VMLTX vs. LSMSX

Last updated Jun 4, 2026

VMLTX (Vanguard Limited-Term Tax-Exempt Fund Investor Shares) and LSMSX (Western Asset SMASh Series TF Fund) are both Municipal Bonds funds. Over the past 5 years, VMLTX returned 2.12%/yr vs 1.20%/yr for LSMSX. A 0.67 correlation means they provide meaningful diversification when combined. VMLTX charges 0.17%/yr vs 0.01%/yr for LSMSX.

Performance

VMLTX vs. LSMSX - 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 Western Asset SMASh Series TF Fund (LSMSX). 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 lower than LSMSX's 2.18% return.

VMLTX

• 1D: 0.09%
• 1M: 0.35%
• YTD: 1.01%
• 6M: 1.37%
• 1Y: 4.36%
• 3Y*: 4.24%
• 5Y*: 2.12%
• 10Y*: 2.13%

LSMSX

• 1D: 0.31%
• 1M: 1.07%
• YTD: 2.18%
• 6M: 2.48%
• 1Y: 8.53%
• 3Y*: 4.03%
• 5Y*: 1.20%
• 10Y*: —

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

VMLTX vs. LSMSX - 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%	1.42%
LSMSX Western Asset SMASh Series TF Fund	2.18%	3.22%	2.22%	7.96%	-10.03%	4.11%	4.48%	8.16%	0.46%	4.92%

Correlation

The correlation between VMLTX and LSMSX is 0.63, 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	0.63
Correlation (3Y) Calculated over the trailing 3-year period	0.73
Correlation (5Y) Calculated over the trailing 5-year period	0.75
Correlation (All Time) Calculated using the full available price history since Feb 2, 2017	0.67

The correlation between VMLTX and LSMSX shifts across timeframes, from 0.63 (1 year) to 0.75 (5 years), reflecting how their relationship changes across market environments.

Return for Risk

VMLTX vs. LSMSX — Risk / Return Rank

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

VMLTX

VMLTX Risk / Return Rank: 77
VMLTX Sharpe Ratio Rank: 89
VMLTX Sortino Ratio Rank: 96
VMLTX Omega Ratio Rank: 97
VMLTX Calmar Ratio Rank: 56
VMLTX Martin Ratio Rank: 45

LSMSX

LSMSX Risk / Return Rank: 77
LSMSX Sharpe Ratio Rank: 89
LSMSX Sortino Ratio Rank: 92
LSMSX Omega Ratio Rank: 94
LSMSX Calmar Ratio Rank: 61
LSMSX Martin Ratio Rank: 49

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. LSMSX - 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 Western Asset SMASh Series TF Fund (LSMSX). 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.

	VMLTX	LSMSX	Difference
Sharpe ratio: Return per unit of total volatility	2.93	2.95	-0.02
Sortino ratio: Return per unit of downside risk	5.38	4.61	+0.76
Omega ratio: Gain probability vs. loss probability	1.96	1.72	+0.24
Calmar ratio: Return relative to maximum drawdown	2.86	2.99	-0.14
Martin ratio: Return relative to average drawdown	9.49	10.07	-0.58
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VMLTX vs. LSMSX - Sharpe Ratio Comparison

The current VMLTX Sharpe Ratio is 2.93, which is comparable to the LSMSX Sharpe Ratio of 2.95. The chart below compares the historical Sharpe Ratios of VMLTX and LSMSX, 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

	VMLTX	LSMSX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.93	2.95	-0.02
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	1.14	0.27	+0.87
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.10	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	1.93	0.63	+1.30

Drawdowns

VMLTX vs. LSMSX - Drawdown Comparison

The maximum VMLTX drawdown since its inception was -6.41%, smaller than the maximum LSMSX drawdown of -15.00%. Use the drawdown chart below to compare losses from any high point for VMLTX and LSMSX.

Drawdown Indicators

	VMLTX	LSMSX	Difference
Max Drawdown Largest peak-to-trough decline	-6.41%	-15.00%	+8.59%
Max Drawdown (1Y) Largest decline over 1 year	-1.53%	-2.82%	+1.29%
Max Drawdown (3Y) Largest decline over 3 years	-2.02%	-7.49%	+5.47%
Max Drawdown (5Y) Largest decline over 5 years	-5.69%	-15.00%	+9.31%
Max Drawdown (10Y) Largest decline over 10 years	-6.41%	—	—
Current Drawdown Current decline from peak	-0.40%	-0.23%	-0.17%
Average Drawdown Average peak-to-trough decline	-0.48%	-2.85%	+2.37%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.46%	0.84%	-0.38%

Volatility

VMLTX vs. LSMSX - Volatility Comparison

The current volatility for Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) is 0.46%, while Western Asset SMASh Series TF Fund (LSMSX) has a volatility of 1.22%. This indicates that VMLTX experiences smaller price fluctuations and is considered to be less risky than LSMSX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMLTX	LSMSX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.46%	1.22%	-0.76%
Volatility (6M) Calculated over the trailing 6-month period	1.14%	2.07%	-0.93%
Volatility (1Y) Calculated over the trailing 1-year period	1.49%	2.88%	-1.39%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.86%	4.49%	-2.63%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.93%	4.51%	-2.58%

VMLTX vs. LSMSX - Expense Ratio Comparison

VMLTX has a 0.17% expense ratio, which is higher than LSMSX's 0.01% 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. LSMSX - Dividend Comparison

VMLTX's dividend yield for the trailing twelve months is around 3.07%, less than LSMSX's 3.86% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
LSMSX Western Asset SMASh Series TF Fund	3.86%	3.83%	4.30%	3.37%	2.38%	2.73%	2.33%	2.55%	2.34%	0.90%	0.00%	0.00%
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 LSMSX in my portfolio?

VMLTX and LSMSX have a correlation of 0.63, 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 LSMSX?

LSMSX has higher volatility (1.22%) compared to VMLTX (0.46%). In terms of maximum drawdown, VMLTX dropped -6.41% vs LSMSX's -15.00%.

Which has better risk-adjusted returns?

LSMSX currently has the higher Sharpe Ratio (2.95 vs 2.93), 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.