VSS vs. VTES
VSS (Vanguard FTSE All-World ex-US Small-Cap ETF) and VTES (Vanguard Short-Term Tax-Exempt Bond ETF) are both exchange-traded funds - VSS is a Foreign Small & Mid Cap Equities fund tracking the FTSE Global Small Cap ex US Index, while VTES is a Municipal Bonds fund tracking the S&P 0-7 Year National AMT-Free Municipal Bond Index. Both are passively managed. Over the past 3 years, VSS returned 16.03%/yr vs 3.09%/yr for VTES. At a 0.18 correlation, their price movements are largely independent. Both charge a 0.07% expense ratio.
Performance
VSS vs. VTES - Performance Comparison
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Returns By Period
In the year-to-date period, VSS achieves a 7.79% return, which is significantly higher than VTES's 0.76% return.
VSS
- 1D
- -2.68%
- 1M
- -3.04%
- YTD
- 7.79%
- 6M
- 7.51%
- 1Y
- 22.53%
- 3Y*
- 16.03%
- 5Y*
- 5.52%
- 10Y*
- 8.46%
VTES
- 1D
- 0.01%
- 1M
- 0.58%
- YTD
- 0.76%
- 6M
- 0.87%
- 1Y
- 3.26%
- 3Y*
- 3.09%
- 5Y*
- —
- 10Y*
- —
VSS vs. VTES - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | |
|---|---|---|---|---|
VSS Vanguard FTSE All-World ex-US Small-Cap ETF | 7.79% | 29.61% | 2.94% | 9.14% |
VTES Vanguard Short-Term Tax-Exempt Bond ETF | 0.76% | 4.19% | 1.85% | 3.32% |
Correlation
The correlation between VSS and VTES is 0.28, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.28 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.23 |
Correlation (All Time) Calculated using the full available price history since Mar 9, 2023 | 0.18 |
The correlation between VSS and VTES shifts across timeframes, from 0.18 (all time) to 0.28 (1 year), reflecting how their relationship changes across market environments.
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Return for Risk
VSS vs. VTES — Risk / Return Rank
VSS
VTES
VSS vs. VTES - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) and Vanguard Short-Term Tax-Exempt Bond ETF (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.
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.
| VSS | VTES | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -1.20 | ||
| Sortino ratioReturn per unit of downside risk | -1.81 | ||
| Omega ratioGain probability vs. loss probability | 1.27 | 1.61 | -0.34 |
| Calmar ratioReturn relative to maximum drawdown | 1.95 | 2.23 | -0.28 |
| Martin ratioReturn relative to average drawdown | 7.24 | 6.38 | +0.86 |
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Drawdowns
VSS vs. VTES - Drawdown Comparison
The maximum VSS drawdown since its inception was -43.51%, which is greater than VTES's maximum drawdown of -2.42%. Use the drawdown chart below to compare losses from any high point for VSS and VTES.
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Drawdown Indicators
| VSS | VTES | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -43.51% | -2.42% | -41.09% |
Max Drawdown (1Y)Largest decline over 1 year | -11.62% | -1.47% | -10.15% |
Max Drawdown (3Y)Largest decline over 3 years | -15.73% | -1.80% | -13.93% |
Max Drawdown (5Y)Largest decline over 5 years | -33.93% | — | — |
Max Drawdown (10Y)Largest decline over 10 years | -43.51% | — | — |
Current DrawdownCurrent decline from peak | -5.03% | -0.52% | -4.51% |
Average DrawdownAverage peak-to-trough decline | -9.62% | -0.50% | -9.12% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 3.12% | 0.51% | +2.61% |
Volatility
VSS vs. VTES - Volatility Comparison
Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) has a higher volatility of 6.54% compared to Vanguard Short-Term Tax-Exempt Bond ETF (VTES) at 0.27%. This indicates that VSS'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.
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Volatility by Period
| VSS | VTES | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 6.54% | 0.27% | +6.27% |
Volatility (6M)Calculated over the trailing 6-month period | 13.88% | 0.98% | +12.90% |
Volatility (1Y)Calculated over the trailing 1-year period | 15.81% | 1.24% | +14.57% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 16.63% | 1.71% | +14.92% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 17.17% | 1.71% | +15.46% |
VSS vs. VTES - Expense Ratio Comparison
Both VSS and VTES have an expense ratio of 0.07%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.
Dividends
VSS vs. VTES - Dividend Comparison
VSS's dividend yield for the trailing twelve months is around 3.24%, more than VTES's 2.75% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VSS Vanguard FTSE All-World ex-US Small-Cap ETF | 3.24% | 3.39% | 3.44% | 3.14% | 2.30% | 2.74% | 1.90% | 3.25% | 2.80% | 2.83% | 2.93% | 2.66% |
VTES Vanguard Short-Term Tax-Exempt Bond ETF | 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
VSS and VTES have a correlation of 0.28, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VSS has higher volatility (6.54%) compared to VTES (0.27%). In terms of maximum drawdown, VSS dropped -43.51% vs VTES's -2.42%.
On 3-year performance, VSS leads with 16.03% vs 3.09% for VTES. Both ETFs have the same 0.07% expense ratio. On volatility, VTES has been the lower-risk option at 0.27%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 3-year period, VSS has performed better with a 16.03% return vs 3.09%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VSS and VTES have the same expense ratio: 0.07% per year.
VSS has the higher dividend yield at 3.24%, compared with 2.75% for VTES.
VSS is categorized as Foreign Small & Mid Cap Equities, while VTES is Municipal Bonds. VSS tracks FTSE Global Small Cap ex US Index, while VTES tracks S&P 0-7 Year National AMT-Free Municipal Bond Index.
VTES currently has the higher Sharpe Ratio (2.64 vs 1.43), 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.
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