VCSH vs. VAW

Last updated Jun 9, 2026

VCSH (Vanguard Short-Term Corporate Bond ETF) and VAW (Vanguard Materials ETF) are both exchange-traded funds - VCSH is a Corporate Bonds fund tracking the Bloomberg U.S. 1-5 Year Corporate Bond Index, while VAW is a Materials fund tracking the MSCI US Investable Market Materials 25/50 Index. Both are passively managed. Over the past 10 years, VCSH returned 2.66%/yr vs 9.87%/yr for VAW. At a 0.09 correlation, their price movements are largely independent. VCSH charges 0.04%/yr vs 0.10%/yr for VAW.

Performance

VCSH vs. VAW - Performance Comparison

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

Returns By Period

In the year-to-date period, VCSH achieves a 0.44% return, which is significantly lower than VAW's 9.07% return. Over the past 10 years, VCSH has underperformed VAW with an annualized return of 2.66%, while VAW has yielded a comparatively higher 9.87% annualized return.

VCSH

• 1D: 0.03%
• 1M: -0.26%
• YTD: 0.44%
• 6M: 0.92%
• 1Y: 4.56%
• 3Y*: 5.56%
• 5Y*: 2.26%
• 10Y*: 2.66%

VAW

• 1D: -1.01%
• 1M: -3.30%
• YTD: 9.07%
• 6M: 14.24%
• 1Y: 17.86%
• 3Y*: 10.82%
• 5Y*: 5.32%
• 10Y*: 9.87%

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

VCSH vs. VAW - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VCSH Vanguard Short-Term Corporate Bond ETF	0.44%	6.77%	4.91%	6.20%	-5.62%	-0.63%	5.13%	7.02%	0.92%	2.17%
VAW Vanguard Materials ETF	9.07%	12.30%	0.48%	13.67%	-11.80%	27.43%	19.44%	23.53%	-17.49%	23.76%

Correlation

The correlation between VCSH and VAW is 0.38, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.38
Correlation (3Y) Calculated over the trailing 3-year period	0.28
Correlation (5Y) Calculated over the trailing 5-year period	0.27
Correlation (10Y) Calculated over the trailing 10-year period	0.14
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009	0.09

Over the past year, VCSH and VAW have become more correlated (0.38) than their long-term average of 0.09, meaning their price movements have been converging.

Return for Risk

VCSH vs. VAW — Risk / Return Rank

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

VCSH

VCSH Risk / Return Rank: 82
VCSH Sharpe Ratio Rank: 84
VCSH Sortino Ratio Rank: 90
VCSH Omega Ratio Rank: 86
VCSH Calmar Ratio Rank: 72
VCSH Martin Ratio Rank: 77

VAW

VAW Risk / Return Rank: 30
VAW Sharpe Ratio Rank: 30
VAW Sortino Ratio Rank: 30
VAW Omega Ratio Rank: 28
VAW Calmar Ratio Rank: 30
VAW Martin Ratio Rank: 32

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. VAW - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Corporate Bond ETF (VCSH) and Vanguard Materials ETF (VAW). 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	VAW	Difference
Sharpe ratio: Return per unit of total volatility	2.45	1.01	+1.44
Sortino ratio: Return per unit of downside risk	3.82	1.49	+2.34
Omega ratio: Gain probability vs. loss probability	1.48	1.18	+0.31
Calmar ratio: Return relative to maximum drawdown	3.27	1.34	+1.93
Martin ratio: Return relative to average drawdown	13.41	4.32	+9.09
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. VAW - Sharpe Ratio Comparison

The current VCSH Sharpe Ratio is 2.45, which is higher than the VAW Sharpe Ratio of 1.01. The chart below compares the historical Sharpe Ratios of VCSH and VAW, 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	VAW	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.45	1.01	+1.44
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.79	0.27	+0.52
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.80	0.47	+0.33
Sharpe Ratio (All Time) Calculated using the full available price history	1.01	0.39	+0.63

Drawdowns

VCSH vs. VAW - Drawdown Comparison

The maximum VCSH drawdown since its inception was -12.86%, smaller than the maximum VAW drawdown of -62.17%. Use the drawdown chart below to compare losses from any high point for VCSH and VAW.

Drawdown Indicators

	VCSH	VAW	Difference
Max Drawdown Largest peak-to-trough decline	-12.86%	-62.17%	+49.31%
Max Drawdown (1Y) Largest decline over 1 year	-1.40%	-13.42%	+12.02%
Max Drawdown (3Y) Largest decline over 3 years	-1.40%	-23.21%	+21.81%
Max Drawdown (5Y) Largest decline over 5 years	-9.48%	-25.50%	+16.02%
Max Drawdown (10Y) Largest decline over 10 years	-12.86%	-41.13%	+28.27%
Current Drawdown Current decline from peak	-0.52%	-7.27%	+6.75%
Average Drawdown Average peak-to-trough decline	-0.97%	-9.63%	+8.66%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.34%	4.14%	-3.80%

Volatility

VCSH vs. VAW - Volatility Comparison

The current volatility for Vanguard Short-Term Corporate Bond ETF (VCSH) is 0.61%, while Vanguard Materials ETF (VAW) has a volatility of 5.94%. This indicates that VCSH experiences smaller price fluctuations and is considered to be less risky than VAW based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VCSH	VAW	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.61%	5.94%	-5.33%
Volatility (6M) Calculated over the trailing 6-month period	1.41%	14.18%	-12.77%
Volatility (1Y) Calculated over the trailing 1-year period	1.87%	17.88%	-16.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	2.88%	19.65%	-16.77%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.35%	21.22%	-17.87%

VCSH vs. VAW - Expense Ratio Comparison

VCSH has a 0.04% expense ratio, which is lower than VAW's 0.10% 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. VAW - Dividend Comparison

VCSH's dividend yield for the trailing twelve months is around 4.46%, more than VAW's 1.41% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VAW Vanguard Materials ETF	1.41%	1.55%	1.70%	1.72%	1.98%	1.44%	1.67%	1.94%	2.03%	1.63%	1.67%	2.30%
VCSH Vanguard Short-Term Corporate Bond ETF	4.46%	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 VAW in my portfolio?

VCSH and VAW have a correlation of 0.38, 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 VAW?

VAW has higher volatility (5.94%) compared to VCSH (0.61%). In terms of maximum drawdown, VCSH dropped -12.86% vs VAW's -62.17%.

Which ETF is better, VCSH or VAW?

On 10-year performance, VAW leads with 9.87% vs 2.66% for VCSH. On fees, VCSH is cheaper at 0.04% per year. On volatility, VCSH has been the lower-risk option at 0.61%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VCSH or VAW?

Over the 10-year period, VAW has performed better with a 9.87% return vs 2.66%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VCSH or VAW?

VCSH is cheaper with a 0.04% expense ratio, compared with 0.10% for VAW.

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

VCSH has the higher dividend yield at 4.46%, compared with 1.41% for VAW.

What is the main difference between VCSH and VAW?

VCSH is categorized as Corporate Bonds, while VAW is Materials. VCSH tracks Bloomberg U.S. 1-5 Year Corporate Bond Index, while VAW tracks MSCI US Investable Market Materials 25/50 Index. Their fees differ too: 0.04% for VCSH and 0.10% for VAW.

Which has better risk-adjusted returns?

VCSH currently has the higher Sharpe Ratio (2.45 vs 1.01), 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.