VTEB vs VYM
VTEB vs VYM
Vanguard Tax-Exempt Bond ETF vs Vanguard High Dividend Yield ETF
Quick Verdict
VTEB has a lower expense ratio. VYM delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | VTEB | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.04% | |
| AUM | $46.0B | $79.0B | |
| Dividend Yield | 3.34% | 2.86% | |
| Holdings | 9,952 | 568 | |
| YTD Return | +0.57% | +15.80% | |
| 1Y Return | +5.15% | +26.12% | |
| 3Y Return (annualized) | +3.20% | +18.25% | |
| 5Y Return (annualized) | +0.58% | +12.51% | |
| Volatility (annualized) | 4.9% | 14.6% | |
| Max Drawdown | -17.0% | -58.8% | |
| Fund Family | Vanguard (US) | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Aug 21, 2015 | Nov 10, 2006 |
VTEB vs VYM Performance
Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US) and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year VTEB returned +5.15% while VYM returned +26.12%. Year to date, VTEB is up 0.57% versus a gain of 15.80% for VYM.
Over three years, VTEB compounded at +3.20% per year against +18.25% for VYM; over five years the annualized figures are +0.58% and +12.51% respectively. Across the full 11-year window we track, VYM has the edge at +7.07% annualized vs +1.27%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% 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 -58.8% for VYM. 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 0.34. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTEB charges 0.03% per year while VYM charges 0.04%. On a $10,000 position that is $3 vs $4 annually, a gap of $1 per year that compounds over a long holding period. On income, VTEB currently yields 3.34% against 2.86% for VYM.
Holdings Overlap
VTEB and VYM share 0 holdings out of 4091 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 VYM?
VTEB has an expense ratio of 0.03% while VYM charges 0.04%. VTEB is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VTEB or VYM?
Over the past year VTEB returned +5.15% vs +26.12% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (11 years), VTEB annualized +1.27% vs +7.07% for VYM. Past performance does not guarantee future results.
Which is riskier, VTEB or VYM?
VYM has been the more volatile fund at 14.6% annualized versus 4.9% for VTEB. Worst drawdown: VTEB -17.0% vs VYM -58.8%.
Should I hold both VTEB and VYM?
VTEB and VYM have a monthly-return correlation of 0.34, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTEB and VYM?
VTEB and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4091 unique securities.
Which pays a higher dividend, VTEB or VYM?
VTEB yields 3.34% while VYM yields 2.86%, so VTEB currently pays the higher dividend yield.
Popular ETF Comparisons
Get Full ETF Analytics
Access complete holdings data, overlap analysis, screener tools, and more with FundXLS.