VGSH vs. BNDD

Last updated Aug 4, 2026

VGSH (Vanguard Short-Term Treasury ETF) and BNDD (Quadratic Deflation ETF) are both Government Bonds funds. VGSH is passively managed, while BNDD is actively managed. Over the past 3 years, VGSH returned 4.22%/yr vs -3.71%/yr for BNDD. Their 0.14 correlation means their historical movements had little consistent relationship. VGSH charges 0.03%/yr vs 1.02%/yr for BNDD.

Performance

VGSH vs. BNDD - Performance Comparison

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

Returns By Period

In the year-to-date period, VGSH achieves a 0.85% return, which is significantly lower than BNDD's 2.42% return.

VGSH

• 1D: 0.07%
• 1M: 0.11%
• 6M: 0.67%
• YTD: 0.85%
• 1Y: 2.65%
• 3Y*: 4.22%
• 5Y*: 1.88%
• 10Y*: 1.75%
• ALL TIME*: 1.41%

BNDD

• 1D: 0.26%
• 1M: -3.90%
• 6M: 1.87%
• YTD: 2.42%
• 1Y: 1.48%
• 3Y*: -3.71%
• 5Y*: —
• 10Y*: —
• ALL TIME*: -4.58%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
BNDD Quadratic Deflation ETF	$1.98M	$4.75M	$3.15M
VGSH Vanguard Short-Term Treasury ETF	$149.43M	$165.20M	$192.79M

VGSH vs. BNDD - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021
VGSH Vanguard Short-Term Treasury ETF	0.85%	5.07%	4.00%	4.31%	-3.86%	-0.64%
BNDD Quadratic Deflation ETF	2.42%	-8.17%	-6.65%	4.02%	-17.48%	5.63%

Correlation

The correlation between VGSH and BNDD is 0.06, meaning there was essentially no consistent relationship between their historical price movements. Each responded to its own set of market drivers.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.06
Correlation (3Y) Balances recent behavior with more history.	0.10
Correlation (All Time) Calculated using the full available price history since Sep 21, 2021	0.14

Return for Risk

VGSH vs. BNDD — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

VGSH

VGSH Risk / Return Rank: 87
VGSH Sharpe Ratio Rank: 88
VGSH Sortino Ratio Rank: 90
VGSH Omega Ratio Rank: 90
VGSH Calmar Ratio Rank: 81
VGSH Martin Ratio Rank: 84

BNDD

BNDD Risk / Return Rank: 14
BNDD Sharpe Ratio Rank: 14
BNDD Sortino Ratio Rank: 13
BNDD Omega Ratio Rank: 13
BNDD Calmar Ratio Rank: 15
BNDD Martin Ratio Rank: 15

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

VGSH vs. BNDD - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Treasury ETF (VGSH) and Quadratic Deflation ETF (BNDD). 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.

	VGSH	BNDD	Difference
Sharpe ratio: Return per unit of total volatility	2.17	0.14	+2.03
Sortino ratio: Return per unit of downside risk	3.22	0.28	+2.95
Omega ratio: Gain probability vs. loss probability	1.42	1.03	+0.39
Calmar ratio: Return relative to maximum drawdown	3.01	0.24	+2.77
Martin ratio: Return relative to average drawdown	11.57	0.51	+11.05

VGSH vs. BNDD - Sharpe Ratio Comparison

The current VGSH Sharpe Ratio is 2.17, which is higher than the BNDD Sharpe Ratio of 0.14. The chart below compares the historical Sharpe Ratios of VGSH and BNDD, 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

VGSH vs. BNDD - Drawdown Comparison

The maximum VGSH drawdown since its inception was -5.70%, smaller than the maximum BNDD drawdown of -30.87%. Use the drawdown chart below to compare losses from any high point for VGSH and BNDD.

Drawdown Indicators

	VGSH	BNDD	Difference
Max Drawdown Largest peak-to-trough decline	-5.70%	-30.87%	+25.17%
Max Drawdown (1Y) Largest decline over 1 year	-0.88%	-6.09%	+5.21%
Max Drawdown (3Y) Largest decline over 3 years	-0.97%	-17.70%	+16.73%
Max Drawdown (5Y) Largest decline over 5 years	-5.62%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-5.70%	—	—
Current Drawdown Current decline from peak	0.00%	-27.84%	+27.84%
Average Drawdown Average peak-to-trough decline	-0.59%	-19.54%	+18.95%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.23%	2.89%	-2.66%

Volatility

VGSH vs. BNDD - Volatility Comparison

The current volatility for Vanguard Short-Term Treasury ETF (VGSH) is 0.35%, while Quadratic Deflation ETF (BNDD) has a volatility of 2.63%. This indicates that VGSH experiences smaller price fluctuations and is considered to be less risky than BNDD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VGSH	BNDD	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.35%	2.63%	-2.28%
Volatility (6M) Calculated over the trailing 6-month period	1.01%	6.90%	-5.89%
Volatility (1Y) Calculated over the trailing 1-year period	1.23%	10.28%	-9.05%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.98%	13.26%	-11.28%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.58%	13.26%	-11.68%

VGSH vs. BNDD - Expense Ratio Comparison

VGSH has a 0.03% expense ratio, which is lower than BNDD's 1.02% expense ratio.

Dividends

VGSH vs. BNDD - Dividend Comparison

VGSH's dividend yield for the trailing twelve months is around 3.82%, more than BNDD's 3.69% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
BNDD Quadratic Deflation ETF	3.69%	3.82%	3.85%	4.30%	43.17%	1.04%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
VGSH Vanguard Short-Term Treasury ETF	3.82%	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

Can I hold both VGSH and BNDD in my portfolio?

VGSH and BNDD have a correlation of 0.06, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VGSH or BNDD?

BNDD has higher volatility (2.63%) compared to VGSH (0.35%). In terms of maximum drawdown, VGSH dropped -5.70% vs BNDD's -30.87%.

Which ETF is better, VGSH or BNDD?

On 3-year performance, VGSH leads with 4.22% vs -3.71% for BNDD. 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.

Which ETF has performed better, VGSH or BNDD?

Over the 3-year period, VGSH has performed better with a 4.22% return vs -3.71%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VGSH or BNDD?

VGSH is cheaper with a 0.03% expense ratio, compared with 1.02% for BNDD.

Which ETF pays a higher dividend yield, VGSH or BNDD?

VGSH has the higher dividend yield at 3.82%, compared with 3.69% for BNDD.

What is the main difference between VGSH and BNDD?

They also come from different issuers: Vanguard and KraneShares. Their fees differ too: 0.03% for VGSH and 1.02% for BNDD.

Which has better risk-adjusted returns?

VGSH currently has the higher Sharpe Ratio (2.17 vs 0.14), 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.