VMBS vs. VB
VMBS (Vanguard Mortgage-Backed Securities ETF) and VB (Vanguard Small-Cap ETF) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while VB is a Small Cap Blend Equities fund tracking the CRSP US Small Cap Index. Both are passively managed. Over the past 10 years, VMBS returned 1.31%/yr vs 11.18%/yr for VB. At a correlation of -0.02, they often move in opposite directions. VMBS charges 0.04%/yr vs 0.05%/yr for VB.
Performance
VMBS vs. VB - Performance Comparison
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Returns By Period
In the year-to-date period, VMBS achieves a 0.27% return, which is significantly lower than VB's 12.60% return. Over the past 10 years, VMBS has underperformed VB with an annualized return of 1.31%, while VB has yielded a comparatively higher 11.18% 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%
VB
- 1D
- 0.40%
- 1M
- 0.41%
- YTD
- 12.60%
- 6M
- 12.39%
- 1Y
- 25.97%
- 3Y*
- 15.91%
- 5Y*
- 6.58%
- 10Y*
- 11.18%
VMBS vs. VB - 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% |
VB Vanguard Small-Cap ETF | 12.60% | 8.87% | 14.17% | 18.22% | -17.51% | 17.57% | 19.19% | 27.34% | -9.34% | 16.26% |
Correlation
The correlation between VMBS and VB is 0.34, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.34 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.27 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.20 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.07 |
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009 | -0.02 |
The correlation between VMBS and VB shifts across timeframes, from -0.02 (all time) to 0.34 (1 year), reflecting how their relationship changes across market environments.
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Return for Risk
VMBS vs. VB — Risk / Return Rank
VMBS
VB
VMBS vs. VB - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and Vanguard Small-Cap ETF (VB). 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 | VB | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.01 | ||
| Sortino ratioReturn per unit of downside risk | +0.10 | ||
| Omega ratioGain probability vs. loss probability | 1.29 | 1.28 | +0.01 |
| Calmar ratioReturn relative to maximum drawdown | 2.55 | 2.91 | -0.35 |
| Martin ratioReturn relative to average drawdown | 8.40 | 10.66 | -2.26 |
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 | VB | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.60 | 1.59 | +0.01 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.06 | 0.32 | -0.26 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.24 | 0.52 | -0.28 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.45 | 0.44 | +0.02 |
Drawdowns
VMBS vs. VB - Drawdown Comparison
The maximum VMBS drawdown since its inception was -17.47%, smaller than the maximum VB drawdown of -59.56%. Use the drawdown chart below to compare losses from any high point for VMBS and VB.
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Drawdown Indicators
| VMBS | VB | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -17.47% | -59.56% | +42.09% |
Max Drawdown (1Y)Largest decline over 1 year | -2.68% | -8.98% | +6.30% |
Max Drawdown (3Y)Largest decline over 3 years | -7.65% | -25.36% | +17.71% |
Max Drawdown (5Y)Largest decline over 5 years | -17.12% | -28.15% | +11.03% |
Max Drawdown (10Y)Largest decline over 10 years | -17.47% | -42.05% | +24.58% |
Current DrawdownCurrent decline from peak | -1.71% | -2.04% | +0.33% |
Average DrawdownAverage peak-to-trough decline | -2.49% | -8.43% | +5.94% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.81% | 2.44% | -1.63% |
Volatility
VMBS vs. VB - Volatility Comparison
The current volatility for Vanguard Mortgage-Backed Securities ETF (VMBS) is 1.56%, while Vanguard Small-Cap ETF (VB) has a volatility of 4.62%. This indicates that VMBS experiences smaller price fluctuations and is considered to be less risky than VB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VMBS | VB | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.56% | 4.62% | -3.06% |
Volatility (6M)Calculated over the trailing 6-month period | 3.19% | 11.97% | -8.78% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.29% | 16.45% | -12.16% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.77% | 20.77% | -14.00% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 5.40% | 21.44% | -16.04% |
VMBS vs. VB - Expense Ratio Comparison
VMBS has a 0.04% expense ratio, which is lower than VB's 0.05% 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
VMBS vs. VB - Dividend Comparison
VMBS's dividend yield for the trailing twelve months is around 4.20%, more than VB's 1.21% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VB Vanguard Small-Cap ETF | 1.21% | 1.33% | 1.30% | 1.55% | 1.59% | 1.24% | 1.14% | 1.39% | 1.67% | 1.35% | 1.50% | 1.48% |
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 VB have a correlation of 0.34, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VB has higher volatility (4.62%) compared to VMBS (1.56%). In terms of maximum drawdown, VMBS dropped -17.47% vs VB's -59.56%.
On 10-year performance, VB leads with 11.18% vs 1.31% for VMBS. On fees, VMBS is cheaper at 0.04% per year. On volatility, VMBS has been the lower-risk option at 1.56%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, VB has performed better with a 11.18% return vs 1.31%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VMBS is cheaper with a 0.04% expense ratio, compared with 0.05% for VB.
VMBS has the higher dividend yield at 4.20%, compared with 1.21% for VB.
VMBS is categorized as Mortgage Backed Securities, while VB is Small Cap Blend Equities. VMBS tracks Barclays Capital U.S. MBS Index, while VB tracks CRSP US Small Cap Index. Their fees differ too: 0.04% for VMBS and 0.05% for VB.
VMBS currently has the higher Sharpe Ratio (1.60 vs 1.59), 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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