VTEB vs VXF
Vanguard Tax-Exempt Bond ETF vs Vanguard Extended Market ETF
Quick Verdict
VTEB has a lower expense ratio. VXF delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VTEB | VXF | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.05% | |
| AUM | $46.0B | $31.6B | |
| Dividend Yield | 3.34% | 1.21% | |
| Holdings | 9,952 | 3,376 | |
| YTD Return | +0.59% | +18.25% | |
| 1Y Return | +4.98% | +25.58% | |
| 3Y Return (annualized) | +3.13% | +19.62% | |
| 5Y Return (annualized) | +0.63% | +7.04% | |
| Volatility (annualized) | 4.9% | 18.7% | |
| Max Drawdown | -17.0% | -59.4% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Aug 21, 2015 | Dec 27, 2001 |
VTEB vs VXF Performance
Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US) and Vanguard Extended Market ETF (VXF) is a ETF from Vanguard (US). Over the past year VTEB returned +4.98% while VXF returned +25.58%. Year to date, VTEB is up 0.59% versus a gain of 18.25% for VXF.
Over three years, VTEB compounded at +3.13% per year against +19.62% for VXF; over five years the annualized figures are +0.63% and +7.04% respectively. Across the full 11-year window we track, VXF has the edge at +9.11% annualized vs +1.27%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VXF has been the more volatile fund, with annualized monthly volatility of 18.7% 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 -59.4% for VXF. 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 0.41. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTEB charges 0.03% per year while VXF charges 0.05%. On a $10,000 position that is $3 vs $5 annually, a gap of $2 per year that compounds over a long holding period. On income, VTEB currently yields 3.34% against 1.21% for VXF.
Holdings Overlap
VTEB and VXF share 0 holdings out of 5995 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 VXF?
VTEB has an expense ratio of 0.03% while VXF charges 0.05%. VTEB is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, VTEB or VXF?
Over the past year VTEB returned +4.98% vs +25.58% for VXF, so VXF leads on 1-year performance. Over the longest common window we track (11 years), VTEB annualized +1.27% vs +9.11% for VXF. Past performance does not guarantee future results.
Which is riskier, VTEB or VXF?
VXF has been the more volatile fund at 18.7% annualized versus 4.9% for VTEB. Worst drawdown: VTEB -17.0% vs VXF -59.4%.
Should I hold both VTEB and VXF?
VTEB and VXF have a monthly-return correlation of 0.41, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTEB and VXF?
VTEB and VXF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 5995 unique securities.
Which pays a higher dividend, VTEB or VXF?
VTEB yields 3.34% while VXF yields 1.21%, so VTEB currently pays the higher dividend yield.
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