VMLTX vs. BND

Last updated Jun 24, 2026

VMLTX (Vanguard Limited-Term Tax-Exempt Fund Investor Shares) and BND (Vanguard Total Bond Market ETF) are both funds - VMLTX is a Municipal Bonds fund managed by Vanguard, while BND is a Total Bond Market fund tracking the Bloomberg U.S. Aggregate Float Adjusted Index. Over the past 10 years, VMLTX returned 2.08%/yr vs 1.56%/yr for BND. At a 0.35 correlation, their price movements are largely independent. VMLTX charges 0.17%/yr vs 0.03%/yr for BND.

Performance

VMLTX vs. BND - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) and Vanguard Total Bond Market ETF (BND). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VMLTX achieves a 1.01% return, which is significantly higher than BND's 0.49% return. Over the past 10 years, VMLTX has outperformed BND with an annualized return of 2.08%, while BND has yielded a comparatively lower 1.56% annualized return.

VMLTX

• 1D: 0.00%
• 1M: 0.72%
• YTD: 1.01%
• 6M: 1.37%
• 1Y: 3.98%
• 3Y*: 4.14%
• 5Y*: 2.13%
• 10Y*: 2.08%

BND

• 1D: 0.11%
• 1M: 0.64%
• YTD: 0.49%
• 6M: 0.57%
• 1Y: 4.23%
• 3Y*: 3.96%
• 5Y*: 0.05%
• 10Y*: 1.56%

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

VMLTX vs. BND - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VMLTX Vanguard Limited-Term Tax-Exempt Fund Investor Shares	1.01%	5.39%	3.14%	4.19%	-2.98%	0.83%	3.30%	4.11%	1.56%	2.02%
BND Vanguard Total Bond Market ETF	0.49%	7.08%	1.38%	5.65%	-13.11%	-1.86%	7.71%	8.84%	-0.12%	3.57%

Correlation

The correlation between VMLTX and BND is 0.40, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.40
Correlation (3Y) Calculated over the trailing 3-year period	0.49
Correlation (5Y) Calculated over the trailing 5-year period	0.44
Correlation (10Y) Calculated over the trailing 10-year period	0.39
Correlation (All Time) Calculated using the full available price history since Apr 10, 2007	0.35

The correlation between VMLTX and BND shifts across timeframes, from 0.35 (all time) to 0.49 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

VMLTX vs. BND — Risk / Return Rank

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

VMLTX

VMLTX Risk / Return Rank: 75
VMLTX Sharpe Ratio Rank: 88
VMLTX Sortino Ratio Rank: 96
VMLTX Omega Ratio Rank: 97
VMLTX Calmar Ratio Rank: 51
VMLTX Martin Ratio Rank: 42

BND

BND Risk / Return Rank: 32
BND Sharpe Ratio Rank: 32
BND Sortino Ratio Rank: 33
BND Omega Ratio Rank: 30
BND Calmar Ratio Rank: 33
BND Martin Ratio Rank: 32

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.

VMLTX vs. BND - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) and Vanguard Total Bond Market ETF (BND). 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.

	VMLTX	BND	Difference
Sharpe ratio: Return per unit of total volatility	2.68	1.14	+1.54
Sortino ratio: Return per unit of downside risk	4.88	1.70	+3.18
Omega ratio: Gain probability vs. loss probability	1.86	1.20	+0.66
Calmar ratio: Return relative to maximum drawdown	2.61	1.59	+1.02
Martin ratio: Return relative to average drawdown	8.49	4.52	+3.97

VMLTX vs. BND - Sharpe Ratio Comparison

The current VMLTX Sharpe Ratio is 2.68, which is higher than the BND Sharpe Ratio of 1.14. The chart below compares the historical Sharpe Ratios of VMLTX and BND, 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

VMLTX vs. BND - Drawdown Comparison

The maximum VMLTX drawdown since its inception was -6.41%, smaller than the maximum BND drawdown of -18.58%. Use the drawdown chart below to compare losses from any high point for VMLTX and BND.

Drawdown Indicators

	VMLTX	BND	Difference
Max Drawdown Largest peak-to-trough decline	-6.41%	-18.58%	+12.17%
Max Drawdown (1Y) Largest decline over 1 year	-1.53%	-2.68%	+1.15%
Max Drawdown (3Y) Largest decline over 3 years	-2.02%	-5.92%	+3.90%
Max Drawdown (5Y) Largest decline over 5 years	-5.69%	-17.91%	+12.22%
Max Drawdown (10Y) Largest decline over 10 years	-6.41%	-18.58%	+12.17%
Current Drawdown Current decline from peak	-0.40%	-2.15%	+1.75%
Average Drawdown Average peak-to-trough decline	-0.48%	-3.06%	+2.58%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.47%	0.94%	-0.47%

Volatility

VMLTX vs. BND - Volatility Comparison

The current volatility for Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) is 0.37%, while Vanguard Total Bond Market ETF (BND) has a volatility of 1.08%. This indicates that VMLTX experiences smaller price fluctuations and is considered to be less risky than BND based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMLTX	BND	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.37%	1.08%	-0.71%
Volatility (6M) Calculated over the trailing 6-month period	1.13%	2.77%	-1.64%
Volatility (1Y) Calculated over the trailing 1-year period	1.49%	3.74%	-2.25%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.86%	6.03%	-4.17%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.93%	5.53%	-3.60%

VMLTX vs. BND - Expense Ratio Comparison

VMLTX has a 0.17% expense ratio, which is higher than BND'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

VMLTX vs. BND - Dividend Comparison

VMLTX's dividend yield for the trailing twelve months is around 3.07%, less than BND's 3.96% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
BND Vanguard Total Bond Market ETF	3.96%	3.86%	3.67%	3.09%	2.60%	2.12%	2.38%	2.72%	2.81%	2.54%	2.51%	2.57%
VMLTX Vanguard Limited-Term Tax-Exempt Fund Investor Shares	3.07%	3.75%	3.27%	2.30%	1.56%	1.64%	1.62%	2.01%	1.81%	1.55%	1.52%	1.50%

Frequently Asked Questions

Can I hold both VMLTX and BND in my portfolio?

VMLTX and BND have a correlation of 0.40, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VMLTX or BND?

BND has higher volatility (1.08%) compared to VMLTX (0.37%). In terms of maximum drawdown, VMLTX dropped -6.41% vs BND's -18.58%.

Which has better risk-adjusted returns?

VMLTX currently has the higher Sharpe Ratio (2.68 vs 1.14), 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.