VMLUX vs VNQ
Vanguard Limited Term Tax-Exempt Fund admiral class vs Vanguard Real Estate ETF
Quick Verdict
VMLUX has a lower expense ratio. VNQ delivered stronger 1-year returns. VMLUX offers more diversification with 7,110 holdings.
Side-by-Side Comparison
| Metric | VMLUX | VNQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.13% | |
| AUM | $34.5B | $39.3B | |
| Dividend Yield | 2.93% | 3.49% | |
| Holdings | 7,110 | 144 | |
| YTD Return | -0.64% | +13.57% | |
| 1Y Return | -0.36% | +12.92% | |
| 3Y Return (annualized) | +0.87% | +11.70% | |
| 5Y Return (annualized) | -0.56% | +2.31% | |
| Volatility (annualized) | 2.8% | 21.4% | |
| Max Drawdown | -8.4% | -75.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Feb 12, 2001 | Sep 23, 2004 |
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 a ETF from Vanguard (US). Over the past year VMLUX returned -0.36% while VNQ returned +12.92%. Year to date, VMLUX is down 0.64% versus a gain of 13.57% for VNQ.
Over three years, VMLUX compounded at +0.87% per year against +11.70% for VNQ; over five years the annualized figures are -0.56% and +2.31% respectively. Across the full 5-year window we track, VNQ has the edge at +4.14% annualized vs -0.56%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VNQ has been the more volatile fund, with annualized monthly volatility of 21.4% 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 -75.8% for VNQ. 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 0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
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.
Holdings Overlap
VMLUX and VNQ share 0 holdings out of 1059 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, VMLUX or VNQ?
VMLUX has an expense ratio of 0.09% while VNQ charges 0.13%. VMLUX is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, VMLUX or VNQ?
Over the past year VMLUX returned -0.36% vs +12.92% for VNQ, so VNQ leads on 1-year performance. Over the longest common window we track (5 years), VMLUX annualized -0.56% vs +4.14% for VNQ. Past performance does not guarantee future results.
Which is riskier, VMLUX or VNQ?
VNQ has been the more volatile fund at 21.4% annualized versus 2.8% for VMLUX. Worst drawdown: VMLUX -8.4% vs VNQ -75.8%.
Should I hold both VMLUX and VNQ?
VMLUX and VNQ have a monthly-return correlation of 0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VMLUX and VNQ?
VMLUX and VNQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1059 unique securities.
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.
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