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TIP vs. VGSH
Performance
Return for Risk
Drawdowns
Volatility
Dividends

TIP vs. VGSH

Last updated Jun 4, 2026

TIP (iShares TIPS Bond ETF) and VGSH (Vanguard Short-Term Treasury ETF) are both exchange-traded funds - TIP is a Inflation-Protected Bonds fund tracking the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L), while VGSH is a Government Bonds fund tracking the Bloomberg U.S. Treasury 1-3 Year Index. Both are passively managed. Over the past 10 years, TIP returned 2.57%/yr vs 1.74%/yr for VGSH. A 0.55 correlation means they provide meaningful diversification when combined. TIP charges 0.19%/yr vs 0.03%/yr for VGSH.

Performance

TIP vs. VGSH - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares TIPS Bond ETF (TIP) and Vanguard Short-Term Treasury ETF (VGSH). The values are adjusted to include any dividend payments, if applicable.

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Returns By Period

In the year-to-date period, TIP achieves a 1.54% return, which is significantly higher than VGSH's 0.48% return. Over the past 10 years, TIP has outperformed VGSH with an annualized return of 2.57%, while VGSH has yielded a comparatively lower 1.74% annualized return.

TIP

1D
-0.18%
1M
-0.09%
YTD
1.54%
6M
1.06%
1Y
4.96%
3Y*
3.88%
5Y*
0.97%
10Y*
2.57%

VGSH

1D
-0.03%
1M
0.08%
YTD
0.48%
6M
0.74%
1Y
3.43%
3Y*
4.15%
5Y*
1.81%
10Y*
1.74%
*Multi-year figures are annualized to reflect compound growth (CAGR)

TIP vs. VGSH - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
TIP
iShares TIPS Bond ETF		1.54%6.77%1.65%3.80%-12.26%5.68%10.84%8.35%-1.42%2.92%
VGSH
Vanguard Short-Term Treasury ETF		0.48%5.07%4.00%4.31%-3.86%-0.60%3.04%3.52%1.55%0.04%

Correlation

The correlation between TIP and VGSH is 0.74, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

0.74

Correlation (3Y)
Calculated over the trailing 3-year period

0.74

Correlation (5Y)
Calculated over the trailing 5-year period

0.67

Correlation (10Y)
Calculated over the trailing 10-year period

0.62

Correlation (All Time)
Calculated using the full available price history since Nov 24, 2009

0.55

The correlation between TIP and VGSH shifts across timeframes, from 0.55 (all time) to 0.74 (1 year), reflecting how their relationship changes across market environments.

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iShares TIPS Bond ETF

Vanguard Short-Term Treasury ETF

Often compared with TIP:
TIP vs. SCHPTIP vs. VTIPTIP vs. SGOVTIP vs. STIPTIP vs. FIPDXTIP vs. BNDTIP vs. IEF
Often compared with VGSH:
VGSH vs. sgovVGSH vs. SHVVGSH vs. SHYVGSH vs. SGOVVGSH vs. BNDVGSH vs. VTIPVGSH vs. VCSH

Return for Risk

TIP vs. VGSH — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
TIP
TIP Risk / Return Rank: 4444
Overall Rank
TIP Sharpe Ratio Rank: 4040
Sharpe Ratio Rank
TIP Sortino Ratio Rank: 4444
Sortino Ratio Rank
TIP Omega Ratio Rank: 3939
Omega Ratio Rank
TIP Calmar Ratio Rank: 5050
Calmar Ratio Rank
TIP Martin Ratio Rank: 4545
Martin Ratio Rank
VGSH
VGSH Risk / Return Rank: 8383
Overall Rank
VGSH Sharpe Ratio Rank: 8181
Sharpe Ratio Rank
VGSH Sortino Ratio Rank: 9191
Sortino Ratio Rank
VGSH Omega Ratio Rank: 8888
Omega Ratio Rank
VGSH Calmar Ratio Rank: 7676
Calmar Ratio Rank
VGSH Martin Ratio Rank: 7878
Martin Ratio Rank
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.

TIP vs. VGSH - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares TIPS Bond ETF (TIP) and Vanguard Short-Term Treasury ETF (VGSH). 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.

TIPVGSHDifference

Sharpe ratio

Return per unit of total volatility

1.46

2.68

-1.22

Sortino ratio

Return per unit of downside risk

2.24

4.43

-2.19

Omega ratio

Gain probability vs. loss probability

1.26

1.57

-0.31

Calmar ratio

Return relative to maximum drawdown

2.52

3.90

-1.37

Martin ratio

Return relative to average drawdown

7.57

15.52

-7.94

Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

TIP vs. VGSH - Sharpe Ratio Comparison

The current TIP Sharpe Ratio is 1.46, which is lower than the VGSH Sharpe Ratio of 2.68. The chart below compares the historical Sharpe Ratios of TIP and VGSH, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Sharpe Ratios by Period

TIPVGSHDifference

Sharpe Ratio (1Y)

Calculated over the trailing 1-year period

1.46

2.68

-1.22

Sharpe Ratio (5Y)

Calculated over the trailing 5-year period

0.16

0.93

-0.77

Sharpe Ratio (10Y)

Calculated over the trailing 10-year period

0.45

1.11

-0.66

Sharpe Ratio (All Time)

Calculated using the full available price history

0.57

1.01

-0.44

Drawdowns

TIP vs. VGSH - Drawdown Comparison

The maximum TIP drawdown since its inception was -14.57%, which is greater than VGSH's maximum drawdown of -5.70%. Use the drawdown chart below to compare losses from any high point for TIP and VGSH.

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Drawdown Indicators

TIPVGSHDifference

Max Drawdown

Largest peak-to-trough decline

-14.57%

-5.70%

-8.87%

Max Drawdown (1Y)

Largest decline over 1 year

-1.98%

-0.88%

-1.10%

Max Drawdown (3Y)

Largest decline over 3 years

-4.54%

-0.97%

-3.57%

Max Drawdown (5Y)

Largest decline over 5 years

-14.51%

-5.66%

-8.85%

Max Drawdown (10Y)

Largest decline over 10 years

-14.51%

-5.70%

-8.81%

Current Drawdown

Current decline from peak

-0.32%

-0.29%

-0.03%

Average Drawdown

Average peak-to-trough decline

-3.43%

-0.60%

-2.83%

Ulcer Index

Depth and duration of drawdowns from previous peaks

0.66%

0.22%

+0.44%

Volatility

TIP vs. VGSH - Volatility Comparison

iShares TIPS Bond ETF (TIP) has a higher volatility of 0.89% compared to Vanguard Short-Term Treasury ETF (VGSH) at 0.35%. This indicates that TIP's price experiences larger fluctuations and is considered to be riskier than VGSH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

TIPVGSHDifference

Volatility (1M)

Calculated over the trailing 1-month period

0.89%

0.35%

+0.54%

Volatility (6M)

Calculated over the trailing 6-month period

2.29%

0.88%

+1.41%

Volatility (1Y)

Calculated over the trailing 1-year period

3.41%

1.29%

+2.12%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

6.21%

1.97%

+4.24%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

5.74%

1.57%

+4.17%

TIP vs. VGSH - Expense Ratio Comparison

TIP has a 0.19% expense ratio, which is higher than VGSH's 0.03% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

TIP vs. VGSH - Dividend Comparison

TIP's dividend yield for the trailing twelve months is around 3.76%, less than VGSH's 3.87% yield.

PositionTTM20252024202320222021202020192018201720162015
TIP
iShares TIPS Bond ETF		3.76%3.46%2.52%2.73%6.96%4.28%1.17%1.75%2.71%2.07%1.48%0.34%
VGSH
Vanguard Short-Term Treasury ETF		3.87%4.00%4.18%3.31%1.15%0.66%1.74%2.28%1.79%1.10%0.84%0.69%

Frequently Asked Questions

TIP and VGSH have a correlation of 0.74, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

TIP has higher volatility (0.89%) compared to VGSH (0.35%). In terms of maximum drawdown, TIP dropped -14.57% vs VGSH's -5.70%.

On 10-year performance, TIP leads with 2.57% vs 1.74% for VGSH. On fees, VGSH is cheaper at 0.03% per year. On volatility, VGSH has been the lower-risk option at 0.35%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, TIP has performed better with a 2.57% return vs 1.74%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

VGSH is cheaper with a 0.03% expense ratio, compared with 0.19% for TIP.

VGSH has the higher dividend yield at 3.87%, compared with 3.76% for TIP.

TIP is categorized as Inflation-Protected Bonds, while VGSH is Government Bonds. TIP tracks Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L), while VGSH tracks Bloomberg U.S. Treasury 1-3 Year Index. They also come from different issuers: iShares and Vanguard. Their fees differ too: 0.19% for TIP and 0.03% for VGSH.

VGSH currently has the higher Sharpe Ratio (2.68 vs 1.46), 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.

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