TAXE vs. VTES

Last updated Jun 25, 2026

TAXE (T. Rowe Price Intermediate Municipal Income ETF) and VTES (Vanguard Short-Term Tax-Exempt Bond ETF) are both Municipal Bonds funds. TAXE is actively managed, while VTES is passively managed. Over the past year, TAXE returned 7.08% vs 3.25% for VTES. A 0.73 correlation means they provide meaningful diversification when combined. TAXE charges 0.24%/yr vs 0.07%/yr for VTES.

Performance

TAXE vs. VTES - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in T. Rowe Price Intermediate Municipal Income ETF (TAXE) 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, TAXE achieves a 2.13% return, which is significantly higher than VTES's 0.77% return.

TAXE

• 1D: 0.18%
• 1M: 1.37%
• YTD: 2.13%
• 6M: 2.09%
• 1Y: 7.08%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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)

TAXE vs. VTES - Yearly Performance Comparison

	2026 (YTD)	2025	2024
TAXE T. Rowe Price Intermediate Municipal Income ETF	2.13%	5.78%	1.56%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	0.77%	4.19%	1.69%

Correlation

The correlation between TAXE and VTES is 0.69, 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	0.69
Correlation (All Time) Calculated using the full available price history since Jul 10, 2024	0.73

The correlation between TAXE and VTES has been stable across timeframes, ranging from 0.69 to 0.73 - a consistent structural relationship.

Return for Risk

TAXE vs. VTES — Risk / Return Rank

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

TAXE

TAXE Risk / Return Rank: 83
TAXE Sharpe Ratio Rank: 95
TAXE Sortino Ratio Rank: 96
TAXE Omega Ratio Rank: 96
TAXE Calmar Ratio Rank: 65
TAXE Martin Ratio Rank: 61

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.

TAXE vs. VTES - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for T. Rowe Price Intermediate Municipal Income ETF (TAXE) 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.

	TAXE	VTES	Difference
Sharpe ratio: Return per unit of total volatility	3.19	2.63	+0.56
Sortino ratio: Return per unit of downside risk	4.86	3.79	+1.07
Omega ratio: Gain probability vs. loss probability	1.76	1.61	+0.15
Calmar ratio: Return relative to maximum drawdown	2.81	2.22	+0.59
Martin ratio: Return relative to average drawdown	9.47	6.35	+3.13

TAXE vs. VTES - Sharpe Ratio Comparison

The current TAXE Sharpe Ratio is 3.19, which is comparable to the VTES Sharpe Ratio of 2.63. The chart below compares the historical Sharpe Ratios of TAXE 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

TAXE vs. VTES - Drawdown Comparison

The maximum TAXE drawdown since its inception was -3.72%, which is greater than VTES's maximum drawdown of -2.42%. Use the drawdown chart below to compare losses from any high point for TAXE and VTES.

Drawdown Indicators

	TAXE	VTES	Difference
Max Drawdown Largest peak-to-trough decline	-3.72%	-2.42%	-1.30%
Max Drawdown (1Y) Largest decline over 1 year	-2.53%	-1.47%	-1.06%
Max Drawdown (3Y) Largest decline over 3 years	—	-1.80%	—
Current Drawdown Current decline from peak	-0.25%	-0.51%	+0.26%
Average Drawdown Average peak-to-trough decline	-0.70%	-0.50%	-0.20%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.75%	0.51%	+0.24%

Volatility

TAXE vs. VTES - Volatility Comparison

T. Rowe Price Intermediate Municipal Income ETF (TAXE) has a higher volatility of 0.56% compared to Vanguard Short-Term Tax-Exempt Bond ETF (VTES) at 0.27%. This indicates that TAXE'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

	TAXE	VTES	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.56%	0.27%	+0.29%
Volatility (6M) Calculated over the trailing 6-month period	1.68%	0.98%	+0.70%
Volatility (1Y) Calculated over the trailing 1-year period	2.23%	1.24%	+0.99%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.12%	1.71%	+1.41%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.12%	1.71%	+1.41%

TAXE vs. VTES - Expense Ratio Comparison

TAXE has a 0.24% 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

TAXE vs. VTES - Dividend Comparison

TAXE's dividend yield for the trailing twelve months is around 3.55%, more than VTES's 2.75% yield.

Position	TTM	2025	2024	2023
TAXE T. Rowe Price Intermediate Municipal Income ETF	3.55%	3.46%	1.74%	0.00%
VTES Vanguard Short-Term Tax-Exempt Bond ETF	2.75%	2.77%	2.99%	2.03%

Frequently Asked Questions

Can I hold both TAXE and VTES in my portfolio?

TAXE and VTES have a correlation of 0.69, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, TAXE or VTES?

TAXE has higher volatility (0.56%) compared to VTES (0.27%). In terms of maximum drawdown, TAXE dropped -3.72% vs VTES's -2.42%.

Which ETF is better, TAXE or VTES?

On 1-year performance, TAXE leads with 7.08% vs 3.25% 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, TAXE or VTES?

Over the 1-year period, TAXE has performed better with a 7.08% return vs 3.25%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, TAXE or VTES?

VTES is cheaper with a 0.07% expense ratio, compared with 0.24% for TAXE.

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

TAXE has the higher dividend yield at 3.55%, compared with 2.75% for VTES.

What is the main difference between TAXE and VTES?

They also come from different issuers: T. Rowe Price and Vanguard. Their fees differ too: 0.24% for TAXE and 0.07% for VTES.

Which has better risk-adjusted returns?

TAXE currently has the higher Sharpe Ratio (3.19 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.