VMLUX vs XLF
Vanguard Limited Term Tax-Exempt Fund admiral class vs State Street Financial Select Sector SPDR ETF
Quick Verdict
XLF has a lower expense ratio. XLF delivered stronger 1-year returns. VMLUX offers more diversification with 915 holdings.
Side-by-Side Comparison
| Metric | VMLUX | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.08% | |
| AUM | $34.1B | $56.2B | |
| Dividend Yield | 2.89% | 1.51% | |
| Holdings | 7,110 | 80 | |
| YTD Return | -0.64% | +6.36% | |
| 1Y Return | -0.36% | +12.12% | |
| 3Y Return (annualized) | +0.78% | +20.37% | |
| 5Y Return (annualized) | -0.58% | +10.20% | |
| Volatility (annualized) | 2.8% | 21.4% | |
| Max Drawdown | -8.5% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Tax Preferred | Equity | |
| Inception | Feb 12, 2001 | Dec 16, 1998 |
VMLUX vs XLF Performance
Vanguard Limited Term Tax-Exempt Fund admiral class (VMLUX) is a mutual fund from Vanguard (US) and State Street Financial Select Sector SPDR ETF (XLF) is a ETF from SPDR State Street Global Advisors. Over the past year VMLUX returned -0.36% while XLF returned +12.12%. Year to date, VMLUX is down 0.64% versus a gain of 6.36% for XLF.
Over three years, VMLUX compounded at +0.78% per year against +20.37% for XLF; over five years the annualized figures are -0.58% and +10.20% respectively. Across the full 5-year window we track, XLF has the edge at +3.70% annualized vs -0.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLF has been the more volatile fund, with annualized monthly volatility of 21.4% 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 -83.8% for XLF. 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 0.47. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VMLUX charges 0.09% per year while XLF charges 0.08%. On a $10,000 position that is $9 vs $8 annually, a gap of $1 per year that compounds over a long holding period. On income, VMLUX currently yields 2.89% against 1.51% for XLF.
Holdings Overlap
VMLUX and XLF share 0 holdings out of 992 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 XLF?
VMLUX has an expense ratio of 0.09% while XLF charges 0.08%. XLF is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VMLUX or XLF?
Over the past year VMLUX returned -0.36% vs +12.12% for XLF, so XLF leads on 1-year performance. Over the longest common window we track (5 years), VMLUX annualized -0.58% vs +3.70% for XLF. Past performance does not guarantee future results.
Which is riskier, VMLUX or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 2.8% for VMLUX. Worst drawdown: VMLUX -8.5% vs XLF -83.8%.
Should I hold both VMLUX and XLF?
VMLUX and XLF have a monthly-return correlation of 0.47, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VMLUX and XLF?
VMLUX and XLF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 992 unique securities.
Which pays a higher dividend, VMLUX or XLF?
VMLUX yields 2.89% while XLF yields 1.51%, so VMLUX currently pays the higher dividend yield.
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