VWSTX vs. VFSTX

Last updated Jun 4, 2026

VWSTX (Vanguard Short-Term Tax-Exempt Fund Investor Shares) and VFSTX (Vanguard Short-Term Investment-Grade Fund Investor Shares) are both mutual funds - VWSTX is a Municipal Bonds fund managed by Vanguard, while VFSTX is a Total Bond Market fund managed by Vanguard. Over the past 10 years, VWSTX returned 1.95%/yr vs 2.54%/yr for VFSTX. At a 0.37 correlation, their price movements are largely independent. VWSTX charges 0.17%/yr vs 0.20%/yr for VFSTX.

Performance

VWSTX vs. VFSTX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Short-Term Tax-Exempt Fund Investor Shares (VWSTX) and Vanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VWSTX achieves a 1.10% return, which is significantly higher than VFSTX's 0.77% return. Over the past 10 years, VWSTX has underperformed VFSTX with an annualized return of 1.95%, while VFSTX has yielded a comparatively higher 2.54% annualized return.

VWSTX

• 1D: 0.00%
• 1M: 0.25%
• YTD: 1.10%
• 6M: 1.43%
• 1Y: 3.68%
• 3Y*: 4.13%
• 5Y*: 2.50%
• 10Y*: 1.95%

VFSTX

• 1D: 0.00%
• 1M: 0.30%
• YTD: 0.77%
• 6M: 1.05%
• 1Y: 4.69%
• 3Y*: 5.52%
• 5Y*: 2.30%
• 10Y*: 2.54%

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

VWSTX vs. VFSTX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VWSTX Vanguard Short-Term Tax-Exempt Fund Investor Shares	1.10%	4.79%	3.68%	3.87%	-0.81%	0.17%	1.82%	2.50%	1.59%	1.00%
VFSTX Vanguard Short-Term Investment-Grade Fund Investor Shares	0.77%	6.75%	4.98%	6.06%	-5.84%	-0.70%	5.16%	5.75%	0.87%	2.02%

Correlation

The correlation between VWSTX and VFSTX is 0.49, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.49
Correlation (3Y) Calculated over the trailing 3-year period	0.51
Correlation (5Y) Calculated over the trailing 5-year period	0.45
Correlation (10Y) Calculated over the trailing 10-year period	0.41
Correlation (All Time) Calculated using the full available price history since Nov 1, 1982	0.37

The correlation between VWSTX and VFSTX shifts across timeframes, from 0.37 (all time) to 0.51 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

VWSTX vs. VFSTX — Risk / Return Rank

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

VWSTX

VWSTX Risk / Return Rank: 96
VWSTX Sharpe Ratio Rank: 95
VWSTX Sortino Ratio Rank: 99
VWSTX Omega Ratio Rank: 99
VWSTX Calmar Ratio Rank: 93
VWSTX Martin Ratio Rank: 96

VFSTX

VFSTX Risk / Return Rank: 59
VFSTX Sharpe Ratio Rank: 48
VFSTX Sortino Ratio Rank: 75
VFSTX Omega Ratio Rank: 68
VFSTX Calmar Ratio Rank: 52
VFSTX Martin Ratio Rank: 53

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.

VWSTX vs. VFSTX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Short-Term Tax-Exempt Fund Investor Shares (VWSTX) and Vanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX). 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.

	VWSTX	VFSTX	Difference
Sharpe ratio Return per unit of total volatility	3.38	2.04	+1.34
Sortino ratio Return per unit of downside risk	8.40	3.61	+4.79
Omega ratio Gain probability vs. loss probability	2.64	1.46	+1.18
Calmar ratio Return relative to maximum drawdown	5.35	2.76	+2.60
Martin ratio Return relative to average drawdown	23.63	10.82	+12.81
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VWSTX vs. VFSTX - Sharpe Ratio Comparison

The current VWSTX Sharpe Ratio is 3.38, which is higher than the VFSTX Sharpe Ratio of 2.04. The chart below compares the historical Sharpe Ratios of VWSTX and VFSTX, 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

	VWSTX	VFSTX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	3.38	2.04	+1.34
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	2.08	0.78	+1.30
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.76	1.03	+0.73
Sharpe Ratio (All Time) Calculated using the full available price history	2.03	1.51	+0.52

Drawdowns

VWSTX vs. VFSTX - Drawdown Comparison

The maximum VWSTX drawdown since its inception was -3.09%, smaller than the maximum VFSTX drawdown of -9.35%. Use the drawdown chart below to compare losses from any high point for VWSTX and VFSTX.

Drawdown Indicators

	VWSTX	VFSTX	Difference
Max Drawdown Largest peak-to-trough decline	-3.09%	-9.35%	+6.26%
Max Drawdown (1Y) Largest decline over 1 year	-0.69%	-1.71%	+1.02%
Max Drawdown (3Y) Largest decline over 3 years	-1.01%	-1.71%	+0.70%
Max Drawdown (5Y) Largest decline over 5 years	-2.32%	-9.35%	+7.03%
Max Drawdown (10Y) Largest decline over 10 years	-3.08%	-9.35%	+6.27%
Current Drawdown Current decline from peak	0.00%	-0.26%	+0.26%
Average Drawdown Average peak-to-trough decline	-0.32%	-1.12%	+0.80%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.16%	0.43%	-0.27%

Volatility

VWSTX vs. VFSTX - Volatility Comparison

The current volatility for Vanguard Short-Term Tax-Exempt Fund Investor Shares (VWSTX) is 0.38%, while Vanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX) has a volatility of 0.74%. This indicates that VWSTX experiences smaller price fluctuations and is considered to be less risky than VFSTX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VWSTX	VFSTX	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.38%	0.74%	-0.36%
Volatility (6M) Calculated over the trailing 6-month period	0.81%	1.65%	-0.84%
Volatility (1Y) Calculated over the trailing 1-year period	1.09%	2.31%	-1.22%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.21%	2.98%	-1.77%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.11%	2.48%	-1.37%

VWSTX vs. VFSTX - Expense Ratio Comparison

VWSTX has a 0.17% expense ratio, which is lower than VFSTX's 0.20% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VWSTX vs. VFSTX - Dividend Comparison

VWSTX's dividend yield for the trailing twelve months is around 3.04%, less than VFSTX's 4.61% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VFSTX Vanguard Short-Term Investment-Grade Fund Investor Shares	4.61%	4.48%	4.06%	3.05%	1.93%	1.70%	2.24%	2.83%	2.68%	2.00%	2.04%	1.99%
VWSTX Vanguard Short-Term Tax-Exempt Fund Investor Shares	3.04%	3.90%	3.73%	2.42%	1.16%	0.61%	1.17%	1.71%	1.45%	1.06%	0.87%	0.70%

Frequently Asked Questions

Can I hold both VWSTX and VFSTX in my portfolio?

VWSTX and VFSTX have a correlation of 0.49, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VWSTX or VFSTX?

VFSTX has higher volatility (0.74%) compared to VWSTX (0.38%). In terms of maximum drawdown, VWSTX dropped -3.09% vs VFSTX's -9.35%.

Which has better risk-adjusted returns?

VWSTX currently has the higher Sharpe Ratio (3.38 vs 2.04), 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.