TAXF vs VOO
American Century Diversified Municipal Bond ETF vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. TAXF offers more diversification with 785 holdings.
Side-by-Side Comparison
| Metric | TAXF | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 0.25% | 0.03% | |
| AUM | $686M | $997.4B | |
| Dividend Yield | 3.84% | 1.08% | |
| Holdings | 785 | 509 | |
| YTD Return | +1.39% | +14.27% | |
| 1Y Return | +6.52% | +21.79% | |
| 3Y Return (annualized) | +3.91% | +22.19% | |
| 5Y Return (annualized) | +0.84% | +13.28% | |
| Volatility (annualized) | 6.0% | 14.2% | |
| Max Drawdown | -13.9% | -34.3% | |
| Fund Family | American Century Investments | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Sep 10, 2018 | Sep 7, 2010 |
TAXF vs VOO Performance
American Century Diversified Municipal Bond ETF (TAXF) is a ETF from American Century Investments and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year TAXF returned +6.52% while VOO returned +21.79%. Year to date, TAXF is up 1.39% versus a gain of 14.27% for VOO.
Over three years, TAXF compounded at +3.91% per year against +22.19% for VOO; over five years the annualized figures are +0.84% and +13.28% respectively. Across the full 8-year window we track, VOO has the edge at +13.59% annualized vs +1.99%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VOO has been the more volatile fund, with annualized monthly volatility of 14.2% compared with 6.0% for TAXF. 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 -13.9% for TAXF and -34.3% for VOO. 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 0.52. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
TAXF charges 0.25% per year while VOO charges 0.03%. On a $10,000 position that is $25 vs $3 annually, a gap of $22 per year that compounds over a long holding period. On income, TAXF currently yields 3.84% against 1.08% for VOO.
Holdings Overlap
TAXF and VOO share 0 holdings out of 996 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, TAXF or VOO?
TAXF has an expense ratio of 0.25% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $22 per year of difference.
Which performed better, TAXF or VOO?
Over the past year TAXF returned +6.52% vs +21.79% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (8 years), TAXF annualized +1.99% vs +13.59% for VOO. Past performance does not guarantee future results.
Which is riskier, TAXF or VOO?
VOO has been the more volatile fund at 14.2% annualized versus 6.0% for TAXF. Worst drawdown: TAXF -13.9% vs VOO -34.3%.
Should I hold both TAXF and VOO?
TAXF and VOO have a monthly-return correlation of 0.52, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between TAXF and VOO?
TAXF and VOO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 996 unique securities.
Which pays a higher dividend, TAXF or VOO?
TAXF yields 3.84% while VOO yields 1.08%, so TAXF currently pays the higher dividend yield.
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