Vanguard Short-Term Treasury ETF

Vanguard Short-Term Treasury ETF (VGSH) tracks the Bloomberg U.S. Treasury 1-3 Year Index, holding Treasury notes and bonds that mature in one to three years. Its yearly fee is 0.03% of assets, tied for the lowest among similar funds. iShares 1-3 Year Treasury Bond ETF (SHY) charges 0.15%. It may suit money set aside for the next few years, because short maturities keep price swings small. Even so, it lost 3.86% in 2022.

• Over the year to Oct 30, 2026, VGSH returned +2.2%, 5th of 8 among similar funds.
• Its 5-year annualized return was +2.1% and its 10-year +1.8%.
• In the 2020 COVID crash, while stocks fell, it gained 2.2%.
• Its worst full calendar year was 2022 (-3.9%); its best was 2025 (+5.1%).
• The deepest fall in its price history was 5.7% (Apr 20, 2021 to Oct 20, 2022), recovered by May 15, 2024.

As of Aug 31, 2026, the fund held 91 securities; the ten largest made up 14.24% of assets.

The bonds mature in 1.9 years on average (weighted by size), with an average coupon of 3.16%.

• Over the three months to Aug 31, 2026, investors added a net $5.50B (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.06%, +0.13%, +0.25%.

VGSH is the exchange-traded share class of Vanguard Short-Term Treasury Index Fund. It aims to track the Bloomberg U.S. Treasury 1-3 Year Index. That index holds U.S. Treasury bonds with one to three years left to maturity and weights them by market size, so larger issues count more. The index leaves out Treasury Inflation-Protected Securities (TIPS), floating-rate notes and certain other types. Normally, at least 80% of the fund's net assets sit in bonds from the index.

Vanguard does not buy every bond in the index. Instead it samples: it holds a mix of bonds that together match the index on key risk factors and other traits. It also keeps the fund's average maturity in line with the index's, which was 2 years as of August 31, 2025. As of August 31, 2026, the fund's 91 holdings averaged 1.9 years to maturity and a 3.16% coupon (the fixed interest rate a bond pays). The largest single note was 2.0% of assets, the top 10 made up 14.2%, and the fund used no derivatives.

Bonds leave the index once they have less than a year left, and newer notes replace them. That steady roll helps explain the fund's 93% turnover, a measure of how much of the portfolio is replaced in a year. Shares trade on Nasdaq at market prices, which can differ slightly from the value of the bonds.

• VGSH charges 0.03% a year, versus an average of 0.09% 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).

It holds short-term U.S. Treasury debt that has barely moved with stocks (a one-year beta of 0.02), so it offers steadier value and modest income rather than growth.

VGSH can cushion money needed within a few years. In the 2020 COVID crash, it gained 2.2% while stocks slid, and a 0.5% dip was erased within days. The 2022 bear market was harder: it fell as much as 4.6% and took 14.6 months to recover. Its worst calendar year was 2022, at -3.9%. Its deepest drop, 5.7% from April 2021 to October 2022, took 18.8 months to win back, so a retiree selling during that stretch would have taken a small loss. The fund launched in 2009, after the 2008 crisis.

Over the 12 months to October 30, 2026, it yielded 3.78%, paid monthly, though that income can fall quickly when rates drop. It costs 0.03% a year, or $39 over 10 years on $10,000 in the SEC's standard example. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

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