VFSUX vs. VTEB

Last updated Jun 4, 2026

VFSUX (Vanguard Short-Term Investment-Grade Fund Admiral Shares) and VTEB (Vanguard Tax-Exempt Bond ETF) are both funds - VFSUX is a Total Bond Market fund managed by Vanguard, while VTEB is a Municipal Bonds fund tracking the S&P National AMT-Free Municipal Bond Index. Over the past 10 years, VFSUX returned 2.64%/yr vs 2.09%/yr for VTEB. A 0.55 correlation means they provide meaningful diversification when combined. VFSUX charges 0.10%/yr vs 0.03%/yr for VTEB.

Performance

VFSUX vs. VTEB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Short-Term Investment-Grade Fund Admiral Shares (VFSUX) 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, VFSUX achieves a 0.82% return, which is significantly lower than VTEB's 1.46% return. Over the past 10 years, VFSUX has outperformed VTEB with an annualized return of 2.64%, while VTEB has yielded a comparatively lower 2.09% annualized return.

VFSUX

• 1D: 0.00%
• 1M: 0.31%
• YTD: 0.82%
• 6M: 1.11%
• 1Y: 4.80%
• 3Y*: 5.63%
• 5Y*: 2.41%
• 10Y*: 2.64%

VTEB

• 1D: -0.06%
• 1M: 0.66%
• YTD: 1.46%
• 6M: 1.89%
• 1Y: 7.14%
• 3Y*: 3.57%
• 5Y*: 0.88%
• 10Y*: 2.09%

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

VFSUX vs. VTEB - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFSUX Vanguard Short-Term Investment-Grade Fund Admiral Shares	0.82%	6.87%	5.08%	6.17%	-5.75%	-0.62%	5.26%	5.85%	0.98%	2.13%
VTEB Vanguard Tax-Exempt Bond ETF	1.46%	3.72%	1.31%	6.15%	-7.99%	1.14%	5.19%	7.35%	1.04%	4.87%

Correlation

The correlation between VFSUX 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	0.63
Correlation (5Y) Calculated over the trailing 5-year period	0.62
Correlation (10Y) Calculated over the trailing 10-year period	0.55
Correlation (All Time) Calculated using the full available price history since Aug 26, 2015	0.55

The correlation between VFSUX and VTEB has been stable across timeframes, ranging from 0.55 to 0.63 - a consistent structural relationship.

Return for Risk

VFSUX vs. VTEB — Risk / Return Rank

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

VFSUX

VFSUX Risk / Return Rank: 61
VFSUX Sharpe Ratio Rank: 49
VFSUX Sortino Ratio Rank: 78
VFSUX Omega Ratio Rank: 71
VFSUX Calmar Ratio Rank: 54
VFSUX Martin Ratio Rank: 55

VTEB

VTEB Risk / Return Rank: 72
VTEB Sharpe Ratio Rank: 80
VTEB Sortino Ratio Rank: 85
VTEB Omega Ratio Rank: 89
VTEB Calmar Ratio Rank: 52
VTEB Martin Ratio Rank: 54

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.

VFSUX vs. VTEB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Investment-Grade Fund Admiral Shares (VFSUX) 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.

	VFSUX	VTEB	Difference
Sharpe ratio: Return per unit of total volatility	2.08	2.64	-0.57
Sortino ratio: Return per unit of downside risk	3.70	3.92	-0.22
Omega ratio: Gain probability vs. loss probability	1.47	1.58	-0.11
Calmar ratio: Return relative to maximum drawdown	2.83	2.65	+0.18
Martin ratio: Return relative to average drawdown	11.18	9.41	+1.77
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VFSUX vs. VTEB - Sharpe Ratio Comparison

The current VFSUX Sharpe Ratio is 2.08, which is comparable to the VTEB Sharpe Ratio of 2.64. The chart below compares the historical Sharpe Ratios of VFSUX 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.

Sharpe Ratios by Period

	VFSUX	VTEB	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.08	2.64	-0.57
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.81	0.23	+0.58
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.06	0.40	+0.66
Sharpe Ratio (All Time) Calculated using the full available price history	1.35	0.47	+0.87

Drawdowns

VFSUX vs. VTEB - Drawdown Comparison

The maximum VFSUX drawdown since its inception was -9.24%, smaller than the maximum VTEB drawdown of -17.00%. Use the drawdown chart below to compare losses from any high point for VFSUX and VTEB.

Drawdown Indicators

	VFSUX	VTEB	Difference
Max Drawdown Largest peak-to-trough decline	-9.24%	-17.00%	+7.76%
Max Drawdown (1Y) Largest decline over 1 year	-1.71%	-2.71%	+1.00%
Max Drawdown (3Y) Largest decline over 3 years	-1.71%	-5.53%	+3.82%
Max Drawdown (5Y) Largest decline over 5 years	-9.24%	-12.64%	+3.40%
Max Drawdown (10Y) Largest decline over 10 years	-9.24%	-17.00%	+7.76%
Current Drawdown Current decline from peak	-0.23%	-0.52%	+0.29%
Average Drawdown Average peak-to-trough decline	-0.87%	-2.33%	+1.46%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.43%	0.76%	-0.33%

Volatility

VFSUX vs. VTEB - Volatility Comparison

The current volatility for Vanguard Short-Term Investment-Grade Fund Admiral Shares (VFSUX) is 0.75%, while Vanguard Tax-Exempt Bond ETF (VTEB) has a volatility of 0.89%. This indicates that VFSUX experiences smaller price fluctuations and is considered to be less risky than VTEB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFSUX	VTEB	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.75%	0.89%	-0.14%
Volatility (6M) Calculated over the trailing 6-month period	1.66%	2.01%	-0.35%
Volatility (1Y) Calculated over the trailing 1-year period	2.33%	2.72%	-0.39%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	2.99%	3.90%	-0.91%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	2.49%	5.26%	-2.77%

VFSUX vs. VTEB - Expense Ratio Comparison

VFSUX has a 0.10% expense ratio, which is higher than VTEB's 0.03% 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

VFSUX vs. VTEB - Dividend Comparison

VFSUX's dividend yield for the trailing twelve months is around 4.72%, more than VTEB's 3.35% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VFSUX Vanguard Short-Term Investment-Grade Fund Admiral Shares	4.72%	4.59%	4.16%	3.14%	2.03%	1.79%	2.34%	2.92%	2.79%	2.11%	2.14%	2.09%
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 VFSUX and VTEB in my portfolio?

VFSUX 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, VFSUX or VTEB?

VTEB has higher volatility (0.89%) compared to VFSUX (0.75%). In terms of maximum drawdown, VFSUX dropped -9.24% vs VTEB's -17.00%.

Which has better risk-adjusted returns?

VTEB currently has the higher Sharpe Ratio (2.64 vs 2.08), 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.