VTES vs. VGSH
VTES (Vanguard Short-Term Tax-Exempt Bond ETF) and VGSH (Vanguard Short-Term Treasury 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 VGSH is a Government Bonds fund tracking the Bloomberg U.S. Treasury 1-3 Year Index. Both are passively managed. Over the past 3 years, VTES returned 2.94%/yr vs 4.29%/yr for VGSH. Their 0.55 correlation means they have sometimes moved together and sometimes differently. VTES charges 0.07%/yr vs 0.03%/yr for VGSH.
Performance
VTES vs. VGSH - Performance Comparison
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Returns By Period
In the year-to-date period, VTES achieves a 0.37% return, which is significantly lower than VGSH's 0.77% return.
VTES
- 1D
- -0.04%
- 1M
- -0.61%
- 6M
- -0.36%
- YTD
- 0.37%
- 1Y
- 1.66%
- 3Y*
- 2.94%
- 5Y*
- —
- 10Y*
- —
- ALL TIME*
- 2.86%
VGSH
- 1D
- -0.05%
- 1M
- 0.03%
- 6M
- 0.55%
- YTD
- 0.77%
- 1Y
- 2.58%
- 3Y*
- 4.29%
- 5Y*
- 1.87%
- 10Y*
- 1.73%
- ALL TIME*
- 1.41%
Liquidity Comparison
| Position | Avg. Volume Value (2W) | Avg. Volume Value (1M) | Avg. Volume Value (3M) |
|---|---|---|---|
| $133.56M | $160.92M | $191.51M | |
| $19.78M | $19.18M | $17.67M |
VTES vs. VGSH - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | |
|---|---|---|---|---|
VTES Vanguard Short-Term Tax-Exempt Bond ETF | 0.37% | 4.19% | 1.85% | 3.32% |
VGSH Vanguard Short-Term Treasury ETF | 0.77% | 5.07% | 4.00% | 4.77% |
Correlation
The correlation between VTES and VGSH is 0.52, which is moderate. They have sometimes moved together and sometimes differently, sharing some price drivers without tracking each other closely.
| Correlation | |
|---|---|
Correlation (1Y) Focuses on recent behavior, but can change the most. | 0.52 |
Correlation (3Y) Balances recent behavior with more history. | 0.51 |
Correlation (All Time) Calculated using the full available price history since Mar 9, 2023 | 0.55 |
The correlation between VTES and VGSH has been stable across timeframes, ranging from 0.51 to 0.55 - a consistent structural relationship.
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Return for Risk
VTES vs. VGSH — Risk / Return Rank
VTES
VGSH
VTES vs. VGSH - 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 Short-Term Treasury ETF (VGSH). 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 | VGSH | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.81 | ||
| Sortino ratioReturn per unit of downside risk | -1.59 | ||
| Omega ratioGain probability vs. loss probability | 1.32 | 1.49 | -0.16 |
| Calmar ratioReturn relative to maximum drawdown | 1.38 | 3.51 | -2.12 |
| Martin ratioReturn relative to average drawdown | 3.68 | 13.46 | -9.79 |
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Drawdowns
VTES vs. VGSH - Drawdown Comparison
The maximum VTES drawdown since its inception was -2.42%, smaller than the maximum VGSH drawdown of -5.70%. Use the drawdown chart below to compare losses from any high point for VTES and VGSH.
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Drawdown Indicators
| VTES | VGSH | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -2.42% | -5.70% | +3.28% |
Max Drawdown (1Y)Largest decline over 1 year | -1.47% | -0.88% | -0.59% |
Max Drawdown (3Y)Largest decline over 3 years | -1.59% | -0.97% | -0.62% |
Max Drawdown (5Y)Largest decline over 5 years | — | -5.66% | — |
Max Drawdown (10Y)Largest decline over 10 years | — | -5.70% | — |
Current DrawdownCurrent decline from peak | -0.90% | -0.05% | -0.85% |
Average DrawdownAverage peak-to-trough decline | -0.50% | -0.59% | +0.09% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.55% | 0.23% | +0.32% |
Volatility
VTES vs. VGSH - Volatility Comparison
Vanguard Short-Term Tax-Exempt Bond ETF (VTES) has a higher volatility of 0.45% compared to Vanguard Short-Term Treasury ETF (VGSH) at 0.36%. This indicates that VTES's price experiences larger fluctuations and is considered to be riskier than VGSH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VTES | VGSH | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.45% | 0.36% | +0.09% |
Volatility (6M)Calculated over the trailing 6-month period | 1.03% | 1.01% | +0.02% |
Volatility (1Y)Calculated over the trailing 1-year period | 1.31% | 1.32% | -0.01% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 1.70% | 1.98% | -0.28% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 1.70% | 1.58% | +0.12% |
VTES vs. VGSH - Expense Ratio Comparison
VTES has a 0.07% expense ratio, which is higher than VGSH'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. VGSH - Dividend Comparison
VTES's dividend yield for the trailing twelve months is around 2.75%, less than VGSH's 3.85% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VGSH Vanguard Short-Term Treasury ETF | 3.50% | 4.00% | 4.18% | 3.31% | 1.15% | 0.66% | 1.74% | 2.28% | 1.79% | 1.10% | 0.84% | 0.69% |
VTES Vanguard Short-Term Tax-Exempt Bond ETF | 2.52% | 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 VGSH 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.
VTES has higher volatility (0.45%) compared to VGSH (0.36%). In terms of maximum drawdown, VTES dropped -2.42% vs VGSH's -5.70%.
On 3-year performance, VGSH leads with 4.29% vs 2.94% for VTES. On fees, VGSH is cheaper at 0.03% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 3-year period, VGSH has performed better with a 4.29% return vs 2.94%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VGSH is cheaper with a 0.03% expense ratio, compared with 0.07% for VTES.
VGSH has the higher dividend yield at 3.50%, compared with 2.52% for VTES.
VTES is categorized as Municipal Bonds, while VGSH is Government Bonds. VTES tracks S&P 0-7 Year National AMT-Free Municipal Bond Index, while VGSH tracks Bloomberg U.S. Treasury 1-3 Year Index. Their fees differ too: 0.07% for VTES and 0.03% for VGSH.
VGSH currently has the higher Sharpe Ratio (2.35 vs 1.55), 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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