VMLUX vs VYM
Vanguard Limited Term Tax-Exempt Fund admiral class vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VMLUX offers more diversification with 915 holdings.
Side-by-Side Comparison
| Metric | VMLUX | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.04% | |
| AUM | $34.1B | $79.0B | |
| Dividend Yield | 2.89% | 2.86% | |
| Holdings | 7,110 | 568 | |
| YTD Return | -0.64% | +16.10% | |
| 1Y Return | -0.36% | +25.99% | |
| 3Y Return (annualized) | +0.81% | +18.29% | |
| 5Y Return (annualized) | -0.58% | +12.35% | |
| Volatility (annualized) | 2.8% | 14.6% | |
| Max Drawdown | -8.5% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Feb 12, 2001 | Nov 10, 2006 |
VMLUX vs VYM Performance
Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VMLUX returned -0.36% while VYM returned +25.99%. Year to date, VMLUX is down 0.64% versus a gain of 16.10% for VYM.
Over three years, VMLUX compounded at +0.81% per year against +18.29% for VYM; over five years the annualized figures are -0.58% and +12.35% respectively. Across the full 5-year window we track, VYM has the edge at +7.08% annualized vs -0.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% 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 -8.5% for VMLUX and -58.8% for VYM. 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 0.56. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VMLUX charges 0.09% per year while VYM charges 0.04%. On a $10,000 position that is $9 vs $4 annually, a gap of $5 per year that compounds over a long holding period. On income, VMLUX currently yields 2.89% against 2.86% for VYM.
Holdings Overlap
VMLUX and VYM share 0 holdings out of 1473 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 VYM?
VMLUX has an expense ratio of 0.09% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VMLUX or VYM?
Over the past year VMLUX returned -0.36% vs +25.99% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (5 years), VMLUX annualized -0.58% vs +7.08% for VYM. Past performance does not guarantee future results.
Which is riskier, VMLUX or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 2.8% for VMLUX. Worst drawdown: VMLUX -8.5% vs VYM -58.8%.
Should I hold both VMLUX and VYM?
VMLUX and VYM have a monthly-return correlation of 0.56, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VMLUX and VYM?
VMLUX and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1473 unique securities.
Which pays a higher dividend, VMLUX or VYM?
VMLUX yields 2.89% while VYM yields 2.86%, so VMLUX currently pays the higher dividend yield.
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