ZTWO vs. VSDB

Last updated Jun 4, 2026

ZTWO (F/M 2-Year Investment Grade Corporate Bond ETF) and VSDB (Vanguard Short Duration Bond ETF Shares) are both Short-Term Bond funds. ZTWO is passively managed, while VSDB is actively managed. Over the past year, ZTWO returned 4.02% vs 5.27% for VSDB. A 0.77 correlation means they provide meaningful diversification when combined. Both charge a 0.15% expense ratio.

Performance

ZTWO vs. VSDB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in F/M 2-Year Investment Grade Corporate Bond ETF (ZTWO) and Vanguard Short Duration Bond ETF Shares (VSDB). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, ZTWO achieves a 0.89% return, which is significantly lower than VSDB's 0.94% return.

ZTWO

• 1D: 0.00%
• 1M: 0.30%
• YTD: 0.89%
• 6M: 1.21%
• 1Y: 4.02%
• 3Y*: —
• 5Y*: —
• 10Y*: —

VSDB

• 1D: -0.03%
• 1M: 0.23%
• YTD: 0.94%
• 6M: 1.35%
• 1Y: 5.27%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

ZTWO vs. VSDB - Yearly Performance Comparison

	2026 (YTD)	2025
ZTWO F/M 2-Year Investment Grade Corporate Bond ETF	0.89%	3.67%
VSDB Vanguard Short Duration Bond ETF Shares	0.94%	4.85%

Correlation

The correlation between ZTWO and VSDB is 0.78, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.78
Correlation (All Time) Calculated using the full available price history since Apr 4, 2025	0.77

The correlation between ZTWO and VSDB has been stable across timeframes, ranging from 0.77 to 0.78 - a consistent structural relationship.

Return for Risk

ZTWO vs. VSDB — Risk / Return Rank

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

ZTWO

ZTWO Risk / Return Rank: 90
ZTWO Sharpe Ratio Rank: 90
ZTWO Sortino Ratio Rank: 94
ZTWO Omega Ratio Rank: 93
ZTWO Calmar Ratio Rank: 82
ZTWO Martin Ratio Rank: 90

VSDB

VSDB Risk / Return Rank: 86
VSDB Sharpe Ratio Rank: 88
VSDB Sortino Ratio Rank: 93
VSDB Omega Ratio Rank: 92
VSDB Calmar Ratio Rank: 74
VSDB Martin Ratio Rank: 82

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.

ZTWO vs. VSDB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for F/M 2-Year Investment Grade Corporate Bond ETF (ZTWO) and Vanguard Short Duration Bond ETF Shares (VSDB). 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.

	ZTWO	VSDB	Difference
Sharpe ratio: Return per unit of total volatility	3.09	3.04	+0.05
Sortino ratio: Return per unit of downside risk	4.96	4.79	+0.17
Omega ratio: Gain probability vs. loss probability	1.64	1.63	+0.01
Calmar ratio: Return relative to maximum drawdown	4.32	3.72	+0.60
Martin ratio: Return relative to average drawdown	20.46	16.38	+4.08
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

ZTWO vs. VSDB - Sharpe Ratio Comparison

The current ZTWO Sharpe Ratio is 3.09, which is comparable to the VSDB Sharpe Ratio of 3.04. The chart below compares the historical Sharpe Ratios of ZTWO and VSDB, 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

	ZTWO	VSDB	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	3.09	3.04	+0.05
Sharpe Ratio (All Time) Calculated using the full available price history	3.16	2.65	+0.50

Drawdowns

ZTWO vs. VSDB - Drawdown Comparison

The maximum ZTWO drawdown since its inception was -0.93%, smaller than the maximum VSDB drawdown of -1.42%. Use the drawdown chart below to compare losses from any high point for ZTWO and VSDB.

Drawdown Indicators

	ZTWO	VSDB	Difference
Max Drawdown Largest peak-to-trough decline	-0.93%	-1.42%	+0.49%
Max Drawdown (1Y) Largest decline over 1 year	-0.93%	-1.42%	+0.49%
Current Drawdown Current decline from peak	-0.11%	-0.16%	+0.05%
Average Drawdown Average peak-to-trough decline	-0.10%	-0.19%	+0.09%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.20%	0.32%	-0.12%

Volatility

ZTWO vs. VSDB - Volatility Comparison

The current volatility for F/M 2-Year Investment Grade Corporate Bond ETF (ZTWO) is 0.42%, while Vanguard Short Duration Bond ETF Shares (VSDB) has a volatility of 0.55%. This indicates that ZTWO experiences smaller price fluctuations and is considered to be less risky than VSDB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ZTWO	VSDB	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.42%	0.55%	-0.13%
Volatility (6M) Calculated over the trailing 6-month period	0.97%	1.35%	-0.38%
Volatility (1Y) Calculated over the trailing 1-year period	1.31%	1.75%	-0.44%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.49%	1.90%	-0.41%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.49%	1.90%	-0.41%

ZTWO vs. VSDB - Expense Ratio Comparison

Both ZTWO and VSDB have an expense ratio of 0.15%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

ZTWO vs. VSDB - Dividend Comparison

ZTWO's dividend yield for the trailing twelve months is around 4.12%, less than VSDB's 4.17% yield.

Position	TTM	2025	2024
VSDB Vanguard Short Duration Bond ETF Shares	4.17%	3.30%	0.00%
ZTWO F/M 2-Year Investment Grade Corporate Bond ETF	4.12%	4.31%	0.39%

Frequently Asked Questions

Can I hold both ZTWO and VSDB in my portfolio?

ZTWO and VSDB have a correlation of 0.78, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, ZTWO or VSDB?

VSDB has higher volatility (0.55%) compared to ZTWO (0.42%). In terms of maximum drawdown, ZTWO dropped -0.93% vs VSDB's -1.42%.

Which ETF is better, ZTWO or VSDB?

On 1-year performance, VSDB leads with 5.27% vs 4.02% for ZTWO. Both ETFs have the same 0.15% expense ratio. On volatility, ZTWO has been the lower-risk option at 0.42%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, ZTWO or VSDB?

Over the 1-year period, VSDB has performed better with a 5.27% return vs 4.02%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, ZTWO or VSDB?

ZTWO and VSDB have the same expense ratio: 0.15% per year.

Which ETF pays a higher dividend yield, ZTWO or VSDB?

VSDB has the higher dividend yield at 4.17%, compared with 4.12% for ZTWO.

What is the main difference between ZTWO and VSDB?

They also come from different issuers: F/m and Vanguard.

Which has better risk-adjusted returns?

ZTWO currently has the higher Sharpe Ratio (3.09 vs 3.04), 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.