PZA vs. VTEC

Last updated Jun 25, 2026

PZA (Invesco National AMT-Free Municipal Bond ETF) and VTEC (Vanguard California Tax-Exempt Bond ETF) are both Municipal Bonds funds - PZA tracks the BofA ML National Long-Term Core Plus Municipal Securities Index while VTEC tracks the S&P California AMT-Free Municipal Bond Index. Both are passively managed. Over the past year, PZA returned 8.89% vs 6.43% for VTEC. A 0.76 correlation means they provide meaningful diversification when combined. PZA charges 0.28%/yr vs 0.08%/yr for VTEC.

Performance

PZA vs. VTEC - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Invesco National AMT-Free Municipal Bond ETF (PZA) and Vanguard California Tax-Exempt Bond ETF (VTEC). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, PZA achieves a 3.01% return, which is significantly higher than VTEC's 1.37% return.

PZA

• 1D: 0.34%
• 1M: 2.45%
• YTD: 3.01%
• 6M: 3.05%
• 1Y: 8.89%
• 3Y*: 3.20%
• 5Y*: 0.10%
• 10Y*: 1.80%

VTEC

• 1D: 0.10%
• 1M: 1.53%
• YTD: 1.37%
• 6M: 1.47%
• 1Y: 6.43%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

PZA vs. VTEC - Yearly Performance Comparison

	2026 (YTD)	2025	2024
PZA Invesco National AMT-Free Municipal Bond ETF	3.01%	1.81%	1.85%
VTEC Vanguard California Tax-Exempt Bond ETF	1.37%	3.98%	1.48%

Correlation

The correlation between PZA and VTEC is 0.70, 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	0.70
Correlation (All Time) Calculated using the full available price history since Jan 30, 2024	0.76

The correlation between PZA and VTEC has been stable across timeframes, ranging from 0.70 to 0.76 - a consistent structural relationship.

Return for Risk

PZA vs. VTEC — Risk / Return Rank

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

PZA

PZA Risk / Return Rank: 74
PZA Sharpe Ratio Rank: 76
PZA Sortino Ratio Rank: 80
PZA Omega Ratio Rank: 86
PZA Calmar Ratio Rank: 64
PZA Martin Ratio Rank: 62

VTEC

VTEC Risk / Return Rank: 72
VTEC Sharpe Ratio Rank: 82
VTEC Sortino Ratio Rank: 86
VTEC Omega Ratio Rank: 90
VTEC Calmar Ratio Rank: 52
VTEC Martin Ratio Rank: 49

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.

PZA vs. VTEC - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Invesco National AMT-Free Municipal Bond ETF (PZA) and Vanguard California Tax-Exempt Bond ETF (VTEC). 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.

	PZA	VTEC	Difference
Sharpe ratio: Return per unit of total volatility	2.14	2.33	-0.19
Sortino ratio: Return per unit of downside risk	3.13	3.44	-0.31
Omega ratio: Gain probability vs. loss probability	1.46	1.51	-0.04
Calmar ratio: Return relative to maximum drawdown	2.81	2.26	+0.55
Martin ratio: Return relative to average drawdown	9.93	7.38	+2.55

PZA vs. VTEC - Sharpe Ratio Comparison

The current PZA Sharpe Ratio is 2.14, which is comparable to the VTEC Sharpe Ratio of 2.33. The chart below compares the historical Sharpe Ratios of PZA and VTEC, 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

PZA vs. VTEC - Drawdown Comparison

The maximum PZA drawdown since its inception was -24.49%, which is greater than VTEC's maximum drawdown of -4.50%. Use the drawdown chart below to compare losses from any high point for PZA and VTEC.

Drawdown Indicators

	PZA	VTEC	Difference
Max Drawdown Largest peak-to-trough decline	-24.49%	-4.50%	-19.99%
Max Drawdown (1Y) Largest decline over 1 year	-3.18%	-2.85%	-0.33%
Max Drawdown (3Y) Largest decline over 3 years	-7.89%	—	—
Max Drawdown (5Y) Largest decline over 5 years	-18.55%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-21.69%	—	—
Current Drawdown Current decline from peak	-0.58%	-0.44%	-0.14%
Average Drawdown Average peak-to-trough decline	-3.94%	-1.11%	-2.83%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.90%	0.87%	+0.03%

Volatility

PZA vs. VTEC - Volatility Comparison

Invesco National AMT-Free Municipal Bond ETF (PZA) has a higher volatility of 1.11% compared to Vanguard California Tax-Exempt Bond ETF (VTEC) at 0.62%. This indicates that PZA's price experiences larger fluctuations and is considered to be riskier than VTEC based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PZA	VTEC	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.11%	0.62%	+0.49%
Volatility (6M) Calculated over the trailing 6-month period	2.97%	1.90%	+1.07%
Volatility (1Y) Calculated over the trailing 1-year period	4.17%	2.77%	+1.40%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.01%	3.72%	+2.29%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	7.08%	3.72%	+3.36%

PZA vs. VTEC - Expense Ratio Comparison

PZA has a 0.28% expense ratio, which is higher than VTEC's 0.08% expense ratio.

Dividends

PZA vs. VTEC - Dividend Comparison

PZA's dividend yield for the trailing twelve months is around 3.65%, more than VTEC's 3.15% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PZA Invesco National AMT-Free Municipal Bond ETF	3.65%	3.55%	3.22%	2.91%	2.68%	2.34%	2.44%	2.81%	3.19%	3.04%	3.23%	3.59%
VTEC Vanguard California Tax-Exempt Bond ETF	3.15%	3.13%	2.54%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both PZA and VTEC in my portfolio?

PZA and VTEC have a correlation of 0.70, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PZA or VTEC?

PZA has higher volatility (1.11%) compared to VTEC (0.62%). In terms of maximum drawdown, PZA dropped -24.49% vs VTEC's -4.50%.

Which ETF is better, PZA or VTEC?

On 1-year performance, PZA leads with 8.89% vs 6.43% for VTEC. On fees, VTEC is cheaper at 0.08% per year. On volatility, VTEC has been the lower-risk option at 0.62%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, PZA or VTEC?

Over the 1-year period, PZA has performed better with a 8.89% return vs 6.43%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PZA or VTEC?

VTEC is cheaper with a 0.08% expense ratio, compared with 0.28% for PZA.

Which ETF pays a higher dividend yield, PZA or VTEC?

PZA has the higher dividend yield at 3.65%, compared with 3.15% for VTEC.

What is the main difference between PZA and VTEC?

PZA tracks BofA ML National Long-Term Core Plus Municipal Securities Index, while VTEC tracks S&P California AMT-Free Municipal Bond Index. They also come from different issuers: Invesco and Vanguard. Their fees differ too: 0.28% for PZA and 0.08% for VTEC.

Which has better risk-adjusted returns?

VTEC currently has the higher Sharpe Ratio (2.33 vs 2.14), 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.