VTEB vs VTILX
Vanguard Tax-Exempt Bond ETF vs Vanguard Total International Bond II Index Fund Class Institutional
Quick Verdict
VTEB has a lower expense ratio. VTEB delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VTEB | VTILX | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.07% | |
| AUM | $46.0B | $142.6B | |
| Dividend Yield | 3.34% | 4.12% | |
| Holdings | 9,952 | 7,391 | |
| YTD Return | +0.59% | -1.04% | |
| 1Y Return | +4.98% | -3.09% | |
| 3Y Return (annualized) | +3.13% | -0.32% | |
| 5Y Return (annualized) | +0.63% | - | |
| Volatility (annualized) | 4.9% | 6.0% | |
| Max Drawdown | -17.0% | -15.3% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Fixed Income | |
| Inception | Aug 21, 2015 | Feb 17, 2021 |
VTEB vs VTILX Performance
Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US) and Vanguard Total International Bond II Index Fund Class Institutional (VTILX) is a mutual fund from Vanguard (US). Over the past year VTEB returned +4.98% while VTILX returned -3.09%. Year to date, VTEB is up 0.59% versus a loss of 1.04% for VTILX.
Over three years, VTEB compounded at +3.13% per year against -0.32% for VTILX. Across the full 5-year window we track, VTEB has the edge at +1.27% annualized vs -2.84%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTILX has been the more volatile fund, with annualized monthly volatility of 6.0% 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 -15.3% for VTILX. 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VTEB charges 0.03% per year while VTILX charges 0.07%. On a $10,000 position that is $3 vs $7 annually, a gap of $4 per year that compounds over a long holding period. On income, VTEB currently yields 3.34% against 4.12% for VTILX.
Holdings Overlap
VTEB and VTILX share 0 holdings out of 4992 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 VTILX?
VTEB has an expense ratio of 0.03% while VTILX charges 0.07%. VTEB is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, VTEB or VTILX?
Over the past year VTEB returned +4.98% vs -3.09% for VTILX, so VTEB leads on 1-year performance. Over the longest common window we track (5 years), VTEB annualized +1.27% vs -2.84% for VTILX. Past performance does not guarantee future results.
Which is riskier, VTEB or VTILX?
VTILX has been the more volatile fund at 6.0% annualized versus 4.9% for VTEB. Worst drawdown: VTEB -17.0% vs VTILX -15.3%.
Should I hold both VTEB and VTILX?
VTEB and VTILX have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTEB and VTILX?
VTEB and VTILX share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4992 unique securities.
Which pays a higher dividend, VTEB or VTILX?
VTEB yields 3.34% while VTILX yields 4.12%, so VTILX currently pays the higher dividend yield.
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