VMLUX vs. LTEBX

Last updated Jun 4, 2026

VMLUX (Vanguard Limited-Term Tax-Exempt Fund Admiral Shares) and LTEBX (American Funds Limited Term Tax-Exempt Bond Fund) are both Municipal Bonds funds. Over the past 10 years, VMLUX returned 2.15%/yr vs 1.82%/yr for LTEBX. A 0.76 correlation means they provide meaningful diversification when combined. VMLUX charges 0.09%/yr vs 0.57%/yr for LTEBX.

Performance

VMLUX vs. LTEBX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Limited-Term Tax-Exempt Fund Admiral Shares (VMLUX) and American Funds Limited Term Tax-Exempt Bond Fund (LTEBX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VMLUX achieves a 1.05% return, which is significantly higher than LTEBX's 0.93% return. Over the past 10 years, VMLUX has outperformed LTEBX with an annualized return of 2.15%, while LTEBX has yielded a comparatively lower 1.82% annualized return.

VMLUX

• 1D: 0.09%
• 1M: 0.36%
• YTD: 1.05%
• 6M: 1.41%
• 1Y: 4.44%
• 3Y*: 4.34%
• 5Y*: 2.21%
• 10Y*: 2.15%

LTEBX

• 1D: 0.13%
• 1M: 0.48%
• YTD: 0.93%
• 6M: 1.30%
• 1Y: 5.12%
• 3Y*: 3.98%
• 5Y*: 1.40%
• 10Y*: 1.82%

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

VMLUX vs. LTEBX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VMLUX Vanguard Limited-Term Tax-Exempt Fund Admiral Shares	1.05%	5.50%	3.25%	4.29%	-2.90%	0.23%	3.38%	4.21%	1.64%	2.13%
LTEBX American Funds Limited Term Tax-Exempt Bond Fund	0.93%	6.02%	1.97%	3.82%	-5.12%	-0.01%	4.01%	4.67%	1.08%	2.95%

Correlation

The correlation between VMLUX and LTEBX is 0.77, 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	0.77
Correlation (3Y) Calculated over the trailing 3-year period	0.82
Correlation (5Y) Calculated over the trailing 5-year period	0.83
Correlation (10Y) Calculated over the trailing 10-year period	0.79
Correlation (All Time) Calculated using the full available price history since Feb 13, 2001	0.76

The correlation between VMLUX and LTEBX has been stable across timeframes, ranging from 0.76 to 0.83 - a consistent structural relationship.

Return for Risk

VMLUX vs. LTEBX — Risk / Return Rank

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

VMLUX

VMLUX Risk / Return Rank: 77
VMLUX Sharpe Ratio Rank: 90
VMLUX Sortino Ratio Rank: 96
VMLUX Omega Ratio Rank: 97
VMLUX Calmar Ratio Rank: 57
VMLUX Martin Ratio Rank: 47

LTEBX

LTEBX Risk / Return Rank: 67
LTEBX Sharpe Ratio Rank: 87
LTEBX Sortino Ratio Rank: 91
LTEBX Omega Ratio Rank: 95
LTEBX Calmar Ratio Rank: 34
LTEBX Martin Ratio Rank: 29

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.

VMLUX vs. LTEBX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Limited-Term Tax-Exempt Fund Admiral Shares (VMLUX) and American Funds Limited Term Tax-Exempt Bond Fund (LTEBX). 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.

	VMLUX	LTEBX	Difference
Sharpe ratio: Return per unit of total volatility	2.96	2.85	+0.11
Sortino ratio: Return per unit of downside risk	5.48	4.50	+0.97
Omega ratio: Gain probability vs. loss probability	1.98	1.78	+0.20
Calmar ratio: Return relative to maximum drawdown	2.91	2.21	+0.71
Martin ratio: Return relative to average drawdown	9.76	6.85	+2.91
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VMLUX vs. LTEBX - Sharpe Ratio Comparison

The current VMLUX Sharpe Ratio is 2.96, which is comparable to the LTEBX Sharpe Ratio of 2.85. The chart below compares the historical Sharpe Ratios of VMLUX and LTEBX, 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

	VMLUX	LTEBX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.96	2.85	+0.11
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	1.18	0.61	+0.58
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.12	0.78	+0.34
Sharpe Ratio (All Time) Calculated using the full available price history	1.48	1.47	+0.01

Drawdowns

VMLUX vs. LTEBX - Drawdown Comparison

The maximum VMLUX drawdown since its inception was -6.41%, smaller than the maximum LTEBX drawdown of -8.33%. Use the drawdown chart below to compare losses from any high point for VMLUX and LTEBX.

Drawdown Indicators

	VMLUX	LTEBX	Difference
Max Drawdown Largest peak-to-trough decline	-6.41%	-8.33%	+1.92%
Max Drawdown (1Y) Largest decline over 1 year	-1.53%	-2.33%	+0.80%
Max Drawdown (3Y) Largest decline over 3 years	-2.02%	-2.91%	+0.89%
Max Drawdown (5Y) Largest decline over 5 years	-5.60%	-8.33%	+2.73%
Max Drawdown (10Y) Largest decline over 10 years	-6.41%	-8.33%	+1.92%
Current Drawdown Current decline from peak	-0.38%	-0.93%	+0.55%
Average Drawdown Average peak-to-trough decline	-0.54%	-1.06%	+0.52%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.46%	0.75%	-0.29%

Volatility

VMLUX vs. LTEBX - Volatility Comparison

The current volatility for Vanguard Limited-Term Tax-Exempt Fund Admiral Shares (VMLUX) is 0.46%, while American Funds Limited Term Tax-Exempt Bond Fund (LTEBX) has a volatility of 0.71%. This indicates that VMLUX experiences smaller price fluctuations and is considered to be less risky than LTEBX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMLUX	LTEBX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.46%	0.71%	-0.25%
Volatility (6M) Calculated over the trailing 6-month period	1.15%	1.47%	-0.32%
Volatility (1Y) Calculated over the trailing 1-year period	1.51%	1.81%	-0.30%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.87%	2.32%	-0.45%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.93%	2.34%	-0.41%

VMLUX vs. LTEBX - Expense Ratio Comparison

VMLUX has a 0.09% expense ratio, which is lower than LTEBX's 0.57% expense ratio.

Dividends

VMLUX vs. LTEBX - Dividend Comparison

VMLUX's dividend yield for the trailing twelve months is around 3.16%, more than LTEBX's 2.59% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
LTEBX American Funds Limited Term Tax-Exempt Bond Fund	2.59%	3.39%	2.34%	1.74%	0.87%	1.24%	1.92%	2.19%	2.04%	2.21%	1.92%	2.34%
VMLUX Vanguard Limited-Term Tax-Exempt Fund Admiral Shares	3.16%	3.85%	3.38%	2.39%	1.64%	1.04%	1.70%	2.10%	1.89%	1.65%	1.62%	1.58%

Frequently Asked Questions

Can I hold both VMLUX and LTEBX in my portfolio?

VMLUX and LTEBX have a correlation of 0.77, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VMLUX or LTEBX?

LTEBX has higher volatility (0.71%) compared to VMLUX (0.46%). In terms of maximum drawdown, VMLUX dropped -6.41% vs LTEBX's -8.33%.

Which has better risk-adjusted returns?

VMLUX currently has the higher Sharpe Ratio (2.96 vs 2.85), 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.