BND vs VMLUX
Vanguard Total Bond Market ETF vs Vanguard Limited Term Tax-Exempt Fund admiral class
Which is better, BND or VMLUX?
Intermediate Term Bond against Municipal Bond.
BND has a lower expense ratio.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | BND | VMLUX |
|---|---|---|
| Expense Ratio | 0.03%Best | 0.09% |
| AUM | $163.3B | $34.5B |
| Dividend Yield | 4.04% | 3.20% |
| Holdings | 16,300 | 7,398 |
| YTD Price Return | -5.12% | -2.91% |
| 1Y Price Return | -5.88% | -3.00% |
| 3Y Price Return (annualized) | +0.38% | +0.50% |
| 5Y Price Return (annualized) | -3.77% | -0.93% |
| Volatility (annualized) | 6.4% | 3.0%Best |
| Max Drawdown | -20.8% | -8.0%Best |
| Fund Family | Vanguard (US) | Vanguard (US) |
| Category | Fixed Income | Tax Preferred |
| Style | Intermediate Term Bond | Municipal Bond |
| Inception | Apr 3, 2007 | Feb 12, 2001 |
Not shown on this pair: $10,000 over 5 years, Top 10 Weight.
A price return is not the return of a fund that pays its income out. The coupon or distribution never appears in the price, so the return rows carry no winner here. BND currently yields 4.04% and VMLUX 3.20%.
Volatility and max drawdown are measured over the window both funds cover: Oct 12, 2021 to Oct 8, 2026 (5 years).
BND vs VMLUX Performance
Vanguard Total Bond Market ETF (BND) is an ETF from Vanguard (US) and Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US). Over the past year BND's price moved -5.88% and VMLUX's -3.00%, before the income each one paid out.
Over three years, BND compounded at +0.38% per year against +0.50% for VMLUX; over five years the annualized figures are -3.77% and -0.93% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
BND has been the more volatile fund, with annualized monthly volatility of 6.4% compared with 3.0% for VMLUX. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -20.8% for BND and -8.0% for VMLUX. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.89. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
BND charges 0.03% per year while VMLUX charges 0.09%. On a $10,000 position that is $3 vs $9 annually, a gap of $6 per year that compounds over a long holding period. On income, BND currently yields 4.04% against 3.20% for VMLUX.
Structure and taxes
VMLUX is a mutual fund and BND is an ETF. A mutual fund prices once a day at net asset value and may carry a purchase minimum. An ETF trades through the day at whatever the market pays for it.
In a taxable account the difference that usually matters is distributions. An ETF can meet redemptions in kind, so it rarely has to sell holdings and rarely passes a capital gain to the people who held it; a mutual fund that sells holdings to meet redemptions can distribute a realised gain at year end to everyone still in the fund, whether or not they sold anything themselves. In a tax-deferred account that difference largely disappears. Both are descriptions of how the two wrappers work, not a recommendation.
Tax-loss harvesting works on either wrapper.
Holdings Overlap
We hold position weights for 12,775 holdings in BND and 878 in VMLUX, totalling 65.9% and 24.4% of the two funds. Neither is a share of a fund we can divide by, so no overlap percentage is shown here. Within what we can see, 3 positions appear in both.
The two holdings books were reported 62 days apart, BND as of Aug 31, 2026 and VMLUX as of Jun 30, 2026, so some of the difference between them is the time between the two reports rather than the funds.
3 positions in common, counted across the 12,775 positions we hold weights for in BND and 878 in VMLUX, against full books of 16,300 and 7,398.
Top Shared Holdings
| Stock | Weight in BND | Weight in VMLUX | Difference |
|---|---|---|---|
| T 4.25 11/15/34Us Treas Nts 4.25% 11/15/34 | 0.41% | 0.00% | 0.41% |
| T 4.25 08/15/35United States Treasury Note/Bond 4.25% 08/15/2035 | 0.38% | 0.00% | 0.38% |
| DIS 4.95 10/15/45Walt Disney Company/the 4.95 | 0.00% | 0.00% | 0.00% |
You are not choosing between two funds in isolation.
Whichever of BND and VMLUX you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, BND or VMLUX?
BND has an expense ratio of 0.03% while VMLUX charges 0.09%. BND is the cheaper option, by $6 a year on a $10,000 investment.
Which is riskier, BND or VMLUX?
BND has been the more volatile fund at 6.4% annualized versus 3.0% for VMLUX. Worst drawdown: BND -20.8% vs VMLUX -8.0%.
Should I hold both BND and VMLUX?
BND and VMLUX have a monthly-return correlation of 0.89, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, BND or VMLUX?
BND yields 4.04% while VMLUX yields 3.20%, so BND currently pays the higher dividend yield.
Is it better to hold VMLUX or BND in a taxable account?
BND is an ETF and VMLUX is a mutual fund. An ETF can meet redemptions in kind, so it rarely distributes a capital gain to the people holding it. A mutual fund that sells holdings to meet redemptions can pass a realised gain to every holder at year end. In a tax-deferred account that difference largely disappears. This is information, not a recommendation.
Is VMLUX better than BND?
BND has a lower expense ratio. Which one suits a particular account depends on what it is for. This is information, not a recommendation.