VEU vs VTEB
Vanguard FTSE All World Ex US ETF vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VTEB has a lower expense ratio. VEU delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VEU | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.03% | |
| AUM | $67.3B | $46.0B | |
| Dividend Yield | 2.54% | 3.34% | |
| Holdings | 3,921 | 9,952 | |
| YTD Return | +14.40% | +0.62% | |
| 1Y Return | +27.97% | +5.07% | |
| 3Y Return (annualized) | +19.79% | +3.14% | |
| 5Y Return (annualized) | +9.31% | +0.61% | |
| Volatility (annualized) | 17.7% | 4.9% | |
| Max Drawdown | -62.8% | -17.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Mar 2, 2007 | Aug 21, 2015 |
VEU vs VTEB Performance
Vanguard FTSE All World Ex US ETF (VEU) is a ETF from Vanguard (US) and Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US). Over the past year VEU returned +27.97% while VTEB returned +5.07%. Year to date, VEU is up 14.40% versus a gain of 0.62% for VTEB.
Over three years, VEU compounded at +19.79% per year against +3.14% for VTEB; over five years the annualized figures are +9.31% and +0.61% respectively. Across the full 11-year window we track, VEU has the edge at +3.55% annualized vs +1.27%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VEU has been the more volatile fund, with annualized monthly volatility of 17.7% 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 -62.8% for VEU 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 0.53. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VEU charges 0.04% per year while VTEB charges 0.03%. On a $10,000 position that is $4 vs $3 annually, a gap of $1 per year that compounds over a long holding period. On income, VEU currently yields 2.54% against 3.34% for VTEB.
Holdings Overlap
VEU and VTEB share 0 holdings out of 6351 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, VEU or VTEB?
VEU has an expense ratio of 0.04% while VTEB charges 0.03%. VTEB is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VEU or VTEB?
Over the past year VEU returned +27.97% vs +5.07% for VTEB, so VEU leads on 1-year performance. Over the longest common window we track (11 years), VEU annualized +3.55% vs +1.27% for VTEB. Past performance does not guarantee future results.
Which is riskier, VEU or VTEB?
VEU has been the more volatile fund at 17.7% annualized versus 4.9% for VTEB. Worst drawdown: VEU -62.8% vs VTEB -17.0%.
Should I hold both VEU and VTEB?
VEU and VTEB have a monthly-return correlation of 0.53, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VEU and VTEB?
VEU and VTEB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 6351 unique securities.
Which pays a higher dividend, VEU or VTEB?
VEU yields 2.54% while VTEB yields 3.34%, so VTEB currently pays the higher dividend yield.
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