VTEB vs. HYD

Last updated Jun 3, 2026

VTEB (Vanguard Tax-Exempt Bond ETF) and HYD (VanEck Vectors High-Yield Municipal Index ETF) are both Municipal Bonds funds - VTEB tracks the S&P National AMT-Free Municipal Bond Index while HYD tracks the Bloomberg Barclays Municipal Custom High Yield Composite Index. Both are passively managed. Over the past 10 years, VTEB returned 2.10%/yr vs 2.01%/yr for HYD. A 0.65 correlation means they provide meaningful diversification when combined. VTEB charges 0.05%/yr vs 0.35%/yr for HYD.

Performance

VTEB vs. HYD - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Tax-Exempt Bond ETF (VTEB) and VanEck Vectors High-Yield Municipal Index ETF (HYD). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VTEB achieves a 1.52% return, which is significantly lower than HYD's 2.17% return. Both investments have delivered pretty close results over the past 10 years, with VTEB having a 2.10% annualized return and HYD not far behind at 2.01%.

VTEB

• 1D: 0.10%
• 1M: 0.61%
• YTD: 1.52%
• 6M: 1.95%
• 1Y: 7.14%
• 3Y*: 3.59%
• 5Y*: 0.93%
• 10Y*: 2.10%

HYD

• 1D: 0.12%
• 1M: 0.97%
• YTD: 2.17%
• 6M: 3.15%
• 1Y: 8.10%
• 3Y*: 4.75%
• 5Y*: -0.07%
• 10Y*: 2.01%

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

VTEB vs. HYD - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VTEB Vanguard Tax-Exempt Bond ETF	1.52%	3.72%	1.31%	6.15%	-7.99%	1.14%	5.19%	7.35%	1.04%	4.87%
HYD VanEck Vectors High-Yield Municipal Index ETF	2.17%	2.83%	4.94%	6.52%	-15.97%	5.05%	0.17%	9.34%	2.19%	9.78%

Correlation

The correlation between VTEB and HYD is 0.80, 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	0.80
Correlation (3Y) Calculated over the trailing 3-year period	0.82
Correlation (5Y) Calculated over the trailing 5-year period	0.78
Correlation (10Y) Calculated over the trailing 10-year period	0.66
Correlation (All Time) Calculated using the full available price history since Aug 26, 2015	0.65

The correlation between VTEB and HYD shifts across timeframes, from 0.65 (all time) to 0.82 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

VTEB vs. HYD — Risk / Return Rank

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

VTEB

VTEB Risk / Return Rank: 72
VTEB Sharpe Ratio Rank: 80
VTEB Sortino Ratio Rank: 86
VTEB Omega Ratio Rank: 89
VTEB Calmar Ratio Rank: 51
VTEB Martin Ratio Rank: 53

HYD

HYD Risk / Return Rank: 58
HYD Sharpe Ratio Rank: 59
HYD Sortino Ratio Rank: 63
HYD Omega Ratio Rank: 70
HYD Calmar Ratio Rank: 48
HYD Martin Ratio Rank: 49

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.

VTEB vs. HYD - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Tax-Exempt Bond ETF (VTEB) and VanEck Vectors High-Yield Municipal Index ETF (HYD). 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.

	VTEB	HYD	Difference
Sharpe ratio Return per unit of total volatility	2.64	2.02	+0.62
Sortino ratio Return per unit of downside risk	3.92	2.96	+0.96
Omega ratio Gain probability vs. loss probability	1.58	1.42	+0.15
Calmar ratio Return relative to maximum drawdown	2.58	2.39	+0.20
Martin ratio Return relative to average drawdown	9.21	8.22	+0.99
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VTEB vs. HYD - Sharpe Ratio Comparison

The current VTEB Sharpe Ratio is 2.64, which is higher than the HYD Sharpe Ratio of 2.02. The chart below compares the historical Sharpe Ratios of VTEB and HYD, 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

	VTEB	HYD	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.64	2.02	+0.62
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.24	-0.01	+0.25
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.40	0.16	+0.24
Sharpe Ratio (All Time) Calculated using the full available price history	0.48	0.45	+0.03

Drawdowns

VTEB vs. HYD - Drawdown Comparison

The maximum VTEB drawdown since its inception was -17.00%, smaller than the maximum HYD drawdown of -35.61%. Use the drawdown chart below to compare losses from any high point for VTEB and HYD.

Drawdown Indicators

	VTEB	HYD	Difference
Max Drawdown Largest peak-to-trough decline	-17.00%	-35.61%	+18.61%
Max Drawdown (1Y) Largest decline over 1 year	-2.71%	-3.21%	+0.50%
Max Drawdown (3Y) Largest decline over 3 years	-5.53%	-7.23%	+1.70%
Max Drawdown (5Y) Largest decline over 5 years	-12.64%	-20.72%	+8.08%
Max Drawdown (10Y) Largest decline over 10 years	-17.00%	-35.61%	+18.61%
Current Drawdown Current decline from peak	-0.46%	-1.99%	+1.53%
Average Drawdown Average peak-to-trough decline	-2.33%	-4.32%	+1.99%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.76%	0.93%	-0.17%

Volatility

VTEB vs. HYD - Volatility Comparison

The current volatility for Vanguard Tax-Exempt Bond ETF (VTEB) is 0.90%, while VanEck Vectors High-Yield Municipal Index ETF (HYD) has a volatility of 1.15%. This indicates that VTEB experiences smaller price fluctuations and is considered to be less risky than HYD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTEB	HYD	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.90%	1.15%	-0.25%
Volatility (6M) Calculated over the trailing 6-month period	2.03%	3.01%	-0.98%
Volatility (1Y) Calculated over the trailing 1-year period	2.72%	4.04%	-1.32%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.90%	6.45%	-2.55%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.26%	12.61%	-7.35%

VTEB vs. HYD - Expense Ratio Comparison

VTEB has a 0.05% expense ratio, which is lower than HYD's 0.35% expense ratio.

Dividends

VTEB vs. HYD - Dividend Comparison

VTEB's dividend yield for the trailing twelve months is around 3.35%, less than HYD's 4.26% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
HYD VanEck Vectors High-Yield Municipal Index ETF	4.26%	4.29%	4.29%	4.13%	3.96%	3.50%	4.01%	4.08%	4.43%	4.29%	4.58%	4.82%
VTEB Vanguard Tax-Exempt Bond ETF	3.35%	3.29%	3.14%	2.79%	2.09%	1.64%	1.99%	2.30%	2.25%	1.96%	1.66%	0.58%

Frequently Asked Questions

Can I hold both VTEB and HYD in my portfolio?

VTEB and HYD have a correlation of 0.80, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VTEB or HYD?

HYD has higher volatility (1.15%) compared to VTEB (0.90%). In terms of maximum drawdown, VTEB dropped -17.00% vs HYD's -35.61%.

Which ETF is better, VTEB or HYD?

On 10-year performance, VTEB leads with 2.10% vs 2.01% for HYD. On fees, VTEB is cheaper at 0.05% per year. On volatility, VTEB has been the lower-risk option at 0.90%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VTEB or HYD?

Over the 10-year period, VTEB has performed better with a 2.10% return vs 2.01%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VTEB or HYD?

VTEB is cheaper with a 0.05% expense ratio, compared with 0.35% for HYD.

Which ETF pays a higher dividend yield, VTEB or HYD?

HYD has the higher dividend yield at 4.26%, compared with 3.35% for VTEB.

What is the main difference between VTEB and HYD?

VTEB tracks S&P National AMT-Free Municipal Bond Index, while HYD tracks Bloomberg Barclays Municipal Custom High Yield Composite Index. They also come from different issuers: Vanguard and VanEck. Their fees differ too: 0.05% for VTEB and 0.35% for HYD.

Which has better risk-adjusted returns?

VTEB currently has the higher Sharpe Ratio (2.64 vs 2.02), 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.