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VWO vs. SHY
Performance
Return for Risk
Drawdowns
Volatility
Dividends

VWO vs. SHY

Last updated Jun 3, 2026

VWO (Vanguard FTSE Emerging Markets ETF) and SHY (iShares 1-3 Year Treasury Bond ETF) are both exchange-traded funds - VWO is a Emerging Markets Equities fund tracking the FTSE Emerging Index, while SHY is a Government Bonds fund tracking the ICE US Treasury 1-3 Year Index. Both are passively managed. Over the past 10 years, VWO returned 9.01%/yr vs 1.65%/yr for SHY. At a correlation of -0.13, they often move in opposite directions. VWO charges 0.08%/yr vs 0.15%/yr for SHY.

Performance

VWO vs. SHY - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Emerging Markets ETF (VWO) and iShares 1-3 Year Treasury Bond ETF (SHY). The values are adjusted to include any dividend payments, if applicable.

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Returns By Period

In the year-to-date period, VWO achieves a 13.82% return, which is significantly higher than SHY's 0.48% return. Over the past 10 years, VWO has outperformed SHY with an annualized return of 9.01%, while SHY has yielded a comparatively lower 1.65% annualized return.

VWO

1D
1.27%
1M
3.73%
YTD
13.82%
6M
15.26%
1Y
32.89%
3Y*
18.58%
5Y*
5.66%
10Y*
9.01%

SHY

1D
0.00%
1M
0.00%
YTD
0.48%
6M
0.80%
1Y
3.34%
3Y*
4.04%
5Y*
1.73%
10Y*
1.65%
*Multi-year figures are annualized to reflect compound growth (CAGR)

VWO vs. SHY - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
VWO
Vanguard FTSE Emerging Markets ETF		13.82%25.60%10.59%9.25%-17.98%1.26%15.17%20.75%-14.76%31.49%
SHY
iShares 1-3 Year Treasury Bond ETF		0.48%4.95%3.92%4.16%-3.88%-0.71%3.03%3.38%1.46%0.26%

Correlation

The correlation between VWO and SHY is 0.22, which is low. Their price movements are largely independent, making them effective diversification partners.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

0.22

Correlation (3Y)
Calculated over the trailing 3-year period

0.17

Correlation (5Y)
Calculated over the trailing 5-year period

0.12

Correlation (10Y)
Calculated over the trailing 10-year period

-0.00

Correlation (All Time)
Calculated using the full available price history since Mar 11, 2005

-0.13

The correlation between VWO and SHY shifts across timeframes, from -0.13 (all time) to 0.22 (1 year), reflecting how their relationship changes across market environments.

Compare stocks, funds, or ETFs

Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.

Vanguard FTSE Emerging Markets ETF

iShares 1-3 Year Treasury Bond ETF

Often compared with VWO:
VWO vs. VEAVWO vs. IEMGVWO vs. VXUSVWO vs. EEMVWO vs. VOOVWO vs. VTIVWO vs. VEMAX
Often compared with SHY:
SHY vs. SGOVSHY vs. VGSHSHY vs. SHVSHY vs. TLTSHY vs. IEFSHY vs. BILSHY vs. BSV

Return for Risk

VWO vs. SHY — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
VWO
VWO Risk / Return Rank: 6161
Overall Rank
VWO Sharpe Ratio Rank: 6262
Sharpe Ratio Rank
VWO Sortino Ratio Rank: 6161
Sortino Ratio Rank
VWO Omega Ratio Rank: 6363
Omega Ratio Rank
VWO Calmar Ratio Rank: 6060
Calmar Ratio Rank
VWO Martin Ratio Rank: 6161
Martin Ratio Rank
SHY
SHY Risk / Return Rank: 7979
Overall Rank
SHY Sharpe Ratio Rank: 7676
Sharpe Ratio Rank
SHY Sortino Ratio Rank: 8989
Sortino Ratio Rank
SHY Omega Ratio Rank: 8484
Omega Ratio Rank
SHY Calmar Ratio Rank: 7272
Calmar Ratio Rank
SHY Martin Ratio Rank: 7676
Martin Ratio Rank
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.

VWO vs. SHY - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Emerging Markets ETF (VWO) and iShares 1-3 Year Treasury Bond ETF (SHY). 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.

VWOSHYDifference

Sharpe ratio

Return per unit of total volatility

2.09

2.51

-0.42

Sortino ratio

Return per unit of downside risk

2.88

4.14

-1.26

Omega ratio

Gain probability vs. loss probability

1.39

1.51

-0.13

Calmar ratio

Return relative to maximum drawdown

3.03

3.67

-0.64

Martin ratio

Return relative to average drawdown

10.94

14.96

-4.01

Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VWO vs. SHY - Sharpe Ratio Comparison

The current VWO Sharpe Ratio is 2.09, which is comparable to the SHY Sharpe Ratio of 2.51. The chart below compares the historical Sharpe Ratios of VWO and SHY, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Sharpe Ratios by Period

VWOSHYDifference

Sharpe Ratio (1Y)

Calculated over the trailing 1-year period

2.09

2.51

-0.42

Sharpe Ratio (5Y)

Calculated over the trailing 5-year period

0.33

0.88

-0.55

Sharpe Ratio (10Y)

Calculated over the trailing 10-year period

0.47

1.06

-0.59

Sharpe Ratio (All Time)

Calculated using the full available price history

0.27

1.29

-1.01

Drawdowns

VWO vs. SHY - Drawdown Comparison

The maximum VWO drawdown since its inception was -67.68%, which is greater than SHY's maximum drawdown of -5.71%. Use the drawdown chart below to compare losses from any high point for VWO and SHY.

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Drawdown Indicators

VWOSHYDifference

Max Drawdown

Largest peak-to-trough decline

-67.68%

-5.71%

-61.97%

Max Drawdown (1Y)

Largest decline over 1 year

-11.17%

-0.89%

-10.28%

Max Drawdown (3Y)

Largest decline over 3 years

-17.37%

-0.97%

-16.40%

Max Drawdown (5Y)

Largest decline over 5 years

-32.64%

-5.71%

-26.93%

Max Drawdown (10Y)

Largest decline over 10 years

-36.39%

-5.71%

-30.68%

Current Drawdown

Current decline from peak

0.00%

-0.26%

+0.26%

Average Drawdown

Average peak-to-trough decline

-15.82%

-0.52%

-15.30%

Ulcer Index

Depth and duration of drawdowns from previous peaks

3.09%

0.22%

+2.87%

Volatility

VWO vs. SHY - Volatility Comparison

Vanguard FTSE Emerging Markets ETF (VWO) has a higher volatility of 5.41% compared to iShares 1-3 Year Treasury Bond ETF (SHY) at 0.37%. This indicates that VWO's price experiences larger fluctuations and is considered to be riskier than SHY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

VWOSHYDifference

Volatility (1M)

Calculated over the trailing 1-month period

5.41%

0.37%

+5.04%

Volatility (6M)

Calculated over the trailing 6-month period

13.13%

0.93%

+12.20%

Volatility (1Y)

Calculated over the trailing 1-year period

15.83%

1.34%

+14.49%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

17.36%

1.98%

+15.38%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

19.20%

1.57%

+17.63%

VWO vs. SHY - Expense Ratio Comparison

VWO has a 0.08% expense ratio, which is lower than SHY's 0.15% 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

VWO vs. SHY - Dividend Comparison

VWO's dividend yield for the trailing twelve months is around 2.37%, less than SHY's 3.68% yield.

PositionTTM20252024202320222021202020192018201720162015
SHY
iShares 1-3 Year Treasury Bond ETF		3.68%3.81%3.92%2.99%1.30%0.26%0.94%2.12%1.72%0.98%0.71%0.54%
VWO
Vanguard FTSE Emerging Markets ETF		2.37%2.79%3.20%3.52%4.11%2.63%1.91%3.23%2.88%2.30%2.52%3.26%

Frequently Asked Questions

VWO and SHY have a correlation of 0.22, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

VWO has higher volatility (5.41%) compared to SHY (0.37%). In terms of maximum drawdown, VWO dropped -67.68% vs SHY's -5.71%.

On 10-year performance, VWO leads with 9.01% vs 1.65% for SHY. On fees, VWO is cheaper at 0.08% per year. On volatility, SHY has been the lower-risk option at 0.37%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, VWO has performed better with a 9.01% return vs 1.65%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

VWO is cheaper with a 0.08% expense ratio, compared with 0.15% for SHY.

SHY has the higher dividend yield at 3.68%, compared with 2.37% for VWO.

VWO is categorized as Emerging Markets Equities, while SHY is Government Bonds. VWO tracks FTSE Emerging Index, while SHY tracks ICE US Treasury 1-3 Year Index. They also come from different issuers: Vanguard and iShares. Their fees differ too: 0.08% for VWO and 0.15% for SHY.

SHY currently has the higher Sharpe Ratio (2.51 vs 2.09), 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.

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