VTEL vs. OVM

Last updated Jun 3, 2026

VTEL (Vanguard Long-Term Tax-Exempt Bond ETF) and OVM (Overlay Shares Municipal Bond ETF) are both Municipal Bonds funds. VTEL is passively managed, while OVM is actively managed. Over the past year, VTEL returned 8.64% vs 12.10% for OVM. A 0.59 correlation means they provide meaningful diversification when combined. VTEL charges 0.09%/yr vs 0.82%/yr for OVM.

Performance

VTEL vs. OVM - Performance Comparison

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

Returns By Period

In the year-to-date period, VTEL achieves a 1.88% return, which is significantly lower than OVM's 4.13% return.

VTEL

• 1D: 0.21%
• 1M: 0.68%
• YTD: 1.88%
• 6M: 2.25%
• 1Y: 8.64%
• 3Y*: —
• 5Y*: —
• 10Y*: —

OVM

• 1D: 0.29%
• 1M: 1.14%
• YTD: 4.13%
• 6M: 4.81%
• 1Y: 12.10%
• 3Y*: 5.43%
• 5Y*: 1.68%
• 10Y*: —

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

VTEL vs. OVM - Yearly Performance Comparison

	2026 (YTD)	2025
VTEL Vanguard Long-Term Tax-Exempt Bond ETF	1.88%	6.66%
OVM Overlay Shares Municipal Bond ETF	4.13%	7.49%

Correlation

The correlation between VTEL and OVM is 0.59, 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	0.59
Correlation (All Time) Calculated using the full available price history since May 23, 2025	0.59

The correlation between VTEL and OVM has been stable across timeframes, ranging from 0.59 to 0.59 - a consistent structural relationship.

Return for Risk

VTEL vs. OVM — Risk / Return Rank

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

VTEL

VTEL Risk / Return Rank: 66
VTEL Sharpe Ratio Rank: 69
VTEL Sortino Ratio Rank: 76
VTEL Omega Ratio Rank: 79
VTEL Calmar Ratio Rank: 51
VTEL Martin Ratio Rank: 53

OVM

OVM Risk / Return Rank: 88
OVM Sharpe Ratio Rank: 87
OVM Sortino Ratio Rank: 91
OVM Omega Ratio Rank: 91
OVM Calmar Ratio Rank: 86
OVM Martin Ratio Rank: 87

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.

VTEL vs. OVM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Long-Term Tax-Exempt Bond ETF (VTEL) and Overlay Shares Municipal Bond ETF (OVM). 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.

	VTEL	OVM	Difference
Sharpe ratio Return per unit of total volatility	2.32	2.93	-0.61
Sortino ratio Return per unit of downside risk	3.49	4.34	-0.85
Omega ratio Gain probability vs. loss probability	1.48	1.60	-0.12
Calmar ratio Return relative to maximum drawdown	2.58	4.83	-2.25
Martin ratio Return relative to average drawdown	9.23	18.85	-9.62
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VTEL vs. OVM - Sharpe Ratio Comparison

The current VTEL Sharpe Ratio is 2.32, which is comparable to the OVM Sharpe Ratio of 2.93. The chart below compares the historical Sharpe Ratios of VTEL and OVM, 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

	VTEL	OVM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.32	2.93	-0.61
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	—	0.31	—
Sharpe Ratio (All Time) Calculated using the full available price history	2.26	0.43	+1.83

Drawdowns

VTEL vs. OVM - Drawdown Comparison

The maximum VTEL drawdown since its inception was -3.22%, smaller than the maximum OVM drawdown of -15.58%. Use the drawdown chart below to compare losses from any high point for VTEL and OVM.

Drawdown Indicators

	VTEL	OVM	Difference
Max Drawdown Largest peak-to-trough decline	-3.22%	-15.58%	+12.36%
Max Drawdown (1Y) Largest decline over 1 year	-3.22%	-2.44%	-0.78%
Max Drawdown (3Y) Largest decline over 3 years	—	-8.20%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-15.58%	—
Current Drawdown Current decline from peak	-0.19%	0.00%	-0.19%
Average Drawdown Average peak-to-trough decline	-0.59%	-4.01%	+3.42%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.90%	0.63%	+0.27%

Volatility

VTEL vs. OVM - Volatility Comparison

Vanguard Long-Term Tax-Exempt Bond ETF (VTEL) and Overlay Shares Municipal Bond ETF (OVM) have volatilities of 1.26% and 1.25%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VTEL	OVM	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.26%	1.25%	+0.01%
Volatility (6M) Calculated over the trailing 6-month period	2.64%	3.38%	-0.74%
Volatility (1Y) Calculated over the trailing 1-year period	3.75%	4.16%	-0.41%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	3.77%	5.39%	-1.62%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	3.77%	6.55%	-2.78%

VTEL vs. OVM - Expense Ratio Comparison

VTEL has a 0.09% expense ratio, which is lower than OVM's 0.82% expense ratio.

Dividends

VTEL vs. OVM - Dividend Comparison

VTEL's dividend yield for the trailing twelve months is around 3.81%, less than OVM's 6.10% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019
OVM Overlay Shares Municipal Bond ETF	6.10%	5.45%	4.91%	4.66%	4.21%	6.10%	3.97%	0.58%
VTEL Vanguard Long-Term Tax-Exempt Bond ETF	3.81%	2.23%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both VTEL and OVM in my portfolio?

VTEL and OVM have a correlation of 0.59, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VTEL or OVM?

VTEL has higher volatility (1.26%) compared to OVM (1.25%). In terms of maximum drawdown, VTEL dropped -3.22% vs OVM's -15.58%.

Which ETF is better, VTEL or OVM?

On 1-year performance, OVM leads with 12.10% vs 8.64% for VTEL. On fees, VTEL is cheaper at 0.09% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VTEL or OVM?

Over the 1-year period, OVM has performed better with a 12.10% return vs 8.64%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VTEL or OVM?

VTEL is cheaper with a 0.09% expense ratio, compared with 0.82% for OVM.

Which ETF pays a higher dividend yield, VTEL or OVM?

OVM has the higher dividend yield at 6.10%, compared with 3.81% for VTEL.

What is the main difference between VTEL and OVM?

They also come from different issuers: Vanguard and Liquid Strategies. Their fees differ too: 0.09% for VTEL and 0.82% for OVM.

Which has better risk-adjusted returns?

OVM currently has the higher Sharpe Ratio (2.93 vs 2.32), 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.