VSBSX vs. VSDM

Last updated Jun 5, 2026

VSBSX (Vanguard Short-Term Treasury Index Fund Admiral Shares) and VSDM (Vanguard Short Duration Tax-Exempt Bond ETF) are both funds - VSBSX is a Government Bonds fund managed by Vanguard, while VSDM is a Municipal Bonds fund actively managed by Vanguard. Over the past year, VSBSX returned 3.25% vs 4.92% for VSDM. At a 0.46 correlation, their price movements are largely independent. VSBSX charges 0.07%/yr vs 0.12%/yr for VSDM.

Performance

VSBSX vs. VSDM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX) and Vanguard Short Duration Tax-Exempt Bond ETF (VSDM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VSBSX achieves a 0.45% return, which is significantly lower than VSDM's 1.29% return.

VSBSX

• 1D: -0.05%
• 1M: 0.06%
• YTD: 0.45%
• 6M: 0.78%
• 1Y: 3.25%
• 3Y*: 4.26%
• 5Y*: 1.86%
• 10Y*: 1.75%

VSDM

• 1D: 0.07%
• 1M: 0.49%
• YTD: 1.29%
• 6M: 1.67%
• 1Y: 4.92%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

VSBSX vs. VSDM - Yearly Performance Comparison

	2026 (YTD)	2025	2024
VSBSX Vanguard Short-Term Treasury Index Fund Admiral Shares	0.45%	5.08%	0.58%
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	1.29%	5.39%	-0.15%

Correlation

The correlation between VSBSX and VSDM is 0.45, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.45
Correlation (All Time) Calculated using the full available price history since Nov 22, 2024	0.46

Return for Risk

VSBSX vs. VSDM — Risk / Return Rank

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

VSBSX

VSBSX Risk / Return Rank: 85
VSBSX Sharpe Ratio Rank: 82
VSBSX Sortino Ratio Rank: 89
VSBSX Omega Ratio Rank: 83
VSBSX Calmar Ratio Rank: 86
VSBSX Martin Ratio Rank: 88

VSDM

VSDM Risk / Return Rank: 84
VSDM Sharpe Ratio Rank: 94
VSDM Sortino Ratio Rank: 95
VSDM Omega Ratio Rank: 97
VSDM Calmar Ratio Rank: 68
VSDM Martin Ratio Rank: 66

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.

VSBSX vs. VSDM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX) and Vanguard Short Duration Tax-Exempt Bond ETF (VSDM). 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.

	VSBSX	VSDM	Difference
Sharpe ratio: Return per unit of total volatility	2.68	3.64	-0.96
Sortino ratio: Return per unit of downside risk	4.40	5.29	-0.89
Omega ratio: Gain probability vs. loss probability	1.57	1.91	-0.34
Calmar ratio: Return relative to maximum drawdown	4.09	3.38	+0.71
Martin ratio: Return relative to average drawdown	16.83	11.92	+4.91
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VSBSX vs. VSDM - Sharpe Ratio Comparison

The current VSBSX Sharpe Ratio is 2.68, which is comparable to the VSDM Sharpe Ratio of 3.64. The chart below compares the historical Sharpe Ratios of VSBSX and VSDM, 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

	VSBSX	VSDM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.68	3.64	-0.96
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.96	—	—
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.14	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	1.07	2.21	-1.14

Drawdowns

VSBSX vs. VSDM - Drawdown Comparison

The maximum VSBSX drawdown since its inception was -5.77%, which is greater than VSDM's maximum drawdown of -1.81%. Use the drawdown chart below to compare losses from any high point for VSBSX and VSDM.

Drawdown Indicators

	VSBSX	VSDM	Difference
Max Drawdown Largest peak-to-trough decline	-5.77%	-1.81%	-3.96%
Max Drawdown (1Y) Largest decline over 1 year	-0.84%	-1.46%	+0.62%
Max Drawdown (3Y) Largest decline over 3 years	-0.84%	—	—
Max Drawdown (5Y) Largest decline over 5 years	-5.77%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-5.77%	—	—
Current Drawdown Current decline from peak	-0.27%	-0.27%	0.00%
Average Drawdown Average peak-to-trough decline	-0.59%	-0.32%	-0.27%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.20%	0.41%	-0.21%

Volatility

VSBSX vs. VSDM - Volatility Comparison

The current volatility for Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX) is 0.36%, while Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) has a volatility of 0.44%. This indicates that VSBSX experiences smaller price fluctuations and is considered to be less risky than VSDM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VSBSX	VSDM	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.36%	0.44%	-0.08%
Volatility (6M) Calculated over the trailing 6-month period	0.87%	1.07%	-0.20%
Volatility (1Y) Calculated over the trailing 1-year period	1.28%	1.36%	-0.08%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.95%	1.95%	0.00%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.54%	1.95%	-0.41%

VSBSX vs. VSDM - Expense Ratio Comparison

VSBSX has a 0.07% expense ratio, which is lower than VSDM's 0.12% 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

VSBSX vs. VSDM - Dividend Comparison

VSBSX's dividend yield for the trailing twelve months is around 3.85%, more than VSDM's 3.10% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VSBSX Vanguard Short-Term Treasury Index Fund Admiral Shares	3.85%	3.98%	4.50%	3.29%	1.12%	0.63%	1.72%	2.26%	1.80%	1.10%	0.76%	0.71%
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	3.10%	3.06%	0.35%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both VSBSX and VSDM in my portfolio?

VSBSX and VSDM have a correlation of 0.45, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VSBSX or VSDM?

VSDM has higher volatility (0.44%) compared to VSBSX (0.36%). In terms of maximum drawdown, VSBSX dropped -5.77% vs VSDM's -1.81%.

Which has better risk-adjusted returns?

VSDM currently has the higher Sharpe Ratio (3.64 vs 2.68), 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.