VMBS vs. VT

Last updated Jun 5, 2026

VMBS (Vanguard Mortgage-Backed Securities ETF) and VT (Vanguard Total World Stock ETF) are both exchange-traded funds - VMBS is a Mortgage Backed Securities fund tracking the Barclays Capital U.S. MBS Index, while VT is a Global Equities fund tracking the FTSE Global All Cap Index. Both are passively managed. Over the past 10 years, VMBS returned 1.36%/yr vs 12.72%/yr for VT. At a correlation of -0.01, they often move in opposite directions. VMBS charges 0.04%/yr vs 0.06%/yr for VT.

Performance

VMBS vs. VT - Performance Comparison

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

Returns By Period

In the year-to-date period, VMBS achieves a 0.70% return, which is significantly lower than VT's 12.66% return. Over the past 10 years, VMBS has underperformed VT with an annualized return of 1.36%, while VT has yielded a comparatively higher 12.72% annualized return.

VMBS

• 1D: 0.04%
• 1M: 0.18%
• YTD: 0.70%
• 6M: 1.11%
• 1Y: 6.25%
• 3Y*: 4.63%
• 5Y*: 0.49%
• 10Y*: 1.36%

VT

• 1D: 0.37%
• 1M: 4.22%
• YTD: 12.66%
• 6M: 13.38%
• 1Y: 29.42%
• 3Y*: 21.22%
• 5Y*: 11.07%
• 10Y*: 12.72%

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

VMBS vs. VT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VMBS Vanguard Mortgage-Backed Securities ETF	0.70%	8.36%	1.70%	5.34%	-11.90%	-1.28%	3.76%	6.19%	0.91%	2.47%
VT Vanguard Total World Stock ETF	12.66%	22.43%	16.49%	22.02%	-18.00%	18.27%	16.59%	26.81%	-9.76%	24.50%

Correlation

The correlation between VMBS and VT is 0.37, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.37
Correlation (3Y) Calculated over the trailing 3-year period	0.29
Correlation (5Y) Calculated over the trailing 5-year period	0.23
Correlation (10Y) Calculated over the trailing 10-year period	0.10
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009	-0.01

The correlation between VMBS and VT shifts across timeframes, from -0.01 (all time) to 0.37 (1 year), reflecting how their relationship changes across market environments.

Return for Risk

VMBS vs. VT — Risk / Return Rank

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

VMBS

VMBS Risk / Return Rank: 45
VMBS Sharpe Ratio Rank: 42
VMBS Sortino Ratio Rank: 44
VMBS Omega Ratio Rank: 41
VMBS Calmar Ratio Rank: 48
VMBS Martin Ratio Rank: 48

VT

VT Risk / Return Rank: 70
VT Sharpe Ratio Rank: 73
VT Sortino Ratio Rank: 72
VT Omega Ratio Rank: 71
VT Calmar Ratio Rank: 63
VT Martin Ratio Rank: 73

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. VT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Mortgage-Backed Securities ETF (VMBS) and Vanguard Total World Stock ETF (VT). 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	VT	Difference
Sharpe ratio: Return per unit of total volatility	1.45	2.33	-0.87
Sortino ratio: Return per unit of downside risk	2.15	3.22	-1.07
Omega ratio: Gain probability vs. loss probability	1.26	1.42	-0.16
Calmar ratio: Return relative to maximum drawdown	2.34	3.05	-0.72
Martin ratio: Return relative to average drawdown	7.83	13.61	-5.79
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. VT - Sharpe Ratio Comparison

The current VMBS Sharpe Ratio is 1.45, which is lower than the VT Sharpe Ratio of 2.33. The chart below compares the historical Sharpe Ratios of VMBS and VT, 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	VT	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.45	2.33	-0.87
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.07	0.69	-0.62
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.25	0.74	-0.49
Sharpe Ratio (All Time) Calculated using the full available price history	0.46	0.44	+0.02

Drawdowns

VMBS vs. VT - Drawdown Comparison

The maximum VMBS drawdown since its inception was -17.47%, smaller than the maximum VT drawdown of -50.27%. Use the drawdown chart below to compare losses from any high point for VMBS and VT.

Drawdown Indicators

	VMBS	VT	Difference
Max Drawdown Largest peak-to-trough decline	-17.47%	-50.27%	+32.80%
Max Drawdown (1Y) Largest decline over 1 year	-2.68%	-9.67%	+6.99%
Max Drawdown (3Y) Largest decline over 3 years	-7.65%	-16.51%	+8.86%
Max Drawdown (5Y) Largest decline over 5 years	-17.12%	-26.38%	+9.26%
Max Drawdown (10Y) Largest decline over 10 years	-17.47%	-34.24%	+16.77%
Current Drawdown Current decline from peak	-1.29%	-0.51%	-0.78%
Average Drawdown Average peak-to-trough decline	-2.49%	-7.02%	+4.53%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.80%	2.17%	-1.37%

Volatility

VMBS vs. VT - Volatility Comparison

The current volatility for Vanguard Mortgage-Backed Securities ETF (VMBS) is 1.61%, while Vanguard Total World Stock ETF (VT) has a volatility of 3.74%. This indicates that VMBS experiences smaller price fluctuations and is considered to be less risky than VT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMBS	VT	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.61%	3.74%	-2.13%
Volatility (6M) Calculated over the trailing 6-month period	3.16%	10.17%	-7.01%
Volatility (1Y) Calculated over the trailing 1-year period	4.37%	12.70%	-8.33%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.77%	16.04%	-9.27%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.40%	17.23%	-11.83%

VMBS vs. VT - Expense Ratio Comparison

VMBS has a 0.04% expense ratio, which is lower than VT'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%.

Dividends

VMBS vs. VT - Dividend Comparison

VMBS's dividend yield for the trailing twelve months is around 4.18%, more than VT's 1.59% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
VT Vanguard Total World Stock ETF	1.59%	1.82%	1.95%	2.08%	2.20%	1.82%	1.66%	2.32%	2.53%	2.11%	2.39%	2.45%

Frequently Asked Questions

Can I hold both VMBS and VT in my portfolio?

VMBS and VT have a correlation of 0.37, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VMBS or VT?

VT has higher volatility (3.74%) compared to VMBS (1.61%). In terms of maximum drawdown, VMBS dropped -17.47% vs VT's -50.27%.

Which ETF is better, VMBS or VT?

On 10-year performance, VT leads with 12.72% vs 1.36% for VMBS. On fees, VMBS is cheaper at 0.04% per year. On volatility, VMBS has been the lower-risk option at 1.61%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VMBS or VT?

Over the 10-year period, VT has performed better with a 12.72% return vs 1.36%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VMBS or VT?

VMBS is cheaper with a 0.04% expense ratio, compared with 0.06% for VT.

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

VMBS has the higher dividend yield at 4.18%, compared with 1.59% for VT.

What is the main difference between VMBS and VT?

VMBS is categorized as Mortgage Backed Securities, while VT is Global Equities. VMBS tracks Barclays Capital U.S. MBS Index, while VT tracks FTSE Global All Cap Index. Their fees differ too: 0.04% for VMBS and 0.06% for VT.

Which has better risk-adjusted returns?

VT currently has the higher Sharpe Ratio (2.33 vs 1.45), 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.