Investors comparing Vanguard Short-Term Corporate Bond ETF (NASDAQ:VCSH) and Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) will find that VCSH offers a slightly higher yield and stronger 1-year return, while VGSH has experienced less severe drawdowns. Both funds have the same low expense ratio and invest exclusively in high-quality bonds.
Vanguard Short-Term Corporate Bond ETF (NASDAQ:VCSH) and Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) differ mainly in credit exposure, yield, and risk, while sharing identical expense ratios and issuer backing. Investors seeking income with limited price swings can benefit from these two approaches, each tailored to specific bond types.
Snapshot (cost & size)
| Metric | VGSH | VCSH |
|---|---|---|
| Issuer | Vanguard | Vanguard |
| Expense ratio | 0.03% | 0.03% |
| 1-yr return (as of Jan. 22, 2026) | 4.91% | 6.63% |
| Dividend yield | 4.0% | 4.3% |
| Beta | 0.26 | 0.13 |
| AUM | $30.4 billion | $46.9 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
Both funds have an equally low annual expense ratio of 0.03%, with VCSH offering a slightly higher yield, making it attractive for investors looking for increased income from their bond allocation.
Performance & risk comparison
| Metric | VGSH | VCSH |
|---|---|---|
| Max drawdown (5 y) | -5.69% | -9.50% |
| Growth of $1,000 over 5 years | $953 | $960 |
What’s inside
VCSH invests in high-quality, investment-grade corporate bonds with maturities between one and five years. The fund holds just 12 positions, with top allocations to Bank of America Corp (NYSE:BAC), Mktliq (NYSE:MKTLIQ), and CVS Health Corp (NYSE:CVS). The portfolio, managed by Vanguard, focuses exclusively on cash and other short-term instruments.
VGSH, on the other hand, is dedicated solely to U.S. Treasury bonds, reducing credit risk but typically offering a lower yield. Its holdings are diversified across 93 different Treasuries, with top allocations to various US Treasury Notes/Bonds.
Short-term bond ETFs like VCSH and VGSH serve different purposes in a portfolio, catering to income-focused investors and those seeking stability and liquidity, respectively.
What this means for investors
Investors considering VCSH should be prepared for potential credit risk exposure but can benefit from higher yields, while VGSH offers a defensive approach with lower income but greater stability. Understanding the differences between these two ETFs can help investors align their bond investments with their financial objectives.
