OVM vs. VSDM

Last updated Jun 4, 2026

OVM (Overlay Shares Municipal Bond ETF) and VSDM (Vanguard Short Duration Tax-Exempt Bond ETF) are both Municipal Bonds funds. Both are actively managed. Over the past year, OVM returned 11.81% vs 4.98% for VSDM. A 0.55 correlation means they provide meaningful diversification when combined. OVM charges 0.82%/yr vs 0.12%/yr for VSDM.

Performance

OVM vs. VSDM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Overlay Shares Municipal Bond ETF (OVM) and Vanguard Short Duration Tax-Exempt Bond ETF (VSDM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, OVM achieves a 3.96% return, which is significantly higher than VSDM's 1.22% return.

OVM

• 1D: -0.17%
• 1M: 1.10%
• YTD: 3.96%
• 6M: 4.16%
• 1Y: 11.81%
• 3Y*: 5.37%
• 5Y*: 1.59%
• 10Y*: —

VSDM

• 1D: 0.00%
• 1M: 0.47%
• YTD: 1.22%
• 6M: 1.63%
• 1Y: 4.98%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

OVM vs. VSDM - Yearly Performance Comparison

	2026 (YTD)	2025	2024
OVM Overlay Shares Municipal Bond ETF	3.96%	4.14%	-0.87%
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	1.22%	5.39%	-0.15%

Correlation

The correlation between OVM and VSDM is 0.51, 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	0.51
Correlation (All Time) Calculated using the full available price history since Nov 22, 2024	0.55

The correlation between OVM and VSDM has been stable across timeframes, ranging from 0.51 to 0.55 - a consistent structural relationship.

Return for Risk

OVM vs. VSDM — Risk / Return Rank

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

OVM

OVM Risk / Return Rank: 88
OVM Sharpe Ratio Rank: 86
OVM Sortino Ratio Rank: 90
OVM Omega Ratio Rank: 90
OVM Calmar Ratio Rank: 86
OVM Martin Ratio Rank: 87

VSDM

VSDM Risk / Return Rank: 84
VSDM Sharpe Ratio Rank: 94
VSDM Sortino Ratio Rank: 95
VSDM Omega Ratio Rank: 97
VSDM Calmar Ratio Rank: 68
VSDM Martin Ratio Rank: 65

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.

OVM vs. VSDM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Overlay Shares Municipal Bond ETF (OVM) and Vanguard Short Duration Tax-Exempt Bond ETF (VSDM). 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.

	OVM	VSDM	Difference
Sharpe ratio: Return per unit of total volatility	2.85	3.67	-0.82
Sortino ratio: Return per unit of downside risk	4.24	5.35	-1.11
Omega ratio: Gain probability vs. loss probability	1.58	1.92	-0.33
Calmar ratio: Return relative to maximum drawdown	4.86	3.42	+1.44
Martin ratio: Return relative to average drawdown	18.92	12.07	+6.85
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

OVM vs. VSDM - Sharpe Ratio Comparison

The current OVM Sharpe Ratio is 2.85, which is comparable to the VSDM Sharpe Ratio of 3.67. The chart below compares the historical Sharpe Ratios of OVM and VSDM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	OVM	VSDM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.85	3.67	-0.82
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.30	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.43	2.19	-1.76

Drawdowns

OVM vs. VSDM - Drawdown Comparison

The maximum OVM drawdown since its inception was -15.58%, which is greater than VSDM's maximum drawdown of -1.81%. Use the drawdown chart below to compare losses from any high point for OVM and VSDM.

Drawdown Indicators

	OVM	VSDM	Difference
Max Drawdown Largest peak-to-trough decline	-15.58%	-1.81%	-13.77%
Max Drawdown (1Y) Largest decline over 1 year	-2.44%	-1.46%	-0.98%
Max Drawdown (3Y) Largest decline over 3 years	-8.20%	—	—
Max Drawdown (5Y) Largest decline over 5 years	-15.58%	—	—
Current Drawdown Current decline from peak	-0.17%	-0.33%	+0.16%
Average Drawdown Average peak-to-trough decline	-4.01%	-0.32%	-3.69%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.63%	0.41%	+0.22%

Volatility

OVM vs. VSDM - Volatility Comparison

Overlay Shares Municipal Bond ETF (OVM) has a higher volatility of 1.26% compared to Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) at 0.44%. This indicates that OVM's price experiences larger fluctuations and is considered to be riskier than VSDM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	OVM	VSDM	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.26%	0.44%	+0.82%
Volatility (6M) Calculated over the trailing 6-month period	3.36%	1.07%	+2.29%
Volatility (1Y) Calculated over the trailing 1-year period	4.16%	1.36%	+2.80%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	5.39%	1.95%	+3.44%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	6.55%	1.95%	+4.60%

OVM vs. VSDM - Expense Ratio Comparison

OVM has a 0.82% expense ratio, which is higher than VSDM's 0.12% expense ratio.

Dividends

OVM vs. VSDM - Dividend Comparison

OVM's dividend yield for the trailing twelve months is around 6.11%, more than VSDM's 3.11% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019
OVM Overlay Shares Municipal Bond ETF	6.11%	5.45%	4.91%	4.66%	4.21%	6.10%	3.97%	0.58%
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	3.11%	3.06%	0.35%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both OVM and VSDM in my portfolio?

OVM and VSDM have a correlation of 0.51, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, OVM or VSDM?

OVM has higher volatility (1.26%) compared to VSDM (0.44%). In terms of maximum drawdown, OVM dropped -15.58% vs VSDM's -1.81%.

Which ETF is better, OVM or VSDM?

On 1-year performance, OVM leads with 11.81% vs 4.98% for VSDM. On fees, VSDM is cheaper at 0.12% per year. On volatility, VSDM has been the lower-risk option at 0.44%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, OVM or VSDM?

Over the 1-year period, OVM has performed better with a 11.81% return vs 4.98%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, OVM or VSDM?

VSDM is cheaper with a 0.12% expense ratio, compared with 0.82% for OVM.

Which ETF pays a higher dividend yield, OVM or VSDM?

OVM has the higher dividend yield at 6.11%, compared with 3.11% for VSDM.

What is the main difference between OVM and VSDM?

They also come from different issuers: Liquid Strategies and Vanguard. Their fees differ too: 0.82% for OVM and 0.12% for VSDM.

Which has better risk-adjusted returns?

VSDM currently has the higher Sharpe Ratio (3.67 vs 2.85), 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.