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VTEB vs. VYM
Performance
Return for Risk
Drawdowns
Volatility
Dividends

VTEB vs. VYM

Last updated Jun 4, 2026

VTEB (Vanguard Tax-Exempt Bond ETF) and VYM (Vanguard High Dividend Yield ETF) are both exchange-traded funds - VTEB is a Municipal Bonds fund tracking the S&P National AMT-Free Municipal Bond Index, while VYM is a Dividend fund tracking the FTSE High Dividend Yield Index. Both are passively managed. Over the past 10 years, VTEB returned 2.09%/yr vs 11.90%/yr for VYM. At a correlation of -0.01, they often move in opposite directions. VTEB charges 0.05%/yr vs 0.04%/yr for VYM.

Performance

VTEB vs. VYM - Performance Comparison

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

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Returns By Period

In the year-to-date period, VTEB achieves a 1.46% return, which is significantly lower than VYM's 12.47% return. Over the past 10 years, VTEB has underperformed VYM with an annualized return of 2.09%, while VYM has yielded a comparatively higher 11.90% annualized return.

VTEB

1D
-0.06%
1M
0.66%
YTD
1.46%
6M
1.89%
1Y
7.14%
3Y*
3.57%
5Y*
0.88%
10Y*
2.09%

VYM

1D
-0.43%
1M
3.38%
YTD
12.47%
6M
12.01%
1Y
26.16%
3Y*
18.88%
5Y*
11.48%
10Y*
11.90%
*Multi-year figures are annualized to reflect compound growth (CAGR)

VTEB vs. VYM - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
VTEB
Vanguard Tax-Exempt Bond ETF		1.46%3.72%1.31%6.15%-7.99%1.14%5.19%7.35%1.04%4.87%
VYM
Vanguard High Dividend Yield ETF		12.47%15.42%17.60%6.57%-0.43%26.20%1.15%24.06%-5.92%16.42%

Correlation

The correlation between VTEB and VYM is 0.22, which is low. Their price movements are largely independent, making them effective diversification partners.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

0.22

Correlation (3Y)
Calculated over the trailing 3-year period

0.20

Correlation (5Y)
Calculated over the trailing 5-year period

0.14

Correlation (10Y)
Calculated over the trailing 10-year period

0.02

Correlation (All Time)
Calculated using the full available price history since Aug 26, 2015

-0.01

The correlation between VTEB and VYM shifts across timeframes, from -0.01 (all time) to 0.22 (1 year), reflecting how their relationship changes across market environments.

Compare stocks, funds, or ETFs

Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.

Vanguard Tax-Exempt Bond ETF

Vanguard High Dividend Yield ETF

Often compared with VTEB:
VTEB vs. MUBVTEB vs. VTESVTEB vs. BNDVTEB vs. VWIUXVTEB vs. VTEIVTEB vs. VWAHXVTEB vs. VTEAX
Often compared with VYM:
VYM vs. SCHDVYM vs. VIGVYM vs. VYMIVYM vs. FDVVVYM vs. VOOVYM vs. VTIVYM vs. DGRO

Return for Risk

VTEB vs. VYM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
VTEB
VTEB Risk / Return Rank: 7272
Overall Rank
VTEB Sharpe Ratio Rank: 8080
Sharpe Ratio Rank
VTEB Sortino Ratio Rank: 8585
Sortino Ratio Rank
VTEB Omega Ratio Rank: 8989
Omega Ratio Rank
VTEB Calmar Ratio Rank: 5252
Calmar Ratio Rank
VTEB Martin Ratio Rank: 5454
Martin Ratio Rank
VYM
VYM Risk / Return Rank: 7777
Overall Rank
VYM Sharpe Ratio Rank: 7777
Sharpe Ratio Rank
VYM Sortino Ratio Rank: 8080
Sortino Ratio Rank
VYM Omega Ratio Rank: 7676
Omega Ratio Rank
VYM Calmar Ratio Rank: 7676
Calmar Ratio Rank
VYM Martin Ratio Rank: 7575
Martin Ratio Rank
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. VYM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Tax-Exempt Bond ETF (VTEB) and Vanguard High Dividend Yield ETF (VYM). 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.

VTEBVYMDifference

Sharpe ratio

Return per unit of total volatility

2.64

2.56

+0.08

Sortino ratio

Return per unit of downside risk

3.92

3.65

+0.27

Omega ratio

Gain probability vs. loss probability

1.58

1.46

+0.12

Calmar ratio

Return relative to maximum drawdown

2.65

3.93

-1.28

Martin ratio

Return relative to average drawdown

9.41

14.76

-5.35

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. VYM - Sharpe Ratio Comparison

The current VTEB Sharpe Ratio is 2.64, which is comparable to the VYM Sharpe Ratio of 2.56. The chart below compares the historical Sharpe Ratios of VTEB and VYM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Sharpe Ratios by Period

VTEBVYMDifference

Sharpe Ratio (1Y)

Calculated over the trailing 1-year period

2.64

2.56

+0.08

Sharpe Ratio (5Y)

Calculated over the trailing 5-year period

0.23

0.83

-0.60

Sharpe Ratio (10Y)

Calculated over the trailing 10-year period

0.40

0.73

-0.33

Sharpe Ratio (All Time)

Calculated using the full available price history

0.47

0.51

-0.04

Drawdowns

VTEB vs. VYM - Drawdown Comparison

The maximum VTEB drawdown since its inception was -17.00%, smaller than the maximum VYM drawdown of -56.98%. Use the drawdown chart below to compare losses from any high point for VTEB and VYM.

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Drawdown Indicators

VTEBVYMDifference

Max Drawdown

Largest peak-to-trough decline

-17.00%

-56.98%

+39.98%

Max Drawdown (1Y)

Largest decline over 1 year

-2.71%

-6.69%

+3.98%

Max Drawdown (3Y)

Largest decline over 3 years

-5.53%

-14.46%

+8.93%

Max Drawdown (5Y)

Largest decline over 5 years

-12.64%

-15.84%

+3.20%

Max Drawdown (10Y)

Largest decline over 10 years

-17.00%

-35.21%

+18.21%

Current Drawdown

Current decline from peak

-0.52%

-0.43%

-0.09%

Average Drawdown

Average peak-to-trough decline

-2.33%

-7.19%

+4.86%

Ulcer Index

Depth and duration of drawdowns from previous peaks

0.76%

1.78%

-1.02%

Volatility

VTEB vs. VYM - Volatility Comparison

The current volatility for Vanguard Tax-Exempt Bond ETF (VTEB) is 0.89%, while Vanguard High Dividend Yield ETF (VYM) has a volatility of 2.77%. This indicates that VTEB experiences smaller price fluctuations and is considered to be less risky than VYM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

VTEBVYMDifference

Volatility (1M)

Calculated over the trailing 1-month period

0.89%

2.77%

-1.88%

Volatility (6M)

Calculated over the trailing 6-month period

2.01%

7.67%

-5.66%

Volatility (1Y)

Calculated over the trailing 1-year period

2.72%

10.28%

-7.56%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

3.90%

13.96%

-10.06%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

5.26%

16.34%

-11.08%

VTEB vs. VYM - Expense Ratio Comparison

VTEB has a 0.05% expense ratio, which is higher than VYM's 0.04% expense ratio. However, 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. VYM - Dividend Comparison

VTEB's dividend yield for the trailing twelve months is around 3.35%, more than VYM's 2.19% yield.

PositionTTM20252024202320222021202020192018201720162015
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%
VYM
Vanguard High Dividend Yield ETF		2.19%2.44%2.74%3.12%3.01%2.76%3.18%3.03%3.40%2.80%2.91%3.22%

Frequently Asked Questions

VTEB and VYM have a correlation of 0.22, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

VYM has higher volatility (2.77%) compared to VTEB (0.89%). In terms of maximum drawdown, VTEB dropped -17.00% vs VYM's -56.98%.

On 10-year performance, VYM leads with 11.90% vs 2.09% for VTEB. On fees, VYM is cheaper at 0.04% per year. On volatility, VTEB has been the lower-risk option at 0.89%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, VYM has performed better with a 11.90% return vs 2.09%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

VYM is cheaper with a 0.04% expense ratio, compared with 0.05% for VTEB.

VTEB has the higher dividend yield at 3.35%, compared with 2.19% for VYM.

VTEB is categorized as Municipal Bonds, while VYM is Dividend. VTEB tracks S&P National AMT-Free Municipal Bond Index, while VYM tracks FTSE High Dividend Yield Index. Their fees differ too: 0.05% for VTEB and 0.04% for VYM.

VTEB currently has the higher Sharpe Ratio (2.64 vs 2.56), 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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