Relative Intelligence · Municipal Bonds
How Vanguard Tax-Exempt Bond ETF (VTEB) compares with the whole market and its popular alternatives
Built by QuantCommons' quantitative engine, this page is about relative opportunity, not data on VTEB alone. It places VTEB (Vanguard Tax-Exempt Bond ETF) against 20+ popular alternatives, its neighboring categories and the entire market of over 10,000 U.S.-listed stocks and ETFs, and surfaces what has done better on consistent outperformance, return for the risk taken, behavior in real market crashes and diversification. The result is a clearer view of where VTEB stands in the market, and of the alternatives worth a closer look.
Period covered: VTEB's full trading record, from August 2015 through September 2026. The crash tests reach back to 2000 using older funds and the S&P 500. All returns include reinvested dividends. Data as of October 20, 2026.
Data as of October 20, 2026. Full tables and charts read best on a larger screen.
On this page12 sections
Key findings
- Right nowOver the past 6 months, VTEB fell 3.3% while the S&P 500 rose 9.1%. That said, both VTEB and the S&P 500 are within a few percent of a record high. At a glance ↓
- Fund or market?VTEB fell 3.3% over the past 3 months, in line with the US bond market ETF AGG (iShares Core U.S. Aggregate Bond ETF), which fell 1.7%. The S&P 500 rose 3.9%.
- Long termVTEB turned $10,000 into $11,900 over the past decade, against $42,100 in the S&P 500. VTEB's 10-year return of 18.6% puts it behind 90% of the ETFs with at least $100 million in assets with that much history. The S&P 500 returned 321%. Growth of $10,000 ↓
- In a crashThe Covid crash took 17.0% off VTEB, against 33.7% for the S&P 500. That was more than SUB (iShares Short-Term National Muni Bond ETF, 9.4%) but less than HYD (VanEck High Yield Muni ETF, 35.6%). Crash tests ↓
- DiversificationAgainst the S&P 500, VTEB has a correlation of 0.64 over 5 years, less closely than 70% of ETFs with at least $100 million in assets. Next to an index fund it is some diversification, but not a hedge. VTEB now moves more with the S&P 500: a correlation of 0.64 over the past 5 years, up from 0.14 in the 5 years before. Market capture ↓
- Better options
- Nearby categories and themes
- SGOV (iShares 0-3 Month Treasury Bond ETF, treasury bonds) and NEAR (iShares Short Duration Bond Active ETF, short-term bonds) earned more than VTEB with less volatility over the past 5 years. SGOV returned 3.8% a year at 0.3% volatility, against 0.3% a year at 4.1%.
- Whole market
- Few investments have done better on both counts: only 62 of the 3,633 stocks and funds worth at least $500 million earned more than VTEB with less volatility over the past 5 years, among them SGOV (iShares 0-3 Month Treasury Bond ETF), VTIP (Vanguard Short-Term Inflation-Protected Securities ETF) and BSV (Vanguard Short-Term Bond ETF).
How much would $10,000 in VTEB have grown?
This chart tracks a hypothetical $10,000 investment in VTEB over the past 11 years, with dividends reinvested, alongside the same amount in the S&P 500, investments that ended ahead of VTEB over the same span and VTEB's popular alternatives, among those that traded for the entire period. A second view covers the past 5 years, the period the better options further down the page are judged on. It shows not only where each investment ended up but also how smooth or uneven the path was.
Note: VTEB began trading on August 25, 2015, so the chart cannot reach back to the dot-com bust, the 2008 financial crisis or two other sell-offs. It covers the most recent 11 years of VTEB's record, starting at the end of September 2015.
- $10,000 invested in VTEB at the end of September 2015 would have grown to $12,258 by September 2026, less than the $47,605 it would have become in SPY, an S&P 500 fund.
- Six of the eight other investments on the chart ended ahead of VTEB, and VTIP finished highest, at $13,519.
Choose a period
From the end of September 2015 to the end of September 2026. Hover over a fund in the key to pick out its line. 2,186 of the 2,591 stocks and funds worth at least $500 million that traded the whole period ended ahead of VTEB; the chart shows 5, closest alternatives first. The other 3 lines are popular alternatives, shown for context.
- SPY (S&P 500)$47,605+376% total · +15.2% a year
- VTIP$13,519+35.2% total · +2.8% a year
- NEAR$13,290+32.9% total · +2.6% a year
- LQD$12,983+29.8% total · +2.4% a year
- HYMB$12,838+28.4% total · +2.3% a year
- HYD$12,471+24.7% total · +2.0% a year
- MUNI$12,363+23.6% total · +1.9% a year
- VTEB$12,258+22.6% total · +1.9% a year
- SUB$11,543+15.4% total · +1.3% a year
- SHM$11,171+11.7% total · +1.0% a year
From the end of September 2021 to the end of September 2026. Hover over a fund in the key to pick out its line. 2,535 of the 3,628 stocks and funds worth at least $500 million that traded the whole period ended ahead of VTEB; the chart shows 5, closest alternatives first. The other 3 lines are popular alternatives, shown for context.
- SPY (S&P 500)$19,000+90.0% total · +13.7% a year
- NEAR$12,027+20.3% total · +3.8% a year
- SGOV$12,000+20.0% total · +3.7% a year
- SUB$10,637+6.4% total · +1.2% a year
- SHM$10,292+2.9% total · +0.6% a year
- MUNI$10,219+2.2% total · +0.4% a year
- JMUB$10,128+1.3% total · +0.3% a year
- VTEB$9,964−0.4% total · −0.1% a year
- HYMB$9,625−3.7% total · −0.8% a year
- LQD$9,381−6.2% total · −1.3% a year
VTEB at a glance
This section summarizes the key facts about the fund, its returns over periods from one to ten years and the risk it has carried, with dividends reinvested throughout. These figures serve as the baseline for every comparison that follows.
Note: VTEB began trading on August 25, 2015, so every figure here, including its worst decline, covers only the time since then. None of them reflect the dot-com bust, the 2008 financial crisis or two other sell-offs.
- VTEB's deepest decline since it began trading in 2015 was 17.0%, in March 2020. It took four months from the low to climb back to its old high.
- Over ten full calendar years, VTEB's best was 2019, when it returned 7.3%, and its worst was 2022, when it lost 8.0%. It lost money in one of those years.
- VTEB is 4.2% below its all-time high.
The fund
- Issuer
- Vanguard
- Began trading
- August 2015
- Expense ratio
- 0.03%per year
- Assets
- $52B
- Category
- Bonds
Returns
- Past 1 year
- −1.8%total return
- Past 3 years
- +11.5%+3.7% a year
- Past 5 years
- +1.4%+0.3% a year
- Past 10 years
- +18.6%+1.7% a year
- Best calendar year
- +7.3%2019
- Worst calendar year
- −8.0%2022
- Losing years
- 1 of 10full calendar years
Risk
- Volatility
- 4.1%typical yearly swing, 5 years
- Sharpe ratio
- 0.09return per unit of risk, 5 years
- Worst decline ever
- −17.0%Mar 2020 to Mar 2020
- From its all-time high
- −4.3%below the peak
VTEB against the whole market
Where VTEB ranks among every stock and fund, and what across the market has done better.
How does VTEB rank among all ETFs?
This section ranks VTEB on return, volatility, risk-adjusted return and worst decline against every ETF worth at least $100 million with enough history. Where the comparisons with its popular alternatives show how VTEB stacks up against its peers, these rankings show where it stands in the market as a whole.
- VTEB is among the steadier ETFs: its price swings rank in the top 6% of the 1,560 ETFs with at least $100 million in assets, where the top is the calmest.
- VTEB's 3-year return ranks in the bottom 5% of the 1,949 ETFs with at least $100 million in assets with 3 years of history.
Ranked against U.S.-listed ETFs with at least $100M in assets that have enough history for each measure, so the count changes from row to row; smaller ETFs and leveraged funds are left out. Lower volatility and smaller declines rank higher.
| Measure | VTEB | Rank | Standing |
|---|---|---|---|
| 1-year return | −1.8% | 2,140 of 2,485 | bottom 15% |
| 3-year return | +11.5% | 1,861 of 1,949 | bottom 6% |
| 5-year return | +1.4% | 1,348 of 1,560 | bottom 15% |
| 10-year return | +18.6% | 860 of 958 | bottom 11% |
| Volatility, 5 years | 4.1% | 95 of 1,560 | top 6% |
| Sharpe ratio, 5 years | 0.09 | 1,361 of 1,560 | bottom 14% |
| Worst decline, past 10 years | −17.0% | 77 of 951 | top 8% |
What has beaten VTEB on both return and risk?
Each dot is an investment, placed by how much it earned a year over the past 5 years (higher is better) and how much its price swung, its volatility (further left is calmer). VTEB sits where the dashed lines cross. Anything in the green box above and to the left earned more than VTEB with smaller swings, a better trade-off over this period on both counts. Past results are no promise, but a name in the box is worth a closer look.
- 62 ETFs worth at least $500 million sit in the green region: each earned more than VTEB over the past 5 years with smaller price swings. That is 2% of the 3,633 screened. Few investments beat it on both counts.
- Among those with at least half VTEB's swings, FLRT has the best return for its risk: 6.0% a year at 2.3% volatility, 43% less than VTEB's 4.1%, and a Sharpe ratio (return above cash per unit of volatility) of 2.55 against 0.09 for VTEB. BALT earned the most, 6.3% a year, while still swinging less than VTEB (3.3% against 4.1%).
- Among VTEB's popular alternatives, SUB is in the region. SUB earned 1.4% a year against 0.3% a year for VTEB, at 1.7% volatility, 58% less than VTEB's 4.1%.
Annual return is the annualized total return with dividends reinvested, and volatility the annualized swing in daily prices, both over 5 years. Labeled dots are the strongest picks from the table below and the names called out above, colored by how close they sit to VTEB; faint dots are 13 more of the 62 in the green region (the strongest, one per fund family). 3,633 stocks and funds worth at least $500 million were screened. Hover over a dot for its figures.
- Popular alternatives
- Same and neighboring categories, and shared themes
- The whole market
- Others in the green region
- 1 with more than 1.6× VTEB's volatility is in the table only
Is there a better investment than VTEB?
Investments that beat VTEB over the past 5 years on return, volatility, drawdowns, consistency, crash losses or fees, from its popular alternatives out to the whole market.
- Among VTEB's popular alternatives, SUB earned more than VTEB with less volatility over the past 5 years: 1.4% a year at 1.7% volatility, against 0.3% a year at 4.1%.
- Looking beyond its popular alternatives, SGOV (treasury bonds) and NEAR (short-term bonds) earned more than VTEB with less volatility over the past 5 years. SGOV returned 3.8% a year at 0.3% volatility, against 0.3% a year at 4.1%.
- Few investments have done better on both counts: only 62 of the 3,633 stocks and funds worth at least $500 million earned more than VTEB with less volatility over the past 5 years, among them SGOV, VTIP and BSV.
How this works
The table below lists investments that beat VTEB over the past 5 years on at least one of these measures: a higher annual return with lower volatility, a higher annual return at similar volatility, a similar return with lower volatility, a higher Sharpe ratio with a smaller worst decline, a higher total return in most periods from 3 months to 10 years, or smaller losses in recent market crashes, and, for funds, the same exposure at a lower expense ratio. It checks VTEB's popular alternatives first, then the rest of its own and neighboring categories, then every stock and fund worth at least $500 million, and shows the strongest few in each group. The full list of those with a higher return and lower volatility than VTEB follows the table.
Annual return is the annualized total return with dividends reinvested. Annual return, volatility and the Sharpe ratio cover 5 years; the worst decline covers the past 10 years. Green marks a better figure than VTEB's. "On the frontier" means no other option shown or tested earned more with less volatility. Funds that hold the same thing are shown once. Beyond the popular alternatives, nothing with more than 1.5× VTEB's volatility counts as better.
These figures cover the past 5 years. Green marks a better figure than VTEB's.
| Investment | Why it is better | Past 5 years | Downside | Long run | Fit | ||||
|---|---|---|---|---|---|---|---|---|---|
| Annual return?higher is better | Volatility?lower is calmer | Sharpe?return per unit of risk | Worst decline?past 10 years | 10Y returntotal | Corr. with VTEB?lower diversifies more | Expenseper year | |||
| VTEBVanguard Tax-Exempt Bond ETF · this page | +0.3% | 4.1% | 0.09 | −17.0% | +18.6% | 1.00 | 0.03% | ||
 SPYState Street SPDR S&P 500 ETF · S&P 500 | +12.7% | 17.1% | 0.79 | −33.7% | +321% | 0.64 | 0.09% | ||
| Popular alternativesbest 3 shownThe investments people most often weigh against VTEB. 3 of 19 passed at least one test. | |||||||||
SUBiShares Short-Term National Muni Bond ETF · Municipal Bonds | Higher return, lower volatilityHigher Sharpe, smaller worst decline | +1.4% | 1.7% | 0.85 | −9.4% | +15.6% | 0.88 | 0.07% | |
MUNIPIMCO Intermediate Municipal Bond Active Exchange-Traded Fund · Bonds | Higher Sharpe, smaller worst declineHigher return in most periods | +0.8% | 3.5% | 0.25 | −11.2% | +20.4% | 0.99 | 0.35% | |
SHMState Street SPDR Nuveen ICE Short Term Municipal Bond ETF · Bonds | Similar return, lower volatilityHigher Sharpe, smaller worst decline | +0.8% | 2.2% | 0.38 | −11.6% | +11.8% | 0.89 | 0.20% | |
| Same and neighboring categories, and shared themesbest 6 shownEverything else in Municipal Bonds and the categories next to it (Investment Grade Bonds, Treasury Bonds, Short-Term Bonds), plus VTEB's specific themes. 28 of 50 passed at least one test. | |||||||||
 SGOViShares 0-3 Month Treasury Bond ETF · Treasury Bonds | On the frontierHigher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +3.8% | 0.3% | 13.25 | −0.3% | — | 0.27 | 0.09% | |
NEARiShares Short Duration Bond Active ETF · Short-Term Bonds | Higher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +3.9% | 1.4% | 2.71 | −9.6% | +31.8% | 0.60 | 0.25% | |
 VTIPVanguard Short-Term Inflation-Protected Securities ETF · Treasury Bonds | Higher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +2.7% | 2.9% | 0.94 | −6.3% | +32.7% | 0.61 | 0.03% | |
SPSBState Street SPDR Portfolio Short Term Corporate Bond ETF · Investment Grade Bonds | Higher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +2.8% | 2.0% | 1.38 | −11.8% | +29.2% | 0.83 | 0.04% | |
SCHOSchwab Short-Term U.S. Treasury ETF · Treasury Bonds | Higher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +2.0% | 2.0% | 0.96 | −5.7% | +18.9% | 0.72 | 0.03% | |
BSCRInvesco BulletShares 2027 Corporate Bond ETF · Investment Grade Bonds | Higher return in most periods | +1.7% | 4.1% | 0.44 | −17.3% | — | 0.82 | 0.10% | |
| The whole marketbest 6 shownEvery other stock and fund worth at least $500 million. 73 of 3,564 passed at least one test. | |||||||||
JAAAJanus Henderson AAA CLO ETF · CLO Bonds | On the frontierHigher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +5.1% | 1.7% | 2.98 | −2.6% | — | 0.25 | 0.20% | |
BALTInnovator Defined Wealth Shield ETF · Crypto | On the frontierHigher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +6.3% | 3.3% | 1.85 | −4.9% | — | 0.65 | 0.69% | |
VNLAJanus Henderson Short Duration Income ETF · Bonds | Higher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +4.0% | 1.1% | 3.77 | −4.5% | — | 0.60 | 0.25% | |
TBUXT. Rowe Price Ultra Short-Term Bond ETF · Bonds | Higher return, lower volatilityHigher Sharpe, smaller worst declineHigher return in most periods | +4.1% | 1.1% | 3.85 | −1.8% | — | 0.60 | 0.17% | |
SRLNState Street Blackstone Senior Loan ETF · Bank Loans | Higher return, similar volatilityHigher return in most periods | +4.7% | 3.9% | 1.18 | −22.3% | +54.2% | 0.31 | 0.70% | |
IBTGiShares iBonds Dec 2026 Term Treasury ETF · Bonds | Similar return, lower volatilityHigher return in most periods | +1.2% | 3.2% | 0.40 | −13.6% | — | 0.74 | 0.07% | |
What these numbers mean for VTEB
- Annual return
- VTEB returned 0.3% a year over the past 5 years with dividends reinvested, against 12.7% a year for the S&P 500. At that pace, $10,000 became about $10,100. Annual return is the steady yearly rate that would produce the same total result, so investments held over the same span compare fairly. Guide: What is performance and return? →
- Volatility
- VTEB's volatility over the past 5 years was 4.1%, 24% of the S&P 500's 17.1%. Volatility measures how widely returns swing around their average: in roughly two years out of three, VTEB's return lands within 4.1% of its average, either way. The higher it is, the rougher the ride and the harder it is to hold through a slump. Guide: Understanding and measuring risk (volatility) →
- Sharpe ratio
- VTEB's Sharpe ratio over the past 5 years was 0.09, against 0.79 for the S&P 500, so VTEB earned less for each unit of risk than an index fund did. The Sharpe ratio is the return earned above cash for each unit of volatility: two investments with the same return are not equal if one got there with far bigger swings. Guide: Balancing reward with risk (Sharpe ratio) →
- Worst decline
- VTEB's worst fall from a peak to a low over the past 10 years was 17.0%, against 33.7% for the S&P 500. Losses and gains are not symmetric: climbing back from a 17.0% fall takes a 20.5% gain. Guide: Market crash risk and tail risk →
- Correlation
- Over the past 5 years, VTEB's monthly returns had a correlation of 0.64 with the S&P 500. Correlation runs from 1 (moving in lockstep) through 0 (unrelated) to −1 (moving in opposite directions). They often move together: some diversification next to an index fund, but not a cushion. In the table, the correlation column measures each option against VTEB instead: the lower it is, the more that option would diversify a VTEB holding. Guide: Correlation and diversification →
Show all 62 stocks and funds worth at least $500 million that earned more than VTEB with less volatility
Out of 3,633 tested over 5 years. The strongest 24 are listed, best first, with funds that hold the same thing listed once.
| # | Investment | Found in | Annual return | Volatility | Sharpe | Worst decline | 10Y return | Corr. with VTEB | Expense |
|---|---|---|---|---|---|---|---|---|---|
| 1 | JAAAJanus Henderson AAA CLO ETF · CLO Bonds | Whole market | +5.1% | 1.7% | 2.98 | −2.6% | — | 0.25 | 0.20% |
| 2 | SGOViShares 0-3 Month Treasury Bond ETF · Treasury Bonds | Same or nearby category | +3.8% | 0.3% | 13.25 | −0.3% | — | 0.27 | 0.09% |
| 3 | BALTInnovator Defined Wealth Shield ETF · Crypto | Whole market | +6.3% | 3.3% | 1.85 | −4.9% | — | 0.65 | 0.69% |
| 4 | VNLAJanus Henderson Short Duration Income ETF · Bonds | Whole market | +4.0% | 1.1% | 3.77 | −4.5% | — | 0.60 | 0.25% |
| 5 | NEARiShares Short Duration Bond Active ETF · Short-Term Bonds | Same or nearby category | +3.9% | 1.4% | 2.71 | −9.6% | +31.8% | 0.60 | 0.25% |
| 6 | TBUXT. Rowe Price Ultra Short-Term Bond ETF · Bonds | Whole market | +4.1% | 1.1% | 3.85 | −1.8% | — | 0.60 | 0.17% |
| 7 | RAVINorthern Trust Ultra-Short Fixed Income ETF · Bonds | Whole market | +3.8% | 1.4% | 2.61 | −3.7% | +30.8% | 0.48 | 0.26% |
| 8 | USTBVictoryShares Short-Term Bond ETF · Bonds | Whole market | +3.6% | 2.0% | 1.73 | −5.3% | — | 0.80 | 0.34% |
| 9 | MEARiShares Short Maturity Municipal Bond Active ETF · Bonds | Whole market | +2.4% | 1.0% | 2.37 | −2.7% | +19.3% | 0.77 | 0.26% |
| 10 | LMBSFirst Trust Low Duration Opportunities ETF · Mortgage-Backed Securities | Whole market | +3.0% | 2.6% | 1.14 | −6.5% | +25.6% | 0.80 | 0.66% |
| 11 | VTIPVanguard Short-Term Inflation-Protected Securities ETF · Treasury Bonds | Same or nearby category | +2.7% | 2.9% | 0.94 | −6.3% | +32.7% | 0.61 | 0.03% |
| 12 | SPSBState Street SPDR Portfolio Short Term Corporate Bond ETF · Investment Grade Bonds | Same or nearby category | +2.8% | 2.0% | 1.38 | −11.8% | +29.2% | 0.83 | 0.04% |
| 13 | FLUDFranklin Ultra Short Bond ETF · Bonds | Whole market | +3.9% | 1.4% | 2.74 | −1.7% | — | 0.42 | 0.15% |
| 14 | SCHOSchwab Short-Term U.S. Treasury ETF · Treasury Bonds | Same or nearby category | +2.0% | 2.0% | 0.96 | −5.7% | +18.9% | 0.72 | 0.03% |
| 15 | LDURPIMCO Enhanced Low Duration Active Exchange-Traded Fund · Bonds | Whole market | +2.4% | 2.1% | 1.13 | −8.7% | +26.7% | 0.70 | 0.54% |
| 16 | STOTState Street DoubleLine Short Duration Total Return Tactical ETF · Bonds | Whole market | +2.9% | 1.7% | 1.65 | −6.1% | +26.0% | 0.72 | 0.45% |
| 17 | VRIGInvesco Variable Rate Investment Grade ETF · Bonds | Whole market | +4.7% | 1.3% | 3.51 | −13.1% | +40.5% | 0.23 | 0.30% |
| 18 | AVSFAvantis Short-Term Fixed Income ETF · Bonds | Whole market | +1.9% | 2.7% | 0.71 | −8.8% | — | 0.85 | 0.15% |
| 19 | FLRTPacer Aristotle Pacific Floating Rate High Income ETF · Financials | Whole market | +6.0% | 2.3% | 2.55 | −21.0% | +58.0% | 0.37 | 0.60% |
| 20 | FLOTiShares Floating Rate Bond ETF · Floating Rate Bonds | Whole market | +4.5% | 1.8% | 2.48 | −13.5% | +35.9% | 0.21 | 0.15% |
| 21 | FLTRVanEck IG Floating Rate ETF · Multi-Asset | Whole market | +4.8% | 2.1% | 2.20 | −17.8% | +41.8% | 0.17 | 0.14% |
| 22 | FLDRFidelity Low Duration Bond Factor ETF · Bonds | Whole market | +3.9% | 1.2% | 3.09 | −12.2% | — | 0.75 | 0.15% |
| 23 | FTSLFirst Trust Senior Loan Fund · Bonds | Whole market | +5.0% | 3.4% | 1.49 | −22.7% | +52.1% | 0.30 | 0.70% |
| 24 | SUBiShares Short-Term National Muni Bond ETF · Municipal Bonds | Popular alternative | +1.4% | 1.7% | 0.85 | −9.4% | +15.6% | 0.88 | 0.07% |
VTEB against its popular alternatives
The investments people most often weigh against VTEB, compared period by period and year by year.
How do VTEB's risk and return compare with its alternatives?
This map plots each investment's annual return over the past 5 years against its volatility, the size of its typical price swings. Investments toward the upper left earned more for a smoother ride, and those toward the lower right earned less for a rougher one. The dashed lines cross at VTEB, which divides the map into what did better or worse on each measure.
- 11 of the 18 popular alternatives earned less than VTEB over the past 5 years while swinging more, the weaker corner of the map.
- Four of the 18 popular alternatives, led by SUB, MUNI and SHM, were both more rewarding and calmer than VTEB over the past 5 years, earning a higher annual return with lower volatility.
- Over the past 5 years, VTEB returned 0.3% a year, less than the S&P 500's 12.7%, with lower volatility (4.1% against 17.1%).
Green points earned more than VTEB with less volatility; red points earned less with more. Hover over a point for its figures. Total returns with dividends reinvested, annualized.
All figures
| Investment | Annual return | Volatility |
|---|---|---|
| SPY S&P 500State Street SPDR S&P 500 ETF | +12.7% | 17.1% |
| SUB iShares Short-Term National Muni Bond ETF | +1.4% | 1.7% |
| MINO PIMCO Municipal Income Opportunities Active Exchange-Traded Fund | +0.8% | 4.6% |
| MUNI PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund | +0.8% | 3.5% |
| SHM State Street SPDR Nuveen ICE Short Term Municipal Bond ETF | +0.8% | 2.2% |
| JMUB JPMorgan Municipal ETF | +0.6% | 3.5% |
| TAXF American Century Diversified Municipal Bond ETF | +0.3% | 4.4% |
| MUB iShares National Muni Bond ETF | +0.3% | 4.2% |
| VTEB This pageVanguard Tax-Exempt Bond ETF | +0.3% | 4.1% |
| ITM VanEck Intermediate Muni ETF | −0.1% | 4.5% |
| MUST Columbia Multi-Sector Municipal Income ETF | −0.1% | 5.7% |
| SPMB State Street SPDR Portfolio Mortgage Backed Bond ETF | −0.1% | 6.9% |
| AGG iShares Core U.S. Aggregate Bond ETF | −0.3% | 6.1% |
| HYMB State Street SPDR Nuveen ICE High Yield Municipal Bond ETF | −0.5% | 6.8% |
| HYD VanEck High Yield Muni ETF | −0.7% | 6.6% |
| TFI State Street SPDR Nuveen ICE Municipal Bond ETF | −0.7% | 4.5% |
| LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | −0.9% | 8.7% |
| PZA Invesco National AMT-Free Municipal Bond ETF | −1.2% | 6.2% |
| IEF iShares 7-10 Year Treasury Bond ETF | −1.7% | 7.7% |
| MLN VanEck Long Muni ETF | −1.8% | 7.6% |
Has VTEB consistently beaten its popular alternatives?
This section compares VTEB with the investments people most often weigh against it, checking each one over eight periods from one month to ten years. Counting how often an alternative earned more than VTEB helps separate lasting outperformance from a single strong stretch.
- MUNI outperformed VTEB in every long-term period and in all but one short-term period, the most consistent record in the group.
- Only one of the 24 popular alternatives, MUNI, outperformed VTEB in at least 3 of 5 short-term and 2 of 3 long-term timeframes.
- SUB, SHM and MUNI earned more for the risk they took than VTEB (a higher Sharpe ratio) and fell less in their worst decline of the past 10 years.
A green cell means the alternative earned more than VTEB over that period. "Qualified" marks those that did so in at least 3 of 5 short-term periods and 2 of 3 long-term periods.
| Investment | Periods outperformed | Short term | Long term | Risk · 5 years | Fund | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1M | 3M | 6M | YTD | 1Y | 3Y | 5Y | 10Y | Volatilitylower is calmer | Sharpehigher is better | Worst declinepast 10 years | Expense | Assets | Overlapsame sectors | ||
| VTEB Vanguard Tax-Exempt Bond ETF (this page) | — | −0.3% | −3.3% | −3.3% | −2.3% | −1.8% | +11.5% | +1.4% | +18.6% | 4.1% | 0.09 | −17.0% | 0.03% | $52B | — |
| MUNI QualifiedPIMCO Intermediate Municipal Bond Active Exchange-Traded Fund | 4/5 short3/3 longAll-weather | 0.0% | −2.4% | −2.5% | −1.5% | −1.0% | +12.6% | +4.1% | +20.4% | 3.5% | 0.25 | −11.2% | 0.35% | $3.1B | — |
| LQD BondsiShares iBoxx $ Investment Grade Corporate Bond ETF | 1/5 short2/3 long | −1.4% | −2.4% | −3.9% | −2.9% | −3.9% | +19.7% | −4.3% | +20.5% | 8.7% | -0.06 | −25.0% | 0.14% | $29B | — |
| JMUB BondsJPMorgan Municipal ETF | 1/5 short2/3 long | −0.3% | −2.9% | −2.8% | −1.9% | −1.4% | +12.3% | +3.2% | — | 3.5% | 0.20 | −12.5% | 0.18% | $8.7B | — |
| HYMB BondsState Street SPDR Nuveen ICE High Yield Municipal Bond ETF | 0/5 short2/3 long | −2.3% | −5.4% | −4.5% | −2.5% | −2.3% | +16.3% | −2.6% | +19.4% | 6.8% | -0.04 | −29.5% | 0.35% | $3.8B | — |
| MINO BondsPIMCO Municipal Income Opportunities Active Exchange-Traded Fund | 0/5 short2/3 long | −0.5% | −3.5% | −3.3% | −1.9% | −1.5% | +15.1% | +4.2% | — | 4.6% | 0.20 | −15.2% | 0.49% | $765M | — |
| SUB BondsiShares Short-Term National Muni Bond ETF | 5/5 short1/3 long | +0.3% | −0.2% | 0.0% | +0.6% | +1.4% | +9.8% | +7.3% | +15.6% | 1.7% | 0.85 | −9.4% | 0.07% | $13B | — |
| SHM BondsState Street SPDR Nuveen ICE Short Term Municipal Bond ETF | 4/5 short1/3 long | 0.0% | −0.9% | −0.7% | 0.0% | +0.5% | +9.4% | +4.0% | +11.8% | 2.2% | 0.38 | −11.6% | 0.20% | $3.5B | — |
| AGG BondsiShares Core U.S. Aggregate Bond ETF | 3/5 short1/3 long | −0.6% | −1.7% | −2.6% | −1.7% | −1.9% | +16.2% | −1.5% | +13.3% | 6.1% | -0.02 | −18.4% | 0.03% | $139B | — |
| HYD Multi-AssetVanEck High Yield Muni ETF | 2/5 short1/3 long | −0.1% | −3.4% | −2.9% | −1.7% | −0.6% | +15.7% | −3.4% | +16.7% | 6.6% | -0.07 | −35.6% | 0.32% | $4.3B | — |
| BND BondsVanguard Total Bond Market ETF | 2/5 short1/3 long | −0.6% | −2.0% | −2.8% | −1.8% | −2.1% | +15.7% | −1.8% | +13.2% | 6.1% | -0.03 | −18.6% | 0.03% | $389B | — |
| SPMB BondsState Street SPDR Portfolio Mortgage Backed Bond ETF | 2/5 short1/3 long | −0.9% | −2.3% | −3.2% | −1.8% | −1.7% | +18.8% | −0.6% | +9.3% | 6.9% | 0.02 | −18.0% | 0.04% | $6.9B | — |
| ITM Multi-AssetVanEck Intermediate Muni ETF | 1/5 short1/3 long | 0.0% | −2.8% | −3.3% | −2.9% | −2.0% | +12.1% | −0.4% | +16.6% | 4.5% | 0.00 | −24.7% | 0.18% | $2.2B | — |
| IEF BondsiShares 7-10 Year Treasury Bond ETF | 1/5 short1/3 long | −0.6% | −2.8% | −4.2% | −3.5% | −4.1% | +12.4% | −8.0% | +3.0% | 7.7% | -0.18 | −23.9% | 0.15% | $42B | — |
| MLN Multi-AssetVanEck Long Muni ETF | 0/5 short1/3 long | −1.1% | −5.1% | −5.0% | −3.4% | −3.3% | +13.4% | −8.6% | +10.6% | 7.6% | -0.20 | −24.4% | 0.24% | $699M | — |
| JMHI BondsJPMorgan High Yield Municipal ETF | 0/5 short1/3 long | −0.9% | −3.8% | −3.3% | −2.3% | −2.0% | +18.0% | — | — | — | — | −7.3% | 0.52% | $302M | — |
| TAXF BondsAmerican Century Diversified Municipal Bond ETF | 0/5 short1/3 long | −0.9% | −4.0% | −3.5% | −2.4% | −1.8% | +12.5% | +1.7% | — | 4.4% | 0.10 | −13.9% | 0.25% | $706M | — |
| DFNM BondsDimensional - National Municipal Bond ETF | 5/5 short0/3 long | +0.2% | −2.1% | −2.1% | −1.0% | −0.4% | +9.8% | — | — | — | — | −7.0% | 0.18% | $2.2B | — |
| VTEI BondsVanguard Intermediate-Term Tax-Exempt Bond ETF | 3/5 short0/3 long | +0.2% | −2.5% | −2.7% | −1.9% | −1.1% | — | — | — | — | — | −6.1% | 0.08% | $1.7B | — |
| MUB BondsiShares National Muni Bond ETF | 0/5 short0/3 long | −0.2% | −3.0% | −3.2% | −2.2% | −1.7% | +10.8% | +1.5% | +17.8% | 4.2% | 0.09 | −13.7% | 0.05% | $51B | — |
| PZA BondsInvesco National AMT-Free Municipal Bond ETF | 0/5 short0/3 long | −1.6% | −6.4% | −5.9% | −4.4% | −4.4% | +9.6% | −5.7% | +13.0% | 6.2% | -0.16 | −21.7% | 0.28% | $4.1B | — |
| TFI BondsState Street SPDR Nuveen ICE Municipal Bond ETF | 0/5 short0/3 long | −0.3% | −3.6% | −3.6% | −2.8% | −2.3% | +10.3% | −3.3% | +11.9% | 4.5% | -0.13 | −15.5% | 0.23% | $2.9B | — |
| MUST BondsColumbia Multi-Sector Municipal Income ETF | 0/5 short0/3 long | −0.5% | −3.7% | −4.0% | −3.3% | −2.9% | +11.1% | −0.4% | — | 5.7% | 0.01 | −13.8% | 0.23% | $514M | — |
| SCMB BondsSchwab Municipal Bond ETF | 0/5 short0/3 long | +0.1% | −3.3% | −3.3% | −2.4% | −2.0% | +10.8% | — | — | — | — | −6.7% | 0.03% | $3.7B | — |
| VTEC BondsVanguard California Tax-Exempt Bond ETF | 0/5 short0/3 long | −0.3% | −3.3% | −3.3% | −2.6% | −1.9% | — | — | — | — | — | −6.4% | 0.06% | $3.6B | — |
How did VTEB do year by year?
This table shows each investment's total return in every full calendar year since 2016, along with where VTEB ranked among its popular alternatives each year. Annual results reveal how consistently each one kept pace with VTEB and how far its good and bad years diverged, detail that multiyear averages tend to smooth over.
Note: VTEB began trading on August 25, 2015, so the table starts with 2016, its first full calendar year, and cannot show how it fared during the dot-com bust, the 2008 financial crisis or two other sell-offs.
- VTEB finished ahead of the S&P 500 in two of its ten full calendar years, and behind it in each of the last three.
- Among its popular alternatives, LQD came out ahead of VTEB most often, in six of the ten years both traded.
- Ranked against its popular alternatives each year, VTEB finished in the top quarter in no of ten years and in the bottom quarter in no. In 2025, it ranked 15 of 21.
Newest year first. Green marks a year in which the fund came out ahead of VTEB; gray means the two finished within a fraction of a point. The rank row places VTEB among the alternatives that traded the full year; dark green is the top quarter and red the bottom quarter.
| Investment | Years ahead of VTEB | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| VTEB This pageVanguard Tax-Exempt Bond ETF | — | +3.7% | +1.3% | +6.1% | −8.0% | +1.1% | +5.2% | +7.3% | +1.0% | +4.9% | +0.2% |
| Rank among alternatives | Top quarter in 0 of 10 | 15 of 21 | 11 of 21 | 9 of 20 | 7 of 20 | 8 of 18 | 9 of 18 | 13 of 18 | 5 of 15 | 7 of 15 | 8 of 15 |
| SPY S&P 500State Street SPDR S&P 500 ETF | 8 of 10 | +17.7% | +24.9% | +26.2% | −18.2% | +28.7% | +18.3% | +31.2% | −4.6% | +21.7% | +12.0% |
| MUNI PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund | 2 of 10 | +4.7% | +1.4% | +6.1% | −6.6% | +0.7% | +4.8% | +7.1% | +1.0% | +4.9% | −0.7% |
| LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 6 of 10 | +7.9% | +0.9% | +9.4% | −17.9% | −1.8% | +11.0% | +17.4% | −3.8% | +7.0% | +6.2% |
| JMUB JPMorgan Municipal ETF | 4 of 7 | +4.3% | +1.9% | +6.0% | −7.4% | +1.6% | +5.0% | +8.2% | — | — | — |
| HYMB State Street SPDR Nuveen ICE High Yield Municipal Bond ETF | 6 of 10 | +2.0% | +5.5% | +7.7% | −15.5% | +5.1% | +3.7% | +9.5% | +4.9% | +3.1% | +2.1% |
| MINO PIMCO Municipal Income Opportunities Active Exchange-Traded Fund | 3 of 4 | +4.4% | +3.1% | +8.5% | −10.4% | — | — | — | — | — | — |
| SUB iShares Short-Term National Muni Bond ETF | 3 of 10 | +3.6% | +2.2% | +2.9% | −2.1% | 0.0% | +2.5% | +2.9% | +1.8% | +0.8% | −0.1% |
| SHM State Street SPDR Nuveen ICE Short Term Municipal Bond ETF | 2 of 10 | +3.9% | +1.2% | +2.9% | −3.8% | −0.4% | +2.7% | +3.6% | +1.6% | +1.0% | −0.6% |
| AGG iShares Core U.S. Aggregate Bond ETF | 4 of 10 | +7.2% | +1.3% | +5.7% | −13.0% | −1.8% | +7.5% | +8.5% | +0.1% | +3.6% | +2.4% |
| HYD VanEck High Yield Muni ETF | 5 of 10 | +2.8% | +5.0% | +6.5% | −16.0% | +5.1% | +0.2% | +9.3% | +2.6% | +9.8% | +0.4% |
| SPMB State Street SPDR Portfolio Mortgage Backed Bond ETF | 2 of 10 | +8.3% | +1.4% | +5.1% | −12.1% | −1.5% | +4.2% | +6.1% | +1.0% | +2.1% | +0.9% |
| ITM VanEck Intermediate Muni ETF | 4 of 10 | +5.3% | +0.7% | +5.7% | −9.3% | +0.2% | +5.9% | +8.3% | +1.0% | +6.1% | −1.1% |
| IEF iShares 7-10 Year Treasury Bond ETF | 4 of 10 | +8.0% | −0.6% | +3.6% | −15.2% | −3.3% | +10.0% | +8.0% | +1.0% | +2.6% | +1.0% |
| MLN VanEck Long Muni ETF | 5 of 10 | +1.8% | +1.5% | +8.1% | −17.2% | +2.2% | +6.3% | +10.6% | −0.8% | +8.2% | +0.1% |
| JMHI JPMorgan High Yield Municipal ETF | 2 of 2 | +4.6% | +5.9% | — | — | — | — | — | — | — | — |
| TAXF American Century Diversified Municipal Bond ETF | 4 of 7 | +4.3% | +1.8% | +7.3% | −9.7% | +2.7% | +5.6% | +9.1% | — | — | — |
| DFNM Dimensional - National Municipal Bond ETF | 1 of 4 | +3.9% | +1.2% | +4.0% | −4.0% | — | — | — | — | — | — |
| MUB iShares National Muni Bond ETF | 1 of 10 | +3.8% | +1.3% | +5.6% | −7.3% | +1.0% | +5.1% | +7.0% | +0.9% | +4.7% | −0.2% |
| PZA Invesco National AMT-Free Municipal Bond ETF | 5 of 10 | +1.8% | +0.8% | +8.6% | −13.2% | +2.3% | +5.1% | +9.0% | −0.1% | +7.0% | +0.8% |
| TFI State Street SPDR Nuveen ICE Municipal Bond ETF | 2 of 10 | +3.6% | 0.0% | +5.6% | −10.2% | +0.3% | +5.9% | +7.4% | +0.5% | +5.5% | −0.4% |
| MUST Columbia Multi-Sector Municipal Income ETF | 4 of 7 | +4.9% | +0.4% | +6.2% | −8.8% | +1.9% | +6.7% | +8.3% | — | — | — |
Risk and diversification
How VTEB has fallen, how it held up in crashes beside the S&P 500 and its popular alternatives, and what moves independently of it.
What were VTEB's worst declines?
A drawdown is the decline from a peak to the lowest point before a new high. This section presents VTEB's four deepest drawdowns since it began trading in 2015, alongside the S&P 500's return over the same dates, and how long each took to recover. Together, these figures show how much an investor could have lost and how long it took to get back to even.
Note: VTEB began trading on August 25, 2015, so this list cannot include the dot-com bust, the 2008 financial crisis or two other sell-offs. The crash tests on this page show how older funds and the S&P 500 fared through those years.
- In all four of VTEB's worst declines, the S&P 500 held up better over the same dates.
- The slowest recovery came after VTEB fell 12.7% from July 2021 to October 2022; it did not regain that peak until December 2024, two years later.
Green means VTEB fell less than the S&P 500 over the same dates. Based on daily closing prices with dividends reinvested.
| During | VTEB fell | S&P 500, same dates | Peak | Low | Time to the low | Back at the peak | Time to recover |
|---|---|---|---|---|---|---|---|
| Covid crash | −17.0% | −12.3% | Mar 2020 | Mar 2020 | Under a month | Jul 2020 | 4 months |
| 2022 bear market | −12.7% | −10.0% | Jul 2021 | Oct 2022 | 15 months | Dec 2024 | 2.2 years |
| No named crash | −6.6% | +2.0% | Jul 2026 | Sep 2026 | 2 months | Not yet | — |
| No named crash | −5.8% | +5.9% | Jul 2016 | Dec 2016 | 5 months | Aug 2017 | 8 months |
How did VTEB do in stock market crashes?
This section measures how far VTEB, the S&P 500 and each alternative fell from peak to trough during every major market crash since 2000. A smaller decline means an investment held up better, and comparing results across crashes shows whether that resilience was consistent or a one-off.
Note: VTEB began trading on August 25, 2015, so its row reads "Not yet trading" for the dot-com bust, the 2008 financial crisis or three other sell-offs. The older alternatives and the S&P 500 show how those crashes played out.
- VTEB fell less than the S&P 500 in all five crashes it has traded through. The clearest case was the late-2018 sell-off, when VTEB fell 0.9% and the S&P 500 fell 19.3%.
- Among its popular alternatives, JMUB held up best, falling less than VTEB in two of the three crashes they both traded through.
- VTEB began trading after the 2008 financial crisis, but five of its popular alternatives lived through it. The mildest fall among them was IEF's 6.2%, against 55.2% for the S&P 500.
Newest crash first. Each figure is the fund's deepest fall within the crash window; green means a smaller fall than VTEB.
| Investment | Held up better | 2023 regional bank crisisMar 2023 | 2022 bear marketJan 2022 | Covid crashFeb 2020 | Late-2018 sell-offSep 2018 | February 2018 volatility shockFeb 2018 | 2015 China and oil sell-offAug 2015 | 2011 euro debt crisisJul 2011 | 2010 flash crashMay 2010 | 2008 financial crisisOct 2007 | Dot-com bustMar 2000 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| VTEB This pageVanguard Tax-Exempt Bond ETF | — | 0.0% | −11.3% | −17.0% | −0.9% | −0.2% | Not yet trading | Not yet trading | Not yet trading | Not yet trading | Not yet trading |
| SPY S&P 500State Street SPDR S&P 500 ETF | 0 of 5 | −3.4% | −24.5% | −33.7% | −19.3% | −6.5% | −12.8% | −17.9% | −1.5% | −55.2% | −47.5% |
| MUNI PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund | 2 of 5 | 0.0% | −9.8% | −10.8% | −0.9% | −0.2% | −0.8% | −1.1% | 0.0% | — | — |
| LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 0 of 5 | −0.1% | −21.3% | −21.8% | −2.6% | −1.2% | −2.7% | −3.2% | 0.0% | −21.5% | — |
| JMUB JPMorgan Municipal ETF | 2 of 3 | 0.0% | −10.7% | −12.5% | — | — | — | — | — | — | — |
| HYMB State Street SPDR Nuveen ICE High Yield Municipal Bond ETF | 0 of 5 | 0.0% | −18.3% | −29.5% | −1.3% | −0.3% | −1.4% | −0.6% | — | — | — |
| MINO PIMCO Municipal Income Opportunities Active Exchange-Traded Fund | 0 of 2 | 0.0% | −13.5% | — | — | — | — | — | — | — | — |
| SUB iShares Short-Term National Muni Bond ETF | 3 of 5 | 0.0% | −3.9% | −9.4% | −0.3% | −0.1% | −0.4% | −1.3% | −0.2% | — | — |
| SHM State Street SPDR Nuveen ICE Short Term Municipal Bond ETF | 2 of 5 | 0.0% | −5.9% | −11.6% | −0.4% | −0.2% | −0.4% | −0.8% | −0.1% | — | — |
| AGG iShares Core U.S. Aggregate Bond ETF | 1 of 5 | 0.0% | −14.5% | −9.6% | −1.1% | −0.8% | −1.5% | −1.3% | −0.4% | −12.8% | — |
| HYD VanEck High Yield Muni ETF | 0 of 5 | 0.0% | −17.8% | −35.6% | −2.4% | −0.3% | −1.9% | −7.0% | −0.3% | — | — |
| SPMB State Street SPDR Portfolio Mortgage Backed Bond ETF | 1 of 5 | 0.0% | −14.7% | −12.6% | −1.2% | −0.4% | −1.2% | −1.5% | 0.0% | — | — |
| ITM VanEck Intermediate Muni ETF | 0 of 5 | 0.0% | −14.0% | −24.7% | −1.2% | −0.3% | −1.0% | −1.6% | 0.0% | — | — |
| IEF iShares 7-10 Year Treasury Bond ETF | 1 of 5 | 0.0% | −16.1% | −4.7% | −1.2% | −0.8% | −2.9% | −1.9% | −0.3% | −6.2% | — |
| MLN VanEck Long Muni ETF | 0 of 5 | 0.0% | −21.8% | −23.6% | −2.4% | −1.0% | −1.5% | −3.0% | −0.3% | — | — |
| TAXF American Century Diversified Municipal Bond ETF | 1 of 4 | 0.0% | −12.7% | −13.4% | −1.0% | — | — | — | — | — | — |
| DFNM Dimensional - National Municipal Bond ETF | 1 of 2 | 0.0% | −6.8% | — | — | — | — | — | — | — | — |
| MUB iShares National Muni Bond ETF | 2 of 5 | 0.0% | −10.6% | −13.7% | −1.4% | −0.2% | −0.8% | −1.4% | −0.1% | −13.9% | — |
| PZA Invesco National AMT-Free Municipal Bond ETF | 0 of 5 | 0.0% | −16.7% | −21.7% | −1.4% | −0.4% | −1.1% | −1.3% | −0.1% | — | — |
| TFI State Street SPDR Nuveen ICE Municipal Bond ETF | 1 of 5 | 0.0% | −13.9% | −15.5% | −1.6% | −0.4% | −1.1% | −2.5% | 0.0% | −15.1% | — |
| MUST Columbia Multi-Sector Municipal Income ETF | 1 of 3 | 0.0% | −12.5% | −12.8% | — | — | — | — | — | — | — |
How closely does VTEB move with the S&P 500?
Upside capture measures how much of the S&P 500's gains an investment kept in the months the market rose, and downside capture how much of its losses it took in the months the market fell. An investment that captures more of the gains than the losses has compounded ahead of the market over time. This section compares VTEB with its popular alternatives on both measures, and on beta (how strongly each has moved with the market), over the past 10 years.
- Over the past 10 years, VTEB captured 14% of the S&P 500's gains in rising months and 19% of its losses in falling months, with a beta of 0.15. Its share of the market's losses was slightly larger than its share of the gains.
- Only SUB, MUNI and SHM had a higher capture ratio (upside capture divided by downside capture) than VTEB's 0.76, out of 14 popular alternatives with the same record.
Monthly total returns over the past 10 years, measured against SPY. 100% capture or a beta of 1.00 means moving in line with the S&P 500. Green marks a better figure than VTEB's: more upside, less downside or a higher capture ratio. Sorted by capture ratio.
| Investment | Upside capture | Downside capture | Capture ratio | Beta |
|---|---|---|---|---|
| VTEB This pageVanguard Tax-Exempt Bond ETF | 14% | 19% | 0.76 | 0.15 |
| SUB iShares Short-Term National Muni Bond ETF | 7% | 5% | 1.41 | 0.05 |
| MUNI PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund | 13% | 15% | 0.85 | 0.13 |
| SHM State Street SPDR Nuveen ICE Short Term Municipal Bond ETF | 8% | 9% | 0.85 | 0.08 |
| MUB iShares National Muni Bond ETF | 14% | 18% | 0.76 | 0.14 |
| AGG iShares Core U.S. Aggregate Bond ETF | 12% | 17% | 0.71 | 0.14 |
| ITM VanEck Intermediate Muni ETF | 15% | 22% | 0.69 | 0.17 |
| HYMB State Street SPDR Nuveen ICE High Yield Municipal Bond ETF | 21% | 31% | 0.67 | 0.25 |
| LQD iShares iBoxx $ Investment Grade Corporate Bond ETF | 25% | 39% | 0.64 | 0.33 |
| SPMB State Street SPDR Portfolio Mortgage Backed Bond ETF | 12% | 20% | 0.62 | 0.14 |
| PZA Invesco National AMT-Free Municipal Bond ETF | 18% | 29% | 0.62 | 0.22 |
| TFI State Street SPDR Nuveen ICE Municipal Bond ETF | 15% | 24% | 0.62 | 0.18 |
| HYD VanEck High Yield Muni ETF | 24% | 40% | 0.60 | 0.35 |
| MLN VanEck Long Muni ETF | 19% | 34% | 0.57 | 0.26 |
| IEF iShares 7-10 Year Treasury Bond ETF | 7% | 14% | 0.51 | 0.08 |
What diversifies VTEB?
Correlation measures how closely two investments move together, on a scale from 1 (in lockstep) through 0 (unrelated) to -1 (in opposite directions). This section lists large ETFs and stocks whose returns have had a low correlation with VTEB's. Because such investments tend not to fall at the same time, pairing VTEB with them can reduce a portfolio's overall swings.
- Moving a fifth of the money in VTEB into DBMF would have cut the portfolio's volatility by 30% over the past 5 years and raised its annual return (-0.1% for VTEB alone, +2.1% for the mix).
- Among large ETFs, DXJ, EMLP and HDV have moved largely independently of VTEB over the past 5 years, with correlations of 0.46 or lower, and each still earned a positive 5-year return.
- In 2022, the one year VTEB lost money (-8.0%), DBMF returned +21.6%.
Only ETFs with at least $1.0B in assets and stocks worth at least $10B, with a correlation below 0.5 over the past 5 years and a positive return, are included, ranked by Sharpe ratio; funds that hold the same thing are shown once. The year columns are the years in which VTEB lost money. The last two columns show a portfolio that is 80% VTEB and 20% the other investment, rebalanced monthly.
ETFs
| Investment | Correlation | 5Y return | Sharpe | 2022 | 80/20 mix volatility | 80/20 mix annual return |
|---|---|---|---|---|---|---|
| VTEB Vanguard Tax-Exempt Bond ETF (this page) | 1.00 | +1.4% | 0.09 | −8.0% | 6.3% | −0.1% |
| DXJ InternationalWisdomTree Japan Hedged Equity Fund | 0.30 | +225% | 1.34 | +6.0% | 6.3% | +5.0% |
| EMLP Broad MarketFirst Trust North American Energy Infrastructure Fund | 0.46 | +101% | 1.04 | +10.4% | 6.9% | +3.0% |
| HDV Dividend & IncomeiShares Core High Dividend ETF | 0.44 | +83.3% | 1.00 | +7.1% | 6.8% | +2.4% |
| GLD CommoditiesSPDR Gold Shares | 0.37 | +126% | 0.96 | −0.8% | 7.1% | +3.6% |
| SPMO Broad MarketInvesco S&P 500 Momentum ETF | 0.44 | +136% | 0.93 | −10.4% | 7.8% | +4.2% |
| XLE EnergyState Street Energy Select Sector SPDR ETF | 0.05 | +177% | 0.93 | +64.4% | 7.5% | +4.8% |
| AMLP EnergyAlerian MLP ETF | 0.21 | +111% | 0.89 | +25.5% | 6.9% | +3.6% |
| DBMF AlternativesiMGP DBi Managed Futures Strategy ETF | -0.49 | +59.7% | 0.82 | +21.6% | 4.4% | +2.1% |
Stocks
| Investment | Correlation | 5Y return | Sharpe | 2022 | 80/20 mix volatility | 80/20 mix annual return |
|---|---|---|---|---|---|---|
| VTEB Vanguard Tax-Exempt Bond ETF (this page) | 1.00 | +1.4% | 0.09 | −8.0% | 6.3% | −0.1% |
| CAH Medical - DistributionCardinal Health, Inc. | 0.28 | +479% | 1.55 | +54.1% | 8.3% | +7.1% |
| CLS Hardware, Equipment & PartsCelestica Inc. | 0.17 | +3,143% | 1.47 | +1.3% | 13.5% | +19.0% |
| FIX Engineering & ConstructionComfort Systems USA, Inc. | 0.26 | +1,636% | 1.46 | +17.0% | 11.4% | +15.2% |
| MCK Medical - DistributionMcKesson Corporation | 0.12 | +413% | 1.44 | +51.8% | 7.6% | +6.6% |
| MPC Oil & Gas Refining & MarketingMarathon Petroleum Corporation | 0.04 | +690% | 1.41 | +86.6% | 8.4% | +9.1% |
Common questions
What was VTEB's worst drawdown?
VTEB's deepest decline since it began trading in 2015 was 17.0%, in March 2020. It took four months from the low to climb back to its old high. Because VTEB launched in August 2015, that record does not include the dot-com bust, the 2008 financial crisis or two other sell-offs.
What were VTEB's best and worst years?
Over ten full calendar years, VTEB's best year was 2019, when it returned 7.3%. Its worst was 2022, with a return of -8.0%.
Is there a better investment than VTEB?
Among VTEB's popular alternatives, SUB earned more than VTEB with less volatility over the past 5 years: 1.4% a year at 1.7% volatility, against 0.3% a year at 4.1%. Looking beyond its popular alternatives, SGOV (treasury bonds) and NEAR (short-term bonds) earned more than VTEB with less volatility over the past 5 years. SGOV returned 3.8% a year at 0.3% volatility, against 0.3% a year at 4.1%.
Is VTEB more volatile than the S&P 500?
No. VTEB's volatility over the past 5 years was 4.1%, 24% of the S&P 500's 17.1%. Volatility measures how widely returns swing around their average: in roughly two years out of three, VTEB's return lands within 4.1% of its average, either way. The higher it is, the rougher the ride and the harder it is to hold through a slump.
What is VTEB's Sharpe ratio?
VTEB's Sharpe ratio over the past 5 years was 0.09, against 0.79 for the S&P 500, so VTEB earned less for each unit of risk than an index fund did. The Sharpe ratio is the return earned above cash for each unit of volatility: two investments with the same return are not equal if one got there with far bigger swings.
How correlated is VTEB with the S&P 500?
Over the past 5 years, VTEB's monthly returns had a correlation of 0.64 with the S&P 500. Correlation runs from 1 (moving in lockstep) through 0 (unrelated) to −1 (moving in opposite directions). They often move together: some diversification next to an index fund, but not a cushion. In the table, the correlation column measures each option against VTEB instead: the lower it is, the more that option would diversify a VTEB holding.
What are the best alternatives to VTEB?
Of the 24 popular alternatives we compared, one outperformed VTEB in at least 3 of 5 short-term and 2 of 3 long-term timeframes, with dividends reinvested: MUNI.
Did VTEB outperform the S&P 500?
VTEB finished ahead of the S&P 500 (SPY) in two of ten full calendar years. In 2025, it returned +3.7%, against +17.7% for the index.
How did VTEB do in stock market crashes?
VTEB fell less than the S&P 500 (SPY) in five of the five major crashes it has traded through, and further in no. The clearest case was the late-2018 sell-off, when VTEB fell 0.9% and the S&P 500 fell 19.3%.
What diversifies VTEB?
These had a low correlation with VTEB over the past 5 years and still earned a positive 5-year return: among large ETFs, DXJ (correlation 0.30), EMLP (correlation 0.46) and HDV (correlation 0.44); among large stocks, CAH (correlation 0.28), CLS (correlation 0.17) and FIX (correlation 0.26). A correlation near zero means the two have moved largely independently.
How we measure
- Short-term periods are 1M, 3M, 6M, YTD, 1Y; long-term periods are 3Y, 5Y, 10Y. An investment outperformed in a period when its total return, with dividends reinvested, was higher than VTEB's. Returns within 0.5 points or 3% of VTEB's, whichever is larger, count as a tie.
- "Qualified" means outperforming in at least 3 of 5 short-term periods and 2 of 3 long-term periods. "All-weather" means outperforming in every long-term period and all but one short-term period.
- Popular alternatives are the funds and stocks most often compared with this one. We include only those that trade today, are not leveraged or inverse, and hold at least $200 million.
- Volatility is the annualized standard deviation of daily returns over 5 years, a measure of how much the price typically swings in a year. The Sharpe ratio is the return above cash for each unit of that volatility.
- A decline, or drawdown, runs from a peak to the lowest close before the next high. The worst decline ever uses all the price history we have; comparisons between funds use the past 10 years so that younger funds are judged on the same stretch.
- Sector overlap is the share of assets two funds hold in the same sectors. Correlation and the mixed-portfolio figures use monthly returns.
- Upside and downside capture follow Morningstar's definition: the compound monthly return in the months the S&P 500 rose (or fell), divided by the S&P 500's compound return in those months. Beta measures how strongly monthly returns have moved with the S&P 500. All three use the same window for every investment.
- Figures are computed from daily adjusted prices and update after each trading day. Past performance does not predict future results.
More research
Popular alternatives to VTEB
AGGiShares Core U.S. Aggregate Bond ETF
BNDVanguard Total Bond Market ETF
IEFiShares 7-10 Year Treasury Bond ETF
MUBiShares National Muni Bond ETF
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