VTBNX vs VTCIX
Vanguard Total Bond Market II Index Fund Institutional Shares vs Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares
Quick Verdict
VTBNX has a lower expense ratio. VTCIX delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | VTBNX | VTCIX | Winner |
|---|---|---|---|
| Expense Ratio | 0.02% | 0.03% | |
| AUM | $207.3B | $5.2B | |
| Dividend Yield | 3.79% | 0.93% | |
| Holdings | 15,623 | 836 | |
| YTD Return | -2.70% | +12.08% | |
| 1Y Return | -1.68% | +20.64% | |
| 3Y Return (annualized) | +0.65% | +20.37% | |
| 5Y Return (annualized) | -3.55% | +10.89% | |
| Volatility (annualized) | 6.3% | 16.1% | |
| Max Drawdown | -21.5% | -26.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Feb 17, 2009 | Feb 24, 1999 |
VTBNX vs VTCIX Performance
Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) 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 VTBNX returned -1.68% while VTCIX returned +20.64%. Year to date, VTBNX is down 2.70% versus a gain of 12.08% for VTCIX.
Over three years, VTBNX compounded at +0.65% per year against +20.37% for VTCIX; over five years the annualized figures are -3.55% and +10.89% respectively. Across the full 5-year window we track, VTCIX has the edge at +10.89% annualized vs -3.55%. 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 6.3% for VTBNX. 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 -21.5% for VTBNX 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 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTBNX charges 0.02% per year while VTCIX charges 0.03%. On a $10,000 position that is $2 vs $3 annually, a gap of $1 per year that compounds over a long holding period. On income, VTBNX currently yields 3.79% against 0.93% for VTCIX.
Holdings Overlap
VTBNX and VTCIX share 7 holdings out of 13546 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VTBNX or VTCIX?
VTBNX has an expense ratio of 0.02% while VTCIX charges 0.03%. VTBNX is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VTBNX or VTCIX?
Over the past year VTBNX returned -1.68% vs +20.64% for VTCIX, so VTCIX leads on 1-year performance. Over the longest common window we track (5 years), VTBNX annualized -3.55% vs +10.89% for VTCIX. Past performance does not guarantee future results.
Which is riskier, VTBNX or VTCIX?
VTCIX has been the more volatile fund at 16.1% annualized versus 6.3% for VTBNX. Worst drawdown: VTBNX -21.5% vs VTCIX -26.0%.
Should I hold both VTBNX and VTCIX?
VTBNX and VTCIX have a monthly-return correlation of 0.63, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTBNX and VTCIX?
VTBNX and VTCIX share 7 common holdings with a 0.1% weight overlap. Combined, they hold 13546 unique securities.
Which pays a higher dividend, VTBNX or VTCIX?
VTBNX yields 3.79% while VTCIX yields 0.93%, so VTBNX currently pays the higher dividend yield.
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