VMBS vs. BIV
VMBS (Vanguard Mortgage-Backed Securities ETF) and BIV (Vanguard Intermediate-Term Bond Index ETF) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while BIV is a Intermediate Core Bond fund tracking the Bloomberg U.S. 5–10 Year Government/Credit Float Adjusted Bond Index. Both are passively managed. Over the past 10 years, VMBS returned 1.31%/yr vs 1.83%/yr for BIV. A 0.78 correlation means they provide meaningful diversification when combined. VMBS charges 0.04%/yr vs 0.03%/yr for BIV.
Performance
VMBS vs. BIV - Performance Comparison
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Returns By Period
In the year-to-date period, VMBS achieves a 0.27% return, which is significantly higher than BIV's -0.67% return. Over the past 10 years, VMBS has underperformed BIV with an annualized return of 1.31%, while BIV has yielded a comparatively higher 1.83% annualized return.
VMBS
- 1D
- 0.04%
- 1M
- -0.83%
- YTD
- 0.27%
- 6M
- 0.91%
- 1Y
- 6.83%
- 3Y*
- 4.37%
- 5Y*
- 0.40%
- 10Y*
- 1.31%
BIV
- 1D
- -0.05%
- 1M
- -0.94%
- YTD
- -0.67%
- 6M
- -0.33%
- 1Y
- 4.70%
- 3Y*
- 4.27%
- 5Y*
- 0.08%
- 10Y*
- 1.83%
VMBS vs. BIV - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
VMBS Vanguard Mortgage-Backed Securities ETF | 0.27% | 8.36% | 1.70% | 5.34% | -11.90% | -1.28% | 3.76% | 6.19% | 0.91% | 2.47% |
BIV Vanguard Intermediate-Term Bond Index ETF | -0.67% | 8.52% | 1.57% | 6.07% | -13.21% | -2.40% | 9.67% | 10.34% | -0.19% | 3.65% |
Correlation
The correlation between VMBS and BIV is 0.94, 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 | 0.94 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.95 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.93 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.86 |
Correlation (All Time) Calculated using the full available price history since Nov 23, 2009 | 0.78 |
The correlation between VMBS and BIV shifts across timeframes, from 0.78 (all time) to 0.95 (3 years), reflecting how their relationship changes across market environments.
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Return for Risk
VMBS vs. BIV — Risk / Return Rank
VMBS
BIV
VMBS vs. BIV - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and Vanguard Intermediate-Term Bond Index ETF (BIV). 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.
| VMBS | BIV | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.42 | ||
| Sortino ratioReturn per unit of downside risk | +0.62 | ||
| Omega ratioGain probability vs. loss probability | 1.29 | 1.21 | +0.09 |
| Calmar ratioReturn relative to maximum drawdown | 2.55 | 1.49 | +1.07 |
| Martin ratioReturn relative to average drawdown | 8.40 | 4.40 | +4.00 |
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month. | |||
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Sharpe Ratios by Period
| VMBS | BIV | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.60 | 1.18 | +0.42 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.06 | 0.01 | +0.05 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.24 | 0.33 | -0.09 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.45 | 0.64 | -0.19 |
Drawdowns
VMBS vs. BIV - Drawdown Comparison
The maximum VMBS drawdown since its inception was -17.47%, smaller than the maximum BIV drawdown of -18.95%. Use the drawdown chart below to compare losses from any high point for VMBS and BIV.
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Drawdown Indicators
| VMBS | BIV | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -17.47% | -18.95% | +1.48% |
Max Drawdown (1Y)Largest decline over 1 year | -2.68% | -3.18% | +0.50% |
Max Drawdown (3Y)Largest decline over 3 years | -7.65% | -6.07% | -1.58% |
Max Drawdown (5Y)Largest decline over 5 years | -17.12% | -18.74% | +1.62% |
Max Drawdown (10Y)Largest decline over 10 years | -17.47% | -18.95% | +1.48% |
Current DrawdownCurrent decline from peak | -1.71% | -2.46% | +0.75% |
Average DrawdownAverage peak-to-trough decline | -2.49% | -3.39% | +0.90% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.81% | 1.07% | -0.26% |
Volatility
VMBS vs. BIV - Volatility Comparison
Vanguard Mortgage-Backed Securities ETF (VMBS) has a higher volatility of 1.56% compared to Vanguard Intermediate-Term Bond Index ETF (BIV) at 1.35%. This indicates that VMBS's price experiences larger fluctuations and is considered to be riskier than BIV based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VMBS | BIV | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.56% | 1.35% | +0.21% |
Volatility (6M)Calculated over the trailing 6-month period | 3.19% | 2.93% | +0.26% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.29% | 4.00% | +0.29% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.77% | 6.40% | +0.37% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 5.40% | 5.51% | -0.11% |
VMBS vs. BIV - Expense Ratio Comparison
VMBS has a 0.04% expense ratio, which is higher than BIV's 0.03% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Dividends
VMBS vs. BIV - Dividend Comparison
VMBS's dividend yield for the trailing twelve months is around 4.20%, which matches BIV's 4.24% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
BIV Vanguard Intermediate-Term Bond Index ETF | 4.24% | 4.01% | 3.79% | 3.09% | 2.41% | 3.42% | 2.95% | 2.75% | 2.88% | 2.69% | 3.01% | 3.02% |
VMBS Vanguard Mortgage-Backed Securities ETF | 4.20% | 4.20% | 3.94% | 3.31% | 2.35% | 1.02% | 2.01% | 2.77% | 2.72% | 2.16% | 2.10% | 2.12% |
Frequently Asked Questions
With a correlation of 0.94, VMBS and BIV 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.
VMBS has higher volatility (1.56%) compared to BIV (1.35%). In terms of maximum drawdown, VMBS dropped -17.47% vs BIV's -18.95%.
On 10-year performance, BIV leads with 1.83% vs 1.31% for VMBS. On fees, BIV is cheaper at 0.03% per year. On volatility, BIV has been the lower-risk option at 1.35%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, BIV has performed better with a 1.83% return vs 1.31%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
BIV is cheaper with a 0.03% expense ratio, compared with 0.04% for VMBS.
BIV has the higher dividend yield at 4.24%, compared with 4.20% for VMBS.
VMBS is categorized as Mortgage Backed Securities, while BIV is Intermediate Core Bond. VMBS tracks Barclays Capital U.S. MBS Index, while BIV tracks Bloomberg U.S. 5–10 Year Government/Credit Float Adjusted Bond Index. Their fees differ too: 0.04% for VMBS and 0.03% for BIV.
VMBS currently has the higher Sharpe Ratio (1.60 vs 1.18), 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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