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

The Vanguard Mortgage-Backed Securities Index Fund ETF Shares, trading under the ticker VMBS, operates within the Mortgage-Backed category managed by issuer Vanguard. This fund holds a position as the second-largest among the four ETFs tracked in its specific category, with assets under management totaling $17.3 billion. It currently carries an overall rank of #261 out of 458 tracked ETFs across all categories and has received an ETFValuer grade of C with a score of 59.6 out of 100. The fund offers a low cost structure with an expense ratio of 0.03% while providing a dividend yield of 4.17%. At a current price of $46.37, the substantial asset base suggests significant investor adoption relative to the limited number of peers in the sector. These metrics collectively define the fund's standing as a widely held, cost-efficient vehicle within its specialized niche.

VMBS has demonstrated a mixed performance trajectory across various time horizons, starting with a +0.19% gain over both the one-day and one-week periods. Short-term results show a decline, with the one-month return at -0.95% and the three-month return at -0.35%, though the six-month period recovered slightly to +0.13%. Year-to-date performance stands at +0.69%, while the one-year return reached +5.02%. Longer-term data indicates stronger momentum, with the three-year return accumulating to +15.51%. This pattern reflects a divergence where recent short-term fluctuations contrast with more positive medium and long-term gains. Peer comparisons within the category show MBB with a +4.94% one-year return and SPMB with a +5.11% one-year return.

The fund is characterized by a volatility label of Very Low, despite exhibiting a beta of 1.12 which suggests price movements that are slightly more sensitive than the broader market. A Sharpe ratio of 0.01 indicates that the risk-adjusted returns have been minimal relative to the volatility experienced. The maximum drawdown recorded for the fund is -6.82%, representing the largest peak-to-trough decline during the measured period. This combination of a low volatility label and a beta above 1.0 implies that while the fund may not experience extreme daily swings, its correlation to market movements remains elevated. The low Sharpe ratio further suggests that the returns generated have not sufficiently compensated for the level of risk taken, even as the maximum drawdown remained contained within a single-digit percentage range.

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. Top 10 holdings make up 7.5% 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 (4.6% 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: 4.65% (as of 2026-07-27) — 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): 18.67 (as of 2026-07-27) — 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 Liquidity, Domicile & Tax Treatment

Liquidity: Quoted bid/ask spread is 0.37% 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 $17.3B 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