VMLUX vs VTEB
Vanguard Limited Term Tax-Exempt Fund admiral class vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VTEB has a lower expense ratio. VTEB delivered stronger 1-year returns. VTEB offers more diversification with 10,566 holdings.
Side-by-Side Comparison
| Metric | VMLUX | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.03% | |
| AUM | $34.5B | $48.5B | |
| Dividend Yield | 2.93% | 3.41% | |
| Holdings | 7,110 | 10,566 | |
| YTD Return | -0.82% | +0.03% | |
| 1Y Return | -0.55% | +4.24% | |
| 3Y Return (annualized) | +0.81% | +3.19% | |
| 5Y Return (annualized) | -0.60% | +0.53% | |
| Volatility (annualized) | 2.8% | 4.9% | |
| Max Drawdown | -8.4% | -17.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Tax Preferred | |
| Inception | Feb 12, 2001 | Aug 21, 2015 |
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 a ETF from Vanguard (US). Over the past year VMLUX returned -0.55% while VTEB returned +4.24%. Year to date, VMLUX is down 0.82% versus a gain of 0.03% for VTEB.
Over three years, VMLUX compounded at +0.81% per year against +3.19% for VTEB; over five years the annualized figures are -0.60% and +0.53% respectively. Across the full 5-year window we track, VTEB has the edge at +1.21% annualized vs -0.60%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTEB has been the more volatile fund, with annualized monthly volatility of 4.9% 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 -17.0% for VTEB. 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 0.95. 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 2.93% against 3.41% for VTEB.
Holdings Overlap
VMLUX and VTEB share 148 holdings out of 1761 unique holdings combined, representing a 0.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VMLUX | Weight in VTEB | Difference |
|---|---|---|---|
| TX HARMED 11/15/2054 | 0.15% | 0.01% | 0.14% |
| NY LSLPWR 09/01/2055 | 0.09% | 0.05% | 0.04% |
| MA MASDEV 05/15/2055 | 0.05% | 0.06% | 0.01% |
| CA CAS 5 08/01/2030 | Pro | Pro | Pro |
| NJ NJS 5 06/01/2028 | Pro | Pro | Pro |
| CA CAS 5 08/01/2029 | Pro | Pro | Pro |
| IL ILSPWR 5 02/01/20 | Pro | Pro | Pro |
| CA CAS 5 09/01/2027 | Pro | Pro | Pro |
| WA WAS 5 07/01/2027 | Pro | Pro | Pro |
| OK OKSSCD 4 07/01/20 | Pro | Pro | Pro |
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. On a $10,000 investment, that is $6 per year of difference.
Which performed better, VMLUX or VTEB?
Over the past year VMLUX returned -0.55% vs +4.24% for VTEB, so VTEB leads on 1-year performance. Over the longest common window we track (5 years), VMLUX annualized -0.60% vs +1.21% for VTEB. Past performance does not guarantee future results.
Which is riskier, VMLUX or VTEB?
VTEB has been the more volatile fund at 4.9% annualized versus 2.8% for VMLUX. Worst drawdown: VMLUX -8.4% vs VTEB -17.0%.
Should I hold both VMLUX and VTEB?
VMLUX and VTEB have a monthly-return correlation of 0.95, 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 VTEB?
VMLUX and VTEB share 148 common holdings with a 0.8% weight overlap. Combined, they hold 1761 unique securities.
Which pays a higher dividend, VMLUX or VTEB?
VMLUX yields 2.93% while VTEB yields 3.41%, so VTEB currently pays the higher dividend yield.
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