VCSH vs. SHM

Last updated Jun 4, 2026

VCSH (Vanguard Short-Term Corporate Bond ETF) and SHM (SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF) are both exchange-traded funds - VCSH is a Corporate Bonds fund tracking the Barclays Capital U.S. 1-5 Year Corporate Index, while SHM is a Municipal Bonds fund tracking the Bloomberg Municipal Managed Money Short. Both are passively managed. Over the past 10 years, VCSH returned 2.70%/yr vs 1.20%/yr for SHM. At a 0.33 correlation, their price movements are largely independent. VCSH charges 0.04%/yr vs 0.20%/yr for SHM.

Performance

VCSH vs. SHM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Short-Term Corporate Bond ETF (VCSH) and SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (SHM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VCSH achieves a 0.64% return, which is significantly lower than SHM's 0.78% return. Over the past 10 years, VCSH has outperformed SHM with an annualized return of 2.70%, while SHM has yielded a comparatively lower 1.20% annualized return.

VCSH

• 1D: -0.08%
• 1M: 0.20%
• YTD: 0.64%
• 6M: 0.95%
• 1Y: 4.59%
• 3Y*: 5.52%
• 5Y*: 2.32%
• 10Y*: 2.70%

SHM

• 1D: 0.04%
• 1M: 0.39%
• YTD: 0.78%
• 6M: 1.08%
• 1Y: 3.47%
• 3Y*: 2.93%
• 5Y*: 0.91%
• 10Y*: 1.20%

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

VCSH vs. SHM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VCSH Vanguard Short-Term Corporate Bond ETF	0.64%	6.77%	4.91%	6.20%	-5.62%	-0.63%	5.13%	7.02%	0.92%	2.17%
SHM SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF	0.78%	3.95%	1.22%	2.92%	-3.82%	-0.37%	2.65%	3.64%	1.56%	0.99%

Correlation

The correlation between VCSH and SHM is 0.40, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.40
Correlation (3Y) Calculated over the trailing 3-year period	0.53
Correlation (5Y) Calculated over the trailing 5-year period	0.49
Correlation (10Y) Calculated over the trailing 10-year period	0.42
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009	0.33

The correlation between VCSH and SHM shifts across timeframes, from 0.33 (all time) to 0.53 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

VCSH vs. SHM — Risk / Return Rank

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

VCSH

VCSH Risk / Return Rank: 74
VCSH Sharpe Ratio Rank: 73
VCSH Sortino Ratio Rank: 84
VCSH Omega Ratio Rank: 79
VCSH Calmar Ratio Rank: 65
VCSH Martin Ratio Rank: 71

SHM

SHM Risk / Return Rank: 75
SHM Sharpe Ratio Rank: 84
SHM Sortino Ratio Rank: 90
SHM Omega Ratio Rank: 90
SHM Calmar Ratio Rank: 62
SHM Martin Ratio Rank: 47

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.

VCSH vs. SHM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Corporate Bond ETF (VCSH) and SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (SHM). 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.

	VCSH	SHM	Difference
Sharpe ratio: Return per unit of total volatility	2.45	2.76	-0.31
Sortino ratio: Return per unit of downside risk	3.85	4.29	-0.45
Omega ratio: Gain probability vs. loss probability	1.48	1.59	-0.11
Calmar ratio: Return relative to maximum drawdown	3.29	3.08	+0.21
Martin ratio: Return relative to average drawdown	13.55	7.88	+5.67
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VCSH vs. SHM - Sharpe Ratio Comparison

The current VCSH Sharpe Ratio is 2.45, which is comparable to the SHM Sharpe Ratio of 2.76. The chart below compares the historical Sharpe Ratios of VCSH and SHM, 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

	VCSH	SHM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.45	2.76	-0.31
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.81	0.44	+0.37
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.81	0.36	+0.44
Sharpe Ratio (All Time) Calculated using the full available price history	1.02	0.48	+0.54

Drawdowns

VCSH vs. SHM - Drawdown Comparison

The maximum VCSH drawdown since its inception was -12.86%, which is greater than SHM's maximum drawdown of -11.61%. Use the drawdown chart below to compare losses from any high point for VCSH and SHM.

Drawdown Indicators

	VCSH	SHM	Difference
Max Drawdown Largest peak-to-trough decline	-12.86%	-11.61%	-1.25%
Max Drawdown (1Y) Largest decline over 1 year	-1.40%	-1.13%	-0.27%
Max Drawdown (3Y) Largest decline over 3 years	-1.40%	-2.03%	+0.63%
Max Drawdown (5Y) Largest decline over 5 years	-9.48%	-6.67%	-2.81%
Max Drawdown (10Y) Largest decline over 10 years	-12.86%	-11.61%	-1.25%
Current Drawdown Current decline from peak	-0.32%	-0.37%	+0.05%
Average Drawdown Average peak-to-trough decline	-0.97%	-0.97%	0.00%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.34%	0.44%	-0.10%

Volatility

VCSH vs. SHM - Volatility Comparison

Vanguard Short-Term Corporate Bond ETF (VCSH) has a higher volatility of 0.57% compared to SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (SHM) at 0.35%. This indicates that VCSH's price experiences larger fluctuations and is considered to be riskier than SHM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VCSH	SHM	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.57%	0.35%	+0.22%
Volatility (6M) Calculated over the trailing 6-month period	1.38%	0.85%	+0.53%
Volatility (1Y) Calculated over the trailing 1-year period	1.88%	1.26%	+0.62%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	2.88%	2.07%	+0.81%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.35%	3.31%	+0.04%

VCSH vs. SHM - Expense Ratio Comparison

VCSH has a 0.04% expense ratio, which is lower than SHM's 0.20% 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

VCSH vs. SHM - Dividend Comparison

VCSH's dividend yield for the trailing twelve months is around 4.45%, more than SHM's 2.67% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SHM SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF	2.67%	2.61%	2.06%	1.15%	0.69%	0.86%	1.24%	1.40%	1.23%	1.06%	0.94%	0.92%
VCSH Vanguard Short-Term Corporate Bond ETF	4.45%	4.35%	3.96%	3.09%	2.01%	1.81%	2.27%	2.87%	2.65%	2.26%	2.10%	2.08%

Frequently Asked Questions

Can I hold both VCSH and SHM in my portfolio?

VCSH and SHM have a correlation of 0.40, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VCSH or SHM?

VCSH has higher volatility (0.57%) compared to SHM (0.35%). In terms of maximum drawdown, VCSH dropped -12.86% vs SHM's -11.61%.

Which ETF is better, VCSH or SHM?

On 10-year performance, VCSH leads with 2.70% vs 1.20% for SHM. On fees, VCSH is cheaper at 0.04% per year. On volatility, SHM has been the lower-risk option at 0.35%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VCSH or SHM?

Over the 10-year period, VCSH has performed better with a 2.70% return vs 1.20%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VCSH or SHM?

VCSH is cheaper with a 0.04% expense ratio, compared with 0.20% for SHM.

Which ETF pays a higher dividend yield, VCSH or SHM?

VCSH has the higher dividend yield at 4.45%, compared with 2.67% for SHM.

What is the main difference between VCSH and SHM?

VCSH is categorized as Corporate Bonds, while SHM is Municipal Bonds. VCSH tracks Barclays Capital U.S. 1-5 Year Corporate Index, while SHM tracks Bloomberg Municipal Managed Money Short. They also come from different issuers: Vanguard and State Street. Their fees differ too: 0.04% for VCSH and 0.20% for SHM.

Which has better risk-adjusted returns?

SHM currently has the higher Sharpe Ratio (2.76 vs 2.45), 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.