VMLTX vs. VSBSX

Last updated Jun 4, 2026

VMLTX (Vanguard Limited-Term Tax-Exempt Fund Investor Shares) and VSBSX (Vanguard Short-Term Treasury Index Fund Admiral Shares) are both mutual funds - VMLTX is a Municipal Bonds fund managed by Vanguard, while VSBSX is a Government Bonds fund managed by Vanguard. Over the past 10 years, VMLTX returned 2.13%/yr vs 1.75%/yr for VSBSX. At a 0.30 correlation, their price movements are largely independent. VMLTX charges 0.17%/yr vs 0.07%/yr for VSBSX.

Performance

VMLTX vs. VSBSX - 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 Short-Term Treasury Index Fund Admiral Shares (VSBSX). 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 VSBSX's 0.51% return. Over the past 10 years, VMLTX has outperformed VSBSX with an annualized return of 2.13%, while VSBSX has yielded a comparatively lower 1.75% annualized 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%

VSBSX

• 1D: 0.00%
• 1M: 0.11%
• YTD: 0.51%
• 6M: 0.78%
• 1Y: 3.46%
• 3Y*: 4.28%
• 5Y*: 1.87%
• 10Y*: 1.75%

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

VMLTX vs. VSBSX - 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%
VSBSX Vanguard Short-Term Treasury Index Fund Admiral Shares	0.51%	5.08%	4.39%	4.23%	-3.87%	-0.69%	3.09%	3.51%	1.52%	0.35%

Correlation

The correlation between VMLTX and VSBSX is 0.34, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.34
Correlation (3Y) Calculated over the trailing 3-year period	0.37
Correlation (5Y) Calculated over the trailing 5-year period	0.36
Correlation (10Y) Calculated over the trailing 10-year period	0.32
Correlation (All Time) Calculated using the full available price history since Nov 24, 2009	0.30

Return for Risk

VMLTX vs. VSBSX — 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

VSBSX

VSBSX Risk / Return Rank: 86
VSBSX Sharpe Ratio Rank: 83
VSBSX Sortino Ratio Rank: 90
VSBSX Omega Ratio Rank: 85
VSBSX Calmar Ratio Rank: 86
VSBSX Martin Ratio Rank: 87

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. VSBSX - 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 Short-Term Treasury Index Fund Admiral Shares (VSBSX). 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	VSBSX	Difference
Sharpe ratio: Return per unit of total volatility	2.93	2.68	+0.25
Sortino ratio: Return per unit of downside risk	5.38	4.40	+0.98
Omega ratio: Gain probability vs. loss probability	1.96	1.57	+0.39
Calmar ratio: Return relative to maximum drawdown	2.86	4.09	-1.23
Martin ratio: Return relative to average drawdown	9.49	16.89	-7.40
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. VSBSX - Sharpe Ratio Comparison

The current VMLTX Sharpe Ratio is 2.93, which is comparable to the VSBSX Sharpe Ratio of 2.68. The chart below compares the historical Sharpe Ratios of VMLTX and VSBSX, 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	VSBSX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.93	2.68	+0.25
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	1.14	0.96	+0.18
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.10	1.14	-0.04
Sharpe Ratio (All Time) Calculated using the full available price history	1.93	1.07	+0.86

Drawdowns

VMLTX vs. VSBSX - Drawdown Comparison

The maximum VMLTX drawdown since its inception was -6.41%, which is greater than VSBSX's maximum drawdown of -5.77%. Use the drawdown chart below to compare losses from any high point for VMLTX and VSBSX.

Drawdown Indicators

	VMLTX	VSBSX	Difference
Max Drawdown Largest peak-to-trough decline	-6.41%	-5.77%	-0.64%
Max Drawdown (1Y) Largest decline over 1 year	-1.53%	-0.84%	-0.69%
Max Drawdown (3Y) Largest decline over 3 years	-2.02%	-0.84%	-1.18%
Max Drawdown (5Y) Largest decline over 5 years	-5.69%	-5.77%	+0.08%
Max Drawdown (10Y) Largest decline over 10 years	-6.41%	-5.77%	-0.64%
Current Drawdown Current decline from peak	-0.40%	-0.21%	-0.19%
Average Drawdown Average peak-to-trough decline	-0.48%	-0.59%	+0.11%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.46%	0.20%	+0.26%

Volatility

VMLTX vs. VSBSX - Volatility Comparison

Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) has a higher volatility of 0.46% compared to Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX) at 0.37%. This indicates that VMLTX's price experiences larger fluctuations and is considered to be riskier than VSBSX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMLTX	VSBSX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.46%	0.37%	+0.09%
Volatility (6M) Calculated over the trailing 6-month period	1.14%	0.87%	+0.27%
Volatility (1Y) Calculated over the trailing 1-year period	1.49%	1.28%	+0.21%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.86%	1.95%	-0.09%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.93%	1.54%	+0.39%

VMLTX vs. VSBSX - Expense Ratio Comparison

VMLTX has a 0.17% expense ratio, which is higher than VSBSX's 0.07% 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. VSBSX - Dividend Comparison

VMLTX's dividend yield for the trailing twelve months is around 3.07%, less than VSBSX's 3.84% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
VSBSX Vanguard Short-Term Treasury Index Fund Admiral Shares	3.84%	3.98%	4.50%	3.29%	1.12%	0.63%	1.72%	2.26%	1.80%	1.10%	0.76%	0.71%

Frequently Asked Questions

Can I hold both VMLTX and VSBSX in my portfolio?

VMLTX and VSBSX have a correlation of 0.34, 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 VSBSX?

VMLTX has higher volatility (0.46%) compared to VSBSX (0.37%). In terms of maximum drawdown, VMLTX dropped -6.41% vs VSBSX's -5.77%.

Which has better risk-adjusted returns?

VMLTX currently has the higher Sharpe Ratio (2.93 vs 2.68), 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.