VMLUX vs VNQ
Vanguard Limited Term Tax-Exempt Fund admiral class vs Vanguard Real Estate ETF
Which is better, VMLUX or VNQ?
Municipal Bond against Mid Cap Blend.
VMLUX 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 | VMLUX | VNQ |
|---|---|---|
| Expense Ratio | 0.09%Best | 0.13% |
| AUM | $34.5B | $39.3B |
| Dividend Yield | 2.93% | 3.49% |
| Holdings | 7,398 | 144 |
| YTD Price Return | -1.09% | +6.33% |
| 1Y Price Return | -1.27% | +2.78% |
| 3Y Price Return (annualized) | +0.72% | +4.88% |
| 5Y Price Return (annualized) | -0.63% | -2.42% |
| Volatility (annualized) | 2.8%Best | 19.2% |
| Max Drawdown | -8.4%Best | -38.8% |
| Fund Family | Vanguard (US) | Vanguard (US) |
| Category | Tax Preferred | Equity |
| Style | Municipal Bond | Mid Cap Blend |
| Inception | Feb 12, 2001 | Sep 23, 2004 |
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. VMLUX currently yields 2.93% and VNQ 3.49%.
Volatility and max drawdown are measured over the window both funds cover: Sep 10, 2021 to Sep 8, 2026 (5 years).
VMLUX vs VNQ Performance
Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US) and Vanguard Real Estate ETF (VNQ) is an ETF from Vanguard (US). Over the past year VMLUX's price moved -1.27% and VNQ's +2.78%, before the income each one paid out.
Over three years, VMLUX compounded at +0.72% per year against +4.88% for VNQ; over five years the annualized figures are -0.63% and -2.42% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VNQ has been the more volatile fund, with annualized monthly volatility of 19.2% compared with 2.8% for VMLUX. 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 -8.4% for VMLUX and -38.8% for VNQ. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.66. They move together some of the time, and apart the rest.
Fees and Cost Over Time
VMLUX charges 0.09% per year while VNQ charges 0.13%. On a $10,000 position that is $9 vs $13 annually, a gap of $4 per year that compounds over a long holding period. On income, VMLUX currently yields 2.93% against 3.49% for VNQ.
Structure and taxes
VMLUX is a mutual fund and VNQ 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 915 holdings in VMLUX and 144 in VNQ, totalling 27.7% and 99.5% of the two funds. The two books name no position in common, so there is no overlap percentage to show.
The two holdings books were reported 150 days apart, VMLUX as of Jan 31, 2026 and VNQ as of Jun 30, 2026, so some of the difference between them is the time between the two reports rather than the funds.
0 positions in common, counted across the 915 positions we hold weights for in VMLUX and 144 in VNQ, against full books of 7,398 and 144.
You are not choosing between two funds in isolation.
Whichever of VMLUX and VNQ 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, VMLUX or VNQ?
VMLUX has an expense ratio of 0.09% while VNQ charges 0.13%. VMLUX is the cheaper option, by $4 a year on a $10,000 investment.
Which is riskier, VMLUX or VNQ?
VNQ has been the more volatile fund at 19.2% annualized versus 2.8% for VMLUX. Worst drawdown: VMLUX -8.4% vs VNQ -38.8%.
Should I hold both VMLUX and VNQ?
VMLUX and VNQ have a monthly-return correlation of 0.66, 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, VMLUX or VNQ?
VMLUX yields 2.93% while VNQ yields 3.49%, so VNQ currently pays the higher dividend yield.
Is it better to hold VMLUX or VNQ in a taxable account?
VNQ is an ETF and VMLUX 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 VNQ better than VMLUX?
VMLUX has a lower expense ratio. Which one suits a particular account depends on what it is for. This is information, not a recommendation.