VIITX vs VTEB
Vanguard Institutional Intermediate Term Bond Fund Institutional Plus Class vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VIITX has a lower expense ratio. VTEB delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VIITX | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.02% | 0.03% | |
| AUM | - | $46.0B | |
| Dividend Yield | 4.56% | 3.34% | |
| Holdings | 2,599 | 9,952 | |
| YTD Return | -2.08% | +0.62% | |
| 1Y Return | -1.49% | +5.07% | |
| 3Y Return (annualized) | +0.49% | +3.14% | |
| 5Y Return (annualized) | -2.31% | +0.61% | |
| Volatility (annualized) | 4.2% | 4.9% | |
| Max Drawdown | -15.0% | -17.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Tax Preferred | |
| Inception | Dec 1, 1997 | Aug 21, 2015 |
VIITX vs VTEB Performance
Vanguard Institutional Intermediate Term Bond Fund Institutional Plus Class (VIITX) is a mutual fund from Vanguard (US) and Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US). Over the past year VIITX returned -1.49% while VTEB returned +5.07%. Year to date, VIITX is down 2.08% versus a gain of 0.62% for VTEB.
Over three years, VIITX compounded at +0.49% per year against +3.14% for VTEB; over five years the annualized figures are -2.31% and +0.61% respectively. Across the full 5-year window we track, VTEB has the edge at +1.27% annualized vs -2.31%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTEB has been the more volatile fund, with annualized monthly volatility of 4.9% compared with 4.2% for VIITX. 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 -15.0% for VIITX 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 0.88. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VIITX charges 0.02% per year while VTEB charges 0.03%. On a $10,000 position that is $2 vs $3 annually, a gap of $1 per year that compounds over a long holding period. On income, VIITX currently yields 4.56% against 3.34% for VTEB.
Holdings Overlap
VIITX and VTEB share 0 holdings out of 4718 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, VIITX or VTEB?
VIITX has an expense ratio of 0.02% while VTEB charges 0.03%. VIITX is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VIITX or VTEB?
Over the past year VIITX returned -1.49% vs +5.07% for VTEB, so VTEB leads on 1-year performance. Over the longest common window we track (5 years), VIITX annualized -2.31% vs +1.27% for VTEB. Past performance does not guarantee future results.
Which is riskier, VIITX or VTEB?
VTEB has been the more volatile fund at 4.9% annualized versus 4.2% for VIITX. Worst drawdown: VIITX -15.0% vs VTEB -17.0%.
Should I hold both VIITX and VTEB?
VIITX and VTEB have a monthly-return correlation of 0.88, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VIITX and VTEB?
VIITX and VTEB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4718 unique securities.
Which pays a higher dividend, VIITX or VTEB?
VIITX yields 4.56% while VTEB yields 3.34%, so VIITX currently pays the higher dividend yield.
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