VMLUX vs VTEB
Vanguard Limited Term Tax-Exempt Fund admiral class vs Vanguard Tax-Exempt Bond ETF
Which is better, VMLUX or VTEB?
Nearly the same fund. VTEB costs less.
VTEB has a lower expense ratio. The two have moved almost in lockstep, correlation 0.95.
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 | VTEB |
|---|---|---|
| Expense Ratio | 0.09% | 0.03%Best |
| AUM | $34.5B | $46.3B |
| Dividend Yield | 3.20% | 3.44% |
| Holdings | 7,398 | 10,724 |
| YTD Price Return | -2.64% | -5.94% |
| 1Y Price Return | -2.72% | -5.82% |
| 3Y Price Return (annualized) | +0.57% | -0.54% |
| 5Y Price Return (annualized) | -0.88% | -2.82% |
| Volatility (annualized) | 3.0%Best | 6.3% |
| Max Drawdown | -8.0%Best | -14.7% |
| Fund Family | Vanguard (US) | Vanguard (US) |
| Category | Tax Preferred | Tax Preferred |
| Style | Municipal Bond | Municipal Bond |
| Inception | Feb 12, 2001 | Aug 21, 2015 |
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 3.20% and VTEB 3.44%.
Volatility and max drawdown are measured over the window both funds cover: Oct 13, 2021 to Oct 9, 2026 (5 years).
VMLUX vs VTEB Performance
Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US) and Vanguard Tax-Exempt Bond ETF (VTEB) is an ETF from Vanguard (US). Over the past year VMLUX's price moved -2.72% and VTEB's -5.82%, before the income each one paid out.
Over three years, VMLUX compounded at +0.57% per year against -0.54% for VTEB; over five years the annualized figures are -0.88% and -2.82% respectively.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTEB has been the more volatile fund, with annualized monthly volatility of 6.3% compared with 3.0% 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 -8.0% for VMLUX and -14.7% for VTEB. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.95. 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 VTEB 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 3.20% against 3.44% for VTEB.
Structure and taxes
VMLUX is a mutual fund and VTEB 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 878 holdings in VMLUX and 666 in VTEB, totalling 24.4% and 10.5% of the two funds. Neither is a share of a fund we can divide by, so no overlap percentage is shown here. Within what we can see, 117 positions appear in both.
The two holdings books were reported 62 days apart, VMLUX as of Jun 30, 2026 and VTEB as of Aug 31, 2026, so some of the difference between them is the time between the two reports rather than the funds.
117 positions in common, counted across the 878 positions we hold weights for in VMLUX and 666 in VTEB, against full books of 7,398 and 10,724.
Top Shared Holdings
| Stock | Weight in VMLUX | Weight in VTEB | Difference |
|---|---|---|---|
| CA CAS 5 08/01/2029State Of California 5 08/01/2029 | 0.05% | 0.15% | 0.10% |
| CA CAS 5 08/01/2028California St Tax Exempt Var Purp Go Ref Bds 2016 | 0.01% | 0.16% | 0.15% |
| IL ILS 5 11/01/2029Fx.rt. Muni Bond 5.0% 11/01/2029 | 0.08% | 0.07% | 0.01% |
| TX HARMED 11/15/2054Harris County Cultural Education Facilities Finance Corp 5 11/15/2054 | 0.14% | 0.01% | 0.13% |
| NJ NJSEDU 07/01/2064New Jersey St Var 07/64 | 0.09% | 0.05% | 0.04% |
| NY LSLPWR 09/01/2055Long Island Power Authority 0.03 09/01/2055 | 0.09% | 0.05% | 0.04% |
| CA LOSUTL 5 01/01/20Los Angeles Calif Dept Wtr & P 5 01/01/2030 | 0.08% | 0.05% | 0.03% |
| TX NSDSCD 06/01/2050Northside Tx Indep Sch Dist Nsdscd 06/50 Adjustable Var 3.6 2050-06-01 | 0.07% | 0.05% | 0.02% |
| IL ILS 5 11/01/2027Illinois St 5 11/01/2027 | 0.04% | 0.08% | 0.04% |
| KY LOUMED 10/01/2053Louisville/Jefferson County Metropolitan Government 2.3 10/01/2053 | 0.07% | 0.04% | 0.03% |
You are not choosing between two funds in isolation.
Whichever of VMLUX and VTEB 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 VTEB?
VMLUX has an expense ratio of 0.09% while VTEB charges 0.03%. VTEB is the cheaper option, by $6 a year on a $10,000 investment.
Which is riskier, VMLUX or VTEB?
VTEB has been the more volatile fund at 6.3% annualized versus 3.0% for VMLUX. Worst drawdown: VMLUX -8.0% vs VTEB -14.7%.
Should I hold both VMLUX and VTEB?
VMLUX and VTEB have a monthly-return correlation of 0.95, so they move almost identically. What is left to separate them is the fee and the index each one tracks. This is information, not a recommendation.
Which pays a higher dividend, VMLUX or VTEB?
VMLUX yields 3.20% while VTEB yields 3.44%, so VTEB currently pays the higher dividend yield.
Is it better to hold VMLUX or VTEB in a taxable account?
VTEB 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 VTEB better than VMLUX?
VTEB has a lower expense ratio. The two have moved almost in lockstep, correlation 0.95. Which one suits a particular account depends on what it is for. This is information, not a recommendation.