VMLUX vs VTCIX
Vanguard Limited Term Tax-Exempt Fund admiral class vs Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares
Quick Verdict
VTCIX has a lower expense ratio. VTCIX delivered stronger 1-year returns. VMLUX offers more diversification with 7,110 holdings.
Side-by-Side Comparison
| Metric | VMLUX | VTCIX | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.03% | |
| AUM | $34.5B | $5.2B | |
| Dividend Yield | 2.93% | 0.93% | |
| Holdings | 7,110 | 836 | |
| YTD Return | -0.73% | +11.54% | |
| 1Y Return | -0.46% | +19.63% | |
| 3Y Return (annualized) | +0.84% | +20.07% | |
| 5Y Return (annualized) | -0.58% | +10.90% | |
| Volatility (annualized) | 2.8% | 16.1% | |
| Max Drawdown | -8.4% | -26.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Feb 12, 2001 | Feb 24, 1999 |
VMLUX vs VTCIX Performance
Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US) and Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares (VTCIX) is a mutual fund from Vanguard (US). Over the past year VMLUX returned -0.46% while VTCIX returned +19.63%. Year to date, VMLUX is down 0.73% versus a gain of 11.54% for VTCIX.
Over three years, VMLUX compounded at +0.84% per year against +20.07% for VTCIX; over five years the annualized figures are -0.58% and +10.90% respectively. Across the full 5-year window we track, VTCIX has the edge at +10.90% annualized vs -0.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTCIX has been the more volatile fund, with annualized monthly volatility of 16.1% 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 -26.0% for VTCIX. 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 0.64. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VMLUX charges 0.09% per year while VTCIX charges 0.03%. On a $10,000 position that is $9 vs $3 annually, a gap of $6 per year that compounds over a long holding period. On income, VMLUX currently yields 2.93% against 0.93% for VTCIX.
Holdings Overlap
VMLUX and VTCIX share 0 holdings out of 1740 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 VTCIX?
VMLUX has an expense ratio of 0.09% while VTCIX charges 0.03%. VTCIX is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, VMLUX or VTCIX?
Over the past year VMLUX returned -0.46% vs +19.63% for VTCIX, so VTCIX leads on 1-year performance. Over the longest common window we track (5 years), VMLUX annualized -0.58% vs +10.90% for VTCIX. Past performance does not guarantee future results.
Which is riskier, VMLUX or VTCIX?
VTCIX has been the more volatile fund at 16.1% annualized versus 2.8% for VMLUX. Worst drawdown: VMLUX -8.4% vs VTCIX -26.0%.
Should I hold both VMLUX and VTCIX?
VMLUX and VTCIX have a monthly-return correlation of 0.64, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VMLUX and VTCIX?
VMLUX and VTCIX share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1740 unique securities.
Which pays a higher dividend, VMLUX or VTCIX?
VMLUX yields 2.93% while VTCIX yields 0.93%, so VMLUX currently pays the higher dividend yield.
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