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 is a Mortgage-Backed category fund issued by Vanguard with $17.1 billion in assets. It holds a C grade and ranks second among four peers in its category, placing it at number 266 across all 458 tracked ETFs. The expense ratio of 0.03% sits slightly below the category median of 0.04%, while its 4.43% dividend yield is marginally lower than the 4.47% median. With top ten holdings comprising just 8.0% of assets, the fund maintains broad diversification, with its largest position being the Vanguard Cmt Funds-Vanguard Market Liquidity Fund at 5.1%.

The fund’s price of $44.43 sits at 12.2% of its 52-week range, reflecting a recent trajectory that contrasts with its longer-term gains. Short-term returns show contraction, with one-month and three-month figures at -2.44% and -3.27% respectively, while the one-year return of -1.29% remains above the category median of -1.54%. This recent weakness diverges from the strong three-year performance of +15.84%, indicating a shift in momentum over the past year. The ETFValuer grade of C has remained unchanged over the last 35 tracked days, suggesting stability in its assessment despite the price history spanning only 3.0 years.

Risk metrics present a mixed picture, with a beta of 1.12 indicating greater sensitivity to market movements compared to the broader market. The annualized volatility of 4.59% is labeled Very Low, yet the Sharpe ratio of -1.37 suggests that recent returns have not adequately compensated for the risk taken. A maximum drawdown of -5.09% highlights the extent of recent losses, while liquidity remains robust with an average daily volume of 1,782,698 shares. These figures collectively describe a fund that has experienced recent negative risk-adjusted performance despite low volatility and high trading activity.

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: 5.28% (as of 2026-10-07) — 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): 15.08 (as of 2026-10-07) — 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: 3.75% (as of 2026-09-01) — The Federal Reserve’s target policy rate, which anchors short-term borrowing costs across the economy.

VMBS Liquidity, Domicile & Tax Treatment

Liquidity: Average daily volume is 1.8M/day. Higher volume and a larger fund generally mean lower round-trip trading costs. AUM of $17.1B 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