VMBS vs. BSV
VMBS (Vanguard Mortgage-Backed Securities ETF) and BSV (Vanguard Short-Term Bond Index Fund ETF Shares) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while BSV is a Short-Term Bond fund tracking the Bloomberg U.S. 1–5 Year Government/Credit Float Adjusted Index. Both are passively managed. Over the past 10 years, VMBS returned 1.31%/yr vs 1.91%/yr for BSV. A 0.71 correlation means they provide meaningful diversification when combined. VMBS charges 0.04%/yr vs 0.03%/yr for BSV.
Performance
VMBS vs. BSV - 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 BSV's 0.10% return. Over the past 10 years, VMBS has underperformed BSV with an annualized return of 1.31%, while BSV has yielded a comparatively higher 1.91% 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%
BSV
- 1D
- -0.01%
- 1M
- -0.38%
- YTD
- 0.10%
- 6M
- 0.53%
- 1Y
- 3.66%
- 3Y*
- 4.42%
- 5Y*
- 1.57%
- 10Y*
- 1.91%
VMBS vs. BSV - 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% |
BSV Vanguard Short-Term Bond Index Fund ETF Shares | 0.10% | 6.00% | 3.78% | 4.90% | -5.49% | -1.09% | 4.70% | 4.98% | 1.34% | 1.20% |
Correlation
The correlation between VMBS and BSV is 0.89, 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 | 0.89 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.88 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.87 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.79 |
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009 | 0.71 |
The correlation between VMBS and BSV shifts across timeframes, from 0.71 (all time) to 0.89 (1 year), reflecting how their relationship changes across market environments.
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Return for Risk
VMBS vs. BSV — Risk / Return Rank
VMBS
BSV
VMBS vs. BSV - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and Vanguard Short-Term Bond Index Fund ETF Shares (BSV). 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 | BSV | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.46 | ||
| Sortino ratioReturn per unit of downside risk | -0.93 | ||
| Omega ratioGain probability vs. loss probability | 1.29 | 1.39 | -0.10 |
| Calmar ratioReturn relative to maximum drawdown | 2.55 | 2.85 | -0.30 |
| Martin ratioReturn relative to average drawdown | 8.40 | 9.83 | -1.43 |
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 | BSV | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.60 | 2.06 | -0.46 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.06 | 0.58 | -0.52 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.24 | 0.81 | -0.56 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.45 | 0.85 | -0.40 |
Drawdowns
VMBS vs. BSV - Drawdown Comparison
The maximum VMBS drawdown since its inception was -17.47%, which is greater than BSV's maximum drawdown of -8.54%. Use the drawdown chart below to compare losses from any high point for VMBS and BSV.
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Drawdown Indicators
| VMBS | BSV | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -17.47% | -8.54% | -8.93% |
Max Drawdown (1Y)Largest decline over 1 year | -2.68% | -1.29% | -1.39% |
Max Drawdown (3Y)Largest decline over 3 years | -7.65% | -1.53% | -6.12% |
Max Drawdown (5Y)Largest decline over 5 years | -17.12% | -8.54% | -8.58% |
Max Drawdown (10Y)Largest decline over 10 years | -17.47% | -8.54% | -8.93% |
Current DrawdownCurrent decline from peak | -1.71% | -0.82% | -0.89% |
Average DrawdownAverage peak-to-trough decline | -2.49% | -0.97% | -1.52% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.81% | 0.37% | +0.44% |
Volatility
VMBS vs. BSV - Volatility Comparison
Vanguard Mortgage-Backed Securities ETF (VMBS) has a higher volatility of 1.56% compared to Vanguard Short-Term Bond Index Fund ETF Shares (BSV) at 0.54%. This indicates that VMBS's price experiences larger fluctuations and is considered to be riskier than BSV based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VMBS | BSV | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.56% | 0.54% | +1.02% |
Volatility (6M)Calculated over the trailing 6-month period | 3.19% | 1.28% | +1.91% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.29% | 1.79% | +2.50% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.77% | 2.73% | +4.04% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 5.40% | 2.38% | +3.02% |
VMBS vs. BSV - Expense Ratio Comparison
VMBS has a 0.04% expense ratio, which is higher than BSV'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. BSV - Dividend Comparison
VMBS's dividend yield for the trailing twelve months is around 4.20%, more than BSV's 4.00% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
BSV Vanguard Short-Term Bond Index Fund ETF Shares | 4.00% | 3.83% | 3.38% | 2.46% | 1.50% | 1.45% | 1.79% | 2.29% | 1.99% | 1.65% | 1.48% | 1.40% |
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
VMBS and BSV have a correlation of 0.89, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VMBS has higher volatility (1.56%) compared to BSV (0.54%). In terms of maximum drawdown, VMBS dropped -17.47% vs BSV's -8.54%.
On 10-year performance, BSV leads with 1.91% vs 1.31% for VMBS. On fees, BSV is cheaper at 0.03% per year. On volatility, BSV has been the lower-risk option at 0.54%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, BSV has performed better with a 1.91% return vs 1.31%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
BSV is cheaper with a 0.03% expense ratio, compared with 0.04% for VMBS.
VMBS has the higher dividend yield at 4.20%, compared with 4.00% for BSV.
VMBS is categorized as Mortgage Backed Securities, while BSV is Short-Term Bond. VMBS tracks Barclays Capital U.S. MBS Index, while BSV tracks Bloomberg U.S. 1–5 Year Government/Credit Float Adjusted Index. Their fees differ too: 0.04% for VMBS and 0.03% for BSV.
BSV currently has the higher Sharpe Ratio (2.06 vs 1.60), 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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