What Is VCSH? Vanguard Short-Term Corporate Bond Index Fund ETF Shares
Last updated September 2026
Short answer
VCSH is Vanguard Short-Term Corporate Bond Index Fund ETF Shares, an ETF that tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index at a 0.03% expense ratio. VCSH holds investment-grade corporate bonds maturing within one to five years. It distributes about 4.44%, only marginally below the intermediate corporate fund at 4.78%, while carrying substantially less exposure to rate moves because its bonds mature and get replaced so much sooner. That combination is why it tends to be used for money with a horizon of a few years: not cash, but not a long-duration commitment either.
VCSH is issued by Vanguard and tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index. It charges a 0.03% expense ratio, holds approximately $51.8B in assets under management, yields about 4.44%, and launched in 2009.
What short duration actually buys you
A bond fund's sensitivity to rates scales roughly with how long its holdings take to mature. At one to five years, VCSH turns over its portfolio quickly, so when rates rise it reinvests into higher-yielding bonds sooner and the price impact is far smaller than on a longer fund.
The interesting part is how little yield that costs. VCSH distributes about 4.44% against roughly 4.78% for the five-to-ten-year version. Giving up a third of a percentage point to remove a large share of the rate risk is the trade being offered, and for money you might actually need it is often the right one.
Not a cash substitute, despite appearances
Short duration is not zero duration. VCSH can and does fall in value, and it carries genuine corporate credit risk that a money market fund or Treasury bill does not. In a credit shock, short-dated corporate bonds reprice too.
The practical framing: money you need next month belongs in cash. Money you need in three to five years, where you want more than a savings rate and can tolerate small fluctuations, is the case this fund is built for.
VCSH holdings: top 10
Approximate weights as of August 2026. Each ticker links to its individual stock guide in Walnut.
| Rank | Ticker | Company | % of VCSH |
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How do I invest in VCSH?
There are three common ways to get VCSH exposure. Buy shares (or fractional shares) of VCSH directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic portfolio in Walnut, so VCSH sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. VCSH trades like a stock during market hours, so you buy it the same way you would any listed share.
New to buying funds? See how to buy an ETF, step by step.
Is VCSH a good buy?
Whether VCSH is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index, so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is VCSH a buy?
The bottom line on VCSH
VCSH gives you the Bloomberg U.S. 1-5 Year Corporate Bond Index exposure in one ticker at a 0.03% expense ratio. Most investors use it as a core holding and layer more concentrated thematic portfolios on top.
More on VCSH
Whether VCSH is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is VCSH a buy?
VCSH yields 4.44% as of August 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see VCSH dividend: yield and schedule.
New to funds like VCSH? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.
Wondering how VCSH fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in VCSH with AI
Connect the broker you already use and ask Walnut's AI how VCSH fits what you actually hold: what it overlaps with, what it leaves you exposed to, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is VCSH?
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VCSH is the Vanguard Short-Term Corporate Bond ETF. It tracks the Bloomberg U.S. 1-5 Year Corporate Bond Index, holding investment-grade corporate debt maturing within one to five years. It charges 0.03%, holds about $51.8B, distributes roughly 4.44%, and launched in 2009.
Is VCSH a safe place to park cash?
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Safer than a long bond fund, and not as safe as cash. It can lose value, and it carries corporate credit risk that a money market fund does not. For money needed within weeks, cash is the right answer. For a three-to-five-year horizon, this is the case VCSH is built for.
VCSH vs VCIT: which should I hold?
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It comes down to your horizon. VCSH holds one-to-five-year corporate bonds and distributes about 4.44%; VCIT holds five-to-ten-year and distributes about 4.78%. VCSH gives up roughly a third of a percentage point of yield to shed a large part of the interest-rate sensitivity. Shorter horizon or less tolerance for price swings points to VCSH.
Why is VCSH less affected by interest rates?
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Because its bonds mature quickly and are replaced. A fund holding one-to-five-year debt recycles into new, higher-yielding bonds soon after rates rise, so the price hit is much smaller than on a fund holding ten-year or thirty-year paper.
VCSH vs a money market fund: what is the trade?
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A money market fund holds very short, very high-quality instruments and its price barely moves. VCSH takes corporate credit risk and a few years of duration to earn more yield. In calm markets VCSH usually pays more; in a credit shock it can fall while the money market fund does not.
How often does VCSH pay?
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Monthly. The payout tracks prevailing short-term rates fairly closely, so it adjusts faster than a long-duration fund when the rate environment changes, in both directions.
What is the main risk in VCSH?
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Credit, more than rates. Duration is short enough that rate moves have a limited effect, but these are corporate borrowers. In a sharp economic downturn, investment-grade spreads widen and short-dated corporate bonds fall in price alongside everything else.
How is VCSH taxed?
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Its distributions are interest income, generally taxed at ordinary rates rather than the lower qualified-dividend rates that apply to most stock dividends. Since the yield is the entire reason to hold it, the account it sits in matters more here than for a growth fund. This is not tax advice.
What is VCSH's expense ratio?
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VCSH has an expense ratio of 0.03% per year as of August 2026, charged by Vanguard and deducted from the fund's value rather than billed to you separately. On a $10,000 position that is roughly $3 a year. Fees compound over time, so on a long-term holding the expense ratio is one of the few return drivers you control. It is worth comparing against other funds that track the Bloomberg U.S. 1-5 Year Corporate Bond Index before you choose.
How do I compare VCSH to similar ETFs?
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Put a few fields side by side: the expense ratio (fees compound over decades), the index or strategy it tracks, the top holdings and how much they overlap with what you already own, the dividend yield, and the AUM, liquidity, and bid-ask spread that affect trading costs. For index funds, tracking error (how closely it follows its index) and tax efficiency matter too. VCSH's figures are above; the full method is in Walnut's guide on how to compare ETFs.
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Walnut is informational, not investment advice. Holdings weights and fund statistics on this page are approximations stamped to August 2026; verify current figures against Vanguard's fund page or your broker before investing.