VTES vs. BND
VTES (Vanguard Short-Term Tax-Exempt Bond ETF) and BND (Vanguard Total Bond Market ETF) are both exchange-traded funds - VTES is a Municipal Bonds fund tracking the S&P 0-7 Year National AMT-Free Municipal Bond Index, while BND is a Total Bond Market fund tracking the Bloomberg U.S. Aggregate Float Adjusted Index. Both are passively managed. Over the past 3 years, VTES returned 3.10%/yr vs 4.11%/yr for BND. A 0.65 correlation means they provide meaningful diversification when combined. VTES charges 0.07%/yr vs 0.03%/yr for BND.
Performance
VTES vs. BND - Performance Comparison
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Returns By Period
In the year-to-date period, VTES achieves a 0.77% return, which is significantly lower than BND's 0.94% return.
VTES
- 1D
- 0.01%
- 1M
- 0.59%
- YTD
- 0.77%
- 6M
- 0.88%
- 1Y
- 3.25%
- 3Y*
- 3.10%
- 5Y*
- —
- 10Y*
- —
BND
- 1D
- 0.45%
- 1M
- 1.09%
- YTD
- 0.94%
- 6M
- 0.78%
- 1Y
- 4.38%
- 3Y*
- 4.11%
- 5Y*
- 0.18%
- 10Y*
- 1.60%
VTES vs. BND - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | |
|---|---|---|---|---|
VTES Vanguard Short-Term Tax-Exempt Bond ETF | 0.77% | 4.19% | 1.85% | 3.32% |
BND Vanguard Total Bond Market ETF | 0.94% | 7.08% | 1.38% | 5.56% |
Correlation
The correlation between VTES and BND 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 (3Y) Calculated over the trailing 3-year period | 0.63 |
Correlation (All Time) Calculated using the full available price history since Mar 9, 2023 | 0.65 |
The correlation between VTES and BND shifts across timeframes, from 0.52 (1 year) to 0.65 (all time), reflecting how their relationship changes across market environments.
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Return for Risk
VTES vs. BND — Risk / Return Rank
VTES
BND
VTES vs. BND - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Tax-Exempt Bond ETF (VTES) and Vanguard Total Bond Market ETF (BND). 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.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| VTES | BND | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +1.45 | ||
| Sortino ratioReturn per unit of downside risk | +2.03 | ||
| Omega ratioGain probability vs. loss probability | 1.61 | 1.21 | +0.40 |
| Calmar ratioReturn relative to maximum drawdown | 2.22 | 1.64 | +0.58 |
| Martin ratioReturn relative to average drawdown | 6.35 | 4.68 | +1.67 |
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Drawdowns
VTES vs. BND - Drawdown Comparison
The maximum VTES drawdown since its inception was -2.42%, smaller than the maximum BND drawdown of -18.58%. Use the drawdown chart below to compare losses from any high point for VTES and BND.
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Drawdown Indicators
| VTES | BND | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -2.42% | -18.58% | +16.16% |
Max Drawdown (1Y)Largest decline over 1 year | -1.47% | -2.68% | +1.21% |
Max Drawdown (3Y)Largest decline over 3 years | -1.80% | -5.92% | +4.12% |
Max Drawdown (5Y)Largest decline over 5 years | — | -17.91% | — |
Max Drawdown (10Y)Largest decline over 10 years | — | -18.58% | — |
Current DrawdownCurrent decline from peak | -0.51% | -1.71% | +1.20% |
Average DrawdownAverage peak-to-trough decline | -0.50% | -3.06% | +2.56% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.51% | 0.94% | -0.43% |
Volatility
VTES vs. BND - Volatility Comparison
The current volatility for Vanguard Short-Term Tax-Exempt Bond ETF (VTES) is 0.27%, while Vanguard Total Bond Market ETF (BND) has a volatility of 1.15%. This indicates that VTES experiences smaller price fluctuations and is considered to be less risky than BND based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VTES | BND | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.27% | 1.15% | -0.88% |
Volatility (6M)Calculated over the trailing 6-month period | 0.98% | 2.80% | -1.82% |
Volatility (1Y)Calculated over the trailing 1-year period | 1.24% | 3.75% | -2.51% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 1.71% | 6.03% | -4.32% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 1.71% | 5.53% | -3.82% |
VTES vs. BND - Expense Ratio Comparison
VTES has a 0.07% expense ratio, which is higher than BND's 0.03% 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
VTES vs. BND - Dividend Comparison
VTES's dividend yield for the trailing twelve months is around 2.75%, less than BND's 3.94% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
BND Vanguard Total Bond Market ETF | 3.94% | 3.86% | 3.67% | 3.09% | 2.60% | 2.12% | 2.38% | 2.72% | 2.81% | 2.54% | 2.51% | 2.57% |
VTES Vanguard Short-Term Tax-Exempt Bond ETF | 2.75% | 2.77% | 2.99% | 2.03% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Frequently Asked Questions
VTES and BND 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.
BND has higher volatility (1.15%) compared to VTES (0.27%). In terms of maximum drawdown, VTES dropped -2.42% vs BND's -18.58%.
On 3-year performance, BND leads with 4.11% vs 3.10% for VTES. On fees, BND is cheaper at 0.03% per year. On volatility, VTES has been the lower-risk option at 0.27%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 3-year period, BND has performed better with a 4.11% return vs 3.10%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
BND is cheaper with a 0.03% expense ratio, compared with 0.07% for VTES.
BND has the higher dividend yield at 3.94%, compared with 2.75% for VTES.
VTES is categorized as Municipal Bonds, while BND is Total Bond Market. VTES tracks S&P 0-7 Year National AMT-Free Municipal Bond Index, while BND tracks Bloomberg U.S. Aggregate Float Adjusted Index. Their fees differ too: 0.07% for VTES and 0.03% for BND.
VTES currently has the higher Sharpe Ratio (2.63 vs 1.18), 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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