dated corporate issues, tracks the Bloomberg U.S. Long Term Corporate Bond Index and has 2,952 holdings, with no single position representing more than 0.47% of the portfolio.

It was also launched in 2009 and has paid $1.20 per share over the trailing 12 months, yielding 5.6%. While both ETFs share similarities in strategy, average duration, expenses, drawdown, and yield, the decision ultimately rests on performance. IGLB, the iShares fund, has outperformed SPLB in every time frame, making it the better investment choice.