VMLUX vs. VTEAX

Last updated Jun 23, 2026

VMLUX (Vanguard Limited-Term Tax-Exempt Fund Admiral Shares) and VTEAX (Vanguard Tax-Exempt Bond Index Fund Admiral Shares) are both Municipal Bonds funds from Vanguard. Over the past 10 years, VMLUX returned 2.12%/yr vs 2.09%/yr for VTEAX. A 0.70 correlation means they provide meaningful diversification when combined. Both charge a 0.09% expense ratio.

Performance

VMLUX vs. VTEAX - 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 Vanguard Tax-Exempt Bond Index Fund Admiral Shares (VTEAX). 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 lower than VTEAX's 1.76% return. Both investments have delivered pretty close results over the past 10 years, with VMLUX having a 2.12% annualized return and VTEAX not far behind at 2.09%.

VMLUX

• 1D: 0.00%
• 1M: 0.72%
• YTD: 1.05%
• 6M: 1.41%
• 1Y: 4.06%
• 3Y*: 4.31%
• 5Y*: 2.21%
• 10Y*: 2.12%

VTEAX

• 1D: 0.10%
• 1M: 1.63%
• YTD: 1.76%
• 6M: 1.96%
• 1Y: 6.78%
• 3Y*: 3.62%
• 5Y*: 0.98%
• 10Y*: 2.09%

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

VMLUX vs. VTEAX - 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%
VTEAX Vanguard Tax-Exempt Bond Index Fund Admiral Shares	1.76%	3.67%	1.63%	6.39%	-8.21%	1.43%	4.97%	7.45%	0.99%	4.94%

Correlation

The correlation between VMLUX and VTEAX is 0.61, 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	0.61
Correlation (3Y) Calculated over the trailing 3-year period	0.75
Correlation (5Y) Calculated over the trailing 5-year period	0.77
Correlation (10Y) Calculated over the trailing 10-year period	0.71
Correlation (All Time) Calculated using the full available price history since Aug 31, 2015	0.70

The correlation between VMLUX and VTEAX shifts across timeframes, from 0.61 (1 year) to 0.77 (5 years), reflecting how their relationship changes across market environments.

Return for Risk

VMLUX vs. VTEAX — 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: 55
VMLUX Martin Ratio Rank: 45

VTEAX

VTEAX Risk / Return Rank: 75
VTEAX Sharpe Ratio Rank: 93
VTEAX Sortino Ratio Rank: 92
VTEAX Omega Ratio Rank: 95
VTEAX Calmar Ratio Rank: 49
VTEAX 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.

VMLUX vs. VTEAX - 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 Vanguard Tax-Exempt Bond Index Fund Admiral Shares (VTEAX). 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.

	VMLUX	VTEAX	Difference
Sharpe ratio: Return per unit of total volatility	2.77	2.89	-0.13
Sortino ratio: Return per unit of downside risk	5.10	4.26	+0.84
Omega ratio: Gain probability vs. loss probability	1.90	1.73	+0.17
Calmar ratio: Return relative to maximum drawdown	2.72	2.57	+0.16
Martin ratio: Return relative to average drawdown	8.97	8.85	+0.12

VMLUX vs. VTEAX - Sharpe Ratio Comparison

The current VMLUX Sharpe Ratio is 2.77, which is comparable to the VTEAX Sharpe Ratio of 2.89. The chart below compares the historical Sharpe Ratios of VMLUX and VTEAX, 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

VMLUX vs. VTEAX - Drawdown Comparison

The maximum VMLUX drawdown since its inception was -6.41%, smaller than the maximum VTEAX drawdown of -12.75%. Use the drawdown chart below to compare losses from any high point for VMLUX and VTEAX.

Drawdown Indicators

	VMLUX	VTEAX	Difference
Max Drawdown Largest peak-to-trough decline	-6.41%	-12.75%	+6.34%
Max Drawdown (1Y) Largest decline over 1 year	-1.53%	-2.65%	+1.12%
Max Drawdown (3Y) Largest decline over 3 years	-2.02%	-5.46%	+3.44%
Max Drawdown (5Y) Largest decline over 5 years	-5.60%	-12.75%	+7.15%
Max Drawdown (10Y) Largest decline over 10 years	-6.41%	-12.75%	+6.34%
Current Drawdown Current decline from peak	-0.38%	-0.26%	-0.12%
Average Drawdown Average peak-to-trough decline	-0.54%	-2.25%	+1.71%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.46%	0.77%	-0.31%

Volatility

VMLUX vs. VTEAX - Volatility Comparison

The current volatility for Vanguard Limited-Term Tax-Exempt Fund Admiral Shares (VMLUX) is 0.38%, while Vanguard Tax-Exempt Bond Index Fund Admiral Shares (VTEAX) has a volatility of 0.64%. This indicates that VMLUX experiences smaller price fluctuations and is considered to be less risky than VTEAX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VMLUX	VTEAX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.38%	0.64%	-0.26%
Volatility (6M) Calculated over the trailing 6-month period	1.14%	1.85%	-0.71%
Volatility (1Y) Calculated over the trailing 1-year period	1.51%	2.35%	-0.84%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.87%	3.61%	-1.74%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.93%	3.66%	-1.73%

VMLUX vs. VTEAX - Expense Ratio Comparison

Both VMLUX and VTEAX have an expense ratio of 0.09%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

VMLUX vs. VTEAX - Dividend Comparison

VMLUX's dividend yield for the trailing twelve months is around 3.16%, less than VTEAX's 3.31% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
VTEAX Vanguard Tax-Exempt Bond Index Fund Admiral Shares	3.31%	3.26%	3.36%	2.98%	2.05%	1.60%	1.97%	2.27%	2.24%	1.95%	1.67%	0.59%

Frequently Asked Questions

Can I hold both VMLUX and VTEAX in my portfolio?

VMLUX and VTEAX have a correlation of 0.61, 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 VTEAX?

VTEAX has higher volatility (0.64%) compared to VMLUX (0.38%). In terms of maximum drawdown, VMLUX dropped -6.41% vs VTEAX's -12.75%.

Which has better risk-adjusted returns?

VTEAX currently has the higher Sharpe Ratio (2.89 vs 2.77), 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.