VTCIX vs VTEB
Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VTCIX delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VTCIX | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.03% | |
| AUM | $5.2B | $46.0B | |
| Dividend Yield | 1.08% | 3.34% | |
| Holdings | 836 | 9,952 | |
| YTD Return | +13.07% | +0.78% | |
| 1Y Return | +20.36% | +5.17% | |
| 3Y Return (annualized) | +19.81% | +3.19% | |
| 5Y Return (annualized) | +11.22% | +0.66% | |
| Volatility (annualized) | 16.1% | 4.9% | |
| Max Drawdown | -26.0% | -17.0% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Feb 24, 1999 | Aug 21, 2015 |
VTCIX vs VTEB Performance
Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares (VTCIX) is a mutual fund from Vanguard (US) and Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US). Over the past year VTCIX returned +20.36% while VTEB returned +5.17%. Year to date, VTCIX is up 13.07% versus a gain of 0.78% for VTEB.
Over three years, VTCIX compounded at +19.81% per year against +3.19% for VTEB; over five years the annualized figures are +11.22% and +0.66% respectively. Across the full 5-year window we track, VTCIX has the edge at +11.22% annualized vs +1.28%. 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 4.9% for VTEB. 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 -26.0% for VTCIX 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 0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTCIX charges 0.03% per year while VTEB charges 0.03%. On a $10,000 position that is $3 vs $3 annually. On income, VTCIX currently yields 1.08% against 3.34% for VTEB.
Holdings Overlap
VTCIX and VTEB share 0 holdings out of 4358 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, VTCIX or VTEB?
VTCIX has an expense ratio of 0.03% while VTEB charges 0.03%. They cost the same. On a $10,000 investment, that is $0 per year of difference.
Which performed better, VTCIX or VTEB?
Over the past year VTCIX returned +20.36% vs +5.17% for VTEB, so VTCIX leads on 1-year performance. Over the longest common window we track (5 years), VTCIX annualized +11.22% vs +1.28% for VTEB. Past performance does not guarantee future results.
Which is riskier, VTCIX or VTEB?
VTCIX has been the more volatile fund at 16.1% annualized versus 4.9% for VTEB. Worst drawdown: VTCIX -26.0% vs VTEB -17.0%.
Should I hold both VTCIX and VTEB?
VTCIX and VTEB have a monthly-return correlation of 0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTCIX and VTEB?
VTCIX and VTEB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4358 unique securities.
Which pays a higher dividend, VTCIX or VTEB?
VTCIX yields 1.08% while VTEB yields 3.34%, so VTEB currently pays the higher dividend yield.
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