BIV vs. VMBS

Last updated Jun 9, 2026

BIV (Vanguard Intermediate-Term Bond Index ETF) and VMBS (Vanguard Mortgage-Backed Securities ETF) are both exchange-traded funds - BIV is a Intermediate Core Bond fund tracking the Bloomberg U.S. 5–10 Year Government/Credit Float Adjusted Bond Index, while VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index. Both are passively managed. Over the past 10 years, BIV returned 1.83%/yr vs 1.31%/yr for VMBS. A 0.78 correlation means they provide meaningful diversification when combined. BIV charges 0.03%/yr vs 0.04%/yr for VMBS.

Performance

BIV vs. VMBS - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Intermediate-Term Bond Index ETF (BIV) and Vanguard Mortgage-Backed Securities ETF (VMBS). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, BIV achieves a -0.67% return, which is significantly lower than VMBS's 0.27% return. Over the past 10 years, BIV has outperformed VMBS with an annualized return of 1.83%, while VMBS has yielded a comparatively lower 1.31% annualized return.

BIV

• 1D: -0.05%
• 1M: -0.94%
• YTD: -0.67%
• 6M: -0.33%
• 1Y: 4.70%
• 3Y*: 4.27%
• 5Y*: 0.08%
• 10Y*: 1.83%

VMBS

• 1D: 0.04%
• 1M: -0.83%
• YTD: 0.27%
• 6M: 0.91%
• 1Y: 6.83%
• 3Y*: 4.37%
• 5Y*: 0.40%
• 10Y*: 1.31%

*Multi-year figures are annualized to reflect compound growth (CAGR)

BIV vs. VMBS - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
BIV Vanguard Intermediate-Term Bond Index ETF	-0.67%	8.52%	1.57%	6.07%	-13.21%	-2.40%	9.67%	10.34%	-0.19%	3.65%
VMBS Vanguard Mortgage-Backed Securities ETF	0.27%	8.36%	1.70%	5.34%	-11.90%	-1.28%	3.76%	6.19%	0.91%	2.47%

Correlation

The correlation between BIV and VMBS is 0.94, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.94
Correlation (3Y) Calculated over the trailing 3-year period	0.95
Correlation (5Y) Calculated over the trailing 5-year period	0.93
Correlation (10Y) Calculated over the trailing 10-year period	0.86
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009	0.78

The correlation between BIV and VMBS shifts across timeframes, from 0.78 (all time) to 0.95 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

BIV vs. VMBS — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

BIV

BIV Risk / Return Rank: 34
BIV Sharpe Ratio Rank: 36
BIV Sortino Ratio Rank: 37
BIV Omega Ratio Rank: 33
BIV Calmar Ratio Rank: 33
BIV Martin Ratio Rank: 32

VMBS

VMBS Risk / Return Rank: 54
VMBS Sharpe Ratio Rank: 52
VMBS Sortino Ratio Rank: 55
VMBS Omega Ratio Rank: 51
VMBS Calmar Ratio Rank: 57
VMBS Martin Ratio Rank: 53

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

BIV vs. VMBS - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Intermediate-Term Bond Index ETF (BIV) and Vanguard Mortgage-Backed Securities ETF (VMBS). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	BIV	VMBS	Difference
Sharpe ratio: Return per unit of total volatility	1.18	1.60	-0.42
Sortino ratio: Return per unit of downside risk	1.76	2.38	-0.62
Omega ratio: Gain probability vs. loss probability	1.21	1.29	-0.09
Calmar ratio: Return relative to maximum drawdown	1.49	2.55	-1.07
Martin ratio: Return relative to average drawdown	4.40	8.40	-4.00
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

BIV vs. VMBS - Sharpe Ratio Comparison

The current BIV Sharpe Ratio is 1.18, which is comparable to the VMBS Sharpe Ratio of 1.60. The chart below compares the historical Sharpe Ratios of BIV and VMBS, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	BIV	VMBS	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.18	1.60	-0.42
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.01	0.06	-0.05
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.33	0.24	+0.09
Sharpe Ratio (All Time) Calculated using the full available price history	0.64	0.45	+0.19

Drawdowns

BIV vs. VMBS - Drawdown Comparison

The maximum BIV drawdown since its inception was -18.95%, which is greater than VMBS's maximum drawdown of -17.47%. Use the drawdown chart below to compare losses from any high point for BIV and VMBS.

Drawdown Indicators

	BIV	VMBS	Difference
Max Drawdown Largest peak-to-trough decline	-18.95%	-17.47%	-1.48%
Max Drawdown (1Y) Largest decline over 1 year	-3.18%	-2.68%	-0.50%
Max Drawdown (3Y) Largest decline over 3 years	-6.07%	-7.65%	+1.58%
Max Drawdown (5Y) Largest decline over 5 years	-18.74%	-17.12%	-1.62%
Max Drawdown (10Y) Largest decline over 10 years	-18.95%	-17.47%	-1.48%
Current Drawdown Current decline from peak	-2.46%	-1.71%	-0.75%
Average Drawdown Average peak-to-trough decline	-3.39%	-2.49%	-0.90%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.07%	0.81%	+0.26%

Volatility

BIV vs. VMBS - Volatility Comparison

The current volatility for Vanguard Intermediate-Term Bond Index ETF (BIV) is 1.35%, while Vanguard Mortgage-Backed Securities ETF (VMBS) has a volatility of 1.56%. This indicates that BIV experiences smaller price fluctuations and is considered to be less risky than VMBS based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	BIV	VMBS	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.35%	1.56%	-0.21%
Volatility (6M) Calculated over the trailing 6-month period	2.93%	3.19%	-0.26%
Volatility (1Y) Calculated over the trailing 1-year period	4.00%	4.29%	-0.29%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.40%	6.77%	-0.37%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.51%	5.40%	+0.11%

BIV vs. VMBS - Expense Ratio Comparison

BIV has a 0.03% expense ratio, which is lower than VMBS's 0.04% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

BIV vs. VMBS - Dividend Comparison

BIV's dividend yield for the trailing twelve months is around 4.24%, which matches VMBS's 4.20% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
BIV Vanguard Intermediate-Term Bond Index ETF	4.24%	4.01%	3.79%	3.09%	2.41%	3.42%	2.95%	2.75%	2.88%	2.69%	3.01%	3.02%
VMBS Vanguard Mortgage-Backed Securities ETF	4.20%	4.20%	3.94%	3.31%	2.35%	1.02%	2.01%	2.77%	2.72%	2.16%	2.10%	2.12%

Frequently Asked Questions

Can I hold both BIV and VMBS in my portfolio?

With a correlation of 0.94, BIV and VMBS move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, BIV or VMBS?

VMBS has higher volatility (1.56%) compared to BIV (1.35%). In terms of maximum drawdown, BIV dropped -18.95% vs VMBS's -17.47%.

Which ETF is better, BIV or VMBS?

On 10-year performance, BIV leads with 1.83% vs 1.31% for VMBS. On fees, BIV is cheaper at 0.03% per year. On volatility, BIV has been the lower-risk option at 1.35%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, BIV or VMBS?

Over the 10-year period, BIV has performed better with a 1.83% return vs 1.31%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, BIV or VMBS?

BIV is cheaper with a 0.03% expense ratio, compared with 0.04% for VMBS.

Which ETF pays a higher dividend yield, BIV or VMBS?

BIV has the higher dividend yield at 4.24%, compared with 4.20% for VMBS.

What is the main difference between BIV and VMBS?

BIV is categorized as Intermediate Core Bond, while VMBS is Mortgage Backed Securities. BIV tracks Bloomberg U.S. 5–10 Year Government/Credit Float Adjusted Bond Index, while VMBS tracks Barclays Capital U.S. MBS Index. Their fees differ too: 0.03% for BIV and 0.04% for VMBS.

Which has better risk-adjusted returns?

VMBS currently has the higher Sharpe Ratio (1.60 vs 1.18), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.