Average Daily Volume
5.02M
Fund Overview
The Vanguard Short-Term Corporate Bond ETF (VCSH) is designed to provide investors with exposure to short-term investment-grade corporate bonds. The fund seeks to track the performance of the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index, which includes U.S. dollar-denominated, investment-grade corporate bonds with maturities between one and five years. VCSH offers a low-cost way to gain diversified exposure to this segment of the fixed-income market, making it suitable for investors seeking income with relatively lower interest rate risk compared to longer-duration bonds. The ETF is known for its high liquidity and low expense ratio, making it a popular choice among both individual and institutional investors.
- Asset Class
-
Bond
- Industry
-
Corporate Bonds
- Annual Dividend Rate
-
- Smart Beta
-
No
- Leveraged / Inverse
-
N/A / No
- Dividend Quality - Yield
-
- 4.66 %
- Currency Hedged
-
No
- Portfolio Turnover
-
69 %
- Dividend Date
-
Why Invest in the VCSH ETF?
Potential Benefits
- Diversified exposure to short-term, investment-grade corporate bonds, reducing single-issuer risk.
- Lower interest rate sensitivity compared to longer-duration bond ETFs, making it less volatile in rising rate environments.
- Competitive expense ratio (0.04% as of 2025), enhancing net returns for investors.
- High liquidity due to Vanguard's strong market presence, facilitating easy entry and exit.
- Regular monthly distributions, providing a steady income stream for investors.
- Strong credit quality, as the fund primarily holds bonds rated BBB or higher.
Potential Risks
- Credit risk: Despite investment-grade ratings, corporate bonds carry default risk, especially during economic downturns.
- Interest rate risk: While lower than long-term bonds, short-term bonds are still affected by rate changes.
- Liquidity risk: In extreme market conditions, bond liquidity may decline, impacting pricing.
- Yield risk: Short-term bonds typically offer lower yields compared to longer-term bonds.
- Sector concentration risk: The fund may have significant exposure to certain industries, such as financials or utilities.
RSI data unavailable or insufficient history.
Monthly Returns (%)
| Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
| 2026 |
+0.4%
|
+0.6%
|
-0.8%
|
+0.4%
|
+0.3%
|
+0.2%
|
-0.2%
|
+0.3%
|
-1.2%
|
+0.3%
|
-
|
-
|
| 2025 |
+0.6%
|
+0.9%
|
+0.4%
|
+0.7%
|
+0.2%
|
+0.9%
|
+0.1%
|
+1.1%
|
+0.4%
|
+0.3%
|
+0.6%
|
+0.3%
|
| 2024 |
+0.3%
|
-0.5%
|
+0.7%
|
-0.6%
|
+1.1%
|
+0.5%
|
+1.6%
|
+1.2%
|
+1.0%
|
-0.9%
|
+0.6%
|
-0.1%
|
| 2023 |
+1.7%
|
-1.3%
|
+1.5%
|
+0.5%
|
-0.4%
|
-0.1%
|
+0.6%
|
+0.1%
|
-0.6%
|
-0.1%
|
+2.4%
|
+1.8%
|
| 2022 |
-1.2%
|
-0.7%
|
-1.8%
|
-1.5%
|
+0.9%
|
-1.3%
|
+1.6%
|
-1.6%
|
-2.2%
|
-0.2%
|
+2.2%
|
0.0%
|
| 2021 |
-0.2%
|
-0.3%
|
-0.2%
|
+0.4%
|
+0.3%
|
0.0%
|
+0.3%
|
-0.1%
|
-0.2%
|
-0.5%
|
-0.3%
|
+0.1%
|
| 2020 |
+0.9%
|
+0.6%
|
-3.5%
|
+2.8%
|
+1.5%
|
+0.9%
|
+0.7%
|
+0.2%
|
-0.1%
|
+0.1%
|
+0.6%
|
+0.4%
|
| 2019 |
+1.3%
|
+0.3%
|
+1.2%
|
+0.2%
|
+0.7%
|
+1.0%
|
+0.1%
|
+1.1%
|
0.0%
|
+0.5%
|
0.0%
|
+0.4%
|
| 2018 |
-0.3%
|
-0.5%
|
+0.1%
|
-0.1%
|
+0.4%
|
0.0%
|
+0.3%
|
+0.5%
|
-0.1%
|
-0.1%
|
-0.1%
|
+0.8%
|
| 2017 |
+0.3%
|
+0.4%
|
+0.1%
|
+0.4%
|
+0.5%
|
+0.1%
|
+0.4%
|
+0.4%
|
-0.1%
|
+0.1%
|
-0.3%
|
0.0%
|
< -5%
-5% to -2%
-2% to 0%
0%
0% to +2%
+2% to +5%
> +5%
Top Holdings (by weight)
| Symbol |
Company Name |
Weight |
No holdings data available.
Related ETFs: VCSH vs Peers
Comparison highlights key differences on cost, coverage, and focus within sector ETFs.
Investment Strategy
VCSH aims to track the performance of the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index, which includes U.S. dollar-denominated, investment-grade corporate bonds with maturities between one and five years. The index is market-cap weighted, meaning larger issuers have a greater impact on the fund's performance. VCSH employs a passive management strategy, seeking to replicate the index's holdings rather than outperform it. The fund primarily holds bonds rated BBB or higher, emphasizing credit quality. Rebalancing occurs periodically to align with the index's composition, ensuring the fund maintains its target duration and credit profile.
Frequently Asked Questions
What is the average duration of VCSH?
As of 2025, VCSH has an average duration of approximately 2.7 years, reflecting its focus on short-term corporate bonds.
Does VCSH pay dividends?
Yes, VCSH distributes income monthly, derived from the interest payments of its underlying bond holdings.
How does VCSH compare to a money market fund?
VCSH offers higher yield potential than money market funds but carries slightly more risk due to its exposure to corporate bonds. Money market funds typically invest in ultra-short-term securities with minimal credit risk.
Can VCSH lose value?
Yes, like all bond ETFs, VCSH can lose value due to rising interest rates or credit downgrades of its holdings. However, its short duration mitigates some of this risk.
Is VCSH suitable for retirement accounts?
Yes, VCSH can be a suitable component of a retirement portfolio, particularly for investors seeking income with moderate risk.
Industry Overview
The Vanguard Short-Term Corporate Bond ETF (VCSH) provides exposure to the short-term investment-grade corporate bond market. This segment of the fixed-income market is favored by investors seeking higher yields than government bonds while maintaining relatively lower risk compared to high-yield or long-term corporate bonds. Short-term corporate bonds are particularly attractive in environments where interest rates are expected to rise, as their shorter durations make them less sensitive to rate hikes. VCSH offers a convenient way to access this market with the benefits of diversification, liquidity, and low costs.
Alternative Comparison
Compared to its peers, VCSH stands out for its ultra-low expense ratio of 0.04%, making it one of the most cost-efficient options in the short-term corporate bond ETF space. For example, iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a slightly higher expense ratio of 0.06%, while SPDR Portfolio Short Term Corporate Bond ETF (SPSB) charges 0.07%. Unlike some actively managed competitors, VCSH follows a strict index-tracking approach, which may appeal to investors seeking predictable, rules-based exposure. Additionally, VCSH's focus on the 1-5 year maturity range provides a balance between yield and interest rate risk, differentiating it from ultra-short-term or intermediate-term bond ETFs.
Issuer Overview
Vanguard is one of the world's largest investment management companies, known for its low-cost index funds and ETFs. Founded in 1975, Vanguard has built a reputation for investor-friendly practices, including low expense ratios and a client-owned structure. The company is a pioneer in passive investing, offering a wide range of products that track various market indices. VCSH is part of Vanguard's extensive fixed-income ETF lineup, which caters to investors with different risk tolerances and investment horizons.
Conclusion
The Vanguard Short-Term Corporate Bond ETF (VCSH) is a compelling choice for investors seeking diversified exposure to short-term, investment-grade corporate bonds. With its low expense ratio, high liquidity, and focus on credit quality, VCSH offers a cost-effective way to enhance fixed-income portfolios while managing interest rate risk. While not without risks—such as credit and liquidity concerns—the fund's passive strategy and Vanguard's reputation make it a reliable option for both individual and institutional investors.
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