SMBS vs. VGIT

Last updated Jun 4, 2026

SMBS (Schwab Mortgage-Backed Securities ETF) and VGIT (Vanguard Intermediate-Term Treasury ETF) are both exchange-traded funds - SMBS is a Mortgage Backed Securities fund tracking the Bloomberg US MBS Float Adjusted Total Return Index, while VGIT is a Government Bonds fund tracking the Bloomberg U.S. Treasury 3-10 Year Index. Both are passively managed. Over the past year, SMBS returned 6.78% vs 3.54% for VGIT. Their correlation of 0.90 suggests significant overlap in exposure. Both charge a 0.03% expense ratio.

Performance

SMBS vs. VGIT - Performance Comparison

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

Returns By Period

In the year-to-date period, SMBS achieves a 0.70% return, which is significantly higher than VGIT's -0.46% return.

SMBS

• 1D: -0.24%
• 1M: 0.33%
• YTD: 0.70%
• 6M: 0.82%
• 1Y: 6.78%
• 3Y*: —
• 5Y*: —
• 10Y*: —

VGIT

• 1D: -0.19%
• 1M: -0.16%
• YTD: -0.46%
• 6M: -0.60%
• 1Y: 3.54%
• 3Y*: 3.40%
• 5Y*: 0.05%
• 10Y*: 1.23%

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

SMBS vs. VGIT - Yearly Performance Comparison

	2026 (YTD)	2025	2024
SMBS Schwab Mortgage-Backed Securities ETF	0.70%	8.15%	-0.07%
VGIT Vanguard Intermediate-Term Treasury ETF	-0.46%	7.34%	-0.12%

Correlation

The correlation between SMBS and VGIT is 0.90, 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	0.90
Correlation (All Time) Calculated using the full available price history since Nov 20, 2024	0.90

The correlation between SMBS and VGIT has been stable across timeframes, ranging from 0.90 to 0.90 - a consistent structural relationship.

Return for Risk

SMBS vs. VGIT — Risk / Return Rank

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

SMBS

SMBS Risk / Return Rank: 48
SMBS Sharpe Ratio Rank: 47
SMBS Sortino Ratio Rank: 49
SMBS Omega Ratio Rank: 47
SMBS Calmar Ratio Rank: 49
SMBS Martin Ratio Rank: 49

VGIT

VGIT Risk / Return Rank: 27
VGIT Sharpe Ratio Rank: 28
VGIT Sortino Ratio Rank: 28
VGIT Omega Ratio Rank: 26
VGIT Calmar Ratio Rank: 26
VGIT Martin Ratio Rank: 26

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.

SMBS vs. VGIT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Schwab Mortgage-Backed Securities ETF (SMBS) and Vanguard Intermediate-Term Treasury ETF (VGIT). 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.

	SMBS	VGIT	Difference
Sharpe ratio Return per unit of total volatility	1.64	1.05	+0.59
Sortino ratio Return per unit of downside risk	2.42	1.59	+0.82
Omega ratio Gain probability vs. loss probability	1.30	1.18	+0.11
Calmar ratio Return relative to maximum drawdown	2.41	1.25	+1.16
Martin ratio Return relative to average drawdown	8.21	3.75	+4.46
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

SMBS vs. VGIT - Sharpe Ratio Comparison

The current SMBS Sharpe Ratio is 1.64, which is higher than the VGIT Sharpe Ratio of 1.05. The chart below compares the historical Sharpe Ratios of SMBS and VGIT, 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

	SMBS	VGIT	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.64	1.05	+0.59
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	—	0.01	—
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	—	0.27	—
Sharpe Ratio (All Time) Calculated using the full available price history	1.18	0.49	+0.69

Drawdowns

SMBS vs. VGIT - Drawdown Comparison

The maximum SMBS drawdown since its inception was -3.20%, smaller than the maximum VGIT drawdown of -16.05%. Use the drawdown chart below to compare losses from any high point for SMBS and VGIT.

Drawdown Indicators

	SMBS	VGIT	Difference
Max Drawdown Largest peak-to-trough decline	-3.20%	-16.05%	+12.85%
Max Drawdown (1Y) Largest decline over 1 year	-2.83%	-2.83%	0.00%
Max Drawdown (3Y) Largest decline over 3 years	—	-4.34%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-15.02%	—
Max Drawdown (10Y) Largest decline over 10 years	—	-16.05%	—
Current Drawdown Current decline from peak	-1.33%	-2.39%	+1.06%
Average Drawdown Average peak-to-trough decline	-0.84%	-3.52%	+2.68%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.83%	0.94%	-0.11%

Volatility

SMBS vs. VGIT - Volatility Comparison

Schwab Mortgage-Backed Securities ETF (SMBS) has a higher volatility of 1.55% compared to Vanguard Intermediate-Term Treasury ETF (VGIT) at 1.05%. This indicates that SMBS's price experiences larger fluctuations and is considered to be riskier than VGIT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SMBS	VGIT	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.55%	1.05%	+0.50%
Volatility (6M) Calculated over the trailing 6-month period	3.03%	2.33%	+0.70%
Volatility (1Y) Calculated over the trailing 1-year period	4.15%	3.38%	+0.77%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	4.86%	5.38%	-0.52%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	4.86%	4.50%	+0.36%

SMBS vs. VGIT - Expense Ratio Comparison

Both SMBS and VGIT have an expense ratio of 0.03%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

SMBS vs. VGIT - Dividend Comparison

SMBS's dividend yield for the trailing twelve months is around 5.17%, more than VGIT's 3.87% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SMBS Schwab Mortgage-Backed Securities ETF	5.17%	4.83%	0.50%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
VGIT Vanguard Intermediate-Term Treasury ETF	3.87%	3.79%	3.67%	2.73%	1.74%	1.69%	2.23%	2.24%	2.05%	1.67%	1.69%	1.69%

Frequently Asked Questions

Can I hold both SMBS and VGIT in my portfolio?

With a correlation of 0.90, SMBS and VGIT 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, SMBS or VGIT?

SMBS has higher volatility (1.55%) compared to VGIT (1.05%). In terms of maximum drawdown, SMBS dropped -3.20% vs VGIT's -16.05%.

Which ETF is better, SMBS or VGIT?

On 1-year performance, SMBS leads with 6.78% vs 3.54% for VGIT. Both ETFs have the same 0.03% expense ratio. On volatility, VGIT has been the lower-risk option at 1.05%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, SMBS or VGIT?

Over the 1-year period, SMBS has performed better with a 6.78% return vs 3.54%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, SMBS or VGIT?

SMBS and VGIT have the same expense ratio: 0.03% per year.

Which ETF pays a higher dividend yield, SMBS or VGIT?

SMBS has the higher dividend yield at 5.17%, compared with 3.87% for VGIT.

What is the main difference between SMBS and VGIT?

SMBS is categorized as Mortgage Backed Securities, while VGIT is Government Bonds. SMBS tracks Bloomberg US MBS Float Adjusted Total Return Index, while VGIT tracks Bloomberg U.S. Treasury 3-10 Year Index. They also come from different issuers: Charles Schwab and Vanguard.

Which has better risk-adjusted returns?

SMBS currently has the higher Sharpe Ratio (1.64 vs 1.05), 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.