VMBS vs. MBB

Last updated Apr 1, 2026

Compare and contrast key facts about Vanguard Mortgage-Backed Securities ETF (VMBS) and iShares MBS Bond ETF (MBB).

VMBS and MBB are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. VMBS is a passively managed fund by Vanguard that tracks the performance of the Barclays Capital U.S. MBS Index. It was launched on Nov 19, 2009. MBB is a passively managed fund by iShares that tracks the performance of the Barclays Capital U.S. MBS Index. It was launched on Mar 16, 2007. Both VMBS and MBB are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.

Performance

VMBS vs. MBB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Mortgage-Backed Securities ETF (VMBS) and iShares MBS Bond ETF (MBB). The values are adjusted to include any dividend payments, if applicable.

VMBS vs. MBB - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VMBS Vanguard Mortgage-Backed Securities ETF	0.41%	8.36%	1.70%	5.34%	-11.90%	-1.28%	3.76%	6.19%	0.91%	2.47%
MBB iShares MBS Bond ETF	0.41%	8.38%	1.31%	5.01%	-11.74%	-1.43%	4.08%	6.18%	0.82%	2.49%

Returns By Period

As of year-to-date, both investments have demonstrated similar returns, with VMBS at 0.41% and MBB at 0.41%. Both investments have delivered pretty close results over the past 10 years, with VMBS having a 1.41% annualized return and MBB not far behind at 1.34%.

VMBS

• 1D: 0.21%
• 1M: -1.57%
• YTD: 0.41%
• 6M: 2.06%
• 1Y: 5.79%
• 3Y*: 4.29%
• 5Y*: 0.49%
• 10Y*: 1.41%

MBB

• 1D: 0.24%
• 1M: -1.69%
• YTD: 0.41%
• 6M: 1.92%
• 1Y: 5.63%
• 3Y*: 4.09%
• 5Y*: 0.40%
• 10Y*: 1.34%

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

VMBS vs. MBB - Expense Ratio Comparison

VMBS has a 0.04% expense ratio, which is lower than MBB's 0.06% 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%.

MBB

iShares MBS Bond ETF

VMBS

Vanguard Mortgage-Backed Securities ETF

Return for Risk

VMBS vs. MBB — Risk / Return Rank

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

VMBS

VMBS Risk / Return Rank: 68
VMBS Sharpe Ratio Rank: 69
VMBS Sortino Ratio Rank: 68
VMBS Omega Ratio Rank: 60
VMBS Calmar Ratio Rank: 77
VMBS Martin Ratio Rank: 64

MBB

MBB Risk / Return Rank: 67
MBB Sharpe Ratio Rank: 67
MBB Sortino Ratio Rank: 67
MBB Omega Ratio Rank: 57
MBB Calmar Ratio Rank: 81
MBB Martin Ratio Rank: 63

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.

VMBS vs. MBB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and iShares MBS Bond ETF (MBB). 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	MBB	Difference
Sharpe ratio Return per unit of total volatility	1.16	1.14	+0.03
Sortino ratio Return per unit of downside risk	1.67	1.63	+0.04
Omega ratio Gain probability vs. loss probability	1.21	1.20	+0.01
Calmar ratio Return relative to maximum drawdown	1.95	2.18	-0.23
Martin ratio Return relative to average drawdown	6.10	6.00	+0.10
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VMBS vs. MBB - Sharpe Ratio Comparison

The current VMBS Sharpe Ratio is 1.16, which is comparable to the MBB Sharpe Ratio of 1.14. The chart below compares the historical Sharpe Ratios of VMBS and MBB, offering insights into how both investments have performed under varying market conditions. These values are calculated using daily returns over the previous 12 months.

Sharpe Ratios by Period

	VMBS	MBB	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.16	1.14	+0.03
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.07	0.06	+0.01
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.26	0.25	+0.01
Sharpe Ratio (All Time) Calculated using the full available price history	0.46	0.59	-0.13

Correlation

The correlation between VMBS and MBB is 0.86, which is considered to be high. That indicates a strong positive relationship between their price movements. Having highly-correlated positions in a portfolio may signal a lack of diversification, potentially leading to increased risk during market downturns.

Dividends

VMBS vs. MBB - Dividend Comparison

VMBS's dividend yield for the trailing twelve months is around 4.23%, which matches MBB's 4.22% yield.

	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VMBS Vanguard Mortgage-Backed Securities ETF	4.23%	4.20%	3.94%	3.31%	2.35%	1.02%	2.01%	2.77%	2.72%	2.16%	2.10%	2.12%
MBB iShares MBS Bond ETF	4.22%	4.21%	3.94%	3.40%	2.31%	1.05%	2.10%	2.77%	2.64%	2.23%	2.58%	2.66%

Drawdowns

VMBS vs. MBB - Drawdown Comparison

The maximum VMBS drawdown since its inception was -17.47%, roughly equal to the maximum MBB drawdown of -17.64%. Use the drawdown chart below to compare losses from any high point for VMBS and MBB.

Drawdown Indicators

	VMBS	MBB	Difference
Max Drawdown Largest peak-to-trough decline	-17.47%	-17.64%	+0.17%
Max Drawdown (1Y) Largest decline over 1 year	-3.00%	-2.64%	-0.36%
Max Drawdown (5Y) Largest decline over 5 years	-17.12%	-17.19%	+0.07%
Max Drawdown (10Y) Largest decline over 10 years	-17.47%	-17.64%	+0.17%
Current Drawdown Current decline from peak	-1.57%	-1.69%	+0.12%
Average Drawdown Average peak-to-trough decline	-2.51%	-2.36%	-0.15%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.96%	0.96%	0.00%

Volatility

VMBS vs. MBB - Volatility Comparison

Vanguard Mortgage-Backed Securities ETF (VMBS) and iShares MBS Bond ETF (MBB) have volatilities of 1.90% and 1.98%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMBS	MBB	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.90%	1.98%	-0.08%
Volatility (6M) Calculated over the trailing 6-month period	2.89%	3.00%	-0.11%
Volatility (1Y) Calculated over the trailing 1-year period	5.00%	4.97%	+0.03%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.71%	6.77%	-0.06%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.37%	5.27%	+0.10%