What Is VGSH? Vanguard Short-Term Treasury ETF
Short answer
VGSH is a Vanguard ETF that holds US Treasury notes maturing in one to three years, so it is a short-term government bond fund rather than a stock fund. Its short duration means very low interest-rate risk, which makes it a common choice for capital preservation and cash-like income. It is comparable to SHY (which tracks a similar 1-3 year Treasury index), while SGOV and BIL hold even shorter T-bills (0-3 months and 1-3 months) and so move even less when rates change. VGSH currently yields roughly 3.8% on a 30-day SEC basis and charges just 0.03%.
VGSH is issued by Vanguard and tracks Bloomberg US Treasury 1-3 Year Index. It charges a 0.03% expense ratio, holds approximately ~$34 billion in assets under management, yields about ~3.8% (30-day SEC yield), and launched in November 19, 2009.
What is VGSH?
VGSH is a Vanguard ETF that holds US Treasury notes maturing in one to three years, so it is a short-term government bond fund rather than a stock fund. Its short duration means very low interest-rate risk, which makes it a common choice for capital preservation and cash-like income. It is comparable to SHY (which tracks a similar 1-3 year Treasury index), while SGOV and BIL hold even shorter T-bills (0-3 months and 1-3 months) and so move even less when rates change. VGSH currently yields roughly 3.8% on a 30-day SEC basis and charges just 0.03%.
VGSH is issued by Vanguard and tracks Bloomberg US Treasury 1-3 Year Index, so a single ticker gives you the whole basket of underlying holdings weighted by the index's methodology rather than by any active stock-picking.
VGSH holdings: what's actually inside
VGSH does not hold a basket of individual stocks. It gets its exposure synthetically, through derivatives such as swaps and futures rather than by owning the underlying shares, so there is no conventional top-10 equity holdings list. See the description above for what VGSH actually tracks and how that exposure is built.
The bottom line on VGSH
VGSH offers low-cost exposure to short-term US Treasuries with minimal credit risk and only modest sensitivity to interest-rate moves. It is built for stability and income rather than capital appreciation, which makes its return profile very different from an equity ETF.
More on VGSH
Whether VGSH 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 VGSH a buy?
VGSH yields ~3.8% (30-day SEC yield) as of early 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see VGSH dividend: yield and schedule.
Build a portfolio around VGSH with Walnut
Use VGSH as your core holding, then let Walnut's AI propose thematic satellites: AI infrastructure, dividend growth, clean energy, whatever you believe in. Connect your broker, build the basket in conversation, track it as one unit.
FAQ
What is VGSH?
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VGSH is the Vanguard Short-Term Treasury ETF, a passively managed bond fund that tracks the Bloomberg US Treasury 1-3 Year Index. It holds US Treasury notes maturing in one to three years and is used mainly for capital preservation and steady, cash-like income. It launched in 2009 and is one of the larger short-term Treasury ETFs available.
What is VGSH's expense ratio?
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VGSH charges an expense ratio of about 0.03%, which is roughly 30 cents per year on every $1,000 invested. That is among the lowest costs in the short-term bond category and reflects Vanguard's passive, index-tracking approach.
What does VGSH hold?
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VGSH holds US Treasury notes with one to three years left until maturity, not company stocks. There are no equities in the fund, so you will not find names like Apple or Microsoft in it. Its returns come from the interest those Treasuries pay plus small price changes as interest rates move.
VGSH vs SHY vs SGOV?
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VGSH and iShares SHY both track 1-3 year US Treasury indexes and behave very similarly. SGOV is different: it holds ultra-short 0-3 month Treasury bills, so it has even less interest-rate sensitivity and trades almost like cash, while VGSH carries a slightly longer duration and can move a bit more when rates change.
What is VGSH's yield?
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VGSH's 30-day SEC yield has recently been around 3.8%, though the exact figure changes as short-term interest rates move. Distributions are paid monthly. The yield largely tracks where short-term Treasury rates sit, so it rises and falls with Federal Reserve policy.
Is VGSH a good investment?
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Whether VGSH fits you depends on your goals, time horizon, and risk tolerance. It is designed for stability and income rather than growth, so it suits investors prioritizing capital preservation over appreciation. Walnut is informational, not investment advice, so consider your own situation or consult a professional before investing.
How sensitive is VGSH to interest rates?
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VGSH has a short duration of roughly two years, meaning a one percentage point rise in interest rates would tend to reduce its price by about 2%, offset over time by its interest income. That is far less sensitivity than long-term Treasury funds, but more than ultra-short T-bill funds like SGOV or BIL.
Can VGSH lose value?
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Yes. Although its holdings are backed by the US government and carry essentially no default risk, the fund's share price can decline modestly when interest rates rise, because existing bonds become less valuable than newly issued higher-rate ones. The declines are typically small given the short maturities, but VGSH is not guaranteed and is not a substitute for an FDIC-insured savings account.
How do I compare VGSH 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. VGSH'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 early 2026; verify current figures against Vanguard's fund page or your broker before investing.