PSDM vs. VTES

Last updated Jun 13, 2026

PSDM (PGIM Short Duration Multi-Sector Bond ETF) and VTES (Vanguard Short-Term Tax-Exempt Bond ETF) are both exchange-traded funds - PSDM is a Multisector Bonds fund actively managed by PGIM, while VTES is a Municipal Bonds fund tracking the S&P 0-7 Year National AMT-Free Municipal Bond Index. PSDM is actively managed, while VTES is passively managed. Over the past year, PSDM returned 5.09% vs 3.39% for VTES. A 0.50 correlation means they provide meaningful diversification when combined. PSDM charges 0.40%/yr vs 0.07%/yr for VTES.

Performance

PSDM vs. VTES - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in PGIM Short Duration Multi-Sector Bond ETF (PSDM) 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, PSDM achieves a 1.39% return, which is significantly higher than VTES's 0.67% return.

PSDM

• 1D: 0.04%
• 1M: 0.45%
• YTD: 1.39%
• 6M: 1.86%
• 1Y: 5.09%
• 3Y*: —
• 5Y*: —
• 10Y*: —

VTES

• 1D: -0.03%
• 1M: 0.42%
• YTD: 0.67%
• 6M: 0.96%
• 1Y: 3.39%
• 3Y*: 3.18%
• 5Y*: —
• 10Y*: —

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

PSDM vs. VTES - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
PSDM PGIM Short Duration Multi-Sector Bond ETF	1.39%	6.16%	5.48%	3.96%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	0.67%	4.19%	1.85%	2.10%

Correlation

The correlation between PSDM and VTES is 0.45, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.45
Correlation (All Time) Calculated using the full available price history since Jul 26, 2023	0.50

The correlation between PSDM and VTES has been stable across timeframes, ranging from 0.45 to 0.50 - a consistent structural relationship.

Return for Risk

PSDM vs. VTES — Risk / Return Rank

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

PSDM

PSDM Risk / Return Rank: 91
PSDM Sharpe Ratio Rank: 92
PSDM Sortino Ratio Rank: 95
PSDM Omega Ratio Rank: 94
PSDM Calmar Ratio Rank: 85
PSDM Martin Ratio Rank: 91

VTES

VTES Risk / Return Rank: 75
VTES Sharpe Ratio Rank: 90
VTES Sortino Ratio Rank: 92
VTES Omega Ratio Rank: 94
VTES Calmar Ratio Rank: 52
VTES Martin Ratio Rank: 46

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.

PSDM vs. VTES - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for PGIM Short Duration Multi-Sector Bond ETF (PSDM) 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.

	PSDM	VTES	Difference
Sharpe ratio: Return per unit of total volatility	2.82	2.70	+0.12
Sortino ratio: Return per unit of downside risk	4.77	3.88	+0.89
Omega ratio: Gain probability vs. loss probability	1.61	1.62	-0.01
Calmar ratio: Return relative to maximum drawdown	4.15	2.28	+1.87
Martin ratio: Return relative to average drawdown	18.67	6.62	+12.05

PSDM vs. VTES - Sharpe Ratio Comparison

The current PSDM Sharpe Ratio is 2.82, which is comparable to the VTES Sharpe Ratio of 2.70. The chart below compares the historical Sharpe Ratios of PSDM 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

PSDM vs. VTES - Drawdown Comparison

The maximum PSDM drawdown since its inception was -1.19%, smaller than the maximum VTES drawdown of -2.42%. Use the drawdown chart below to compare losses from any high point for PSDM and VTES.

Drawdown Indicators

	PSDM	VTES	Difference
Max Drawdown Largest peak-to-trough decline	-1.19%	-2.42%	+1.23%
Max Drawdown (1Y) Largest decline over 1 year	-1.19%	-1.47%	+0.28%
Max Drawdown (3Y) Largest decline over 3 years	—	-1.80%	—
Current Drawdown Current decline from peak	0.00%	-0.60%	+0.60%
Average Drawdown Average peak-to-trough decline	-0.17%	-0.50%	+0.33%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.26%	0.50%	-0.24%

Volatility

PSDM vs. VTES - Volatility Comparison

PGIM Short Duration Multi-Sector Bond ETF (PSDM) has a higher volatility of 0.55% compared to Vanguard Short-Term Tax-Exempt Bond ETF (VTES) at 0.35%. This indicates that PSDM'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

	PSDM	VTES	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.55%	0.35%	+0.20%
Volatility (6M) Calculated over the trailing 6-month period	1.30%	0.98%	+0.32%
Volatility (1Y) Calculated over the trailing 1-year period	1.75%	1.24%	+0.51%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	2.00%	1.71%	+0.29%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	2.00%	1.71%	+0.29%

PSDM vs. VTES - Expense Ratio Comparison

PSDM has a 0.40% expense ratio, which is higher than VTES's 0.07% expense ratio.

Dividends

PSDM vs. VTES - Dividend Comparison

PSDM's dividend yield for the trailing twelve months is around 4.84%, more than VTES's 2.75% yield.

Position	TTM	2025	2024	2023
PSDM PGIM Short Duration Multi-Sector Bond ETF	4.84%	4.57%	5.17%	2.91%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	2.75%	2.77%	2.99%	2.03%

Frequently Asked Questions

Can I hold both PSDM and VTES in my portfolio?

PSDM and VTES have a correlation of 0.45, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PSDM or VTES?

PSDM has higher volatility (0.55%) compared to VTES (0.35%). In terms of maximum drawdown, PSDM dropped -1.19% vs VTES's -2.42%.

Which ETF is better, PSDM or VTES?

On 1-year performance, PSDM leads with 5.09% vs 3.39% for VTES. On fees, VTES is cheaper at 0.07% per year. On volatility, VTES has been the lower-risk option at 0.35%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, PSDM or VTES?

Over the 1-year period, PSDM has performed better with a 5.09% return vs 3.39%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PSDM or VTES?

VTES is cheaper with a 0.07% expense ratio, compared with 0.40% for PSDM.

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

PSDM has the higher dividend yield at 4.84%, compared with 2.75% for VTES.

What is the main difference between PSDM and VTES?

PSDM is categorized as Multisector Bonds, while VTES is Municipal Bonds. They also come from different issuers: PGIM and Vanguard. Their fees differ too: 0.40% for PSDM and 0.07% for VTES.

Which has better risk-adjusted returns?

PSDM currently has the higher Sharpe Ratio (2.82 vs 2.70), 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.