This year has been a challenging one for fixed income investors as the Federal Reserve has increased interest rates twice. Bond markets are pricing in two more rate hikes by the end of the year, with one expected in at the Fed's September meeting.

With borrowing costs climbing, many fixed income investors are gravitating to short-term bonds and the related exchange-traded funds (ETFs). Lower-duration funds offer less interest rate risk but can be light on income relative to longer-duration funds. Intermediate-term bond funds can help investors enhance their income profiles while mitigating some interest rate risk. (See also: Interest Rate Risk Between Long-Term and Short-Term Bonds.)

Investors considering the income benefits of intermediate-term corporate bonds may want to evaluate the Vanguard Intermediate-Term Corporate Bond ETF (VCIT). VCIT, one of the largest corporate bond ETFs of any duration, follows the cap-weighted Bloomberg Barclays US 5-10 Year Corporate Bond Index.

"Roughly one-third of the portfolio is invested in the financials sector, which is a source of risk," said Morningstar. "Its average sector exposure has been less than a fourth of the portfolio from 2010 to 2016, but the stake gradually grew to be more than 30% of the fund by the end of 2017. Any negative developments in this sector could hurt the fund’s performance."

At the end of July, VCIT had $19 billion in assets under management (AUM). Year to date, investors have added $1.37 billion to the Vanguard fund. VCIT's immense popularity is partly attributable to its low fee. Its annual expense ratio is just 0.07%, or $7 on a $10,000 investment, making it cheaper than 91% of rival funds, according to issuer data. (For more, see: VCIT: Vanguard Intermediate-Term Corp Bd ETF.)

VCIT's 1,725 holdings have an average effective maturity of 7.5 years and an average duration of 6.3 years, which is mostly in line with the category average. Although this is an investment-grade fund, VCIT tilts toward the lower end of that universe.

"The portfolio is concentrated on the lower end of the investment-grade spectrum, with considerable exposure to bonds rated A and BBB. These securities take up nearly 90% of the portfolio," said Morningstar. "This concentration is both driven by the U.S. banks and the recent surge in mergers-and-acquisitions-related debt issuances by telecommunication firms. Its typical category peer invests roughly three-fourths of its assets in A and BBB rated bonds, dividing the balance between higher-credit-quality and below-investment-grade securities. However, this fund does not invest in high-yield securities."

Morningstar has a Silver rating on VCIT. (For additional reading, check out: Looking to Cut Market Exposure? Try These ETFs.)