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<h2>Key Points</h2><ul><li>SMB has a higher expense ratio and lower asset size than VGSH.</li><li>VGSH has a higher trailing 12-month yield.</li><li>Both funds focus on ultra-short bonds, but SMB targets tax-exempt municipal debt, which could appeal to investors in higher tax brackets.</li><li>10 stocks we like better than VanEck ETF Trust - VanEck Short Muni ETF ›</li></ul><p>The <strong>VanEck Short Muni ETF</strong> (<strong>NYSEMKT:SMB</strong>) and the <strong>Vanguard Short-Term Treasury ETF</strong> (<strong>NASDAQ:VGSH</strong>) both offer low-cost, short-duration bond exposure. However, VGSH offers a higher yield, while SMB pays a lower yield but with tax advantages from municipal bonds.</p><p>Both funds aim to deliver safe income by investing in high-quality, short-term bonds. VGSH sticks to U.S. Treasury debt, prioritizing safety and liquidity, while SMB holds a diversified mix of short-term municipal bonds, appealing to those seeking tax-exempt income. This comparison highlights key differences in cost, returns, risk, and portfolio construction for investors considering these two options.</p><h2 id="snapshot-cost-amp-size">Snapshot (cost &amp; size)</h2><section><table><tbody><tr><th>Metric</th><th>VGSH</th><th>SMB</th></tr><tr><td>Issuer</td><td>Vanguard</td><td>VanEck</td></tr><tr><td>Expense ratio</td><td>0.03%</td><td>0.07%</td></tr><tr><td>1-yr return (as of 2026-03-24)</td><td>3.77%</td><td>3.44%</td></tr><tr><td>Dividend yield</td><td>3.96%</td><td>2.69%</td></tr><tr><td>Beta</td><td>0.25</td><td>0.34</td></tr><tr><td>AUM</td><td>$32 billion</td><td>$303 million</td></tr></tbody></table></section><p><em>Beta measures price volatility relative to the S&amp;P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.</em></p><p>SMB charges a slightly higher expense ratio than VGSH, making VGSH the more affordable option. However, VGSH also offers a higher trailing yield, which may appeal to investors prioritizing current income over potential tax savings from municipal bonds.</p><h2 id="performance-amp-risk-comparison">Performance &amp; risk comparison</h2><section><table><tbody><tr><th>Metric</th><th>VGSH</th><th>SMB</th></tr><tr><td>Max drawdown (5 y)</td><td>(5.7%)</td><td>(7.5%)</td></tr><tr><td>Growth of $1,000 over 5 years</td><td>$1,090</td><td>$1,058</td></tr></tbody></table></section><h2 id="whatx27s-inside">What's inside</h2><p>SMB tracks a portfolio of 330 short-term, investment-grade, tax-exempt municipal bonds, maintaining a focus on cash-equivalent and very short-duration debt. The fund’s largest holdings are California Community Choice Financing A, New York City Transitional Finance Auth, and State of California. With an 18-year track record, SMB may appeal to those seeking diversification across many issuers and potentially lower tax liability, depending on individual circumstances.</p><p>VGSH, in contrast, currently holds 91 U.S. Treasury securities, offering exposure exclusively to government-backed bonds and virtually eliminating credit risk. The fund’s largest positions are United States Treasury Note/Bond issues with varying maturities, and its portfolio is designed for maximum liquidity and stability. Unlike SMB, VGSH does not provide tax-exempt income, but its simplicity and scale may suit those seeking straightforward access to the short-term Treasury market.</p><p>For more guidance on ETF investing, check out the full guide at this link.</p><h2 id="what-this-means-for-investors">What this means for investors</h2><p>Investors looking for a solid short-term bond fund have solid options in SMB and VGSH. Vanguard is known for offering straightforward, low-cost funds, and VGSH certainly fits the bill. Its ultra-low expense ratio and massive size, with over $32 billion in net assets, will appeal to investors who care about liquidity and maximizing returns at minimal costs.</p><p>However, investors in higher tax brackets may find SMB a simpler option due to its tax-free income. The higher yield from VGSH may not be an advantage for those who pay higher tax rates.</p><p>Overall, VGSH is a more solid bond fund for most investors. Its greater asset size may lead to tighter spreads for trading, tilting the cost advantage more in its favor. Moreover, its 100% focus on U.S. Treasuries makes it a safer option than local and state issues. </p><p> </p><h2>Should you buy stock in VanEck ETF Trust - VanEck Short Muni ETF right now?</h2>
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VGSH

GOVT

<p>The comparison between VanEck Short Muni ETF (SMB) and Vanguard Short-Term Treasury ETF (VGSH) highlights key differences for investors. VGSH offers a higher yield (3.96%) and lower expense ratio (0.03%) compared to SMB's yield (2.69%) and expense ratio (0.07%). While VGSH focuses on U.S. Treasury securities, SMB targets tax-exempt municipal bonds, appealing to higher tax bracket investors. VGSH's larger asset size ($32 billion) provides better liquidity and lower trading costs, making it a more solid option for most investors. However, SMB may be preferable for those seeking tax-free income.</p>

SMB vs. VGSH: Is Tax-Free Income Better Than High Yield?