VCLAX vs. PZA

Last updated Jun 5, 2026

VCLAX (Vanguard California Long-Term Tax-Exempt Fund Admiral Shares) and PZA (Invesco National AMT-Free Municipal Bond ETF) are both Municipal Bonds funds. Over the past 10 years, VCLAX returned 2.61%/yr vs 1.90%/yr for PZA. A 0.62 correlation means they provide meaningful diversification when combined. VCLAX charges 0.09%/yr vs 0.28%/yr for PZA.

Performance

VCLAX vs. PZA - Performance Comparison

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

Returns By Period

In the year-to-date period, VCLAX achieves a 1.79% return, which is significantly lower than PZA's 2.60% return. Over the past 10 years, VCLAX has outperformed PZA with an annualized return of 2.61%, while PZA has yielded a comparatively lower 1.90% annualized return.

VCLAX

• 1D: 0.00%
• 1M: 0.83%
• YTD: 1.79%
• 6M: 2.18%
• 1Y: 8.23%
• 3Y*: 4.86%
• 5Y*: 1.39%
• 10Y*: 2.61%

PZA

• 1D: 0.26%
• 1M: 1.10%
• YTD: 2.60%
• 6M: 2.86%
• 1Y: 8.99%
• 3Y*: 3.37%
• 5Y*: 0.03%
• 10Y*: 1.90%

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

VCLAX vs. PZA - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VCLAX Vanguard California Long-Term Tax-Exempt Fund Admiral Shares	1.79%	4.97%	2.77%	7.60%	-9.99%	1.50%	5.68%	8.91%	0.76%	6.93%
PZA Invesco National AMT-Free Municipal Bond ETF	2.60%	1.81%	0.81%	8.64%	-13.17%	2.37%	5.07%	9.00%	-0.09%	6.95%

Correlation

The correlation between VCLAX and PZA is 0.66, 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	0.66
Correlation (3Y) Calculated over the trailing 3-year period	0.71
Correlation (5Y) Calculated over the trailing 5-year period	0.71
Correlation (10Y) Calculated over the trailing 10-year period	0.67
Correlation (All Time) Calculated using the full available price history since Oct 19, 2007	0.62

The correlation between VCLAX and PZA has been stable across timeframes, ranging from 0.62 to 0.71 - a consistent structural relationship.

Return for Risk

VCLAX vs. PZA — Risk / Return Rank

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

VCLAX

VCLAX Risk / Return Rank: 69
VCLAX Sharpe Ratio Rank: 83
VCLAX Sortino Ratio Rank: 88
VCLAX Omega Ratio Rank: 91
VCLAX Calmar Ratio Rank: 43
VCLAX Martin Ratio Rank: 42

PZA

PZA Risk / Return Rank: 66
PZA Sharpe Ratio Rank: 65
PZA Sortino Ratio Rank: 69
PZA Omega Ratio Rank: 79
PZA Calmar Ratio Rank: 58
PZA Martin Ratio Rank: 58

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.

VCLAX vs. PZA - Risk-Adjusted Trends Comparison

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

	VCLAX	PZA	Difference
Sharpe ratio: Return per unit of total volatility	2.73	2.14	+0.59
Sortino ratio: Return per unit of downside risk	4.30	3.11	+1.20
Omega ratio: Gain probability vs. loss probability	1.68	1.46	+0.22
Calmar ratio: Return relative to maximum drawdown	2.50	2.84	-0.34
Martin ratio: Return relative to average drawdown	8.92	10.03	-1.11
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VCLAX vs. PZA - Sharpe Ratio Comparison

The current VCLAX Sharpe Ratio is 2.73, which is comparable to the PZA Sharpe Ratio of 2.14. The chart below compares the historical Sharpe Ratios of VCLAX and PZA, 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

	VCLAX	PZA	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.73	2.14	+0.59
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.30	0.00	+0.30
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.57	0.27	+0.31
Sharpe Ratio (All Time) Calculated using the full available price history	0.94	0.43	+0.51

Drawdowns

VCLAX vs. PZA - Drawdown Comparison

The maximum VCLAX drawdown since its inception was -15.72%, smaller than the maximum PZA drawdown of -24.49%. Use the drawdown chart below to compare losses from any high point for VCLAX and PZA.

Drawdown Indicators

	VCLAX	PZA	Difference
Max Drawdown Largest peak-to-trough decline	-15.72%	-24.49%	+8.77%
Max Drawdown (1Y) Largest decline over 1 year	-3.43%	-3.18%	-0.25%
Max Drawdown (3Y) Largest decline over 3 years	-6.55%	-7.89%	+1.34%
Max Drawdown (5Y) Largest decline over 5 years	-15.72%	-18.55%	+2.83%
Max Drawdown (10Y) Largest decline over 10 years	-15.72%	-21.69%	+5.97%
Current Drawdown Current decline from peak	-0.46%	-0.98%	+0.52%
Average Drawdown Average peak-to-trough decline	-2.18%	-3.95%	+1.77%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.96%	0.90%	+0.06%

Volatility

VCLAX vs. PZA - Volatility Comparison

The current volatility for Vanguard California Long-Term Tax-Exempt Fund Admiral Shares (VCLAX) is 1.21%, while Invesco National AMT-Free Municipal Bond ETF (PZA) has a volatility of 1.49%. This indicates that VCLAX experiences smaller price fluctuations and is considered to be less risky than PZA based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VCLAX	PZA	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.21%	1.49%	-0.28%
Volatility (6M) Calculated over the trailing 6-month period	2.40%	2.90%	-0.50%
Volatility (1Y) Calculated over the trailing 1-year period	3.14%	4.23%	-1.09%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	4.57%	6.00%	-1.43%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	4.56%	7.08%	-2.52%

VCLAX vs. PZA - Expense Ratio Comparison

VCLAX has a 0.09% expense ratio, which is lower than PZA's 0.28% expense ratio.

Dividends

VCLAX vs. PZA - Dividend Comparison

VCLAX's dividend yield for the trailing twelve months is around 3.60%, which matches PZA's 3.63% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PZA Invesco National AMT-Free Municipal Bond ETF	3.63%	3.55%	3.22%	2.91%	2.68%	2.34%	2.44%	2.81%	3.19%	3.04%	3.23%	3.59%
VCLAX Vanguard California Long-Term Tax-Exempt Fund Admiral Shares	3.60%	4.41%	3.95%	3.07%	2.74%	2.60%	3.28%	3.24%	3.41%	3.32%	3.56%	3.58%

Frequently Asked Questions

Can I hold both VCLAX and PZA in my portfolio?

VCLAX and PZA have a correlation of 0.66, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VCLAX or PZA?

PZA has higher volatility (1.49%) compared to VCLAX (1.21%). In terms of maximum drawdown, VCLAX dropped -15.72% vs PZA's -24.49%.

Which has better risk-adjusted returns?

VCLAX currently has the higher Sharpe Ratio (2.73 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.