VSDM vs. BSMR

Last updated Jun 4, 2026

VSDM (Vanguard Short Duration Tax-Exempt Bond ETF) and BSMR (Invesco BulletShares 2027 Municipal Bond ETF) are both Municipal Bonds funds. VSDM is actively managed, while BSMR is passively managed. Over the past year, VSDM returned 4.98% vs 4.16% for BSMR. At a 0.49 correlation, their price movements are largely independent. VSDM charges 0.12%/yr vs 0.18%/yr for BSMR.

Performance

VSDM vs. BSMR - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) and Invesco BulletShares 2027 Municipal Bond ETF (BSMR). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VSDM achieves a 1.22% return, which is significantly higher than BSMR's 1.04% return.

VSDM

• 1D: 0.00%
• 1M: 0.47%
• YTD: 1.22%
• 6M: 1.63%
• 1Y: 4.98%
• 3Y*: —
• 5Y*: —
• 10Y*: —

BSMR

• 1D: 0.05%
• 1M: 0.41%
• YTD: 1.04%
• 6M: 1.31%
• 1Y: 4.16%
• 3Y*: 3.03%
• 5Y*: 0.48%
• 10Y*: —

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

VSDM vs. BSMR - Yearly Performance Comparison

	2026 (YTD)	2025	2024
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	1.22%	5.39%	-0.15%
BSMR Invesco BulletShares 2027 Municipal Bond ETF	1.04%	3.10%	-0.15%

Correlation

The correlation between VSDM and BSMR is 0.42, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.42
Correlation (All Time) Calculated using the full available price history since Nov 22, 2024	0.49

Return for Risk

VSDM vs. BSMR — Risk / Return Rank

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

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: 65

BSMR

BSMR Risk / Return Rank: 94
BSMR Sharpe Ratio Rank: 92
BSMR Sortino Ratio Rank: 96
BSMR Omega Ratio Rank: 95
BSMR Calmar Ratio Rank: 94
BSMR Martin Ratio Rank: 92

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.

VSDM vs. BSMR - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) and Invesco BulletShares 2027 Municipal Bond ETF (BSMR). 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.

	VSDM	BSMR	Difference
Sharpe ratio: Return per unit of total volatility	3.67	3.33	+0.34
Sortino ratio: Return per unit of downside risk	5.35	5.57	-0.23
Omega ratio: Gain probability vs. loss probability	1.92	1.74	+0.18
Calmar ratio: Return relative to maximum drawdown	3.42	7.37	-3.95
Martin ratio: Return relative to average drawdown	12.07	23.41	-11.34
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VSDM vs. BSMR - Sharpe Ratio Comparison

The current VSDM Sharpe Ratio is 3.67, which is comparable to the BSMR Sharpe Ratio of 3.33. The chart below compares the historical Sharpe Ratios of VSDM and BSMR, 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

	VSDM	BSMR	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	3.67	3.33	+0.34
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	—	0.16	—
Sharpe Ratio (All Time) Calculated using the full available price history	2.19	0.22	+1.97

Drawdowns

VSDM vs. BSMR - Drawdown Comparison

The maximum VSDM drawdown since its inception was -1.81%, smaller than the maximum BSMR drawdown of -13.49%. Use the drawdown chart below to compare losses from any high point for VSDM and BSMR.

Drawdown Indicators

	VSDM	BSMR	Difference
Max Drawdown Largest peak-to-trough decline	-1.81%	-13.49%	+11.68%
Max Drawdown (1Y) Largest decline over 1 year	-1.46%	-0.57%	-0.89%
Max Drawdown (3Y) Largest decline over 3 years	—	-3.50%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-12.02%	—
Current Drawdown Current decline from peak	-0.33%	0.00%	-0.33%
Average Drawdown Average peak-to-trough decline	-0.32%	-3.49%	+3.17%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.41%	0.18%	+0.23%

Volatility

VSDM vs. BSMR - Volatility Comparison

Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) has a higher volatility of 0.44% compared to Invesco BulletShares 2027 Municipal Bond ETF (BSMR) at 0.34%. This indicates that VSDM's price experiences larger fluctuations and is considered to be riskier than BSMR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VSDM	BSMR	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.44%	0.34%	+0.10%
Volatility (6M) Calculated over the trailing 6-month period	1.07%	0.92%	+0.15%
Volatility (1Y) Calculated over the trailing 1-year period	1.36%	1.25%	+0.11%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.95%	3.03%	-1.08%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.95%	5.72%	-3.77%

VSDM vs. BSMR - Expense Ratio Comparison

VSDM has a 0.12% expense ratio, which is lower than BSMR's 0.18% 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

VSDM vs. BSMR - Dividend Comparison

VSDM's dividend yield for the trailing twelve months is around 3.11%, more than BSMR's 2.72% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019
BSMR Invesco BulletShares 2027 Municipal Bond ETF	2.72%	2.77%	2.78%	2.72%	1.40%	1.00%	1.49%	0.45%
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	3.11%	3.06%	0.35%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both VSDM and BSMR in my portfolio?

VSDM and BSMR have a correlation of 0.42, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VSDM or BSMR?

VSDM has higher volatility (0.44%) compared to BSMR (0.34%). In terms of maximum drawdown, VSDM dropped -1.81% vs BSMR's -13.49%.

Which ETF is better, VSDM or BSMR?

On 1-year performance, VSDM leads with 4.98% vs 4.16% for BSMR. On fees, VSDM is cheaper at 0.12% per year. On volatility, BSMR has been the lower-risk option at 0.34%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VSDM or BSMR?

Over the 1-year period, VSDM has performed better with a 4.98% return vs 4.16%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VSDM or BSMR?

VSDM is cheaper with a 0.12% expense ratio, compared with 0.18% for BSMR.

Which ETF pays a higher dividend yield, VSDM or BSMR?

VSDM has the higher dividend yield at 3.11%, compared with 2.72% for BSMR.

What is the main difference between VSDM and BSMR?

They also come from different issuers: Vanguard and Invesco. Their fees differ too: 0.12% for VSDM and 0.18% for BSMR.

Which has better risk-adjusted returns?

VSDM currently has the higher Sharpe Ratio (3.67 vs 3.33), 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.