VMBS vs. VCSH
VMBS (Vanguard Mortgage-Backed Securities ETF) and VCSH (Vanguard Short-Term Corporate Bond ETF) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while VCSH is a Corporate Bonds fund tracking the Barclays Capital U.S. 1-5 Year Corporate Index. Both are passively managed. Over the past 10 years, VMBS returned 1.35%/yr vs 2.70%/yr for VCSH. A 0.64 correlation means they provide meaningful diversification when combined. Both charge a 0.04% expense ratio.
Performance
VMBS vs. VCSH - Performance Comparison
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Returns By Period
The year-to-date returns for both stocks are quite close, with VMBS having a 0.66% return and VCSH slightly lower at 0.64%. Over the past 10 years, VMBS has underperformed VCSH with an annualized return of 1.35%, while VCSH has yielded a comparatively higher 2.70% annualized return.
VMBS
- 1D
- -0.15%
- 1M
- 0.33%
- YTD
- 0.66%
- 6M
- 0.85%
- 1Y
- 6.93%
- 3Y*
- 4.60%
- 5Y*
- 0.48%
- 10Y*
- 1.35%
VCSH
- 1D
- -0.08%
- 1M
- 0.20%
- YTD
- 0.64%
- 6M
- 0.95%
- 1Y
- 4.59%
- 3Y*
- 5.52%
- 5Y*
- 2.32%
- 10Y*
- 2.70%
VMBS vs. VCSH - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
VMBS Vanguard Mortgage-Backed Securities ETF | 0.66% | 8.36% | 1.70% | 5.34% | -11.90% | -1.28% | 3.76% | 6.19% | 0.91% | 2.47% |
VCSH Vanguard Short-Term Corporate Bond ETF | 0.64% | 6.77% | 4.91% | 6.20% | -5.62% | -0.63% | 5.13% | 7.02% | 0.92% | 2.17% |
Correlation
The correlation between VMBS and VCSH is 0.86, 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 | 0.86 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.87 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.86 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.77 |
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009 | 0.64 |
Over the past year, VMBS and VCSH have become more correlated (0.86) than their long-term average of 0.64, meaning their price movements have been converging.
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Return for Risk
VMBS vs. VCSH — Risk / Return Rank
VMBS
VCSH
VMBS vs. VCSH - 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 Corporate Bond ETF (VCSH). 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 | VCSH | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.85 | ||
| Sortino ratioReturn per unit of downside risk | -1.47 | ||
| Omega ratioGain probability vs. loss probability | 1.29 | 1.48 | -0.19 |
| Calmar ratioReturn relative to maximum drawdown | 2.59 | 3.29 | -0.70 |
| Martin ratioReturn relative to average drawdown | 8.68 | 13.55 | -4.87 |
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 | VCSH | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.59 | 2.45 | -0.85 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.07 | 0.81 | -0.74 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.25 | 0.81 | -0.56 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.46 | 1.02 | -0.56 |
Drawdowns
VMBS vs. VCSH - Drawdown Comparison
The maximum VMBS drawdown since its inception was -17.47%, which is greater than VCSH's maximum drawdown of -12.86%. Use the drawdown chart below to compare losses from any high point for VMBS and VCSH.
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Drawdown Indicators
| VMBS | VCSH | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -17.47% | -12.86% | -4.61% |
Max Drawdown (1Y)Largest decline over 1 year | -2.68% | -1.40% | -1.28% |
Max Drawdown (3Y)Largest decline over 3 years | -7.65% | -1.40% | -6.25% |
Max Drawdown (5Y)Largest decline over 5 years | -17.12% | -9.48% | -7.64% |
Max Drawdown (10Y)Largest decline over 10 years | -17.47% | -12.86% | -4.61% |
Current DrawdownCurrent decline from peak | -1.33% | -0.32% | -1.01% |
Average DrawdownAverage peak-to-trough decline | -2.49% | -0.97% | -1.52% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.80% | 0.34% | +0.46% |
Volatility
VMBS vs. VCSH - Volatility Comparison
Vanguard Mortgage-Backed Securities ETF (VMBS) has a higher volatility of 1.62% compared to Vanguard Short-Term Corporate Bond ETF (VCSH) at 0.57%. This indicates that VMBS's price experiences larger fluctuations and is considered to be riskier than VCSH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VMBS | VCSH | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.62% | 0.57% | +1.05% |
Volatility (6M)Calculated over the trailing 6-month period | 3.16% | 1.38% | +1.78% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.37% | 1.88% | +2.49% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.77% | 2.88% | +3.89% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 5.40% | 3.35% | +2.05% |
VMBS vs. VCSH - Expense Ratio Comparison
Both VMBS and VCSH have an expense ratio of 0.04%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.
Dividends
VMBS vs. VCSH - Dividend Comparison
VMBS's dividend yield for the trailing twelve months is around 4.19%, less than VCSH's 4.45% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VCSH Vanguard Short-Term Corporate Bond ETF | 4.45% | 4.35% | 3.96% | 3.09% | 2.01% | 1.81% | 2.27% | 2.87% | 2.65% | 2.26% | 2.10% | 2.08% |
VMBS Vanguard Mortgage-Backed Securities ETF | 4.19% | 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 VCSH have a correlation of 0.86, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VMBS has higher volatility (1.62%) compared to VCSH (0.57%). In terms of maximum drawdown, VMBS dropped -17.47% vs VCSH's -12.86%.
On 10-year performance, VCSH leads with 2.70% vs 1.35% for VMBS. Both ETFs have the same 0.04% expense ratio. On volatility, VCSH has been the lower-risk option at 0.57%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, VCSH has performed better with a 2.70% return vs 1.35%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VMBS and VCSH have the same expense ratio: 0.04% per year.
VCSH has the higher dividend yield at 4.45%, compared with 4.19% for VMBS.
VMBS is categorized as Mortgage Backed Securities, while VCSH is Corporate Bonds. VMBS tracks Barclays Capital U.S. MBS Index, while VCSH tracks Barclays Capital U.S. 1-5 Year Corporate Index.
VCSH currently has the higher Sharpe Ratio (2.45 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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