VTEC vs. UTWO

Last updated Apr 15, 2026

VTEC (Vanguard California Tax-Exempt Bond ETF) and UTWO (US Treasury 2 Year Note ETF) are both exchange-traded funds — VTEC is a Municipal Bonds fund tracking the S&P California AMT-Free Municipal Bond Index, while UTWO is a Government Bonds fund tracking the ICE BofA Current 2 Year US Treasury Index - Benchmark TR Gross. Both are passively managed. Over the past year, VTEC returned 6.41% vs 3.43% for UTWO. A 0.51 correlation means they provide meaningful diversification when combined. VTEC charges 0.08%/yr vs 0.15%/yr for UTWO.

Performance

VTEC vs. UTWO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard California Tax-Exempt Bond ETF (VTEC) and US Treasury 2 Year Note ETF (UTWO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VTEC achieves a 0.56% return, which is significantly higher than UTWO's 0.42% return.

VTEC

• 1D: 0.05%
• 1M: 0.15%
• YTD: 0.56%
• 6M: 1.71%
• 1Y: 6.41%
• 3Y*: —
• 5Y*: —
• 10Y*: —

UTWO

• 1D: -0.02%
• 1M: 0.17%
• YTD: 0.42%
• 6M: 1.17%
• 1Y: 3.43%
• 3Y*: 3.63%
• 5Y*: —
• 10Y*: —

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

VTEC vs. UTWO - Yearly Performance Comparison

	2026 (YTD)	2025	2024
VTEC Vanguard California Tax-Exempt Bond ETF	0.56%	3.98%	1.42%
UTWO US Treasury 2 Year Note ETF	0.42%	4.79%	3.62%

Correlation

The correlation between VTEC and UTWO is 0.45, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.45
Correlation (All Time) Calculated using the full available price history since Jan 31, 2024	0.51

The correlation between VTEC and UTWO has been stable across timeframes, ranging from 0.45 to 0.51 — a consistent structural relationship.

Return for Risk

VTEC vs. UTWO — Risk / Return Rank

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

VTEC

VTEC Risk / Return Rank: 51
VTEC Sharpe Ratio Rank: 55
VTEC Sortino Ratio Rank: 58
VTEC Omega Ratio Rank: 69
VTEC Calmar Ratio Rank: 33
VTEC Martin Ratio Rank: 41

UTWO

UTWO Risk / Return Rank: 72
UTWO Sharpe Ratio Rank: 69
UTWO Sortino Ratio Rank: 82
UTWO Omega Ratio Rank: 79
UTWO Calmar Ratio Rank: 69
UTWO Martin Ratio Rank: 63

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. UTWO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard California Tax-Exempt Bond ETF (VTEC) and US Treasury 2 Year Note ETF (UTWO). 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	UTWO	Difference
Sharpe ratio Return per unit of total volatility	2.15	2.47	-0.32
Sortino ratio Return per unit of downside risk	3.09	3.93	-0.84
Omega ratio Gain probability vs. loss probability	1.45	1.51	-0.06
Calmar ratio Return relative to maximum drawdown	2.32	4.06	-1.74
Martin ratio Return relative to average drawdown	9.73	13.97	-4.24
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. UTWO - Sharpe Ratio Comparison

The current VTEC Sharpe Ratio is 2.15, which is comparable to the UTWO Sharpe Ratio of 2.47. The chart below compares the historical Sharpe Ratios of VTEC and UTWO, 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	UTWO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.15	2.47	-0.32
Sharpe Ratio (All Time) Calculated using the full available price history	0.71	1.50	-0.79

Drawdowns

VTEC vs. UTWO - Drawdown Comparison

The maximum VTEC drawdown since its inception was -4.50%, which is greater than UTWO's maximum drawdown of -2.04%. Use the drawdown chart below to compare losses from any high point for VTEC and UTWO.

Drawdown Indicators

	VTEC	UTWO	Difference
Max Drawdown Largest peak-to-trough decline	-4.50%	-2.04%	-2.46%
Max Drawdown (1Y) Largest decline over 1 year	-2.85%	-0.90%	-1.95%
Current Drawdown Current decline from peak	-1.23%	-0.29%	-0.94%
Average Drawdown Average peak-to-trough decline	-1.11%	-0.49%	-0.62%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.68%	0.26%	+0.42%

Volatility

VTEC vs. UTWO - Volatility Comparison

Vanguard California Tax-Exempt Bond ETF (VTEC) has a higher volatility of 1.28% compared to US Treasury 2 Year Note ETF (UTWO) at 0.51%. This indicates that VTEC's price experiences larger fluctuations and is considered to be riskier than UTWO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTEC	UTWO	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.28%	0.51%	+0.77%
Volatility (6M) Calculated over the trailing 6-month period	1.78%	0.86%	+0.92%
Volatility (1Y) Calculated over the trailing 1-year period	3.24%	1.40%	+1.84%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.82%	2.09%	+1.73%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.82%	2.09%	+1.73%

VTEC vs. UTWO - Expense Ratio Comparison

VTEC has a 0.08% expense ratio, which is lower than UTWO's 0.15% 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. UTWO - Dividend Comparison

VTEC's dividend yield for the trailing twelve months is around 3.16%, less than UTWO's 3.48% yield.

	TTM	2025	2024	2023	2022
VTEC Vanguard California Tax-Exempt Bond ETF	3.16%	3.13%	2.54%	0.00%	0.00%
UTWO US Treasury 2 Year Note ETF	3.48%	3.63%	4.22%	4.39%	1.22%