"VCSH tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index, which is a fancy way of saying it owns a giant basket of investment-grade corporate IOUs that mature within five years."
"The return engine has two parts. The big one is coupon income from those corporates, which sits meaningfully above what equivalent Treasuries pay because investors demand a credit spread for taking on default risk."
"The fund has paid a distribution every month since 2009. Recent monthly payouts have run between $0.27 and $0.30 per share, with a special distribution layered on most Decembers."
Vanguard Short-Term Corporate Bond ETF (VCSH) tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index, holding nearly 2,924 investment-grade corporate bonds. The fund primarily generates returns through coupon income, which exceeds that of Treasuries due to credit risk. With a short duration, VCSH minimizes the impact of interest rate changes on net asset value. The expense ratio is low at 0.03%, and the fund has consistently paid monthly distributions since 2009, averaging around $3.50 per share annually against a price of nearly $79.
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