VTEB vs. VCITX

Last updated Jun 3, 2026

VTEB (Vanguard Tax-Exempt Bond ETF) and VCITX (Vanguard California Long-Term Tax-Exempt Fund Investor Shares) are both Municipal Bonds funds from Vanguard. Over the past 10 years, VTEB returned 2.10%/yr vs 2.51%/yr for VCITX. A 0.69 correlation means they provide meaningful diversification when combined. VTEB charges 0.05%/yr vs 0.17%/yr for VCITX.

Performance

VTEB vs. VCITX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Tax-Exempt Bond ETF (VTEB) and Vanguard California Long-Term Tax-Exempt Fund Investor Shares (VCITX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

The year-to-date returns for both investments are quite close, with VTEB having a 1.52% return and VCITX slightly higher at 1.59%. Over the past 10 years, VTEB has underperformed VCITX with an annualized return of 2.10%, while VCITX has yielded a comparatively higher 2.51% annualized return.

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%

VCITX

• 1D: 0.00%
• 1M: 0.56%
• YTD: 1.59%
• 6M: 2.07%
• 1Y: 8.19%
• 3Y*: 4.72%
• 5Y*: 1.31%
• 10Y*: 2.51%

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

VTEB vs. VCITX - 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%
VCITX Vanguard California Long-Term Tax-Exempt Fund Investor Shares	1.59%	4.90%	2.66%	7.51%	-10.06%	1.46%	5.60%	8.81%	0.67%	6.82%

Correlation

The correlation between VTEB and VCITX is 0.72, 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	0.72
Correlation (3Y) Calculated over the trailing 3-year period	0.74
Correlation (5Y) Calculated over the trailing 5-year period	0.74
Correlation (10Y) Calculated over the trailing 10-year period	0.70
Correlation (All Time) Calculated using the full available price history since Aug 26, 2015	0.69

The correlation between VTEB and VCITX has been stable across timeframes, ranging from 0.69 to 0.74 - a consistent structural relationship.

Return for Risk

VTEB vs. VCITX — 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

VCITX

VCITX Risk / Return Rank: 64
VCITX Sharpe Ratio Rank: 75
VCITX Sortino Ratio Rank: 84
VCITX Omega Ratio Rank: 87
VCITX Calmar Ratio Rank: 38
VCITX Martin Ratio Rank: 38

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. VCITX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Tax-Exempt Bond ETF (VTEB) and Vanguard California Long-Term Tax-Exempt Fund Investor Shares (VCITX). 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	VCITX	Difference
Sharpe ratio Return per unit of total volatility	2.64	2.52	+0.12
Sortino ratio Return per unit of downside risk	3.92	3.95	-0.03
Omega ratio Gain probability vs. loss probability	1.58	1.61	-0.03
Calmar ratio Return relative to maximum drawdown	2.58	2.37	+0.22
Martin ratio Return relative to average drawdown	9.21	8.46	+0.75
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. VCITX - Sharpe Ratio Comparison

The current VTEB Sharpe Ratio is 2.64, which is comparable to the VCITX Sharpe Ratio of 2.52. The chart below compares the historical Sharpe Ratios of VTEB and VCITX, 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	VCITX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.64	2.52	+0.12
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.24	0.29	-0.05
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.40	0.55	-0.15
Sharpe Ratio (All Time) Calculated using the full available price history	0.48	1.02	-0.55

Drawdowns

VTEB vs. VCITX - Drawdown Comparison

The maximum VTEB drawdown since its inception was -17.00%, smaller than the maximum VCITX drawdown of -22.71%. Use the drawdown chart below to compare losses from any high point for VTEB and VCITX.

Drawdown Indicators

	VTEB	VCITX	Difference
Max Drawdown Largest peak-to-trough decline	-17.00%	-22.71%	+5.71%
Max Drawdown (1Y) Largest decline over 1 year	-2.71%	-3.43%	+0.72%
Max Drawdown (3Y) Largest decline over 3 years	-5.53%	-6.57%	+1.04%
Max Drawdown (5Y) Largest decline over 5 years	-12.64%	-15.79%	+3.15%
Max Drawdown (10Y) Largest decline over 10 years	-17.00%	-15.79%	-1.21%
Current Drawdown Current decline from peak	-0.46%	-0.64%	+0.18%
Average Drawdown Average peak-to-trough decline	-2.33%	-2.58%	+0.25%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.76%	0.96%	-0.20%

Volatility

VTEB vs. VCITX - Volatility Comparison

The current volatility for Vanguard Tax-Exempt Bond ETF (VTEB) is 0.90%, while Vanguard California Long-Term Tax-Exempt Fund Investor Shares (VCITX) has a volatility of 1.22%. This indicates that VTEB experiences smaller price fluctuations and is considered to be less risky than VCITX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTEB	VCITX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.90%	1.22%	-0.32%
Volatility (6M) Calculated over the trailing 6-month period	2.03%	2.42%	-0.39%
Volatility (1Y) Calculated over the trailing 1-year period	2.72%	3.16%	-0.44%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.90%	4.56%	-0.66%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.26%	4.56%	+0.70%

VTEB vs. VCITX - Expense Ratio Comparison

VTEB has a 0.05% expense ratio, which is lower than VCITX'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

VTEB vs. VCITX - Dividend Comparison

VTEB's dividend yield for the trailing twelve months is around 3.35%, less than VCITX's 3.55% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VCITX Vanguard California Long-Term Tax-Exempt Fund Investor Shares	3.55%	4.34%	3.85%	2.99%	2.66%	2.56%	3.21%	3.16%	3.32%	3.22%	3.45%	3.50%
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 VCITX in my portfolio?

VTEB and VCITX have a correlation of 0.72, 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 VCITX?

VCITX has higher volatility (1.22%) compared to VTEB (0.90%). In terms of maximum drawdown, VTEB dropped -17.00% vs VCITX's -22.71%.

Which has better risk-adjusted returns?

VTEB currently has the higher Sharpe Ratio (2.64 vs 2.52), 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.