Vanguard Ultra-Short Bond ETF

Vanguard Ultra-Short Bond ETF (VUSB) is an actively managed fund that holds investment-grade bonds that mature soon. It aims to pay current income while keeping price swings small. Its 0.10% expense ratio is below the 0.17% average of seven similar ultra-short funds, though iShares' ICSH charges 0.08%. Its deepest drop since its 2021 launch was 1.8%, and it pays income monthly.

• Over the year to Oct 27, 2026, VUSB returned +3.5%, 5th of 8 among similar funds.
• Its 5-year annualized return was +3.7%.
• Its worst full calendar year was 2022 (-0.4%); its best was 2024 (+5.7%).
• The deepest fall in its price history was 1.8% (Oct 1, 2021 to Jun 14, 2022), recovered by Mar 10, 2023.

As of Jun 30, 2026, the fund held 1,281 securities; the ten largest made up 8.77% of assets.

The bonds mature in 2.8 years on average (weighted by size), with an average coupon of 4.16%.

• Over the three months to Jun 30, 2026, investors added a net $748.0M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.40%, +0.37%, +0.24%.

VUSB does not track an index. Vanguard's managers choose the bonds, aiming for current income with limited price swings. At least 80% of net assets go into bonds. These include corporate bonds, US Treasury and agency debt, and asset-backed and mortgage-backed securities, which are bonds backed by pools of loans. The fund aims for a dollar-weighted average maturity of 0 to 2 years. That figure is the average time until its bonds repay, weighted by how much the fund holds of each. Short maturities make the fund's price react less to interest-rate changes than longer-term bond funds do.

The fund buys only investment-grade bonds. Most are rated A3 or better, and some carry a Baa rating, the lowest investment-grade tier. As of June 30, 2026, it held 1,281 securities, and the top 10 made up just 8.77% of assets. The largest was a Treasury bill at about 4.2%. Bonds from PNC, Regions Bank, US Bancorp and Charles Schwab came in at roughly 0.5% each. About 25% was in CDOs and CLOs, asset-backed securities built from pools of loans.

Holdings are not rebalanced on a fixed schedule. The managers trade as they see fit, and portfolio turnover was 65%. The fund may use derivatives such as futures, swaps and currency forwards, but these made up about 0.01% of assets as of June 30, 2026. Shares trade on Cboe BZX, so the market price can sometimes differ from net asset value.

• VUSB charges 0.1% a year, versus an average of 0.17% for the similar funds below (2nd of 8, cheapest first).
• Of that, 0.09% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $10 in the first year and $128 over 10 years (assuming a 5% annual return).

Its short-term, investment-grade bonds have had small, brief declines, which makes it a place for money that may be needed soon rather than a source of growth.

VUSB could serve as a defensive holding for money set aside for near-term spending. It launched in April 2021, so it has no record from the 2008 or 2020 crashes. In the 2022 bear market it fell 1.5% from January 4 to June 14, 2022, and was back to its earlier high by January 19, 2023. Its deepest drop was 1.8%. Its worst calendar year was 2022, with a 0.43% loss. A retiree forced to sell shares that year would have taken a small loss, not a large one. The trailing yield was 4.3% as of October 27, 2026, paid monthly, but income can shrink when rates fall. In the SEC's standard example, fees come to about $10 a year on $10,000. The trade-off is modest growth: 1.96% a year from launch through December 31, 2025. 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).