At a glance
VCSH charges 0.03% a year, below the 0.1% average of the 7 funds most like it (the cheapest of 8). It has $51.74B in assets, the 3rd largest of that group; it paid 4.54% of its price in distributions over the past 12 months, monthly. Over the past year it returned +1.9% with distributions reinvested, 3rd of those 8 funds; over three years it returned +5.7% a year. At its worst it fell 12.9% in the 2020 crash (S&P 500: 33.7%) and 7.8% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 2 months and 15 months after the lows. Its ten largest positions make up 1.9% of the fund, out of 3,064 in all.
The short version
Vanguard Short-Term Corporate Bond ETF (VCSH) tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index: investment-grade (higher-rated) company bonds maturing in one to five years, from issuers such as Bank of America, AbbVie and Amazon. Its 0.03% annual expense ratio compares with a 0.10% average for seven similar funds and 0.04% for the closest match, iShares' IGSB. It pays income monthly; its yield over the 12 months to October 30, 2026, was 4.54%.
Price history
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VCSH +1.9% over the year to Oct 30, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| VCSH official prospectus, to Dec 31, 2024 | — | +4.95% | — | +1.93% | +2.36% | — |
| VCSH price data to Oct 30, 2026 | +1.0% | +1.9% | +5.7% | +2.5% | +2.7% | +2.9% |
- Over the year to Oct 30, 2026, VCSH returned +1.9%, 3rd of 8 among similar funds.
- Its 5-year annualized return was +2.5% and its 10-year +2.7%.
- In the 2020 COVID crash it fell 12.9% and regained its old high 2.3 months after the low.
- Its worst full calendar year was 2022 (-5.6%); its best was 2019 (+7.0%).
- The deepest fall in its price history was 12.9% (Mar 5, 2020 to Mar 19, 2020), recovered by May 28, 2020.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +1.0% | — |
| 2025 | +6.8% | — |
| 2024 | +4.9% | +4.95% |
| 2023 | +6.2% | +6.24% |
| 2022 | -5.6% | -5.71% |
| 2021 | -0.6% | -0.41% |
| 2020 | +5.1% | +5.08% |
| 2019 | +7.0% | +6.85% |
| 2018 | +0.9% | +0.91% |
| 2017 | +2.2% | — |
| 2016 | +2.6% | — |
| 2015 | +1.3% | — |
| 2014 | +1.8% | — |
| 2013 | +1.4% | — |
| 2012 | +5.6% | — |
| 2011 | +3.0% | — |
| 2010 | +5.3% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 7.2% over that stretch · deepest drop along the way 12.9%, back to its old high 2.3 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 7.7% over that stretch · deepest drop along the way 7.8%, back to its old high 14.8 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $2.6500 | |
| 2025 | $3.4700 | +12.3% |
| 2024 | $3.0900 | +29.3% |
| 2023 | $2.3900 | +56.2% |
| 2022 | $1.5300 | +3.4% |
| 2021 | $1.4800 | -21.3% |
| 2020 | $1.8800 | -19.0% |
| 2019 | $2.3200 | +13.7% |
| 2018 | $2.0400 | +14.6% |
| 2017 | $1.7800 | +6.8% |
| 2016 | $1.6670 | +1.5% |
| 2015 | $1.6420 | +2.8% |
| 2014 | $1.5980 | -2.4% |
| 2013 | $1.6370 | -10.9% |
| 2012 | $1.8380 | -2.9% |
| 2011 | $1.8930 | +2.0% |
| 2010 | $1.8550 |
What's inside
As of Aug 31, 2026, the fund held 3,064 securities; the ten largest made up 1.94% of assets.
| Holding | Weight | |
|---|---|---|
| Bank of America Corp Bonds and notes | 0.23% | |
| Space Exploration Technologies Corp Bonds and notes | 0.22% | |
| AbbVie Inc Bonds and notes | 0.20% | |
| T-Mobile USA Inc Bonds and notes | 0.19% | |
| CVS Health Corp Bonds and notes | 0.19% | |
| Amazon.com Inc Bonds and notes | 0.19% | |
| Boeing Co Bonds and notes | 0.19% | |
| Wells Fargo & Co Bonds and notes | 0.18% | |
| JPMorgan Chase & Co Bonds and notes | 0.17% | |
| Pfizer Investment Enterprises Pte Ltd Bonds and notes | 0.17% | |
| Morgan Stanley Bonds and notes | 0.17% | |
| Amgen Inc Bonds and notes | 0.16% | |
| Bank of America Corp Bonds and notes | 0.16% | |
| Cigna Group Bonds and notes | 0.16% | |
| NVIDIA Corp Bonds and notes | 0.16% |
By country
United States 82.3%United Kingdom 4.52%Canada 3.57%Japan 2.59%Australia 0.91%By issuer
Companies 98.67%US Treasury 0.06%The bonds mature in 3.5 years on average (weighted by size), with an average coupon of 4.28%.
Source: N-PORT holdings report as of Aug 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Aug 31, 2026, investors added a net $1.92B (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.12%, -0.13%, +0.29%.
How it works
VCSH is the exchange-traded share class of Vanguard Short-Term Corporate Bond Index Fund, sharing one portfolio with its other share classes. The fund tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index. It covers investment-grade (lower default risk), fixed-rate, taxable U.S. dollar bonds maturing in one to five years, issued by U.S. and non-U.S. industrial, utility and financial companies. The index is market-weighted, so issuers with more bonds outstanding carry more weight.
Instead of owning every index bond, the fund uses sampling: it holds a mix of bonds that together match the index's key risk traits. At least 80% of net assets must sit in index bonds, and the average maturity stays in line with the index's, which was 2.9 years as of August 31, 2025. As of August 31, 2026, the fund had 3,064 holdings, and the 10 largest made up just 1.94% of assets. Bonds from Bank of America, Space Exploration Technologies (SpaceX) and AbbVie led the list at about 0.2% each.
Bonds leave the index once they have less than one year left to maturity, so the portfolio changes steadily. Turnover was 73%, per the prospectus filed December 19, 2025. The fund also held tiny Treasury futures positions that netted to about zero. ETF shares trade on Nasdaq at market prices, which can drift from the value of the bonds.
What it really costs
- VCSH charges 0.03% a year, versus an average of 0.1% 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).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| VCSH | $3 | $10 | $17 | $39 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
Its short-maturity, investment-grade company bonds have kept price swings small, though it still fell during the 2020 and 2022 downturns.
VCSH launched in November 2009, so it has no record from the 2008 crisis. Its deepest drop was 12.9%, from March 5 to March 19, 2020, in the COVID crash; it recovered by May 28, 2020. The 2022 bear market brought a slower 7.8% decline that took about 14.8 months to recover, and 2022 was its worst calendar year, a 5.71% loss. Drawing cash near those lows would have locked in losses.
It pays income monthly, with a yield of 4.54% over the 12 months to October 30, 2026, though income from short-term bonds can drop quickly when rates fall. Its holdings are company bonds, so they carry credit risk, the chance an issuer can't pay. It costs 0.03% a year, or $39 over 10 years in the SEC's $10,000 example. Past results don't predict future ones, and a retirement plan should weigh the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors wanting a very low-cost corporate bond holding: 0.03% a year, or $39 over 10 years in the SEC's $10,000 example.
- Retirees who value monthly income from investment-grade company bonds; the yield was 4.54% over the 12 months to October 30, 2026.
- Those wanting smaller price swings than longer bond funds: its worst calendar year, 2022, lost 5.71%, and its worst quarter lost 3.71%.
Look elsewhere if
- Anyone wanting a hedge against stock crashes: it fell 12.9% in March 2020, during the COVID crash, before recovering by late May.
- Investors who want government-backed bonds: holdings were almost all company debt, with just 0.06% in U.S. Treasuries as of August 31, 2026.
- Long-term growth seekers: its average annual return was 2.36% over the 10 years through December 31, 2024.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| VCSH this fund | 3.5 yrs | 0.03% | $51.74B | +1.9% | +5.7% |
| IGSB iShares 1-5 Year Investment Grade Corporate… | 3.7 yrs | 0.04% | $23.46B | +1.5% | +5.4% |
| FCSH Federated Hermes Short Duration Corporate E… | 2.8 yrs | 0.3% | $65.2M | +1.2% | +5.2% |
| SPSB SPDR Portfolio Short Term Corporate Bond ETF | 2.4 yrs | 0.04% | $10.63B | +2.3% | +5.1% |
| USHY iShares Broad USD High Yield Corporate Bond… | 5.4 yrs | 0.08% | $28.59B | +1.2% | +7.7% |
| JPST JPMorgan Ultra-Short Income ETF | 2 yrs | 0.18% | $41.13B | +3.1% | +4.8% |
| BSV Vanguard Short-Term Bond ETF | 2.9 yrs | 0.03% | $69.75B | +1.7% | +4.5% |
| VCIT Vanguard Intermediate-Term Corporate Bond E… | 8.2 yrs | 0.03% | $72.04B | -0.6% | +7.1% |
Questions investors ask
Does VCSH pay monthly dividends?
Yes. VCSH pays income every month. Over the 12 months to October 30, 2026, it paid $3.54 per share, a yield of 4.54%. The payments come from interest on its bonds, whose average coupon (the fixed interest rate a bond pays) was 4.28% as of August 31, 2026. Because its bonds are short-term, the fund reinvests often, so its income can fall fairly quickly when interest rates drop.
What's the difference between VCSH and IGSB?
Not much. IGSB, the iShares 1-5 Year Investment Grade Corporate Bond ETF, is VCSH's closest match on maturity and issuer mix. VCSH costs 0.03% a year versus 0.04% for IGSB. VCSH is larger: $51.7 billion across all of the fund's share classes, against $23.5 billion for IGSB, both as of August 31, 2026. Average maturity was 3.5 years versus 3.7. Both returned an average of 5.7% a year over the three years to October 30, 2026.
Is VCSH good for retirement?
It can serve as a defensive bond holding, but it has limits. VCSH may suit retirees who want low costs (0.03% a year), monthly income and short-term bonds with smaller price swings. Its worst calendar year was 2022, a 5.71% loss, and its 10-year average annual return was 2.36% through December 31, 2024, so it has offered more stability than growth. Its company bonds also carry credit risk, the chance an issuer fails to pay. It covers one role in a portfolio, not a whole plan.
Can you lose money in VCSH?
Yes. VCSH fell 12.9% between March 5 and March 19, 2020, during the COVID crash, though it recovered by May 28, 2020. In the 2022 bear market it dropped 7.8% and needed about 14.8 months to regain its peak, and it lost 5.71% for calendar 2022. Bond prices fall when interest rates rise, and company bonds can lose value if investors doubt an issuer's ability to pay. The fund is not a bank deposit and is not FDIC insured.
What is VCSH's expense ratio?
VCSH's expense ratio is 0.03% a year, including a 0.02% management fee, according to its prospectus filed December 19, 2025. In the SEC's standard example, $10,000 invested at a 5% annual return would cost about $3 in the first year, $17 over five years and $39 over 10 years. That compares with a 0.10% average for seven similar funds, ranging from 0.03% for two other Vanguard funds to 0.30% for Federated Hermes Short Duration Corporate ETF.