VMBS — Vanguard Mortgage-Backed Securities Index Fund ETF Shares

Overview

The Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS) operates within the Mortgage-Backed category, which currently contains two ETFs tracked by ETFValuer. Issued by Vanguard, this fund has accumulated assets under management of $17.3 billion and trades at a price of $46.37. It holds an overall rank of #86 out of 120 tracked ETFs across all categories and has received an ETFValuer grade of C with a score of 56.8 out of 100. The fund maintains a low cost structure with an expense ratio of 0.03% while offering a dividend yield of 4.17%. The substantial asset size and low expense ratio suggest significant investor adoption relative to the small category size. These metrics position the fund as a widely held option within its specific sector despite its mid-tier overall ranking.

VMBS has recorded a one-day return of -0.19% and a one-week return of -0.59%, indicating recent short-term weakness. Over the past month, the fund posted a gain of +0.33%, followed by a three-month decline of -0.37%. Year-to-date performance stands at +0.34%, while the six-month return is slightly positive at +0.13%. The one-year return is +5.11%, which is comparable to the closest category peer MBB that returned +4.99% over the same period. Longer-term data shows a three-year return of +12.83%, suggesting a divergence between recent short-term fluctuations and the broader multi-year trend. The pattern reflects periods of modest growth interspersed with minor corrections across the various time horizons.

The fund carries a volatility label of Very Low, yet it exhibits a beta of 1.12, indicating it moves slightly more than the broader market. A Sharpe ratio of 0.03 suggests that the risk-adjusted returns have been minimal relative to the volatility experienced. The maximum drawdown recorded for the fund is -7.65%, which defines the largest peak-to-trough decline observed. This combination of a low volatility label with a beta above 1.0 implies that while the fund may not experience extreme daily swings, it remains sensitive to market movements. The low Sharpe ratio alongside the specific drawdown figure indicates that the fund has not generated significant excess returns for the level of downside risk taken.

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

VMBS Top Holdings

Holdings as of 2026-02-28 per the fund's most recent SEC N-PORT-P filing.

Market Backdrop

10-Year Treasury Yield: 4.55% (as of 2026-07-07) — 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): 16.13 (as of 2026-07-07) — 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: 3.63% (as of 2026-06-01) — The Federal Reserve’s target policy rate, which anchors short-term borrowing costs across the economy.

VMBS Performance History

How VMBS Compares to Other Mortgage-Backed ETFs