Bonds & Boredom

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My Aunt Mildred, bless her heart, recently decided she needed to diversify. Not her hobbies, mind you—she’s already collecting porcelain thimbles and judging local bake sales—but her portfolio. She asked me, naturally, because I once explained the difference between a stock and a bond at Thanksgiving, a conversation that ended with my uncle accusing me of ruining the cranberry sauce. So, I started looking at these ETFs, these little bundles of…well, debt, mostly. Two caught my eye, and honestly, the names alone were enough to induce a low-grade headache: the VanEck Short Muni ETF (SMB) and the iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB). They both promised stability, which is what you want when you’re nearing eighty and suspect the squirrels are plotting something.

The SMB, as I understand it, deals in municipal bonds—essentially, loans to cities and towns. Think school construction, sewer repairs, things that require a lot of paperwork and disgruntled taxpayers. The IGSB, on the other hand, is all about corporate bonds—loans to companies, the kind that might lay you off with a polite email and a severance package just large enough to cover your cat’s vet bills. The difference, as far as I can tell, is one is marginally less likely to leave you staring into the abyss, and the other offers a slightly better return. A trade-off, really. Like choosing between a lukewarm cup of tea and a slightly chipped mug.

A Quick Glance (Because Numbers Make My Eyes Water)

Metric SMB IGSB
Issuer VanEck iShares
Expense ratio 0.07% 0.04%
1-yr return (as of Feb. 14, 2026) 1.93% 2.65%
Dividend yield 2.64% 4.44%
Beta 0.10 0.13
AUM $303.14 million $22.37 billion

(The 1-yr return represents total return over the trailing 12 months. A fact I dutifully copied and pasted because someone, somewhere, is probably tracking these things.)

The expense ratio on the IGSB is negligible, honestly. A rounding error in the grand scheme of things. But that dividend yield? Nearly double the SMB. That’s enough to buy a decent bird feeder, or maybe a slightly less judgmental porcelain thimble.

Risk & Reward (Or, Why I Avoid Roller Coasters)

Metric SMB IGSB
Max drawdown (5 y) -7.44% -9.44%
Growth of $1,000 over 5 years $958 $960

So, both of these have lost about four percent of their value over the last five years. Which, I suppose, is better than losing your keys, your wallet, and your faith in humanity, all before lunchtime. The IGSB is a bit more volatile, a little more likely to swing wildly, but it also has the potential for a slightly better return. It’s like choosing between a sensible sedan and a slightly used sports car. I, naturally, opted for the sedan. I’m not good with sudden stops.

The IGSB holds a staggering 4,532 bonds, mostly issued by companies like Goldman Sachs and Bank of America. Solid, dependable institutions, presumably. The SMB, meanwhile, has a more modest 334 bonds, with a heavier emphasis on higher-rated (and therefore, presumably, safer) municipal debt. It’s the difference between spreading your bets across the entire casino and putting it all on black. I’m a black kind of guy.

For more ETF guidance, you can check out a full guide at this link. (I haven’t read it, frankly. I prefer to wallow in my own financial ignorance.)

The Bottom Line (Or, What Aunt Mildred Should Do)

Ultimately, choosing between these two ETFs comes down to risk tolerance. If you’re the type who enjoys a little excitement, a little uncertainty, the IGSB might be for you. If you prefer a slow, steady, predictable return, the SMB is the safer bet. For Aunt Mildred, I recommended the SMB. She already has enough excitement in her life, what with the thimbles and the bake sales. She nodded slowly, then asked if I could explain the difference between a stock and a bond again. I sighed. Some things, it seems, are destined to repeat themselves. And frankly, the cranberry sauce is still a sore subject.

Bond ETFs aren’t going to make you rich, of course. They’re not going to fund a yacht or a private island. But they can provide a steady stream of income, a little bit of stability in a world that feels increasingly chaotic. And sometimes, that’s enough.

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2026-02-15 08:03