VEGBX vs. VTEB

Last updated Jun 19, 2026

VEGBX (Vanguard Emerging Markets Bond Fund Admiral Shares) and VTEB (Vanguard Tax-Exempt Bond ETF) are both funds - VEGBX is a Emerging Markets Bonds fund managed by Vanguard, while VTEB is a Municipal Bonds fund tracking the S&P National AMT-Free Municipal Bond Index. Over the past 5 years, VEGBX returned 4.41%/yr vs 0.91%/yr for VTEB. At a 0.45 correlation, their price movements are largely independent. VEGBX charges 0.40%/yr vs 0.03%/yr for VTEB.

Performance

VEGBX vs. VTEB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Emerging Markets Bond Fund Admiral Shares (VEGBX) and Vanguard Tax-Exempt Bond ETF (VTEB). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VEGBX achieves a 3.36% return, which is significantly higher than VTEB's 1.74% return.

VEGBX

• 1D: -0.28%
• 1M: 2.47%
• YTD: 3.36%
• 6M: 3.61%
• 1Y: 13.11%
• 3Y*: 11.49%
• 5Y*: 4.41%
• 10Y*: —

VTEB

• 1D: 0.32%
• 1M: 1.83%
• YTD: 1.74%
• 6M: 2.01%
• 1Y: 6.93%
• 3Y*: 3.45%
• 5Y*: 0.91%
• 10Y*: 2.05%

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

VEGBX vs. VTEB - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VEGBX Vanguard Emerging Markets Bond Fund Admiral Shares	3.36%	14.46%	7.60%	13.81%	-13.02%	-1.44%	15.18%	17.87%	-0.66%	11.65%
VTEB Vanguard Tax-Exempt Bond ETF	1.74%	3.72%	1.31%	6.15%	-7.99%	1.14%	5.19%	7.35%	1.04%	4.62%

Correlation

The correlation between VEGBX and VTEB is 0.56, 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	0.56
Correlation (3Y) Calculated over the trailing 3-year period	0.64
Correlation (5Y) Calculated over the trailing 5-year period	0.58
Correlation (All Time) Calculated using the full available price history since Feb 1, 2017	0.45

The correlation between VEGBX and VTEB shifts across timeframes, from 0.45 (all time) to 0.64 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

VEGBX vs. VTEB — Risk / Return Rank

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

VEGBX

VEGBX Risk / Return Rank: 90
VEGBX Sharpe Ratio Rank: 95
VEGBX Sortino Ratio Rank: 95
VEGBX Omega Ratio Rank: 90
VEGBX Calmar Ratio Rank: 81
VEGBX Martin Ratio Rank: 87

VTEB

VTEB Risk / Return Rank: 76
VTEB Sharpe Ratio Rank: 87
VTEB Sortino Ratio Rank: 90
VTEB Omega Ratio Rank: 92
VTEB Calmar Ratio Rank: 56
VTEB Martin Ratio Rank: 55

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.

VEGBX vs. VTEB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Emerging Markets Bond Fund Admiral Shares (VEGBX) and Vanguard Tax-Exempt Bond ETF (VTEB). 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.

	VEGBX	VTEB	Difference
Sharpe ratio: Return per unit of total volatility	3.01	2.60	+0.41
Sortino ratio: Return per unit of downside risk	4.86	3.84	+1.01
Omega ratio: Gain probability vs. loss probability	1.62	1.57	+0.05
Calmar ratio: Return relative to maximum drawdown	3.47	2.57	+0.90
Martin ratio: Return relative to average drawdown	15.17	9.06	+6.10

VEGBX vs. VTEB - Sharpe Ratio Comparison

The current VEGBX Sharpe Ratio is 3.01, which is comparable to the VTEB Sharpe Ratio of 2.60. The chart below compares the historical Sharpe Ratios of VEGBX and VTEB, 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

VEGBX vs. VTEB - Drawdown Comparison

The maximum VEGBX drawdown since its inception was -24.27%, which is greater than VTEB's maximum drawdown of -17.00%. Use the drawdown chart below to compare losses from any high point for VEGBX and VTEB.

Drawdown Indicators

	VEGBX	VTEB	Difference
Max Drawdown Largest peak-to-trough decline	-24.27%	-17.00%	-7.27%
Max Drawdown (1Y) Largest decline over 1 year	-3.79%	-2.71%	-1.08%
Max Drawdown (3Y) Largest decline over 3 years	-5.53%	-5.53%	0.00%
Max Drawdown (5Y) Largest decline over 5 years	-24.27%	-12.64%	-11.63%
Max Drawdown (10Y) Largest decline over 10 years	—	-17.00%	—
Current Drawdown Current decline from peak	-0.28%	-0.24%	-0.04%
Average Drawdown Average peak-to-trough decline	-3.83%	-2.32%	-1.51%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.87%	0.77%	+0.10%

Volatility

VEGBX vs. VTEB - Volatility Comparison

Vanguard Emerging Markets Bond Fund Admiral Shares (VEGBX) has a higher volatility of 1.28% compared to Vanguard Tax-Exempt Bond ETF (VTEB) at 0.72%. This indicates that VEGBX's price experiences larger fluctuations and is considered to be riskier than VTEB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VEGBX	VTEB	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.28%	0.72%	+0.56%
Volatility (6M) Calculated over the trailing 6-month period	3.66%	2.06%	+1.60%
Volatility (1Y) Calculated over the trailing 1-year period	4.38%	2.68%	+1.70%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.35%	3.90%	+2.45%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	6.36%	5.26%	+1.10%

VEGBX vs. VTEB - Expense Ratio Comparison

VEGBX has a 0.40% expense ratio, which is higher than VTEB's 0.03% expense ratio.

Dividends

VEGBX vs. VTEB - Dividend Comparison

VEGBX's dividend yield for the trailing twelve months is around 6.12%, more than VTEB's 3.35% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VEGBX Vanguard Emerging Markets Bond Fund Admiral Shares	6.12%	6.34%	7.02%	7.20%	5.61%	5.14%	4.62%	6.42%	5.00%	0.39%	0.00%	0.00%
VTEB Vanguard Tax-Exempt Bond ETF	3.35%	3.29%	3.14%	2.79%	2.09%	1.64%	1.99%	2.30%	2.25%	1.96%	1.66%	0.58%

Frequently Asked Questions

Can I hold both VEGBX and VTEB in my portfolio?

VEGBX and VTEB have a correlation of 0.56, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VEGBX or VTEB?

VEGBX has higher volatility (1.28%) compared to VTEB (0.72%). In terms of maximum drawdown, VEGBX dropped -24.27% vs VTEB's -17.00%.

Which has better risk-adjusted returns?

VEGBX currently has the higher Sharpe Ratio (3.01 vs 2.60), 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.