BAB vs. VTEB
BAB (Invesco Taxable Municipal Bond ETF) and VTEB (Vanguard Tax-Exempt Bond ETF) are both Municipal Bonds funds - BAB tracks the BofA Merrill Lynch Build America Bond Index while VTEB tracks the S&P National AMT-Free Municipal Bond Index. Both are passively managed. Over the past 10 years, BAB returned 2.15%/yr vs 1.97%/yr for VTEB. A 0.62 correlation means they provide meaningful diversification when combined. BAB charges 0.28%/yr vs 0.03%/yr for VTEB.
Performance
BAB vs. VTEB - Performance Comparison
Loading charts...
Returns By Period
In the year-to-date period, BAB achieves a 0.41% return, which is significantly lower than VTEB's 1.70% return. Over the past 10 years, BAB has outperformed VTEB with an annualized return of 2.15%, while VTEB has yielded a comparatively lower 1.97% annualized return.
BAB
- 1D
- -0.04%
- 1M
- 1.11%
- YTD
- 0.41%
- 6M
- 0.48%
- 1Y
- 6.00%
- 3Y*
- 4.30%
- 5Y*
- -0.58%
- 10Y*
- 2.15%
VTEB
- 1D
- -0.02%
- 1M
- 1.38%
- YTD
- 1.70%
- 6M
- 1.88%
- 1Y
- 6.65%
- 3Y*
- 3.38%
- 5Y*
- 0.95%
- 10Y*
- 1.97%
BAB vs. VTEB - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
BAB Invesco Taxable Municipal Bond ETF | 0.41% | 8.30% | 1.03% | 8.67% | -19.50% | 1.00% | 9.11% | 10.85% | 0.93% | 9.87% |
VTEB Vanguard Tax-Exempt Bond ETF | 1.70% | 3.72% | 1.31% | 6.15% | -7.99% | 1.14% | 5.19% | 7.35% | 1.04% | 4.87% |
Correlation
The correlation between BAB and VTEB is 0.60, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.60 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.69 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.67 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.62 |
Correlation (All Time) Calculated using the full available price history since Aug 25, 2015 | 0.62 |
The correlation between BAB and VTEB has been stable across timeframes, ranging from 0.60 to 0.69 - a consistent structural relationship.
Compare stocks, funds, or ETFs
Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.
Return for Risk
BAB vs. VTEB — Risk / Return Rank
BAB
VTEB
BAB vs. VTEB - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Invesco Taxable Municipal Bond ETF (BAB) and Vanguard Tax-Exempt Bond ETF (VTEB). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| BAB | VTEB | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -1.43 | ||
| Sortino ratioReturn per unit of downside risk | -2.05 | ||
| Omega ratioGain probability vs. loss probability | 1.19 | 1.54 | -0.36 |
| Calmar ratioReturn relative to maximum drawdown | 1.45 | 2.47 | -1.01 |
| Martin ratioReturn relative to average drawdown | 3.89 | 8.69 | -4.80 |
Loading charts...
Drawdowns
BAB vs. VTEB - Drawdown Comparison
The maximum BAB drawdown since its inception was -27.80%, which is greater than VTEB's maximum drawdown of -17.00%. Use the drawdown chart below to compare losses from any high point for BAB and VTEB.
Loading charts...
Drawdown Indicators
| BAB | VTEB | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -27.80% | -17.00% | -10.80% |
Max Drawdown (1Y)Largest decline over 1 year | -4.15% | -2.71% | -1.44% |
Max Drawdown (3Y)Largest decline over 3 years | -7.57% | -5.53% | -2.04% |
Max Drawdown (5Y)Largest decline over 5 years | -24.95% | -12.64% | -12.31% |
Max Drawdown (10Y)Largest decline over 10 years | -27.80% | -17.00% | -10.80% |
Current DrawdownCurrent decline from peak | -5.37% | -0.28% | -5.09% |
Average DrawdownAverage peak-to-trough decline | -5.31% | -2.32% | -2.99% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.55% | 0.77% | +0.78% |
Volatility
BAB vs. VTEB - Volatility Comparison
Invesco Taxable Municipal Bond ETF (BAB) has a higher volatility of 0.98% compared to Vanguard Tax-Exempt Bond ETF (VTEB) at 0.72%. This indicates that BAB's price experiences larger fluctuations and is considered to be riskier than VTEB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
Loading charts...
Volatility by Period
| BAB | VTEB | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.98% | 0.72% | +0.26% |
Volatility (6M)Calculated over the trailing 6-month period | 3.75% | 2.06% | +1.69% |
Volatility (1Y)Calculated over the trailing 1-year period | 5.66% | 2.68% | +2.98% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 8.31% | 3.90% | +4.41% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 9.68% | 5.25% | +4.43% |
BAB vs. VTEB - Expense Ratio Comparison
BAB has a 0.28% expense ratio, which is higher than VTEB's 0.03% expense ratio.
Dividends
BAB vs. VTEB - Dividend Comparison
BAB's dividend yield for the trailing twelve months is around 4.12%, more than VTEB's 3.35% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
BAB Invesco Taxable Municipal Bond ETF | 4.12% | 3.96% | 3.97% | 3.65% | 3.40% | 2.63% | 2.96% | 3.77% | 4.20% | 3.96% | 4.26% | 4.71% |
VTEB Vanguard Tax-Exempt Bond ETF | 3.35% | 3.29% | 3.14% | 2.79% | 2.09% | 1.64% | 1.99% | 2.30% | 2.25% | 1.96% | 1.66% | 0.58% |
Frequently Asked Questions
BAB and VTEB have a correlation of 0.60, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
BAB has higher volatility (0.98%) compared to VTEB (0.72%). In terms of maximum drawdown, BAB dropped -27.80% vs VTEB's -17.00%.
On 10-year performance, BAB leads with 2.15% vs 1.97% for VTEB. On fees, VTEB is cheaper at 0.03% per year. On volatility, VTEB has been the lower-risk option at 0.72%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, BAB has performed better with a 2.15% return vs 1.97%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VTEB is cheaper with a 0.03% expense ratio, compared with 0.28% for BAB.
BAB has the higher dividend yield at 4.12%, compared with 3.35% for VTEB.
BAB tracks BofA Merrill Lynch Build America Bond Index, while VTEB tracks S&P National AMT-Free Municipal Bond Index. They also come from different issuers: Invesco and Vanguard. Their fees differ too: 0.28% for BAB and 0.03% for VTEB.
VTEB currently has the higher Sharpe Ratio (2.49 vs 1.06), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
Find the right allocation for BAB and VTEB
Add both to a portfolio and optimize allocations for your target — whether that's maximizing returns, minimizing drawdowns, or balancing risk across holdings.
Open Portfolio Optimizer