VMBS vs. VGIT

Last updated Jun 3, 2026

VMBS (Vanguard Mortgage-Backed Securities ETF) and VGIT (Vanguard Intermediate-Term Treasury ETF) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while VGIT is a Government Bonds fund tracking the Bloomberg U.S. Treasury 3-10 Year Index. Both are passively managed. Over the past 10 years, VMBS returned 1.36%/yr vs 1.25%/yr for VGIT. A 0.76 correlation means they provide meaningful diversification when combined. VMBS charges 0.04%/yr vs 0.03%/yr for VGIT.

Performance

VMBS vs. VGIT - Performance Comparison

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

Returns By Period

In the year-to-date period, VMBS achieves a 0.81% return, which is significantly higher than VGIT's -0.27% return. Over the past 10 years, VMBS has outperformed VGIT with an annualized return of 1.36%, while VGIT has yielded a comparatively lower 1.25% annualized return.

VMBS

• 1D: -0.15%
• 1M: 0.05%
• YTD: 0.81%
• 6M: 1.13%
• 1Y: 6.98%
• 3Y*: 4.65%
• 5Y*: 0.53%
• 10Y*: 1.36%

VGIT

• 1D: 0.03%
• 1M: -0.23%
• YTD: -0.27%
• 6M: -0.28%
• 1Y: 3.64%
• 3Y*: 3.47%
• 5Y*: 0.15%
• 10Y*: 1.25%

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

VMBS vs. VGIT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VMBS Vanguard Mortgage-Backed Securities ETF	0.81%	8.36%	1.70%	5.34%	-11.90%	-1.28%	3.76%	6.19%	0.91%	2.47%
VGIT Vanguard Intermediate-Term Treasury ETF	-0.27%	7.34%	1.39%	4.28%	-10.53%	-2.64%	7.71%	6.19%	1.35%	1.70%

Correlation

The correlation between VMBS and VGIT is 0.93, 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	0.93
Correlation (3Y) Calculated over the trailing 3-year period	0.94
Correlation (5Y) Calculated over the trailing 5-year period	0.92
Correlation (10Y) Calculated over the trailing 10-year period	0.85
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009	0.76

The correlation between VMBS and VGIT shifts across timeframes, from 0.76 (all time) to 0.94 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

VMBS vs. VGIT — Risk / Return Rank

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

VMBS

VMBS Risk / Return Rank: 48
VMBS Sharpe Ratio Rank: 46
VMBS Sortino Ratio Rank: 48
VMBS Omega Ratio Rank: 46
VMBS Calmar Ratio Rank: 49
VMBS Martin Ratio Rank: 50

VGIT

VGIT Risk / Return Rank: 28
VGIT Sharpe Ratio Rank: 30
VGIT Sortino Ratio Rank: 30
VGIT Omega Ratio Rank: 28
VGIT Calmar Ratio Rank: 25
VGIT Martin Ratio Rank: 26

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. VGIT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and Vanguard Intermediate-Term Treasury ETF (VGIT). 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	VGIT	Difference
Sharpe ratio Return per unit of total volatility	1.60	1.08	+0.52
Sortino ratio Return per unit of downside risk	2.39	1.65	+0.75
Omega ratio Gain probability vs. loss probability	1.29	1.19	+0.10
Calmar ratio Return relative to maximum drawdown	2.49	1.20	+1.29
Martin ratio Return relative to average drawdown	8.42	3.64	+4.77
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. VGIT - Sharpe Ratio Comparison

The current VMBS Sharpe Ratio is 1.60, which is higher than the VGIT Sharpe Ratio of 1.08. The chart below compares the historical Sharpe Ratios of VMBS and VGIT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VMBS	VGIT	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.60	1.08	+0.52
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.08	0.03	+0.05
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.25	0.28	-0.03
Sharpe Ratio (All Time) Calculated using the full available price history	0.46	0.50	-0.04

Drawdowns

VMBS vs. VGIT - Drawdown Comparison

The maximum VMBS drawdown since its inception was -17.47%, which is greater than VGIT's maximum drawdown of -16.05%. Use the drawdown chart below to compare losses from any high point for VMBS and VGIT.

Drawdown Indicators

	VMBS	VGIT	Difference
Max Drawdown Largest peak-to-trough decline	-17.47%	-16.05%	-1.42%
Max Drawdown (1Y) Largest decline over 1 year	-2.68%	-2.83%	+0.15%
Max Drawdown (3Y) Largest decline over 3 years	-7.65%	-4.34%	-3.31%
Max Drawdown (5Y) Largest decline over 5 years	-17.12%	-15.02%	-2.10%
Max Drawdown (10Y) Largest decline over 10 years	-17.47%	-16.05%	-1.42%
Current Drawdown Current decline from peak	-1.18%	-2.21%	+1.03%
Average Drawdown Average peak-to-trough decline	-2.50%	-3.52%	+1.02%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.80%	0.93%	-0.13%

Volatility

VMBS vs. VGIT - Volatility Comparison

Vanguard Mortgage-Backed Securities ETF (VMBS) has a higher volatility of 1.67% compared to Vanguard Intermediate-Term Treasury ETF (VGIT) at 1.06%. This indicates that VMBS's price experiences larger fluctuations and is considered to be riskier than VGIT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMBS	VGIT	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.67%	1.06%	+0.61%
Volatility (6M) Calculated over the trailing 6-month period	3.18%	2.35%	+0.83%
Volatility (1Y) Calculated over the trailing 1-year period	4.37%	3.38%	+0.99%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.77%	5.38%	+1.39%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.40%	4.50%	+0.90%

VMBS vs. VGIT - Expense Ratio Comparison

VMBS has a 0.04% expense ratio, which is higher than VGIT'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. VGIT - Dividend Comparison

VMBS's dividend yield for the trailing twelve months is around 4.18%, more than VGIT's 3.86% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VGIT Vanguard Intermediate-Term Treasury ETF	3.86%	3.79%	3.67%	2.73%	1.74%	1.69%	2.23%	2.24%	2.05%	1.67%	1.69%	1.69%
VMBS Vanguard Mortgage-Backed Securities ETF	4.18%	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

Can I hold both VMBS and VGIT in my portfolio?

With a correlation of 0.93, VMBS and VGIT move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VMBS or VGIT?

VMBS has higher volatility (1.67%) compared to VGIT (1.06%). In terms of maximum drawdown, VMBS dropped -17.47% vs VGIT's -16.05%.

Which ETF is better, VMBS or VGIT?

On 10-year performance, VMBS leads with 1.36% vs 1.25% for VGIT. On fees, VGIT is cheaper at 0.03% per year. On volatility, VGIT has been the lower-risk option at 1.06%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VMBS or VGIT?

Over the 10-year period, VMBS has performed better with a 1.36% return vs 1.25%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VMBS or VGIT?

VGIT is cheaper with a 0.03% expense ratio, compared with 0.04% for VMBS.

Which ETF pays a higher dividend yield, VMBS or VGIT?

VMBS has the higher dividend yield at 4.18%, compared with 3.86% for VGIT.

What is the main difference between VMBS and VGIT?

VMBS is categorized as Mortgage Backed Securities, while VGIT is Government Bonds. VMBS tracks Barclays Capital U.S. MBS Index, while VGIT tracks Bloomberg U.S. Treasury 3-10 Year Index. Their fees differ too: 0.04% for VMBS and 0.03% for VGIT.

Which has better risk-adjusted returns?

VMBS currently has the higher Sharpe Ratio (1.60 vs 1.08), 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.