VIG vs VTEB
Vanguard Dividend Appreciation ETF vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VTEB has a lower expense ratio. VIG delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VIG | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.03% | |
| AUM | $110.2B | $46.0B | |
| Dividend Yield | 1.79% | 3.34% | |
| Holdings | 335 | 9,952 | |
| YTD Return | +12.33% | +0.51% | |
| 1Y Return | +20.84% | +4.96% | |
| 3Y Return (annualized) | +16.69% | +3.17% | |
| 5Y Return (annualized) | +10.89% | +0.57% | |
| Volatility (annualized) | 13.3% | 4.9% | |
| Max Drawdown | -48.2% | -17.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Apr 21, 2006 | Aug 21, 2015 |
VIG vs VTEB Performance
Vanguard Dividend Appreciation ETF (VIG) is a ETF from Vanguard (US) and Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US). Over the past year VIG returned +20.84% while VTEB returned +4.96%. Year to date, VIG is up 12.33% versus a gain of 0.51% for VTEB.
Over three years, VIG compounded at +16.69% per year against +3.17% for VTEB; over five years the annualized figures are +10.89% and +0.57% respectively. Across the full 11-year window we track, VIG has the edge at +8.70% annualized vs +1.26%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VIG has been the more volatile fund, with annualized monthly volatility of 13.3% 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 -48.2% for VIG 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 0.43. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VIG 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, VIG currently yields 1.79% against 3.34% for VTEB.
Holdings Overlap
VIG and VTEB share 0 holdings out of 3864 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, VIG or VTEB?
VIG 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, VIG or VTEB?
Over the past year VIG returned +20.84% vs +4.96% for VTEB, so VIG leads on 1-year performance. Over the longest common window we track (11 years), VIG annualized +8.70% vs +1.26% for VTEB. Past performance does not guarantee future results.
Which is riskier, VIG or VTEB?
VIG has been the more volatile fund at 13.3% annualized versus 4.9% for VTEB. Worst drawdown: VIG -48.2% vs VTEB -17.0%.
Should I hold both VIG and VTEB?
VIG and VTEB have a monthly-return correlation of 0.43, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VIG and VTEB?
VIG and VTEB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 3864 unique securities.
Which pays a higher dividend, VIG or VTEB?
VIG yields 1.79% while VTEB yields 3.34%, so VTEB currently pays the higher dividend yield.
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