VSMGX vs. VMLTX

Last updated Aug 5, 2026

VSMGX (Vanguard LifeStrategy 60/40 Fund) and VMLTX (Vanguard Limited-Term Tax-Exempt Fund Investor Shares) are both mutual funds - VSMGX is a Diversified Portfolio fund managed by Vanguard, while VMLTX is a Municipal Bonds fund managed by Vanguard. Over the past 10 years, VSMGX returned 8.53%/yr vs 2.02%/yr for VMLTX. Their 0.07 correlation means their historical movements had little consistent relationship. VSMGX charges 0.10%/yr vs 0.17%/yr for VMLTX.

Performance

VSMGX vs. VMLTX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard LifeStrategy 60/40 Fund (VSMGX) and Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VSMGX achieves a 7.62% return, which is significantly higher than VMLTX's 0.63% return. Over the past 10 years, VSMGX has outperformed VMLTX with an annualized return of 8.53%, while VMLTX has yielded a comparatively lower 2.02% annualized return.

VSMGX

• 1D: 0.82%
• 1M: 0.38%
• 6M: 5.33%
• YTD: 7.62%
• 1Y: 14.83%
• 3Y*: 15.02%
• 5Y*: 7.30%
• 10Y*: 8.53%
• ALL TIME*: 7.84%

VMLTX

• 1D: 0.09%
• 1M: -0.73%
• 6M: -0.16%
• YTD: 0.63%
• 1Y: 2.41%
• 3Y*: 4.04%
• 5Y*: 1.96%
• 10Y*: 2.02%
• ALL TIME*: 3.27%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
VMLTX Vanguard Limited-Term Tax-Exempt Fund Investor Shares	$0.00	$0.00	$0.00
VSMGX Vanguard LifeStrategy 60/40 Fund	$0.00	$0.00	$0.00

VSMGX vs. VMLTX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VSMGX Vanguard LifeStrategy 60/40 Fund	7.62%	16.26%	15.03%	15.70%	-16.01%	10.08%	13.59%	19.37%	-4.91%	13.66%
VMLTX Vanguard Limited-Term Tax-Exempt Fund Investor Shares	0.63%	5.39%	3.14%	4.19%	-2.98%	0.83%	3.30%	4.11%	1.56%	2.02%

Correlation

The correlation between VSMGX and VMLTX is 0.26, which is low. Their historical price movements had little consistent relationship.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.26
Correlation (3Y) Balances recent behavior with more history.	0.21
Correlation (5Y) Shows whether the relationship held over a longer period.	0.20
Correlation (10Y) Provides a long-term view across more market conditions.	0.11
Correlation (All Time) Calculated using the full available price history since Sep 30, 1994	0.07

The correlation between VSMGX and VMLTX shifts across timeframes, from 0.07 (all time) to 0.26 (1 year), reflecting how their relationship changes across market environments.

Return for Risk

VSMGX vs. VMLTX — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

VSMGX

VSMGX Risk / Return Rank: 71
VSMGX Sharpe Ratio Rank: 72
VSMGX Sortino Ratio Rank: 70
VSMGX Omega Ratio Rank: 69
VSMGX Calmar Ratio Rank: 68
VSMGX Martin Ratio Rank: 75

VMLTX

VMLTX Risk / Return Rank: 56
VMLTX Sharpe Ratio Rank: 56
VMLTX Sortino Ratio Rank: 74
VMLTX Omega Ratio Rank: 87
VMLTX Calmar Ratio Rank: 33
VMLTX Martin Ratio Rank: 30

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

VSMGX vs. VMLTX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard LifeStrategy 60/40 Fund (VSMGX) and Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX). 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.

	VSMGX	VMLTX	Difference
Sharpe ratio: Return per unit of total volatility	1.76	1.60	+0.17
Sortino ratio: Return per unit of downside risk	2.50	2.63	-0.13
Omega ratio: Gain probability vs. loss probability	1.33	1.44	-0.11
Calmar ratio: Return relative to maximum drawdown	2.40	1.58	+0.83
Martin ratio: Return relative to average drawdown	9.90	4.82	+5.08

VSMGX vs. VMLTX - Sharpe Ratio Comparison

The current VSMGX Sharpe Ratio is 1.76, which is comparable to the VMLTX Sharpe Ratio of 1.60. The chart below compares the historical Sharpe Ratios of VSMGX and VMLTX, 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

VSMGX vs. VMLTX - Drawdown Comparison

The maximum VSMGX drawdown since its inception was -41.13%, which is greater than VMLTX's maximum drawdown of -6.41%. Use the drawdown chart below to compare losses from any high point for VSMGX and VMLTX.

Drawdown Indicators

	VSMGX	VMLTX	Difference
Max Drawdown Largest peak-to-trough decline	-41.13%	-6.41%	-34.72%
Max Drawdown (1Y) Largest decline over 1 year	-6.64%	-1.53%	-5.11%
Max Drawdown (3Y) Largest decline over 3 years	-9.62%	-2.02%	-7.60%
Max Drawdown (5Y) Largest decline over 5 years	-22.29%	-5.61%	-16.68%
Max Drawdown (10Y) Largest decline over 10 years	-22.43%	-6.41%	-16.02%
Current Drawdown Current decline from peak	-0.58%	-0.77%	+0.19%
Average Drawdown Average peak-to-trough decline	-4.82%	-0.48%	-4.34%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.61%	0.50%	+1.11%

Volatility

VSMGX vs. VMLTX - Volatility Comparison

Vanguard LifeStrategy 60/40 Fund (VSMGX) has a higher volatility of 2.82% compared to Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) at 0.47%. This indicates that VSMGX's price experiences larger fluctuations and is considered to be riskier than VMLTX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VSMGX	VMLTX	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.82%	0.47%	+2.35%
Volatility (6M) Calculated over the trailing 6-month period	7.67%	1.20%	+6.47%
Volatility (1Y) Calculated over the trailing 1-year period	9.06%	1.52%	+7.54%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	10.33%	1.88%	+8.45%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	10.38%	1.94%	+8.44%

VSMGX vs. VMLTX - Expense Ratio Comparison

VSMGX has a 0.10% expense ratio, which is lower than VMLTX's 0.17% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VSMGX vs. VMLTX - Dividend Comparison

VSMGX's dividend yield for the trailing twelve months is around 4.90%, more than VMLTX's 2.86% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VMLTX Vanguard Limited-Term Tax-Exempt Fund Investor Shares	2.86%	3.75%	3.27%	2.30%	1.56%	1.64%	1.62%	2.01%	1.81%	1.55%	1.52%	1.50%
VSMGX Vanguard LifeStrategy 60/40 Fund	4.90%	5.25%	11.49%	4.01%	2.66%	3.86%	3.46%	2.52%	4.11%	1.09%	2.26%	3.89%

Frequently Asked Questions

Can I hold both VSMGX and VMLTX in my portfolio?

VSMGX and VMLTX have a correlation of 0.26, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VSMGX or VMLTX?

VSMGX has higher volatility (2.82%) compared to VMLTX (0.47%). In terms of maximum drawdown, VSMGX dropped -41.13% vs VMLTX's -6.41%.

Which has better risk-adjusted returns?

VSMGX currently has the higher Sharpe Ratio (1.76 vs 1.60), 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.