VMLTX vs. VTES

Last updated Jun 4, 2026

VMLTX (Vanguard Limited-Term Tax-Exempt Fund Investor Shares) and VTES (Vanguard Short-Term Tax-Exempt Bond ETF Shares) are both Municipal Bonds funds from Vanguard. Over the past 3 years, VMLTX returned 4.24%/yr vs 3.23%/yr for VTES. A 0.63 correlation means they provide meaningful diversification when combined. VMLTX charges 0.17%/yr vs 0.07%/yr for VTES.

Performance

VMLTX vs. VTES - 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 Tax-Exempt Bond ETF Shares (VTES). 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 VTES's 0.66% 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%

VTES

• 1D: 0.01%
• 1M: 0.29%
• YTD: 0.66%
• 6M: 1.02%
• 1Y: 3.63%
• 3Y*: 3.23%
• 5Y*: —
• 10Y*: —

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

VMLTX vs. VTES - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
VMLTX Vanguard Limited-Term Tax-Exempt Fund Investor Shares	1.01%	5.39%	3.14%	3.82%
VTES Vanguard Short-Term Tax-Exempt Bond ETF Shares	0.66%	4.19%	1.85%	3.32%

Correlation

The correlation between VMLTX and VTES 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	0.62
Correlation (All Time) Calculated using the full available price history since Mar 10, 2023	0.63

The correlation between VMLTX and VTES has been stable across timeframes, ranging from 0.56 to 0.63 - a consistent structural relationship.

Return for Risk

VMLTX vs. VTES — 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

VTES

VTES Risk / Return Rank: 73
VTES Sharpe Ratio Rank: 87
VTES Sortino Ratio Rank: 90
VTES Omega Ratio Rank: 94
VTES Calmar Ratio Rank: 49
VTES Martin Ratio Rank: 44

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. VTES - 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 Tax-Exempt Bond ETF Shares (VTES). 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	VTES	Difference
Sharpe ratio: Return per unit of total volatility	2.93	2.94	-0.01
Sortino ratio: Return per unit of downside risk	5.38	4.26	+1.12
Omega ratio: Gain probability vs. loss probability	1.96	1.70	+0.27
Calmar ratio: Return relative to maximum drawdown	2.86	2.48	+0.37
Martin ratio: Return relative to average drawdown	9.49	7.36	+2.13
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. VTES - Sharpe Ratio Comparison

The current VMLTX Sharpe Ratio is 2.93, which is comparable to the VTES Sharpe Ratio of 2.94. The chart below compares the historical Sharpe Ratios of VMLTX and VTES, 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	VTES	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.93	2.94	-0.01
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	1.14	—	—
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	1.81	+0.12

Drawdowns

VMLTX vs. VTES - Drawdown Comparison

The maximum VMLTX drawdown since its inception was -6.41%, which is greater than VTES's maximum drawdown of -2.42%. Use the drawdown chart below to compare losses from any high point for VMLTX and VTES.

Drawdown Indicators

	VMLTX	VTES	Difference
Max Drawdown Largest peak-to-trough decline	-6.41%	-2.42%	-3.99%
Max Drawdown (1Y) Largest decline over 1 year	-1.53%	-1.47%	-0.06%
Max Drawdown (3Y) Largest decline over 3 years	-2.02%	-1.80%	-0.22%
Max Drawdown (5Y) Largest decline over 5 years	-5.69%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-6.41%	—	—
Current Drawdown Current decline from peak	-0.40%	-0.62%	+0.22%
Average Drawdown Average peak-to-trough decline	-0.48%	-0.50%	+0.02%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.46%	0.49%	-0.03%

Volatility

VMLTX vs. VTES - Volatility Comparison

Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) has a higher volatility of 0.46% compared to Vanguard Short-Term Tax-Exempt Bond ETF Shares (VTES) at 0.35%. This indicates that VMLTX's price experiences larger fluctuations and is considered to be riskier than VTES based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMLTX	VTES	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.46%	0.35%	+0.11%
Volatility (6M) Calculated over the trailing 6-month period	1.14%	0.97%	+0.17%
Volatility (1Y) Calculated over the trailing 1-year period	1.49%	1.24%	+0.25%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.86%	1.72%	+0.14%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.93%	1.72%	+0.21%

VMLTX vs. VTES - Expense Ratio Comparison

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

VMLTX's dividend yield for the trailing twelve months is around 3.07%, more than VTES's 2.75% 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%
VTES Vanguard Short-Term Tax-Exempt Bond ETF Shares	2.75%	2.77%	2.99%	2.03%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both VMLTX and VTES in my portfolio?

VMLTX and VTES 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, VMLTX or VTES?

VMLTX has higher volatility (0.46%) compared to VTES (0.35%). In terms of maximum drawdown, VMLTX dropped -6.41% vs VTES's -2.42%.

Which has better risk-adjusted returns?

VTES currently has the higher Sharpe Ratio (2.94 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.