VUSB vs. VTES

Last updated Jun 4, 2026

VUSB (Vanguard Ultra-Short Bond ETF) and VTES (Vanguard Short-Term Tax-Exempt Bond ETF Shares) are both exchange-traded funds - VUSB is a Ultrashort Bond fund actively managed by Vanguard, while VTES is a Municipal Bonds fund tracking the S&P 0-7 Yr National AMT-Free Municipal Bond Index - Benchmark TR Gross. VUSB is actively managed, while VTES is passively managed. Over the past 3 years, VUSB returned 5.34%/yr vs 3.23%/yr for VTES. At a 0.43 correlation, their price movements are largely independent. VUSB charges 0.10%/yr vs 0.07%/yr for VTES.

Performance

VUSB vs. VTES - Performance Comparison

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

Returns By Period

In the year-to-date period, VUSB achieves a 1.39% return, which is significantly higher than VTES's 0.66% return.

VUSB

• 1D: -0.02%
• 1M: 0.40%
• YTD: 1.39%
• 6M: 1.76%
• 1Y: 4.59%
• 3Y*: 5.34%
• 5Y*: 3.43%
• 10Y*: —

VTES

• 1D: 0.01%
• 1M: 0.29%
• YTD: 0.66%
• 6M: 1.02%
• 1Y: 3.63%
• 3Y*: 3.23%
• 5Y*: —
• 10Y*: —

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

VUSB vs. VTES - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
VUSB Vanguard Ultra-Short Bond ETF	1.39%	5.20%	5.68%	5.02%
VTES Vanguard Short-Term Tax-Exempt Bond ETF Shares	0.66%	4.19%	1.85%	3.32%

Correlation

The correlation between VUSB and VTES is 0.38, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.38
Correlation (3Y) Calculated over the trailing 3-year period	0.43
Correlation (All Time) Calculated using the full available price history since Mar 10, 2023	0.43

Return for Risk

VUSB vs. VTES — Risk / Return Rank

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

VUSB

VUSB Risk / Return Rank: 98
VUSB Sharpe Ratio Rank: 99
VUSB Sortino Ratio Rank: 99
VUSB Omega Ratio Rank: 99
VUSB Calmar Ratio Rank: 97
VUSB Martin Ratio Rank: 98

VTES

VTES Risk / Return Rank: 73
VTES Sharpe Ratio Rank: 87
VTES Sortino Ratio Rank: 90
VTES Omega Ratio Rank: 94
VTES Calmar Ratio Rank: 49
VTES Martin Ratio Rank: 44

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.

VUSB vs. VTES - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Ultra-Short Bond ETF (VUSB) and Vanguard Short-Term Tax-Exempt Bond ETF Shares (VTES). 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.

	VUSB	VTES	Difference
Sharpe ratio: Return per unit of total volatility	7.10	2.94	+4.16
Sortino ratio: Return per unit of downside risk	13.16	4.26	+8.90
Omega ratio: Gain probability vs. loss probability	3.44	1.70	+1.74
Calmar ratio: Return relative to maximum drawdown	12.43	2.48	+9.95
Martin ratio: Return relative to average drawdown	71.97	7.36	+64.60
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VUSB vs. VTES - Sharpe Ratio Comparison

The current VUSB Sharpe Ratio is 7.10, which is higher than the VTES Sharpe Ratio of 2.94. The chart below compares the historical Sharpe Ratios of VUSB and VTES, 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

	VUSB	VTES	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	7.10	2.94	+4.16
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	4.14	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	4.09	1.81	+2.28

Drawdowns

VUSB vs. VTES - Drawdown Comparison

The maximum VUSB drawdown since its inception was -1.79%, smaller than the maximum VTES drawdown of -2.42%. Use the drawdown chart below to compare losses from any high point for VUSB and VTES.

Drawdown Indicators

	VUSB	VTES	Difference
Max Drawdown Largest peak-to-trough decline	-1.79%	-2.42%	+0.63%
Max Drawdown (1Y) Largest decline over 1 year	-0.37%	-1.47%	+1.10%
Max Drawdown (3Y) Largest decline over 3 years	-0.46%	-1.80%	+1.34%
Max Drawdown (5Y) Largest decline over 5 years	-1.79%	—	—
Current Drawdown Current decline from peak	-0.02%	-0.62%	+0.60%
Average Drawdown Average peak-to-trough decline	-0.27%	-0.50%	+0.23%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.06%	0.49%	-0.43%

Volatility

VUSB vs. VTES - Volatility Comparison

The current volatility for Vanguard Ultra-Short Bond ETF (VUSB) is 0.18%, while Vanguard Short-Term Tax-Exempt Bond ETF Shares (VTES) has a volatility of 0.35%. This indicates that VUSB experiences smaller price fluctuations and is considered to be less risky than VTES based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VUSB	VTES	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.18%	0.35%	-0.17%
Volatility (6M) Calculated over the trailing 6-month period	0.52%	0.97%	-0.45%
Volatility (1Y) Calculated over the trailing 1-year period	0.65%	1.24%	-0.59%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	0.83%	1.72%	-0.89%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	0.82%	1.72%	-0.90%

VUSB vs. VTES - Expense Ratio Comparison

VUSB has a 0.10% expense ratio, which is higher than VTES's 0.07% 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

VUSB vs. VTES - Dividend Comparison

VUSB's dividend yield for the trailing twelve months is around 4.39%, more than VTES's 2.75% yield.

Position	TTM	2025	2024	2023	2022	2021
VTES Vanguard Short-Term Tax-Exempt Bond ETF Shares	2.75%	2.77%	2.99%	2.03%	0.00%	0.00%
VUSB Vanguard Ultra-Short Bond ETF	4.39%	4.63%	5.16%	4.45%	1.56%	0.26%

Frequently Asked Questions

Can I hold both VUSB and VTES in my portfolio?

VUSB and VTES have a correlation of 0.38, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VUSB or VTES?

VTES has higher volatility (0.35%) compared to VUSB (0.18%). In terms of maximum drawdown, VUSB dropped -1.79% vs VTES's -2.42%.

Which ETF is better, VUSB or VTES?

On 3-year performance, VUSB leads with 5.34% vs 3.23% for VTES. On fees, VTES is cheaper at 0.07% per year. On volatility, VUSB has been the lower-risk option at 0.18%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VUSB or VTES?

Over the 3-year period, VUSB has performed better with a 5.34% return vs 3.23%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VUSB or VTES?

VTES is cheaper with a 0.07% expense ratio, compared with 0.10% for VUSB.

Which ETF pays a higher dividend yield, VUSB or VTES?

VUSB has the higher dividend yield at 4.39%, compared with 2.75% for VTES.

What is the main difference between VUSB and VTES?

VUSB is categorized as Ultrashort Bond, while VTES is Municipal Bonds. Their fees differ too: 0.10% for VUSB and 0.07% for VTES.

Which has better risk-adjusted returns?

VUSB currently has the higher Sharpe Ratio (7.10 vs 2.94), 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.