VTEC vs. CGSM

Last updated Jun 4, 2026

VTEC (Vanguard California Tax-Exempt Bond ETF) and CGSM (Capital Group Short Duration Municipal Income ETF) are both Municipal Bonds funds. VTEC is passively managed, while CGSM is actively managed. Over the past year, VTEC returned 6.69% vs 4.63% for CGSM. A 0.64 correlation means they provide meaningful diversification when combined. VTEC charges 0.08%/yr vs 0.25%/yr for CGSM.

Performance

VTEC vs. CGSM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard California Tax-Exempt Bond ETF (VTEC) and Capital Group Short Duration Municipal Income ETF (CGSM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VTEC achieves a 0.98% return, which is significantly lower than CGSM's 1.29% return.

VTEC

• 1D: -0.05%
• 1M: 0.62%
• YTD: 0.98%
• 6M: 1.25%
• 1Y: 6.69%
• 3Y*: —
• 5Y*: —
• 10Y*: —

CGSM

• 1D: 0.08%
• 1M: 0.38%
• YTD: 1.29%
• 6M: 1.54%
• 1Y: 4.63%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

VTEC vs. CGSM - Yearly Performance Comparison

	2026 (YTD)	2025	2024
VTEC Vanguard California Tax-Exempt Bond ETF	0.98%	3.98%	1.42%
CGSM Capital Group Short Duration Municipal Income ETF	1.29%	4.58%	4.21%

Correlation

The correlation between VTEC and CGSM is 0.52, 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	0.52
Correlation (All Time) Calculated using the full available price history since Jan 31, 2024	0.64

The correlation between VTEC and CGSM shifts across timeframes, from 0.52 (1 year) to 0.64 (all time), reflecting how their relationship changes across market environments.

Return for Risk

VTEC vs. CGSM — Risk / Return Rank

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

VTEC

VTEC Risk / Return Rank: 66
VTEC Sharpe Ratio Rank: 73
VTEC Sortino Ratio Rank: 78
VTEC Omega Ratio Rank: 84
VTEC Calmar Ratio Rank: 48
VTEC Martin Ratio Rank: 47

CGSM

CGSM Risk / Return Rank: 86
CGSM Sharpe Ratio Rank: 93
CGSM Sortino Ratio Rank: 95
CGSM Omega Ratio Rank: 96
CGSM Calmar Ratio Rank: 78
CGSM Martin Ratio Rank: 70

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.

VTEC vs. CGSM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard California Tax-Exempt Bond ETF (VTEC) and Capital Group Short Duration Municipal Income ETF (CGSM). 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.

	VTEC	CGSM	Difference
Sharpe ratio Return per unit of total volatility	2.39	3.49	-1.11
Sortino ratio Return per unit of downside risk	3.53	5.39	-1.86
Omega ratio Gain probability vs. loss probability	1.52	1.81	-0.29
Calmar ratio Return relative to maximum drawdown	2.35	3.95	-1.60
Martin ratio Return relative to average drawdown	7.83	12.91	-5.08
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VTEC vs. CGSM - Sharpe Ratio Comparison

The current VTEC Sharpe Ratio is 2.39, which is lower than the CGSM Sharpe Ratio of 3.49. The chart below compares the historical Sharpe Ratios of VTEC and CGSM, 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

	VTEC	CGSM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.39	3.49	-1.11
Sharpe Ratio (All Time) Calculated using the full available price history	0.73	2.87	-2.15

Drawdowns

VTEC vs. CGSM - Drawdown Comparison

The maximum VTEC drawdown since its inception was -4.50%, which is greater than CGSM's maximum drawdown of -1.42%. Use the drawdown chart below to compare losses from any high point for VTEC and CGSM.

Drawdown Indicators

	VTEC	CGSM	Difference
Max Drawdown Largest peak-to-trough decline	-4.50%	-1.42%	-3.08%
Max Drawdown (1Y) Largest decline over 1 year	-2.85%	-1.18%	-1.67%
Current Drawdown Current decline from peak	-0.82%	-0.22%	-0.60%
Average Drawdown Average peak-to-trough decline	-1.12%	-0.24%	-0.88%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.86%	0.36%	+0.50%

Volatility

VTEC vs. CGSM - Volatility Comparison

Vanguard California Tax-Exempt Bond ETF (VTEC) has a higher volatility of 0.86% compared to Capital Group Short Duration Municipal Income ETF (CGSM) at 0.42%. This indicates that VTEC's price experiences larger fluctuations and is considered to be riskier than CGSM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTEC	CGSM	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.86%	0.42%	+0.44%
Volatility (6M) Calculated over the trailing 6-month period	1.87%	0.98%	+0.89%
Volatility (1Y) Calculated over the trailing 1-year period	2.82%	1.33%	+1.49%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.76%	1.79%	+1.97%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.76%	1.79%	+1.97%

VTEC vs. CGSM - Expense Ratio Comparison

VTEC has a 0.08% expense ratio, which is lower than CGSM's 0.25% 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

VTEC vs. CGSM - Dividend Comparison

VTEC's dividend yield for the trailing twelve months is around 3.16%, more than CGSM's 3.00% yield.

Position	TTM	2025	2024	2023
CGSM Capital Group Short Duration Municipal Income ETF	3.00%	3.05%	3.11%	0.84%
VTEC Vanguard California Tax-Exempt Bond ETF	3.16%	3.13%	2.54%	0.00%

Frequently Asked Questions

Can I hold both VTEC and CGSM in my portfolio?

VTEC and CGSM have a correlation of 0.52, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VTEC or CGSM?

VTEC has higher volatility (0.86%) compared to CGSM (0.42%). In terms of maximum drawdown, VTEC dropped -4.50% vs CGSM's -1.42%.

Which ETF is better, VTEC or CGSM?

On 1-year performance, VTEC leads with 6.69% vs 4.63% for CGSM. On fees, VTEC is cheaper at 0.08% per year. On volatility, CGSM has been the lower-risk option at 0.42%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VTEC or CGSM?

Over the 1-year period, VTEC has performed better with a 6.69% return vs 4.63%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VTEC or CGSM?

VTEC is cheaper with a 0.08% expense ratio, compared with 0.25% for CGSM.

Which ETF pays a higher dividend yield, VTEC or CGSM?

VTEC has the higher dividend yield at 3.16%, compared with 3.00% for CGSM.

What is the main difference between VTEC and CGSM?

They also come from different issuers: Vanguard and Capital Group. Their fees differ too: 0.08% for VTEC and 0.25% for CGSM.

Which has better risk-adjusted returns?

CGSM currently has the higher Sharpe Ratio (3.49 vs 2.39), 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.