FMB vs. VTES

Last updated Jun 25, 2026

FMB (First Trust Managed Municipal ETF) and VTES (Vanguard Short-Term Tax-Exempt Bond ETF) are both Municipal Bonds funds. FMB is actively managed, while VTES is passively managed. Over the past 3 years, FMB returned 3.78%/yr vs 3.10%/yr for VTES. A 0.75 correlation means they provide meaningful diversification when combined. FMB charges 0.50%/yr vs 0.07%/yr for VTES.

Performance

FMB vs. VTES - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in First Trust Managed Municipal ETF (FMB) 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, FMB achieves a 2.17% return, which is significantly higher than VTES's 0.77% return.

FMB

• 1D: 0.21%
• 1M: 1.56%
• YTD: 2.17%
• 6M: 2.14%
• 1Y: 6.93%
• 3Y*: 3.78%
• 5Y*: 0.81%
• 10Y*: 2.22%

VTES

• 1D: 0.01%
• 1M: 0.59%
• YTD: 0.77%
• 6M: 0.88%
• 1Y: 3.25%
• 3Y*: 3.10%
• 5Y*: —
• 10Y*: —

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

FMB vs. VTES - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
FMB First Trust Managed Municipal ETF	2.17%	3.73%	1.94%	5.42%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	0.77%	4.19%	1.85%	3.32%

Correlation

The correlation between FMB and VTES is 0.64, 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	0.64
Correlation (3Y) Calculated over the trailing 3-year period	0.74
Correlation (All Time) Calculated using the full available price history since Mar 9, 2023	0.75

The correlation between FMB and VTES shifts across timeframes, from 0.64 (1 year) to 0.75 (all time), reflecting how their relationship changes across market environments.

Return for Risk

FMB vs. VTES — Risk / Return Rank

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

FMB

FMB Risk / Return Rank: 78
FMB Sharpe Ratio Rank: 89
FMB Sortino Ratio Rank: 91
FMB Omega Ratio Rank: 94
FMB Calmar Ratio Rank: 58
FMB Martin Ratio Rank: 58

VTES

VTES Risk / Return Rank: 73
VTES Sharpe Ratio Rank: 89
VTES Sortino Ratio Rank: 91
VTES Omega Ratio Rank: 94
VTES Calmar Ratio Rank: 50
VTES Martin Ratio Rank: 43

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.

FMB vs. VTES - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for First Trust Managed Municipal ETF (FMB) 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.

	FMB	VTES	Difference
Sharpe ratio: Return per unit of total volatility	2.63	2.63	+0.01
Sortino ratio: Return per unit of downside risk	3.85	3.79	+0.07
Omega ratio: Gain probability vs. loss probability	1.58	1.61	-0.02
Calmar ratio: Return relative to maximum drawdown	2.55	2.22	+0.33
Martin ratio: Return relative to average drawdown	9.08	6.35	+2.73

FMB vs. VTES - Sharpe Ratio Comparison

The current FMB Sharpe Ratio is 2.63, which is comparable to the VTES Sharpe Ratio of 2.63. The chart below compares the historical Sharpe Ratios of FMB 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

FMB vs. VTES - Drawdown Comparison

The maximum FMB drawdown since its inception was -14.16%, which is greater than VTES's maximum drawdown of -2.42%. Use the drawdown chart below to compare losses from any high point for FMB and VTES.

Drawdown Indicators

	FMB	VTES	Difference
Max Drawdown Largest peak-to-trough decline	-14.16%	-2.42%	-11.74%
Max Drawdown (1Y) Largest decline over 1 year	-2.73%	-1.47%	-1.26%
Max Drawdown (3Y) Largest decline over 3 years	-4.76%	-1.80%	-2.96%
Max Drawdown (5Y) Largest decline over 5 years	-14.16%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-14.16%	—	—
Current Drawdown Current decline from peak	-0.11%	-0.51%	+0.40%
Average Drawdown Average peak-to-trough decline	-2.60%	-0.50%	-2.10%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.77%	0.51%	+0.26%

Volatility

FMB vs. VTES - Volatility Comparison

First Trust Managed Municipal ETF (FMB) has a higher volatility of 0.76% compared to Vanguard Short-Term Tax-Exempt Bond ETF (VTES) at 0.27%. This indicates that FMB'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

	FMB	VTES	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.76%	0.27%	+0.49%
Volatility (6M) Calculated over the trailing 6-month period	1.97%	0.98%	+0.99%
Volatility (1Y) Calculated over the trailing 1-year period	2.64%	1.24%	+1.40%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.71%	1.71%	+2.00%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	4.53%	1.71%	+2.82%

FMB vs. VTES - Expense Ratio Comparison

FMB has a 0.50% expense ratio, which is higher than VTES's 0.07% expense ratio.

Dividends

FMB vs. VTES - Dividend Comparison

FMB's dividend yield for the trailing twelve months is around 3.49%, more than VTES's 2.75% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FMB First Trust Managed Municipal ETF	3.49%	3.37%	3.22%	2.98%	2.47%	1.96%	2.19%	2.47%	2.58%	2.49%	2.93%	3.07%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	2.75%	2.77%	2.99%	2.03%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both FMB and VTES in my portfolio?

FMB and VTES have a correlation of 0.64, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FMB or VTES?

FMB has higher volatility (0.76%) compared to VTES (0.27%). In terms of maximum drawdown, FMB dropped -14.16% vs VTES's -2.42%.

Which ETF is better, FMB or VTES?

On 3-year performance, FMB leads with 3.78% vs 3.10% 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, FMB or VTES?

Over the 3-year period, FMB has performed better with a 3.78% return vs 3.10%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FMB or VTES?

VTES is cheaper with a 0.07% expense ratio, compared with 0.50% for FMB.

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

FMB has the higher dividend yield at 3.49%, compared with 2.75% for VTES.

What is the main difference between FMB and VTES?

They also come from different issuers: First Trust and Vanguard. Their fees differ too: 0.50% for FMB and 0.07% for VTES.

Which has better risk-adjusted returns?

FMB currently has the higher Sharpe Ratio (2.63 vs 2.63), 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.