VSMIX vs. AMBFX

Last updated Aug 1, 2026

VSMIX (Vanguard Short-Term Investment-Grade Fund Investor Shares) and AMBFX (American Funds American Balanced Fund® Class F-2) are both mutual funds - VSMIX is a Short-Term Bond fund managed by Vanguard, while AMBFX is a Diversified Portfolio fund managed by American Funds. Over the past 10 years, VSMIX returned 17.01%/yr vs 10.07%/yr for AMBFX. Their correlation of 0.81 means they have usually moved in the same direction. VSMIX charges 0.20%/yr vs 0.35%/yr for AMBFX.

Performance

VSMIX vs. AMBFX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Short-Term Investment-Grade Fund Investor Shares (VSMIX) and American Funds American Balanced Fund® Class F-2 (AMBFX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VSMIX achieves a 21.79% return, which is significantly higher than AMBFX's 8.35% return. Over the past 10 years, VSMIX has outperformed AMBFX with an annualized return of 17.01%, while AMBFX has yielded a comparatively lower 10.07% annualized return.

VSMIX

• 1D: 2.73%
• 1M: -4.63%
• 6M: 10.46%
• YTD: 21.79%
• 1Y: 43.50%
• 3Y*: 24.31%
• 5Y*: 19.82%
• 10Y*: 17.01%
• ALL TIME*: 11.90%

AMBFX

• 1D: 1.08%
• 1M: -0.96%
• 6M: 5.56%
• YTD: 8.35%
• 1Y: 18.59%
• 3Y*: 15.60%
• 5Y*: 9.23%
• 10Y*: 10.07%
• ALL TIME*: 9.32%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
AMBFX American Funds American Balanced Fund® Class F-2	$0.00	$0.00	$0.00
VSMIX Vanguard Short-Term Investment-Grade Fund Investor Shares	$0.00	$0.00	$0.00

VSMIX vs. AMBFX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VSMIX Vanguard Short-Term Investment-Grade Fund Investor Shares	21.79%	18.01%	24.82%	23.14%	4.58%	36.67%	11.14%	32.32%	-25.45%	18.47%
AMBFX American Funds American Balanced Fund® Class F-2	8.35%	18.67%	15.25%	13.81%	-11.93%	16.00%	11.06%	19.45%	-2.69%	14.85%

Correlation

The correlation between VSMIX and AMBFX is 0.79, which is moderate. They have sometimes moved together and sometimes differently, sharing some price drivers without tracking each other closely.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.79
Correlation (3Y) Balances recent behavior with more history.	0.80
Correlation (5Y) Shows whether the relationship held over a longer period.	0.80
Correlation (10Y) Provides a long-term view across more market conditions.	0.76
Correlation (All Time) Calculated using the full available price history since Aug 1, 2008	0.81

The correlation between VSMIX and AMBFX has been stable across timeframes, ranging from 0.76 to 0.81 - a consistent structural relationship.

Return for Risk

VSMIX vs. AMBFX — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

VSMIX

VSMIX Risk / Return Rank: 76
VSMIX Sharpe Ratio Rank: 73
VSMIX Sortino Ratio Rank: 67
VSMIX Omega Ratio Rank: 65
VSMIX Calmar Ratio Rank: 89
VSMIX Martin Ratio Rank: 84

AMBFX

AMBFX Risk / Return Rank: 80
AMBFX Sharpe Ratio Rank: 80
AMBFX Sortino Ratio Rank: 78
AMBFX Omega Ratio Rank: 77
AMBFX Calmar Ratio Rank: 78
AMBFX Martin Ratio Rank: 86

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

VSMIX vs. AMBFX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Investment-Grade Fund Investor Shares (VSMIX) and American Funds American Balanced Fund® Class F-2 (AMBFX). 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VSMIX	AMBFX	Difference
Sharpe ratio: Return per unit of total volatility	1.71	1.86	-0.15
Sortino ratio: Return per unit of downside risk	2.28	2.61	-0.33
Omega ratio: Gain probability vs. loss probability	1.29	1.34	-0.05
Calmar ratio: Return relative to maximum drawdown	3.29	2.50	+0.79
Martin ratio: Return relative to average drawdown	10.36	10.68	-0.32

VSMIX vs. AMBFX - Sharpe Ratio Comparison

The current VSMIX Sharpe Ratio is 1.71, which is comparable to the AMBFX Sharpe Ratio of 1.86. The chart below compares the historical Sharpe Ratios of VSMIX and AMBFX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VSMIX vs. AMBFX - Drawdown Comparison

The maximum VSMIX drawdown since its inception was -57.53%, which is greater than AMBFX's maximum drawdown of -35.05%. Use the drawdown chart below to compare losses from any high point for VSMIX and AMBFX.

Drawdown Indicators

	VSMIX	AMBFX	Difference
Max Drawdown Largest peak-to-trough decline	-57.53%	-35.05%	-22.48%
Max Drawdown (1Y) Largest decline over 1 year	-12.09%	-7.00%	-5.09%
Max Drawdown (3Y) Largest decline over 3 years	-25.26%	-10.64%	-14.62%
Max Drawdown (5Y) Largest decline over 5 years	-25.26%	-18.65%	-6.61%
Max Drawdown (10Y) Largest decline over 10 years	-57.53%	-22.31%	-35.22%
Current Drawdown Current decline from peak	-9.69%	-1.68%	-8.01%
Average Drawdown Average peak-to-trough decline	-9.48%	-3.56%	-5.92%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.85%	1.63%	+2.22%

Volatility

VSMIX vs. AMBFX - Volatility Comparison

Vanguard Short-Term Investment-Grade Fund Investor Shares (VSMIX) has a higher volatility of 7.92% compared to American Funds American Balanced Fund® Class F-2 (AMBFX) at 2.32%. This indicates that VSMIX's price experiences larger fluctuations and is considered to be riskier than AMBFX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VSMIX	AMBFX	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.92%	2.32%	+5.60%
Volatility (6M) Calculated over the trailing 6-month period	18.53%	7.38%	+11.15%
Volatility (1Y) Calculated over the trailing 1-year period	23.33%	9.41%	+13.92%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	23.45%	10.60%	+12.85%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	26.71%	10.70%	+16.01%

VSMIX vs. AMBFX - Expense Ratio Comparison

VSMIX has a 0.20% expense ratio, which is lower than AMBFX's 0.35% expense ratio.

Dividends

VSMIX vs. AMBFX - Dividend Comparison

VSMIX's dividend yield for the trailing twelve months is around 7.01%, less than AMBFX's 7.39% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
AMBFX American Funds American Balanced Fund® Class F-2	7.39%	8.47%	7.40%	2.20%	2.52%	4.50%	4.56%	4.19%	6.20%	4.85%	4.46%	5.81%
VSMIX Vanguard Short-Term Investment-Grade Fund Investor Shares	7.01%	8.53%	7.40%	4.71%	9.53%	15.84%	0.40%	2.37%	26.83%	15.94%	1.65%	10.91%

Frequently Asked Questions

Can I hold both VSMIX and AMBFX in my portfolio?

VSMIX and AMBFX have a correlation of 0.79, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VSMIX or AMBFX?

VSMIX has higher volatility (7.92%) compared to AMBFX (2.32%). In terms of maximum drawdown, VSMIX dropped -57.53% vs AMBFX's -35.05%.

Which has better risk-adjusted returns?

AMBFX currently has the higher Sharpe Ratio (1.86 vs 1.71), 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.