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 and BND are closely matched — they split the tracked metrics evenly. VCSH has delivered stronger 1-year price return (+1.10% vs -0.86% 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 | 24.5 | 24.4 |
| Latest closei | $77.53 | $71.20 |
| 1M returni | +0.66% | +1.80% |
| 3M returni | -0.97% | -1.37% |
| 6M returni | -0.32% | -1.44% |
| 1Y returni | +1.10% | -0.86% |
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 | $10.54K (+5.4%) started 2025-11-03 | $10.29K (+2.9%) started 2025-11-03 |
| 5Y ago | $13.46K (+34.6%) started 2021-11-04 | $11.68K (+16.8%) started 2021-11-04 |
| 10Y ago | $17.93K (+79.3%) started 2016-11-04 | $16.2K (+62.0%) started 2016-11-04 |
Hypothetical — past performance does not guarantee future results.
| Metric | VCSH | BND |
|---|---|---|
| Expense ratioi | 0.03% | 0.03% |
| Total assets (AUM)i | $50.87B | $389.05B |
| Dividend yieldi | 4.56% | 4.17% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.14 | 0.27 |
| 52-week change | 1.10% | -0.86% |
| Metric | VCSH | BND |
|---|---|---|
| 1Y returni | +1.10% | -0.86% |
| 6M returni | -0.32% | -1.44% |
| 3M returni | -0.97% | -1.37% |
| 1M returni | +0.66% | +1.80% |
| 1Y Sharpe ratio | -1.61 | -1.33 |
| Betai | 0.14 | 0.27 |
| Dividend yieldi | 4.56% | 4.17% |
| 5Y CAGR | +2.29% | -0.42% |
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 | +1.10% | -0.86% |
| CAGRi | +1.10% | -0.86% | |
| Volatilityi | 2.10% | 3.96% | |
| Sharpe ratioi | -1.61 | -1.33 | |
| Sortino ratioi | -2.01 | -1.74 | |
| Max drawdowni | 1.84% | 4.83% | |
| Current drawdowni | 1.19% | 3.04% | |
| Avg drawdowni | 0.41% | 1.48% | |
| Ulcer Indexi | 0.62% | 1.88% | |
| Max daily dropi | 0.45% | 0.84% | |
| Max wkly dropi | 0.72% | 1.65% | |
| 5Y | Growthi | +11.97% | -2.09% |
| CAGRi | +2.29% | -0.42% | |
| Volatilityi | 2.94% | 6.07% | |
| Sharpe ratioi | -0.74 | -0.78 | |
| Sortino ratioi | -1.02 | -1.06 | |
| Max drawdowni | 9.01% | 17.38% | |
| Current drawdowni | 1.19% | 3.04% | |
| Avg drawdowni | 2.08% | 7.31% | |
| Ulcer Indexi | 3.18% | 8.64% | |
| Max daily dropi | 0.92% | 1.62% | |
| Max wkly dropi | 2.24% | 3.50% | |
| 10Y | Growthi | +28.68% | +15.00% |
| CAGRi | +2.56% | +1.41% | |
| Volatilityi | 3.37% | 5.57% | |
| Sharpe ratioi | -0.57 | -0.53 | |
| Sortino ratioi | -0.76 | -0.71 | |
| Max drawdowni | 12.86% | 18.58% | |
| Current drawdowni | 1.19% | 3.86% | |
| Avg drawdowni | 1.38% | 4.95% | |
| Ulcer Indexi | 2.55% | 7.00% | |
| 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 | $50.87B | $389.05B |
| Dividend yieldi | 4.56% | 4.17% |
- 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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