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. The two have moved almost in lockstep, correlation 0.90.
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 | $160.9B | $34.5B |
| Dividend Yield | 4.04% | 2.93% |
| Holdings | 17,437 | 7,398 |
| YTD Price Return | -3.84% | -1.91% |
| 1Y Price Return | -4.30% | -2.35% |
| 3Y Price Return (annualized) | +0.23% | +0.47% |
| 5Y Price Return (annualized) | -3.82% | -0.80% |
| Volatility (annualized) | 6.3% | 2.9%Best |
| Max Drawdown | -21.4% | -8.4%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 2.93%.
Volatility and max drawdown are measured over the window both funds cover: Sep 20, 2021 to Sep 18, 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 -4.30% and VMLUX's -2.35%, before the income each one paid out.
Over three years, BND compounded at +0.23% per year against +0.47% for VMLUX; over five years the annualized figures are -3.82% and -0.80% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
BND has been the more volatile fund, with annualized monthly volatility of 6.3% compared with 2.9% 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 -21.4% for BND and -8.4% 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 0.90. They move almost in lockstep, so holding both mostly duplicates the same exposure.
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 2.93% 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 16 holdings in BND and 872 in VMLUX, totalling 1.5% and 24.4% of the two funds. The two books name no position in common, so there is no overlap percentage to show.
0 positions in common, counted across the 16 positions we hold weights for in BND and 872 in VMLUX, against full books of 17,437 and 7,398.
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 6.3% annualized versus 2.9% for VMLUX. Worst drawdown: BND -21.4% vs VMLUX -8.4%.
Should I hold both BND and VMLUX?
BND and VMLUX have a monthly-return correlation of 0.90, so they move almost identically. What is left to separate them is the fee and the index each one tracks. This is information, not a recommendation.
Which pays a higher dividend, BND or VMLUX?
BND yields 4.04% while VMLUX yields 2.93%, 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. The two have moved almost in lockstep, correlation 0.90. Which one suits a particular account depends on what it is for. This is information, not a recommendation.