VMBS vs VTI
VMBS vs VTI
Vanguard Mortgage-Backed Securities ETF vs Vanguard Total Stock Market ETF
Quick Verdict
VTI delivered stronger 1-year returns. VMBS offers more diversification with 4688 holdings.
Side-by-Side Comparison
| Metric | VMBS | VTI | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.03% | |
| AUM | $15.6B | $663.5B | |
| Dividend Yield | 4.15% | 1.07% | |
| Holdings | 5,043 | 3,543 | |
| YTD Return | -0.07% | +11.83% | |
| 1Y Return | +3.16% | +21.79% | |
| 3Y Return (annualized) | +4.59% | +20.40% | |
| 5Y Return (annualized) | +0.21% | +11.96% | |
| Volatility (annualized) | 4.2% | 15.3% | |
| Max Drawdown | -18.4% | -56.6% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | May 24, 2001 |
VMBS vs VTI Performance
Vanguard Mortgage-Backed Securities ETF (VMBS) is a ETF from Vanguard (US) and Vanguard Total Stock Market ETF (VTI) is a ETF from Vanguard (US). Over the past year VMBS returned +3.16% while VTI returned +21.79%. Year to date, VMBS is down 0.07% versus a gain of 11.83% for VTI.
Over three years, VMBS compounded at +4.59% per year against +20.40% for VTI; over five years the annualized figures are +0.21% and +11.96% respectively. Across the full 17-year window we track, VTI has the edge at +8.06% annualized vs +0.49%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTI has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 4.2% for VMBS. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -18.4% for VMBS and -56.6% for VTI. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.26. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VMBS charges 0.03% per year while VTI charges 0.03%. On a $10,000 position that is $3 vs $3 annually. On income, VMBS currently yields 4.15% against 1.07% for VTI.
Holdings Overlap
VMBS and VTI share 0 holdings out of 7471 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VMBS or VTI?
VMBS has an expense ratio of 0.03% while VTI charges 0.03%. They cost the same. On a $10,000 investment, that is $0 per year of difference.
Which performed better, VMBS or VTI?
Over the past year VMBS returned +3.16% vs +21.79% for VTI, so VTI leads on 1-year performance. Over the longest common window we track (17 years), VMBS annualized +0.49% vs +8.06% for VTI. Past performance does not guarantee future results.
Which is riskier, VMBS or VTI?
VTI has been the more volatile fund at 15.3% annualized versus 4.2% for VMBS. Worst drawdown: VMBS -18.4% vs VTI -56.6%.
Should I hold both VMBS and VTI?
VMBS and VTI have a monthly-return correlation of 0.26, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VMBS and VTI?
VMBS and VTI share 0 common holdings with a 0.0% weight overlap. Combined, they hold 7471 unique securities.
Which pays a higher dividend, VMBS or VTI?
VMBS yields 4.15% while VTI yields 1.07%, so VMBS currently pays the higher dividend yield.
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