VGSH vs. SHY
VGSH (Vanguard Short-Term Treasury ETF) and SHY (iShares 1-3 Year Treasury Bond ETF) are both Government Bonds funds - VGSH tracks the Bloomberg U.S. Treasury 1-3 Year Index while SHY tracks the ICE US Treasury 1-3 Year Index. Both are passively managed. Over the past 10 years, VGSH returned 1.70%/yr vs 1.62%/yr for SHY. Their correlation of 0.82 suggests significant overlap in exposure. VGSH charges 0.03%/yr vs 0.15%/yr for SHY.
Performance
VGSH vs. SHY - Performance Comparison
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Returns By Period
In the year-to-date period, VGSH achieves a 0.47% return, which is significantly higher than SHY's 0.43% return. Both investments have delivered pretty close results over the past 10 years, with VGSH having a 1.70% annualized return and SHY not far behind at 1.62%.
VGSH
- 1D
- 0.05%
- 1M
- 0.11%
- YTD
- 0.47%
- 6M
- 0.64%
- 1Y
- 2.99%
- 3Y*
- 4.20%
- 5Y*
- 1.85%
- 10Y*
- 1.70%
SHY
- 1D
- 0.07%
- 1M
- 0.11%
- YTD
- 0.43%
- 6M
- 0.60%
- 1Y
- 2.87%
- 3Y*
- 4.10%
- 5Y*
- 1.75%
- 10Y*
- 1.62%
VGSH vs. SHY - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
VGSH Vanguard Short-Term Treasury ETF | 0.47% | 5.07% | 4.00% | 4.31% | -3.86% | -0.60% | 3.04% | 3.52% | 1.55% | 0.04% |
SHY iShares 1-3 Year Treasury Bond ETF | 0.43% | 4.95% | 3.92% | 4.16% | -3.88% | -0.71% | 3.03% | 3.38% | 1.46% | 0.26% |
Correlation
The correlation between VGSH and SHY is 0.95, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.95 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.96 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.97 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.91 |
Correlation (All Time) Calculated using the full available price history since Nov 23, 2009 | 0.82 |
The correlation between VGSH and SHY shifts across timeframes, from 0.82 (all time) to 0.97 (5 years), reflecting how their relationship changes across market environments.
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Return for Risk
VGSH vs. SHY — Risk / Return Rank
VGSH
SHY
VGSH vs. SHY - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Treasury ETF (VGSH) and iShares 1-3 Year Treasury Bond ETF (SHY). 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 | SHY | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.19 | ||
| Sortino ratioReturn per unit of downside risk | +0.31 | ||
| Omega ratioGain probability vs. loss probability | 1.48 | 1.42 | +0.06 |
| Calmar ratioReturn relative to maximum drawdown | 3.40 | 3.24 | +0.16 |
| Martin ratioReturn relative to average drawdown | 13.02 | 12.62 | +0.40 |
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Drawdowns
VGSH vs. SHY - Drawdown Comparison
The maximum VGSH drawdown since its inception was -5.70%, roughly equal to the maximum SHY drawdown of -5.71%. Use the drawdown chart below to compare losses from any high point for VGSH and SHY.
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Drawdown Indicators
| VGSH | SHY | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -5.70% | -5.71% | +0.01% |
Max Drawdown (1Y)Largest decline over 1 year | -0.88% | -0.89% | +0.01% |
Max Drawdown (3Y)Largest decline over 3 years | -0.97% | -0.97% | 0.00% |
Max Drawdown (5Y)Largest decline over 5 years | -5.66% | -5.71% | +0.05% |
Max Drawdown (10Y)Largest decline over 10 years | -5.70% | -5.71% | +0.01% |
Current DrawdownCurrent decline from peak | -0.31% | -0.31% | 0.00% |
Average DrawdownAverage peak-to-trough decline | -0.60% | -0.52% | -0.08% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.23% | 0.23% | 0.00% |
Volatility
VGSH vs. SHY - Volatility Comparison
The current volatility for Vanguard Short-Term Treasury ETF (VGSH) is 0.45%, while iShares 1-3 Year Treasury Bond ETF (SHY) has a volatility of 0.50%. This indicates that VGSH experiences smaller price fluctuations and is considered to be less risky than SHY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VGSH | SHY | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.45% | 0.50% | -0.05% |
Volatility (6M)Calculated over the trailing 6-month period | 0.95% | 1.01% | -0.06% |
Volatility (1Y)Calculated over the trailing 1-year period | 1.31% | 1.37% | -0.06% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 1.97% | 1.99% | -0.02% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 1.58% | 1.57% | +0.01% |
VGSH vs. SHY - Expense Ratio Comparison
VGSH has a 0.03% expense ratio, which is lower than SHY's 0.15% 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
VGSH vs. SHY - Dividend Comparison
VGSH's dividend yield for the trailing twelve months is around 3.88%, more than SHY's 3.68% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
SHY iShares 1-3 Year Treasury Bond ETF | 3.68% | 3.81% | 3.92% | 2.99% | 1.30% | 0.26% | 0.94% | 2.12% | 1.72% | 0.98% | 0.71% | 0.54% |
VGSH Vanguard Short-Term Treasury ETF | 3.88% | 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
With a correlation of 0.95, VGSH and SHY move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.
SHY has higher volatility (0.50%) compared to VGSH (0.45%). In terms of maximum drawdown, VGSH dropped -5.70% vs SHY's -5.71%.
On 10-year performance, VGSH leads with 1.70% vs 1.62% for SHY. On fees, VGSH is cheaper at 0.03% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, VGSH has performed better with a 1.70% return vs 1.62%. 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 0.15% for SHY.
VGSH has the higher dividend yield at 3.88%, compared with 3.68% for SHY.
VGSH tracks Bloomberg U.S. Treasury 1-3 Year Index, while SHY tracks ICE US Treasury 1-3 Year Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.03% for VGSH and 0.15% for SHY.
VGSH currently has the higher Sharpe Ratio (2.29 vs 2.10), 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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