VDIGX vs VTEB
Vanguard Dividend Growth Fund Investor Class vs Vanguard Tax-Exempt Bond ETF
Which is better, VDIGX or VTEB?
Large Cap Blend against Municipal Bond.
VTEB 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 | VDIGX | VTEB |
|---|---|---|
| Expense Ratio | 0.20% | 0.03%Best |
| AUM | $35.5B | $48.5B |
| Dividend Yield | 23.10% | 3.44% |
| Holdings | 62 | 10,566 |
| YTD Price Return | -3.99% | -4.17% |
| 1Y Price Return | -14.10% | -3.83% |
| 3Y Price Return (annualized) | -3.79% | -0.54% |
| 5Y Price Return (annualized) | -3.26% | -2.65% |
| Volatility (annualized) | 16.0% | 6.2%Best |
| Max Drawdown | -32.6% | -14.2%Best |
| Fund Family | Vanguard (US) | Vanguard (US) |
| Category | Equity | Tax Preferred |
| Style | Large Cap Blend | Municipal Bond |
| Inception | May 15, 1992 | Aug 21, 2015 |
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. VDIGX currently yields 23.10% and VTEB 3.44%.
Volatility and max drawdown are measured over the window both funds cover: Sep 20, 2021 to Sep 18, 2026 (5 years).
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 an ETF from Vanguard (US). Over the past year VDIGX's price moved -14.10% and VTEB's -3.83%, before the income each one paid out.
Over three years, VDIGX compounded at -3.79% per year against -0.54% for VTEB; over five years the annualized figures are -3.26% and -2.65% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VDIGX has been the more volatile fund, with annualized monthly volatility of 16.0% compared with 6.2% 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 -14.2% for VTEB. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.56. They move together some of the time, and apart the rest.
Fees and Cost Over Time
VDIGX charges 0.20% per year while VTEB charges 0.03%. On a $10,000 position that is $20 vs $3 annually, a gap of $17 per year that compounds over a long holding period. On income, VDIGX currently yields 23.10% against 3.44% for VTEB.
Structure and taxes
VDIGX is a mutual fund and VTEB 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 51 holdings in VDIGX and 17 in VTEB, totalling 99.3% and 0.0% 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 51 positions we hold weights for in VDIGX and 17 in VTEB, against full books of 62 and 10,566.
You are not choosing between two funds in isolation.
Whichever of VDIGX and VTEB 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, VDIGX or VTEB?
VDIGX has an expense ratio of 0.20% while VTEB charges 0.03%. VTEB is the cheaper option, by $17 a year on a $10,000 investment.
Which is riskier, VDIGX or VTEB?
VDIGX has been the more volatile fund at 16.0% annualized versus 6.2% for VTEB. Worst drawdown: VDIGX -32.6% vs VTEB -14.2%.
Should I hold both VDIGX and VTEB?
VDIGX and VTEB have a monthly-return correlation of 0.56, 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, VDIGX or VTEB?
VDIGX yields 23.10% while VTEB yields 3.44%, so VDIGX currently pays the higher dividend yield.
Is it better to hold VDIGX or VTEB in a taxable account?
VTEB is an ETF and VDIGX 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 VTEB better than VDIGX?
VTEB has a lower expense ratio. Which one suits a particular account depends on what it is for. This is information, not a recommendation.