DFNM vs. VTES

Last updated Jun 23, 2026

DFNM (Dimensional National Municipal Bond ETF) and VTES (Vanguard Short-Term Tax-Exempt Bond ETF) are both Municipal Bonds funds. DFNM is actively managed, while VTES is passively managed. Over the past 3 years, DFNM returned 3.20%/yr vs 3.09%/yr for VTES. A 0.72 correlation means they provide meaningful diversification when combined. DFNM charges 0.17%/yr vs 0.07%/yr for VTES.

Performance

DFNM vs. VTES - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Dimensional National Municipal Bond ETF (DFNM) and Vanguard Short-Term Tax-Exempt Bond ETF (VTES). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, DFNM achieves a 1.44% return, which is significantly higher than VTES's 0.75% return.

DFNM

• 1D: -0.01%
• 1M: 0.92%
• YTD: 1.44%
• 6M: 1.52%
• 1Y: 5.19%
• 3Y*: 3.20%
• 5Y*: —
• 10Y*: —

VTES

• 1D: -0.01%
• 1M: 0.57%
• YTD: 0.75%
• 6M: 0.95%
• 1Y: 3.30%
• 3Y*: 3.09%
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

DFNM vs. VTES - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
DFNM Dimensional National Municipal Bond ETF	1.44%	3.87%	1.19%	4.19%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	0.75%	4.19%	1.85%	3.32%

Correlation

The correlation between DFNM and VTES is 0.58, 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	0.58
Correlation (3Y) Calculated over the trailing 3-year period	0.70
Correlation (All Time) Calculated using the full available price history since Mar 9, 2023	0.72

The correlation between DFNM and VTES shifts across timeframes, from 0.58 (1 year) to 0.72 (all time), reflecting how their relationship changes across market environments.

Return for Risk

DFNM vs. VTES — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

DFNM

DFNM Risk / Return Rank: 80
DFNM Sharpe Ratio Rank: 91
DFNM Sortino Ratio Rank: 93
DFNM Omega Ratio Rank: 95
DFNM Calmar Ratio Rank: 59
DFNM Martin Ratio Rank: 59

VTES

VTES Risk / Return Rank: 71
VTES Sharpe Ratio Rank: 86
VTES Sortino Ratio Rank: 88
VTES Omega Ratio Rank: 93
VTES Calmar Ratio Rank: 47
VTES Martin Ratio Rank: 42

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

DFNM vs. VTES - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Dimensional National Municipal Bond ETF (DFNM) and Vanguard Short-Term Tax-Exempt Bond ETF (VTES). 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.

	DFNM	VTES	Difference
Sharpe ratio: Return per unit of total volatility	3.04	2.67	+0.37
Sortino ratio: Return per unit of downside risk	4.39	3.85	+0.54
Omega ratio: Gain probability vs. loss probability	1.70	1.62	+0.09
Calmar ratio: Return relative to maximum drawdown	2.84	2.25	+0.58
Martin ratio: Return relative to average drawdown	10.19	6.47	+3.71

DFNM vs. VTES - Sharpe Ratio Comparison

The current DFNM Sharpe Ratio is 3.04, which is comparable to the VTES Sharpe Ratio of 2.67. The chart below compares the historical Sharpe Ratios of DFNM and VTES, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

DFNM vs. VTES - Drawdown Comparison

The maximum DFNM drawdown since its inception was -6.99%, which is greater than VTES's maximum drawdown of -2.42%. Use the drawdown chart below to compare losses from any high point for DFNM and VTES.

Drawdown Indicators

	DFNM	VTES	Difference
Max Drawdown Largest peak-to-trough decline	-6.99%	-2.42%	-4.57%
Max Drawdown (1Y) Largest decline over 1 year	-1.84%	-1.47%	-0.37%
Max Drawdown (3Y) Largest decline over 3 years	-2.82%	-1.80%	-1.02%
Current Drawdown Current decline from peak	-0.22%	-0.53%	+0.31%
Average Drawdown Average peak-to-trough decline	-1.94%	-0.50%	-1.44%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.51%	0.51%	0.00%

Volatility

DFNM vs. VTES - Volatility Comparison

Dimensional National Municipal Bond ETF (DFNM) has a higher volatility of 0.38% compared to Vanguard Short-Term Tax-Exempt Bond ETF (VTES) at 0.27%. This indicates that DFNM's price experiences larger fluctuations and is considered to be riskier than VTES based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	DFNM	VTES	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.38%	0.27%	+0.11%
Volatility (6M) Calculated over the trailing 6-month period	1.29%	0.98%	+0.31%
Volatility (1Y) Calculated over the trailing 1-year period	1.72%	1.24%	+0.48%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	2.53%	1.71%	+0.82%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	2.53%	1.71%	+0.82%

DFNM vs. VTES - Expense Ratio Comparison

DFNM has a 0.17% expense ratio, which is higher than VTES's 0.07% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

DFNM vs. VTES - Dividend Comparison

DFNM's dividend yield for the trailing twelve months is around 2.89%, more than VTES's 2.75% yield.

Position	TTM	2025	2024	2023	2022	2021
DFNM Dimensional National Municipal Bond ETF	2.89%	2.94%	2.74%	2.39%	1.16%	0.05%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	2.75%	2.77%	2.99%	2.03%	0.00%	0.00%

Frequently Asked Questions

Can I hold both DFNM and VTES in my portfolio?

DFNM and VTES have a correlation of 0.58, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, DFNM or VTES?

DFNM has higher volatility (0.38%) compared to VTES (0.27%). In terms of maximum drawdown, DFNM dropped -6.99% vs VTES's -2.42%.

Which ETF is better, DFNM or VTES?

On 3-year performance, DFNM leads with 3.20% vs 3.09% for VTES. On fees, VTES is cheaper at 0.07% per year. On volatility, VTES has been the lower-risk option at 0.27%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, DFNM or VTES?

Over the 3-year period, DFNM has performed better with a 3.20% return vs 3.09%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, DFNM or VTES?

VTES is cheaper with a 0.07% expense ratio, compared with 0.17% for DFNM.

Which ETF pays a higher dividend yield, DFNM or VTES?

DFNM has the higher dividend yield at 2.89%, compared with 2.75% for VTES.

What is the main difference between DFNM and VTES?

They also come from different issuers: Dimensional and Vanguard. Their fees differ too: 0.17% for DFNM and 0.07% for VTES.

Which has better risk-adjusted returns?

DFNM currently has the higher Sharpe Ratio (3.04 vs 2.67), 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.