VDIGX vs VTEB
Vanguard Dividend Growth Fund Investor Class vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VTEB has a lower expense ratio. VTEB delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VDIGX | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.22% | 0.03% | |
| AUM | $36.4B | $46.0B | |
| Dividend Yield | 1.87% | 3.34% | |
| Holdings | 55 | 9,952 | |
| YTD Return | -0.21% | +0.57% | |
| 1Y Return | -8.99% | +5.15% | |
| 3Y Return (annualized) | -3.09% | +3.20% | |
| 5Y Return (annualized) | -2.76% | +0.58% | |
| Volatility (annualized) | 16.1% | 4.9% | |
| Max Drawdown | -32.6% | -17.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | May 15, 1992 | Aug 21, 2015 |
VDIGX vs VTEB Performance
Vanguard Dividend Growth Fund Investor Class (VDIGX) is a mutual fund from Vanguard (US) and Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US). Over the past year VDIGX returned -8.99% while VTEB returned +5.15%. Year to date, VDIGX is down 0.21% versus a gain of 0.57% for VTEB.
Over three years, VDIGX compounded at -3.09% per year against +3.20% for VTEB; over five years the annualized figures are -2.76% and +0.58% respectively. Across the full 5-year window we track, VTEB has the edge at +1.27% annualized vs -2.76%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VDIGX has been the more volatile fund, with annualized monthly volatility of 16.1% compared with 4.9% for VTEB. 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 -32.6% for VDIGX and -17.0% for VTEB. 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 0.54. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VDIGX charges 0.22% per year while VTEB charges 0.03%. On a $10,000 position that is $22 vs $3 annually, a gap of $19 per year that compounds over a long holding period. On income, VDIGX currently yields 1.87% against 3.34% for VTEB.
Holdings Overlap
VDIGX and VTEB share 0 holdings out of 3580 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, VDIGX or VTEB?
VDIGX has an expense ratio of 0.22% while VTEB charges 0.03%. VTEB is the cheaper option. On a $10,000 investment, that is $19 per year of difference.
Which performed better, VDIGX or VTEB?
Over the past year VDIGX returned -8.99% vs +5.15% for VTEB, so VTEB leads on 1-year performance. Over the longest common window we track (5 years), VDIGX annualized -2.76% vs +1.27% for VTEB. Past performance does not guarantee future results.
Which is riskier, VDIGX or VTEB?
VDIGX has been the more volatile fund at 16.1% annualized versus 4.9% for VTEB. Worst drawdown: VDIGX -32.6% vs VTEB -17.0%.
Should I hold both VDIGX and VTEB?
VDIGX and VTEB have a monthly-return correlation of 0.54, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VDIGX and VTEB?
VDIGX and VTEB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 3580 unique securities.
Which pays a higher dividend, VDIGX or VTEB?
VDIGX yields 1.87% while VTEB yields 3.34%, so VTEB currently pays the higher dividend yield.
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