VTES vs. VSS
VTES (Vanguard Short-Term Tax-Exempt Bond ETF) and VSS (Vanguard FTSE All-World ex-US Small-Cap 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 VSS is a Foreign Small & Mid Cap Equities fund tracking the FTSE Global Small Cap ex US Index. Both are passively managed. Over the past 3 years, VTES returned 3.10%/yr vs 15.99%/yr for VSS. At a 0.18 correlation, their price movements are largely independent. Both charge a 0.07% expense ratio.
Performance
VTES vs. VSS - 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 VSS's 7.69% return.
VTES
- 1D
- 0.01%
- 1M
- 0.59%
- YTD
- 0.77%
- 6M
- 0.88%
- 1Y
- 3.25%
- 3Y*
- 3.10%
- 5Y*
- —
- 10Y*
- —
VSS
- 1D
- -0.10%
- 1M
- -3.13%
- YTD
- 7.69%
- 6M
- 7.31%
- 1Y
- 20.91%
- 3Y*
- 15.99%
- 5Y*
- 5.43%
- 10Y*
- 8.45%
VTES vs. VSS - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | |
|---|---|---|---|---|
VTES Vanguard Short-Term Tax-Exempt Bond ETF | 0.77% | 4.19% | 1.85% | 3.32% |
VSS Vanguard FTSE All-World ex-US Small-Cap ETF | 7.69% | 29.61% | 2.94% | 9.14% |
Correlation
The correlation between VTES and VSS is 0.28, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.28 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.23 |
Correlation (All Time) Calculated using the full available price history since Mar 9, 2023 | 0.18 |
The correlation between VTES and VSS shifts across timeframes, from 0.18 (all time) to 0.28 (1 year), reflecting how their relationship changes across market environments.
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Return for Risk
VTES vs. VSS — Risk / Return Rank
VTES
VSS
VTES vs. VSS - 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 FTSE All-World ex-US Small-Cap ETF (VSS). 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 | VSS | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +1.29 | ||
| Sortino ratioReturn per unit of downside risk | +1.93 | ||
| Omega ratioGain probability vs. loss probability | 1.61 | 1.25 | +0.36 |
| Calmar ratioReturn relative to maximum drawdown | 2.22 | 1.81 | +0.41 |
| Martin ratioReturn relative to average drawdown | 6.35 | 6.68 | -0.33 |
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Drawdowns
VTES vs. VSS - Drawdown Comparison
The maximum VTES drawdown since its inception was -2.42%, smaller than the maximum VSS drawdown of -43.51%. Use the drawdown chart below to compare losses from any high point for VTES and VSS.
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Drawdown Indicators
| VTES | VSS | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -2.42% | -43.51% | +41.09% |
Max Drawdown (1Y)Largest decline over 1 year | -1.47% | -11.62% | +10.15% |
Max Drawdown (3Y)Largest decline over 3 years | -1.80% | -15.73% | +13.93% |
Max Drawdown (5Y)Largest decline over 5 years | — | -33.93% | — |
Max Drawdown (10Y)Largest decline over 10 years | — | -43.51% | — |
Current DrawdownCurrent decline from peak | -0.51% | -5.12% | +4.61% |
Average DrawdownAverage peak-to-trough decline | -0.50% | -9.62% | +9.12% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 0.51% | 3.14% | -2.63% |
Volatility
VTES vs. VSS - Volatility Comparison
The current volatility for Vanguard Short-Term Tax-Exempt Bond ETF (VTES) is 0.27%, while Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) has a volatility of 6.52%. This indicates that VTES experiences smaller price fluctuations and is considered to be less risky than VSS based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VTES | VSS | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 0.27% | 6.52% | -6.25% |
Volatility (6M)Calculated over the trailing 6-month period | 0.98% | 13.86% | -12.88% |
Volatility (1Y)Calculated over the trailing 1-year period | 1.24% | 15.79% | -14.55% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 1.71% | 16.63% | -14.92% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 1.71% | 17.16% | -15.45% |
VTES vs. VSS - Expense Ratio Comparison
Both VTES and VSS have an expense ratio of 0.07%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.
Dividends
VTES vs. VSS - Dividend Comparison
VTES's dividend yield for the trailing twelve months is around 2.75%, less than VSS's 3.24% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VSS Vanguard FTSE All-World ex-US Small-Cap ETF | 3.24% | 3.39% | 3.44% | 3.14% | 2.30% | 2.74% | 1.90% | 3.25% | 2.80% | 2.83% | 2.93% | 2.66% |
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 VSS have a correlation of 0.28, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VSS has higher volatility (6.52%) compared to VTES (0.27%). In terms of maximum drawdown, VTES dropped -2.42% vs VSS's -43.51%.
On 3-year performance, VSS leads with 15.99% vs 3.10% for VTES. Both ETFs have the same 0.07% expense ratio. 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, VSS has performed better with a 15.99% return vs 3.10%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
VTES and VSS have the same expense ratio: 0.07% per year.
VSS has the higher dividend yield at 3.24%, compared with 2.75% for VTES.
VTES is categorized as Municipal Bonds, while VSS is Foreign Small & Mid Cap Equities. VTES tracks S&P 0-7 Year National AMT-Free Municipal Bond Index, while VSS tracks FTSE Global Small Cap ex US Index.
VTES currently has the higher Sharpe Ratio (2.63 vs 1.33), 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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