VCRM vs. VSDM

Last updated Jun 4, 2026

VCRM (Vanguard Core Tax-Exempt Bond ETF) and VSDM (Vanguard Short Duration Tax-Exempt Bond ETF) are both Municipal Bonds funds from Vanguard. VCRM is passively managed, while VSDM is actively managed. Over the past year, VCRM returned 8.18% vs 4.98% for VSDM. A 0.70 correlation means they provide meaningful diversification when combined. Both charge a 0.12% expense ratio.

Performance

VCRM vs. VSDM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Core Tax-Exempt Bond ETF (VCRM) 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, VCRM achieves a 1.95% return, which is significantly higher than VSDM's 1.22% return.

VCRM

• 1D: -0.06%
• 1M: 0.74%
• YTD: 1.95%
• 6M: 2.36%
• 1Y: 8.18%
• 3Y*: —
• 5Y*: —
• 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)

VCRM vs. VSDM - Yearly Performance Comparison

	2026 (YTD)	2025	2024
VCRM Vanguard Core Tax-Exempt Bond ETF	1.95%	4.91%	-0.58%
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	1.22%	5.39%	-0.15%

Correlation

The correlation between VCRM and VSDM is 0.65, 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	0.65
Correlation (All Time) Calculated using the full available price history since Nov 22, 2024	0.70

The correlation between VCRM and VSDM has been stable across timeframes, ranging from 0.65 to 0.70 - a consistent structural relationship.

Return for Risk

VCRM vs. VSDM — Risk / Return Rank

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

VCRM

VCRM Risk / Return Rank: 76
VCRM Sharpe Ratio Rank: 82
VCRM Sortino Ratio Rank: 87
VCRM Omega Ratio Rank: 90
VCRM Calmar Ratio Rank: 60
VCRM Martin Ratio Rank: 62

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.

VCRM vs. VSDM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Core Tax-Exempt Bond ETF (VCRM) 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.

	VCRM	VSDM	Difference
Sharpe ratio: Return per unit of total volatility	2.70	3.67	-0.97
Sortino ratio: Return per unit of downside risk	3.99	5.35	-1.36
Omega ratio: Gain probability vs. loss probability	1.59	1.92	-0.33
Calmar ratio: Return relative to maximum drawdown	3.02	3.42	-0.40
Martin ratio: Return relative to average drawdown	11.19	12.07	-0.87
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VCRM vs. VSDM - Sharpe Ratio Comparison

The current VCRM Sharpe Ratio is 2.70, which is comparable to the VSDM Sharpe Ratio of 3.67. The chart below compares the historical Sharpe Ratios of VCRM 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

	VCRM	VSDM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.70	3.67	-0.97
Sharpe Ratio (All Time) Calculated using the full available price history	1.07	2.19	-1.12

Drawdowns

VCRM vs. VSDM - Drawdown Comparison

The maximum VCRM drawdown since its inception was -4.12%, which is greater than VSDM's maximum drawdown of -1.81%. Use the drawdown chart below to compare losses from any high point for VCRM and VSDM.

Drawdown Indicators

	VCRM	VSDM	Difference
Max Drawdown Largest peak-to-trough decline	-4.12%	-1.81%	-2.31%
Max Drawdown (1Y) Largest decline over 1 year	-2.72%	-1.46%	-1.26%
Current Drawdown Current decline from peak	-0.26%	-0.33%	+0.07%
Average Drawdown Average peak-to-trough decline	-1.13%	-0.32%	-0.81%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.73%	0.41%	+0.32%

Volatility

VCRM vs. VSDM - Volatility Comparison

Vanguard Core Tax-Exempt Bond ETF (VCRM) has a higher volatility of 0.98% compared to Vanguard Short Duration Tax-Exempt Bond ETF (VSDM) at 0.44%. This indicates that VCRM'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

	VCRM	VSDM	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.98%	0.44%	+0.54%
Volatility (6M) Calculated over the trailing 6-month period	2.17%	1.07%	+1.10%
Volatility (1Y) Calculated over the trailing 1-year period	3.05%	1.36%	+1.69%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.89%	1.95%	+1.94%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.89%	1.95%	+1.94%

VCRM vs. VSDM - Expense Ratio Comparison

Both VCRM and VSDM have an expense ratio of 0.12%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

VCRM vs. VSDM - Dividend Comparison

VCRM's dividend yield for the trailing twelve months is around 3.64%, more than VSDM's 3.11% yield.

Position	TTM	2025	2024
VCRM Vanguard Core Tax-Exempt Bond ETF	3.64%	3.42%	0.40%
VSDM Vanguard Short Duration Tax-Exempt Bond ETF	3.11%	3.06%	0.35%

Frequently Asked Questions

Can I hold both VCRM and VSDM in my portfolio?

VCRM and VSDM have a correlation of 0.65, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VCRM or VSDM?

VCRM has higher volatility (0.98%) compared to VSDM (0.44%). In terms of maximum drawdown, VCRM dropped -4.12% vs VSDM's -1.81%.

Which ETF is better, VCRM or VSDM?

On 1-year performance, VCRM leads with 8.18% vs 4.98% for VSDM. Both ETFs have the same 0.12% expense ratio. 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, VCRM or VSDM?

Over the 1-year period, VCRM has performed better with a 8.18% return vs 4.98%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VCRM or VSDM?

VCRM and VSDM have the same expense ratio: 0.12% per year.

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

VCRM has the higher dividend yield at 3.64%, compared with 3.11% for VSDM.

Which has better risk-adjusted returns?

VSDM currently has the higher Sharpe Ratio (3.67 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.