VTEB vs VTI
Vanguard Tax-Exempt Bond ETF vs Vanguard Total Stock Market ETF
Quick Verdict
VTI delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VTEB | VTI | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.03% | |
| AUM | $46.0B | $663.5B | |
| Dividend Yield | 3.34% | 1.07% | |
| Holdings | 9,952 | 3,543 | |
| YTD Return | +0.62% | +13.87% | |
| 1Y Return | +5.07% | +23.31% | |
| 3Y Return (annualized) | +3.14% | +21.17% | |
| 5Y Return (annualized) | +0.61% | +12.23% | |
| Volatility (annualized) | 4.9% | 15.3% | |
| Max Drawdown | -17.0% | -56.6% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Aug 21, 2015 | May 24, 2001 |
VTEB vs VTI Performance
Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US) and Vanguard Total Stock Market ETF (VTI) is a ETF from Vanguard (US). Over the past year VTEB returned +5.07% while VTI returned +23.31%. Year to date, VTEB is up 0.62% versus a gain of 13.87% for VTI.
Over three years, VTEB compounded at +3.14% per year against +21.17% for VTI; over five years the annualized figures are +0.61% and +12.23% respectively. Across the full 11-year window we track, VTI has the edge at +8.13% annualized vs +1.27%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTI has been the more volatile fund, with annualized monthly volatility of 15.3% 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 -17.0% for VTEB and -56.6% for VTI. 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 0.43. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTEB charges 0.03% per year while VTI charges 0.03%. On a $10,000 position that is $3 vs $3 annually. On income, VTEB currently yields 3.34% against 1.07% for VTI.
Holdings Overlap
VTEB and VTI share 0 holdings out of 6316 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, VTEB or VTI?
VTEB has an expense ratio of 0.03% while VTI charges 0.03%. They cost the same. On a $10,000 investment, that is $0 per year of difference.
Which performed better, VTEB or VTI?
Over the past year VTEB returned +5.07% vs +23.31% for VTI, so VTI leads on 1-year performance. Over the longest common window we track (11 years), VTEB annualized +1.27% vs +8.13% for VTI. Past performance does not guarantee future results.
Which is riskier, VTEB or VTI?
VTI has been the more volatile fund at 15.3% annualized versus 4.9% for VTEB. Worst drawdown: VTEB -17.0% vs VTI -56.6%.
Should I hold both VTEB and VTI?
VTEB and VTI have a monthly-return correlation of 0.43, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTEB and VTI?
VTEB and VTI share 0 common holdings with a 0.0% weight overlap. Combined, they hold 6316 unique securities.
Which pays a higher dividend, VTEB or VTI?
VTEB yields 3.34% while VTI yields 1.07%, so VTEB currently pays the higher dividend yield.
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