VMLUX vs VTBNX
Vanguard Limited Term Tax-Exempt Fund admiral class vs Vanguard Total Bond Market II Index Fund Institutional Shares
Quick Verdict
VTBNX has a lower expense ratio. VMLUX delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | VMLUX | VTBNX | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.02% | |
| AUM | $34.5B | $207.3B | |
| Dividend Yield | 2.93% | 3.79% | |
| Holdings | 7,110 | 15,623 | |
| YTD Return | -0.73% | -2.49% | |
| 1Y Return | -0.46% | -1.68% | |
| 3Y Return (annualized) | +0.84% | +0.72% | |
| 5Y Return (annualized) | -0.58% | -3.58% | |
| Volatility (annualized) | 2.8% | 6.3% | |
| Max Drawdown | -8.4% | -21.5% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Fixed Income | |
| Inception | Feb 12, 2001 | Feb 17, 2009 |
VMLUX vs VTBNX Performance
Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US) and Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US). Over the past year VMLUX returned -0.46% while VTBNX returned -1.68%. Year to date, VMLUX is down 0.73% versus a loss of 2.49% for VTBNX.
Over three years, VMLUX compounded at +0.84% per year against +0.72% for VTBNX; over five years the annualized figures are -0.58% and -3.58% respectively. Across the full 5-year window we track, VMLUX has the edge at -0.58% annualized vs -3.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTBNX has been the more volatile fund, with annualized monthly volatility of 6.3% 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 -21.5% for VTBNX. 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 0.90. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
VMLUX charges 0.09% per year while VTBNX charges 0.02%. On a $10,000 position that is $9 vs $2 annually, a gap of $7 per year that compounds over a long holding period. On income, VMLUX currently yields 2.93% against 3.79% for VTBNX.
Holdings Overlap
VMLUX and VTBNX share 0 holdings out of 13643 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 VTBNX?
VMLUX has an expense ratio of 0.09% while VTBNX charges 0.02%. VTBNX is the cheaper option. On a $10,000 investment, that is $7 per year of difference.
Which performed better, VMLUX or VTBNX?
Over the past year VMLUX returned -0.46% vs -1.68% for VTBNX, so VMLUX leads on 1-year performance. Over the longest common window we track (5 years), VMLUX annualized -0.58% vs -3.58% for VTBNX. Past performance does not guarantee future results.
Which is riskier, VMLUX or VTBNX?
VTBNX has been the more volatile fund at 6.3% annualized versus 2.8% for VMLUX. Worst drawdown: VMLUX -8.4% vs VTBNX -21.5%.
Should I hold both VMLUX and VTBNX?
VMLUX and VTBNX have a monthly-return correlation of 0.90, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between VMLUX and VTBNX?
VMLUX and VTBNX share 0 common holdings with a 0.0% weight overlap. Combined, they hold 13643 unique securities.
Which pays a higher dividend, VMLUX or VTBNX?
VMLUX yields 2.93% while VTBNX yields 3.79%, so VTBNX currently pays the higher dividend yield.
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