VCSH vs BND Stock Comparison: AI Score, Valuation, Performance and Upside
VCSH and BND are both investment-grade bond ETFs from Vanguard but with very different duration profiles. VCSH's ~2.7 year duration provides stability in rising rate environments but lower income than BND. BND's 6-7 year duration provides higher income and flight-to-safety benefits from Treasury bonds but much more price sensitivity to rate changes. Investors uncertain about rates favor VCSH; investors using bonds as portfolio ballast in a 60/40 allocation favor BND.
VCSH vs BND — Vanguard Short-Term Corporate Bond ETF (1-5 year investment-grade corporates with ~2.7 year duration for capital preservation and moderate yield pickup over cash) versus Vanguard Total Bond Market ETF (total investment-grade bond market with 6-7 year duration including Treasury flight-to-safety component and complete bond market diversification at 0.03%).
VCSH holds the edge across 3 of 5 key metrics in this comparison. VCSH has delivered stronger 1-year price return (+1.71% vs -0.30% for BND).
- want investment-grade corporate bond income with minimal interest rate risk — 2.7 year duration means significantly less pain in rising rate environments vs longer-duration alternatives
- use bonds as capital preservation allocation for intermediate-term needs (1-5 years) rather than long-term portfolio ballast
- are uncertain about interest rate direction and want to minimize duration risk while earning above-cash yields
- are comfortable with no Treasury flight-to-safety benefit — VCSH holds only corporates, so doesn't provide the equity hedge of Treasury-heavy BND
- want the complete US investment-grade bond market for classic 60/40 portfolio diversification including Treasury bonds that rise during equity crashes
- hold bonds as long-term portfolio ballast accepting rate sensitivity in exchange for the complete bond market's diversification and flight-to-safety characteristics
- prefer total market exposure at 0.03% rather than taking a specific duration bet by choosing short-term vs long-term bond ETFs
- are comfortable with 6-7 year duration and significant price volatility in rising rate environments in exchange for higher income in normal yield curves and Treasury flight-to-safety in equity crises
| Metric | VCSH | BND |
|---|---|---|
| ETF scorei | 38.0 | 33.0 |
| Latest closei | $77.80 | $71.47 |
| 1M returni | -0.66% | -0.69% |
| 6M returni | +0.43% | -1.11% |
| 1Y returni | +1.71% | -0.30% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | VCSH | BND |
|---|---|---|
| 1Y ago | $10.64K (+6.4%) started 2025-09-17 | $10.38K (+3.8%) started 2025-09-17 |
| 5Y ago | $13.48K (+34.8%) started 2021-09-17 | $11.71K (+17.1%) started 2021-09-17 |
| 10Y ago | $18.09K (+80.9%) started 2016-09-19 | $16.33K (+63.3%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | VCSH | BND |
|---|---|---|
| Expense ratioi | 0.03% | 0.03% |
| Total assets (AUM)i | $51.73B | $398.83B |
| Dividend yieldi | 4.47% | 4.04% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.14 | 0.26 |
| 52-week change | 1.71% | -0.30% |
| Metric | VCSH | BND |
|---|---|---|
| 1Y returni | +1.71% | -0.30% |
| 6M returni | +0.43% | -1.11% |
| 1M returni | -0.66% | -0.69% |
| 1Y Sharpe ratio | -1.45 | -1.28 |
| Betai | 0.14 | 0.26 |
| Dividend yieldi | 4.47% | 4.04% |
| 5Y CAGR | +2.26% | -0.44% |
Over the past year, VCSH and BND have moved strongly in the same direction (correlation of 0.90), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | VCSH | BND |
|---|---|---|---|
| 1Y | Growthi | +1.71% | -0.30% |
| CAGRi | +1.72% | -0.30% | |
| Volatilityi | 1.92% | 3.68% | |
| Sharpe ratioi | -1.45 | -1.28 | |
| Sortino ratioi | -1.83 | -1.67 | |
| Max drawdowni | 1.40% | 3.16% | |
| Current drawdowni | 0.85% | 2.67% | |
| Avg drawdowni | 0.26% | 1.05% | |
| Ulcer Indexi | 0.39% | 1.31% | |
| Max daily dropi | 0.40% | 0.80% | |
| Max wkly dropi | 0.65% | 1.10% | |
| 5Y | Growthi | +11.84% | -2.19% |
| CAGRi | +2.26% | -0.44% | |
| Volatilityi | 2.92% | 6.04% | |
| Sharpe ratioi | -0.76 | -0.79 | |
| Sortino ratioi | -1.05 | -1.07 | |
| Max drawdowni | 9.36% | 17.78% | |
| Current drawdowni | 0.85% | 2.67% | |
| Avg drawdowni | 2.23% | 7.62% | |
| Ulcer Indexi | 3.39% | 8.96% | |
| Max daily dropi | 0.92% | 1.62% | |
| Max wkly dropi | 2.24% | 3.50% | |
| 10Y | Growthi | +29.21% | +15.32% |
| CAGRi | +2.60% | +1.44% | |
| Volatilityi | 3.35% | 5.54% | |
| Sharpe ratioi | -0.56 | -0.53 | |
| Sortino ratioi | -0.74 | -0.71 | |
| Max drawdowni | 12.86% | 18.58% | |
| Current drawdowni | 0.85% | 3.50% | |
| Avg drawdowni | 1.36% | 4.96% | |
| Ulcer Indexi | 2.55% | 6.99% | |
| Max daily dropi | 3.43% | 5.44% | |
| Max wkly dropi | 8.74% | 8.05% |
| Category | VCSH | BND |
|---|---|---|
| Fund name | Vanguard Short-Term Corporate Bond Index Fund ETF Shares | Vanguard Total Bond Market Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratioi | 0.03% | 0.03% |
| Total assets (AUM)i | $51.73B | $398.83B |
| Dividend yieldi | 4.47% | 4.04% |
- Low ~2.7 year duration limits rate risk: VCSH's short maturities provide significantly less interest rate sensitivity than BND — appropriate for investors uncertain about rate direction
- Investment-grade corporate yield premium over Treasuries: VCSH earns a credit spread above Treasury bonds of the same maturity — providing meaningfully higher yield than short-term Treasury ETFs
- Capital preservation focus: short-duration bonds mature quickly, limiting the time that market price can fall below face value — investors holding to maturity recover par value in a predictable timeframe
- Flight-to-safety Treasury bond component: BND's 65% US government/agency allocation rises in value during stock market crashes — providing the core 60/40 portfolio diversification benefit
- Total bond market diversification: BND spans Treasuries, agencies, and corporates — complete investment-grade bond market in one fund at 0.03%
- Higher income in normal yield curve environments: BND's longer duration typically provides higher yield than VCSH when the yield curve is normal (upward sloping)
- Lower yield than BND in normal yield curve environments: VCSH earns less than BND when yield curves are normal (upward sloping) — accepting lower income for reduced rate sensitivity
- Credit risk in recessions: corporate bonds can widen dramatically in credit crises — VCSH's investment-grade rating doesn't eliminate corporate spread risk entirely in severe downturns
- No Treasury flight-to-safety benefit: VCSH holds only corporate bonds — in severe market stress, corporate bond spreads widen even as Treasury bonds rally, so VCSH doesn't provide the same flight-to-safety as BND's Treasury-heavy portfolio
- Much higher duration (~6-7 years) amplifies rate losses: BND lost 13%+ in 2022 — investors in short-duration VCSH experienced much smaller losses in the same rate spike
- MBS prepayment risk: BND's mortgage-backed securities return principal when homeowners refinance — disrupting expected income when rates fall and borrowers refinance aggressively
- Less appropriate for short-term cash management: BND's duration makes it unsuitable for funds needed within 2-3 years — VCSH's short duration is more appropriate for medium-term savings
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