ETF Evaluator:
Vanguard Mortgage-Backed Secs ETF (VMBS)
Follow This ETF
(as of Jul 30)
Best Performing in Government Mortgage-Backed Bond Over the Last Year
| 5.8% | PIMCO Mortgage-Backed Securities Act ETF (PMBS) |
| 5.7% | iShares Mortgage-Backed Secs Act ETF (MBBA) |
| 5.5% | Janus Henderson Mortgage-Backed Sec ETF (JMBS) |
| 5.5% | Academy Veteran Bond ETF (VETZ) |
| 5.4% | Regan Floating Rate MBS ETF (MBSF) |
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ETF Details
Vanguard Mortgage-Backed Secs ETF Overview
Vanguard Mortgage-Backed Secs ETF (VMBS) is a passively managed Taxable Bond Government Mortgage-Backed Bond exchange-traded fund (ETF). Vanguard launched the ETF in 2009.
The investment seeks to track the performance of a market-weighted mortgage-backed securities index.
The fund employs an indexing investment approach designed to track the performance of the Bloomberg U.S. MBS Float Adjusted Index. This index covers U.S. agency mortgage-backed pass-through securities issued by the GNMA, the FNMA, and the FHLMC. To be included in the index, pool aggregates must have at least $1 billion currently outstanding and a weighted average maturity of at least 1 year. All of the fund's investments will be selected through the sampling process, and at least 80% of the fund's assets will be invested in bonds included in the index.
About Vanguard Mortgage-Backed Secs ETF (VMBS)
There are 1 members of the management team with an average tenure of 13.36 years: Joshua Barrickman (2013). Management tenure is more important for actively managed ETFs than passive index ETFs.
The ETF has 2 primary benchmarks: Bloomberg US Agg Float Adj TR USD index with a weighting of 100% and Bloomberg US MBS Float Adjusted TR USD index with a weighting of 100%. Vanguard Mortgage-Backed Secs ETF has 5133 securities in its portfolio. The top 10 holdings constitute 4.1% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.
Vanguard Mortgage-Backed Secs ETF is part of the Fixed Income global asset class and is within the Taxable Bond ETF group. Vanguard Mortgage-Backed Secs ETF has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0% There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 94.5% (94.5% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Vanguard Mortgage-Backed Secs ETF has 5.5% of the portfolio in cash.
Assets Under Management
The fund has $15 billion in total assets, which is above the $5 billion average for the Government Mortgage-Backed Bond category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.
VMBS Performance and Fees
The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Vanguard Mortgage-Backed Secs ETF expense ratio is low compared to funds in the Government Mortgage-Backed Bond category. Vanguard Mortgage-Backed Secs ETF has an expense ratio of 0.03%, which is 88% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.
High portfolio turnover can translate to higher expenses and lower aftertax returns. Vanguard Mortgage-Backed Secs ETF has a portfolio turnover rate of 91%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 281% for the Government Mortgage-Backed Bond category.
Recently, in the month of June 2026, Vanguard Mortgage-Backed Secs ETF returned 0.2%, which earned it a grade of C, as the Government Mortgage-Backed Bond category had an average return of 0.3%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.
Vanguard Mortgage-Backed Secs ETF has a trailing yield of 4.17%, which is below the 4.61% category average.
The fund normally distributes its income monthly and its capital gains annually.
It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.
Vanguard Mortgage-Backed Secs ETF Grades
Year to date, the ETF has returned 1.2%, 0.1 percentage points worse than the category, which translates into a grade of C. The fund has returned 5.3% over the past year (grade of C), 4.7% over the past three years (grade of B) and 0.6% per year over the past five years (grade of C) and 1.4% per year over the past 10 years (grade of A).
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VMBS Trailing NAV Total Returns Data as of 6/30/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| VMBS Return (NAV) | 0.2% | 0.7% | 5.3% | 4.7% | 0.6% | 1.4% |
| VMBS Return (Price) | 0.1% | 0.7% | 5.3% | 4.7% | 0.6% | 1.4% |
| NAV +/- Price Return | 0.086% | 0.002% | -0.038% | 0.038% | -0.010% | 0.000% |
| Government Mortgage-Backed Bond Avg | 0.3% | 0.7% | 5.2% | 4.6% | 0.6% | 1.4% |
| VMBS Grade (NAV) | C | B | C | B | C | A |
| +/- Category (NAV) | -0.1% | 0.0% | 0.0% | 0.1% | -0.0% | -0.1% |
| VMBS Tax-Cost Ratio | na | na | 1.7% | 1.6% | 1.3% | 1.1% |
VMBS Annual NAV Total ReturnsData as of 6/30/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| VMBS Return (NAV) | 1.2% | 8.5% | 1.4% | 5.0% | -11.6% | -1.3% | 3.8% | 6.2% | 0.9% | 2.4% | 1.4% |
| VMBS Return (Price) | 1.2% | 8.4% | 1.7% | 5.3% | -11.9% | -1.3% | 3.8% | 6.2% | 0.9% | 2.5% | 1.3% |
| NAV +/- Price Ret | -0.020% | -0.013% | 0.183% | 0.059% | 0.029% | -0.029% | -0.005% | 0.3% | 4.4% | 4.1% | -12.1% |
| Government Mortgage-Backed Bond Avg | 1.2% | 8.1% | 1.7% | 5.1% | -11.6% | -1.0% | 4.5% | 6.3% | 0.7% | 2.2% | 1.5% |
| VMBS Grade (NAV) | C | B | D | D | C | D | F | D | A | A | B |
| +/- Category | -0.1% | 0.4% | -0.2% | -0.1% | 0.0% | -0.3% | -0.7% | -0.1% | 0.1% | 0.2% | -0.1% |
| Risk Measures | |
| Beta: | 1.12 |
| R-Squared: | 99% |
| Standard Deviation: | 6.3% |
| Category Risk Index: | 1.03 |
| Category Risk Rating: | Above Average |
| Total Risk Index: | 0.51 |
| Total Risk Rating: | Low |
| Portfolio Characteristics | |
| Yield: | 4.2% |
| Total Assets: | $ 17,325 Mil |
| Share Class Assets: | $ 15,621 Mil |
| Turnover: | 91.0% |
| Expense Ratio: | 0.03% |
| Index Fund: | Yes |
| Index Tracked: | Bloomberg US Agg Float Adj TR USD |
| Index Weighting: | 100% |
| Leveraged: | No |
| Socially Responsible Fund: | No |
| Capital Gains Distribution Frequency: | Annually |
| Income Distribution Frequency: | Monthly |
Management Team
| Number of Managers: 1 | |||
| Longest Tenure: 13.4 years | |||
| Average Tenure: 13.4 years | |||
| Managers (Year): Barrickman Joshua (2013) | |||
Portfolio Composition (as of 5/31/26)
| # of Holdings: | 5133 |
| % in Top 10 Holdings: | 4.1% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | 0.0% |
Portfolio Allocation |
|
| Domestic Stock: | 0.0% |
| Foreign Stock: | 0.0% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 94.5% |
| Foreign Bond: | 0.0% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 5.5% |
Purchase Information
| Legal Structure: | Open Ended Investment Company |
| Fund Family: | Vanguard |
| Phone Number: | 866-499-8473 |
| Website: | www.vanguard.com |
| Inception Date: | November 19, 2009 |
Expenses and Fees
| Expense Ratio (%): | 0.03% (Rating: Low) |
| Category Average Expense Ratio (%): | 0.25% |
