VMBS vs. VEA
VMBS (Vanguard Mortgage-Backed Securities ETF) and VEA (Vanguard FTSE Developed Markets ETF) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while VEA is a Foreign Large Cap Equities fund tracking the FTSE Developed All Cap ex US Index. Both are passively managed. Over the past 10 years, VMBS returned 1.31%/yr vs 10.14%/yr for VEA. At a 0.03 correlation, their price movements are largely independent. VMBS charges 0.04%/yr vs 0.03%/yr for VEA.
Performance
VMBS vs. VEA - 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 VEA's 12.02% return. Over the past 10 years, VMBS has underperformed VEA with an annualized return of 1.31%, while VEA has yielded a comparatively higher 10.14% 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%
VEA
- 1D
- 1.00%
- 1M
- -1.37%
- YTD
- 12.02%
- 6M
- 14.95%
- 1Y
- 28.06%
- 3Y*
- 18.65%
- 5Y*
- 9.09%
- 10Y*
- 10.14%
VMBS vs. VEA - 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% |
VEA Vanguard FTSE Developed Markets ETF | 12.02% | 35.16% | 3.15% | 17.93% | -15.34% | 11.66% | 9.71% | 22.62% | -14.75% | 26.42% |
Correlation
The correlation between VMBS and VEA is 0.44, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.44 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.36 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.28 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.14 |
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009 | 0.03 |
Over the past year, VMBS and VEA have become more correlated (0.44) than their long-term average of 0.03, meaning their price movements have been converging.
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Return for Risk
VMBS vs. VEA — Risk / Return Rank
VMBS
VEA
VMBS vs. VEA - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and Vanguard FTSE Developed Markets ETF (VEA). 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 | VEA | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.15 | ||
| Sortino ratioReturn per unit of downside risk | -0.02 | ||
| Omega ratioGain probability vs. loss probability | 1.29 | 1.32 | -0.03 |
| Calmar ratioReturn relative to maximum drawdown | 2.55 | 2.42 | +0.13 |
| Martin ratioReturn relative to average drawdown | 8.40 | 9.39 | -0.99 |
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 | VEA | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 1.60 | 1.75 | -0.15 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.06 | 0.55 | -0.49 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.24 | 0.59 | -0.34 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.45 | 0.24 | +0.21 |
Drawdowns
VMBS vs. VEA - Drawdown Comparison
The maximum VMBS drawdown since its inception was -17.47%, smaller than the maximum VEA drawdown of -60.68%. Use the drawdown chart below to compare losses from any high point for VMBS and VEA.
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Drawdown Indicators
| VMBS | VEA | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -17.47% | -60.68% | +43.21% |
Max Drawdown (1Y)Largest decline over 1 year | -2.68% | -11.63% | +8.95% |
Max Drawdown (3Y)Largest decline over 3 years | -7.65% | -13.45% | +5.80% |
Max Drawdown (5Y)Largest decline over 5 years | -17.12% | -29.71% | +12.59% |
Max Drawdown (10Y)Largest decline over 10 years | -17.47% | -35.73% | +18.26% |
Current DrawdownCurrent decline from peak | -1.71% | -3.40% | +1.69% |
Average DrawdownAverage peak-to-trough decline | -2.49% | -13.29% | +10.80% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.81% | 3.00% | -2.19% |
Volatility
VMBS vs. VEA - Volatility Comparison
The current volatility for Vanguard Mortgage-Backed Securities ETF (VMBS) is 1.56%, while Vanguard FTSE Developed Markets ETF (VEA) has a volatility of 6.03%. This indicates that VMBS experiences smaller price fluctuations and is considered to be less risky than VEA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VMBS | VEA | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.56% | 6.03% | -4.47% |
Volatility (6M)Calculated over the trailing 6-month period | 3.19% | 13.91% | -10.72% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.29% | 16.15% | -11.86% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.77% | 16.63% | -9.86% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 5.40% | 17.40% | -12.00% |
VMBS vs. VEA - Expense Ratio Comparison
VMBS has a 0.04% expense ratio, which is higher than VEA'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. VEA - Dividend Comparison
VMBS's dividend yield for the trailing twelve months is around 4.20%, more than VEA's 2.69% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VEA Vanguard FTSE Developed Markets ETF | 2.69% | 3.22% | 3.35% | 3.15% | 2.91% | 3.16% | 2.04% | 3.04% | 3.35% | 2.77% | 3.05% | 2.92% |
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 VEA have a correlation of 0.44, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VEA has higher volatility (6.03%) compared to VMBS (1.56%). In terms of maximum drawdown, VMBS dropped -17.47% vs VEA's -60.68%.
On 10-year performance, VEA leads with 10.14% vs 1.31% for VMBS. On fees, VEA is cheaper at 0.03% 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, VEA has performed better with a 10.14% return vs 1.31%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VEA 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 2.69% for VEA.
VMBS is categorized as Mortgage Backed Securities, while VEA is Foreign Large Cap Equities. VMBS tracks Barclays Capital U.S. MBS Index, while VEA tracks FTSE Developed All Cap ex US Index. Their fees differ too: 0.04% for VMBS and 0.03% for VEA.
VEA currently has the higher Sharpe Ratio (1.75 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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