TAFI vs VTI
AB Tax Aware Short Duration Municipal ETF vs Vanguard Total Stock Market ETF
Quick Verdict
VTI has a lower expense ratio. VTI delivered stronger 1-year returns. VTI offers more diversification with 2783 holdings.
Side-by-Side Comparison
| Metric | TAFI | VTI | Winner |
|---|---|---|---|
| Expense Ratio | 0.27% | 0.03% | |
| AUM | $1.4B | $663.5B | |
| Dividend Yield | 2.98% | 1.07% | |
| Holdings | 624 | 3,543 | |
| YTD Return | +0.96% | +14.22% | |
| 1Y Return | +2.47% | +22.19% | |
| 3Y Return (annualized) | +3.49% | +21.27% | |
| 5Y Return (annualized) | - | +12.23% | |
| Volatility (annualized) | 2.3% | 15.3% | |
| Max Drawdown | -1.9% | -56.6% | |
| Fund Family | AllianceBernstein L.P. | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Sep 13, 2022 | May 24, 2001 |
TAFI vs VTI Performance
AB Tax Aware Short Duration Municipal ETF (TAFI) is a ETF from AllianceBernstein L.P. and Vanguard Total Stock Market ETF (VTI) is a ETF from Vanguard (US). Over the past year TAFI returned +2.47% while VTI returned +22.19%. Year to date, TAFI is up 0.96% versus a gain of 14.22% for VTI.
Over three years, TAFI compounded at +3.49% per year against +21.27% for VTI. Across the full 4-year window we track, VTI has the edge at +8.14% annualized vs +3.26%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTI has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 2.3% for TAFI. 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 -1.9% for TAFI and -56.6% for VTI. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.59. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TAFI charges 0.27% per year while VTI charges 0.03%. On a $10,000 position that is $27 vs $3 annually, a gap of $24 per year that compounds over a long holding period. On income, TAFI currently yields 2.98% against 1.07% for VTI.
Holdings Overlap
TAFI and VTI share 1 holdings out of 2961 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in TAFI | Weight in VTI | Difference |
|---|---|---|---|
| C | 0.01% | 0.32% | 0.31% |
Frequently Asked Questions
Which is cheaper, TAFI or VTI?
TAFI has an expense ratio of 0.27% while VTI charges 0.03%. VTI is the cheaper option. On a $10,000 investment, that is $24 per year of difference.
Which performed better, TAFI or VTI?
Over the past year TAFI returned +2.47% vs +22.19% for VTI, so VTI leads on 1-year performance. Over the longest common window we track (4 years), TAFI annualized +3.26% vs +8.14% for VTI. Past performance does not guarantee future results.
Which is riskier, TAFI or VTI?
VTI has been the more volatile fund at 15.3% annualized versus 2.3% for TAFI. Worst drawdown: TAFI -1.9% vs VTI -56.6%.
Should I hold both TAFI and VTI?
TAFI and VTI have a monthly-return correlation of 0.59, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TAFI and VTI?
TAFI and VTI share 1 common holdings with a 0.0% weight overlap. Combined, they hold 2961 unique securities.
Which pays a higher dividend, TAFI or VTI?
TAFI yields 2.98% while VTI yields 1.07%, so TAFI currently pays the higher dividend yield.
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