Vanguard Short-Term Bond ETF

Vanguard Short-Term Bond ETF (BSV) is the exchange-traded share class of a Vanguard index fund that tracks the Bloomberg U.S. 1-5 Year Government/Credit Float Adjusted Index: U.S. government and higher-rated corporate bonds maturing in one to five years. Unlike short-term funds that hold only Treasuries or only corporate bonds, it holds both, with about 69% in Treasuries and 28% in corporate bonds as of June 30, 2026. Its yearly fee of 0.03% ties for the lowest among similar funds.

• Over the year to Nov 2, 2026, BSV returned +1.7%, 7th of 8 among similar funds.
• Its 5-year annualized return was +1.8% and its 10-year +2.0%.
• In the 2020 COVID crash, while stocks fell, it gained 0%.
• Its worst full calendar year was 2022 (-5.5%); its best was 2008 (+8.5%).
• The deepest fall in its price history was 8.6% (Aug 3, 2021 to Oct 20, 2022), recovered by Jul 30, 2024.

As of Jun 30, 2026, the fund held 3,185 securities; the ten largest made up 8.36% of assets.

The bonds mature in 2.9 years on average (weighted by size), with an average coupon of 3.55%.

• Over the three months to Jun 30, 2026, investors added a net $520.7M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.21%, +0.09%, +0.07%.

BSV is the exchange-traded share class of Vanguard Short-Term Bond Index Fund, sharing one portfolio with the fund's other share classes. The fund tracks the Bloomberg U.S. 1-5 Year Government/Credit Float Adjusted Index, which includes U.S. government bonds plus investment-grade corporate and international dollar bonds maturing in one to five years. Investment-grade means rating agencies judge the issuer relatively likely to repay. Only medium and larger public issues qualify, and bigger issues carry more weight.

Instead of owning every bond in the index, the fund uses sampling, holding a mix of bonds that together approximate the index's key risk factors. At least 80% of net assets normally sits in index bonds. As of June 30, 2026, the fund had 3,185 holdings, and the 10 largest, all U.S. Treasury notes, made up just 8.36% of assets. Treasuries accounted for about 69% and corporate bonds about 28%.

The fund keeps its average maturity, the average time until its bonds repay, close to the index's, which was 2.82 years as of December 31, 2025. Bonds leave the index once they have less than a year left, so the fund keeps replacing aging holdings; portfolio turnover, the share of holdings replaced in a year, was 55%. ETF shares trade on NYSE Arca at market prices, which can differ slightly from its bonds' value.

• BSV charges 0.03% a year, versus an average of 0.05% for the similar funds below (1st of 8, cheapest first).
• Of that, 0.02% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $3 in the first year and $39 over 10 years (assuming a 5% annual return).

Its short-term, mostly U.S. Treasury holdings have kept price swings small, with a deepest drop of 8.6% since its 2007 launch.

BSV could serve as a reserve that has often held up when stocks fell. Over the stock market's 2007–2009 slide it gained 8.7%, despite a 7% dip in fall 2008 that it made up by late November. In the 2020 COVID crash it fell 4.7% and recovered within a month. But in 2022 it fell 6.6% alongside stocks and lost 5.55% for the calendar year, its worst. Its deepest drop, 8.6%, took about 21 months after the October 2022 low to recover, so withdrawals then meant cashing out at a loss.

It paid monthly, yielding 4.13% over the 12 months to October 27, 2026, though short-term bond income can drop quickly when rates fall. Its 0.03% yearly fee comes to about $3 in year one on $10,000, per the SEC's standard example. Past results don't predict the future, and any plan needs to weigh the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).