Which Short-Term Bond ETF Is the Better Buy: Vanguard’s Treasury Fund VGSH or Bond Fund BSV?
BSV offers higher yield but greater volatility, while VGSH provides pure Treasury exposure with lower drawdown risk. Both charge just 0.03% annually.
Vanguard offers two short-term bond ETFs: VGSH, which invests in U.S. Treasury securities, and BSV, which includes corporate and international bonds. Both funds have identical expense ratios and aim to track the short end of the yield curve. VGSH provides a more conservative investment with lower price volatility, while BSV offers higher income but with additional credit risk. The choice between the two depends on an investor's risk tolerance and willingness to accept extra credit risk for slightly higher yields.
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