VMBS — Vanguard Mortgage-Backed Securities Index Fund ETF Shares

VMBS Price Performance — Growth of $10,000

Value of a $10,000 investment in VMBS over time, compared with SPY. Both lines are rebased to $10,000 on the first shared date. Based on total returns — prices are adjusted for dividends and splits, so this assumes distributions were reinvested. Hover or tap the chart for exact values.

VMBS Drawdown

The "underwater" chart: VMBS's decline from its highest prior value at each point in time. It shows how deep past losses ran and how long the fund took to recover to break-even.

Overview

Vanguard Mortgage-Backed Securities Index Fund ETF Shares, issued by Vanguard, is a mortgage-backed securities ETF with a relatively small asset under management of $17.2B, ranking #268 out of 458 tracked ETFs across all categories. The fund has an expense ratio of 0.03%, indicating a low-cost investment option. It offers a dividend yield of 4.24%, providing a steady income stream for investors. The fund's price of $46.15 and AUM suggest moderate investor adoption, as the fund is neither the most nor the least popular in its category. ETFValuer grades the fund with a C (score 58.2/100), reflecting a below-average performance relative to its peers.

Over the past year, the fund has seen a modest return of +3.88%, with a more pronounced gain of +16.05% over the past three years. The returns have been relatively stable, with a slight increase in the 1-month period (+0.54%) and a slight decrease in the 6-month period (-1.00%). The 1-day return of -0.19% and the 1-week return of -0.04% suggest that the fund's performance is somewhat volatile in the short term, but the long-term trend is positive, with a significant gain over the past three years.

The fund is labeled as having a 'Very Low' volatility, which suggests that it is less prone to price fluctuations compared to more volatile assets. However, its beta of 1.12 indicates a slight sensitivity to market movements, meaning it may not fully insulate investors from market risks. The Sharpe ratio of -0.26, while not negative, is relatively low, indicating that the fund's returns are not adequately compensating for the risk taken. The maximum drawdown of -6.02% shows that the fund has experienced a significant decline in value, but it is not extreme compared to other ETFs. Overall, the combination of low volatility and a moderate beta suggests that the fund may be suitable for investors seeking a stable income stream with some market exposure, but it may not be the best choice for those seeking high returns or those who are highly risk-averse.

AI-generated summary based on the data on this page.

VMBS Top Holdings

Holdings as of 2026-05-31 per the fund's most recent SEC N-PORT-P filing. Top 10 holdings make up 8.0% of net assets — a rough gauge of concentration risk (the higher this figure, the more the fund's return depends on a handful of names). To see how VMBS's holdings overlap with other ETFs you own or are considering, check the Stock Overlap tool.

Which Funds Overlap With VMBS

Holding two funds that own the same companies adds cost and complexity without adding much diversification. These tracked ETFs share the most names with VMBS's top 10 — VEA overlaps most, holding 1 of the same companies as VMBS's top 10 (5.1% of VMBS's assets).

Compares the top 10 reported holdings of each fund, so it's a floor on true overlap — two S&P 500 trackers overlap ~100% even when only 10 names are listed. Use the Stock Overlap tool to search by individual company.

Market Backdrop

10-Year Treasury Yield: 4.69% (as of 2026-08-20) — The yield on 10-year US Treasury bonds — the standard "risk-free rate" benchmark used to contextualize this fund’s Sharpe ratio and returns.

CBOE Volatility Index (VIX): 16.01 (as of 2026-08-20) — A real-time gauge of expected S&P 500 volatility over the next 30 days — useful context for this fund’s own volatility label.

Federal Funds Rate: 3.63% (as of 2026-07-01) — The Federal Reserve’s target policy rate, which anchors short-term borrowing costs across the economy.

VMBS Liquidity, Domicile & Tax Treatment

Liquidity: Quoted bid/ask spread is 0.28% and average daily volume is 1.3M/day. Tighter spreads and higher volume mean lower round-trip trading costs; this is a live-market snapshot and can widen during volatile sessions. AUM of $17.2B provides ample scale, supporting tight spreads and issuer commitment to keep the fund open.

Domicile & tax treatment: VMBS is a US-domiciled, SEC-registered ('40 Act) exchange-traded fund. Dividends and capital gains distributions are reported to US investors on Form 1099-DIV, and the fund is not subject to the PFIC reporting or UCITS-specific rules that apply to Irish- or Luxembourg-domiciled funds. Non-US investors should note that US-domiciled ETFs are generally subject to 30% US withholding tax on dividends (unless reduced by treaty) and to US estate tax exposure on the position — Irish-domiciled UCITS ETFs tracking the same index often avoid both, which is why non-US residents frequently prefer the UCITS equivalent where one exists. This is general information, not tax advice — consult a tax professional for your situation.

VMBS Performance History

How VMBS Compares to Other Mortgage-Backed ETFs