VGB.AX vs. VSO.AX

Last updated Jul 16, 2026

VGB.AX (Vanguard Australian Government Bond Index ETF) and VSO.AX (Vanguard MSCI Australian Small Companies INDEX ETF) are both exchange-traded funds - VGB.AX is a Government Bonds fund tracking the Vanguard Australian Government Bond Index Index, while VSO.AX is a Australia Equities fund tracking the MSCI Australian Shares Small Cap Index. Both are passively managed. Over the past 10 years, VGB.AX returned 0.93%/yr vs 7.48%/yr for VSO.AX. At a 0.06 correlation, their price movements are largely independent.

Performance

VGB.AX vs. VSO.AX - Performance Comparison

The chart below illustrates the hypothetical performance of a A$10,000 investment in Vanguard Australian Government Bond Index ETF (VGB.AX) and Vanguard MSCI Australian Small Companies INDEX ETF (VSO.AX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VGB.AX achieves a 0.93% return, which is significantly higher than VSO.AX's -6.04% return. Over the past 10 years, VGB.AX has underperformed VSO.AX with an annualized return of 0.93%, while VSO.AX has yielded a comparatively higher 7.48% annualized return.

VGB.AX

• 1D: 0.00%
• 1M: 0.08%
• 6M: 1.26%
• YTD: 0.93%
• 1Y: 0.51%
• 3Y*: 2.44%
• 5Y*: -0.92%
• 10Y*: 0.93%

VSO.AX

• 1D: 0.43%
• 1M: -4.53%
• 6M: -7.75%
• YTD: -6.04%
• 1Y: 6.63%
• 3Y*: 8.30%
• 5Y*: 4.24%
• 10Y*: 7.48%

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

VGB.AX vs. VSO.AX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VGB.AX Vanguard Australian Government Bond Index ETF	0.93%	2.39%	1.19%	4.44%	-10.45%	-3.26%	4.30%	7.50%	3.89%	2.32%
VSO.AX Vanguard MSCI Australian Small Companies INDEX ETF	-6.04%	24.14%	7.38%	3.70%	-13.32%	21.77%	14.75%	21.67%	-8.38%	15.95%

Correlation

The correlation between VGB.AX and VSO.AX is 0.29, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.29
Correlation (3Y) Calculated over the trailing 3-year period	0.30
Correlation (5Y) Calculated over the trailing 5-year period	0.26
Correlation (10Y) Calculated over the trailing 10-year period	0.13
Correlation (All Time) Calculated using the full available price history since Apr 24, 2012	0.06

Over the past year, VGB.AX and VSO.AX have become more correlated (0.29) than their long-term average of 0.06, meaning their price movements have been converging.

Return for Risk

VGB.AX vs. VSO.AX — Risk / Return Rank

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

VGB.AX

VGB.AX Risk / Return Rank: 11
VGB.AX Sharpe Ratio Rank: 12
VGB.AX Sortino Ratio Rank: 10
VGB.AX Omega Ratio Rank: 10
VGB.AX Calmar Ratio Rank: 11
VGB.AX Martin Ratio Rank: 11

VSO.AX

VSO.AX Risk / Return Rank: 15
VSO.AX Sharpe Ratio Rank: 16
VSO.AX Sortino Ratio Rank: 15
VSO.AX Omega Ratio Rank: 15
VSO.AX Calmar Ratio Rank: 14
VSO.AX Martin Ratio Rank: 15

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.

VGB.AX vs. VSO.AX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Australian Government Bond Index ETF (VGB.AX) and Vanguard MSCI Australian Small Companies INDEX ETF (VSO.AX). 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VGB.AX	VSO.AX	Difference
Sharpe ratio: Return per unit of total volatility	0.15	0.39	-0.24
Sortino ratio: Return per unit of downside risk	0.24	0.66	-0.41
Omega ratio: Gain probability vs. loss probability	1.03	1.08	-0.05
Calmar ratio: Return relative to maximum drawdown	0.13	0.39	-0.27
Martin ratio: Return relative to average drawdown	0.24	1.00	-0.76

VGB.AX vs. VSO.AX - Sharpe Ratio Comparison

The current VGB.AX Sharpe Ratio is 0.15, which is lower than the VSO.AX Sharpe Ratio of 0.39. The chart below compares the historical Sharpe Ratios of VGB.AX and VSO.AX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VGB.AX vs. VSO.AX - Drawdown Comparison

The maximum VGB.AX drawdown since its inception was -16.56%, smaller than the maximum VSO.AX drawdown of -40.60%. Use the drawdown chart below to compare losses from any high point for VGB.AX and VSO.AX.

Drawdown Indicators

	VGB.AX	VSO.AX	Difference
Max Drawdown Largest peak-to-trough decline	-16.56%	-40.60%	+24.04%
Max Drawdown (1Y) Largest decline over 1 year	-4.83%	-16.81%	+11.98%
Max Drawdown (3Y) Largest decline over 3 years	-4.83%	-16.81%	+11.98%
Max Drawdown (5Y) Largest decline over 5 years	-15.82%	-23.62%	+7.80%
Max Drawdown (10Y) Largest decline over 10 years	-16.56%	-40.60%	+24.04%
Current Drawdown Current decline from peak	-6.49%	-9.45%	+2.96%
Average Drawdown Average peak-to-trough decline	-4.48%	-6.78%	+2.30%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.55%	6.73%	-4.18%

Volatility

VGB.AX vs. VSO.AX - Volatility Comparison

The current volatility for Vanguard Australian Government Bond Index ETF (VGB.AX) is 0.69%, while Vanguard MSCI Australian Small Companies INDEX ETF (VSO.AX) has a volatility of 3.79%. This indicates that VGB.AX experiences smaller price fluctuations and is considered to be less risky than VSO.AX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VGB.AX	VSO.AX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.69%	3.79%	-3.10%
Volatility (6M) Calculated over the trailing 6-month period	3.06%	14.29%	-11.23%
Volatility (1Y) Calculated over the trailing 1-year period	3.93%	16.97%	-13.04%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	5.41%	16.31%	-10.90%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	4.66%	16.89%	-12.23%

Dividends

VGB.AX vs. VSO.AX - Dividend Comparison

VGB.AX's dividend yield for the trailing twelve months is around 2.32%, less than VSO.AX's 3.08% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VGB.AX Vanguard Australian Government Bond Index ETF	2.32%	3.32%	1.14%	1.00%	0.50%	2.10%	2.94%	1.95%	2.04%	1.83%	1.90%	1.94%
VSO.AX Vanguard MSCI Australian Small Companies INDEX ETF	3.08%	6.86%	1.12%	1.48%	3.25%	3.55%	6.24%	2.96%	1.09%	2.57%	1.50%	1.08%

Frequently Asked Questions

Can I hold both VGB.AX and VSO.AX in my portfolio?

VGB.AX and VSO.AX have a correlation of 0.29, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

What is the main difference between VGB.AX and VSO.AX?

VGB.AX is categorized as Government Bonds, while VSO.AX is Australia Equities. VGB.AX tracks Vanguard Australian Government Bond Index Index, while VSO.AX tracks MSCI Australian Shares Small Cap Index.