TAXF vs VTEB
American Century Diversified Municipal Bond ETF vs Vanguard Tax-Exempt Bond ETF
Which is better, TAXF or VTEB?
Nearly the same fund. VTEB costs less.
VTEB has a lower expense ratio. TAXF led over 3Y and the full window, VTEB over 1Y and 5Y. The two have moved almost in lockstep, correlation 0.98.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | TAXF | VTEB |
|---|---|---|
| Expense Ratio | 0.25% | 0.03%Best |
| AUM | $699M | $49.6B |
| Dividend Yield | 4.06% | 3.60% |
| Holdings | 1,580 | 10,724 |
| YTD Return | -3.80% | -3.03%Best |
| 1Y Return | -2.49% | -2.02%Best |
| 3Y Return (annualized) | +3.13%Best | +2.98% |
| 5Y Return (annualized) | -0.04% | +0.05%Best |
| Volatility (annualized) | 6.1% | 5.6%Best |
| Max Drawdown | -13.9%Best | -17.0% |
| $10,000 over 5 years | $9,980 | $10,025Best |
| Fund Family | American Century Investments | Vanguard (US) |
| Category | Tax Preferred | Tax Preferred |
| Style | Municipal Bond | Municipal Bond |
| Inception | Sep 10, 2018 | Aug 21, 2015 |
Not shown on this pair: Top 10 Weight.
Volatility and max drawdown are measured over the window both funds cover: Sep 12, 2018 to Oct 14, 2026 (8.1 years).
TAXF vs VTEB growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view covers the 8.1 years both funds cover.
TAXF vs VTEB Performance
American Century Diversified Municipal Bond ETF (TAXF) is an ETF from American Century Investments and Vanguard Tax-Exempt Bond ETF (VTEB) is an ETF from Vanguard (US). Over the past year TAXF returned -2.49% while VTEB returned -2.02%. Year to date, TAXF is down 3.80% versus a loss of 3.03% for VTEB.
Over three years, TAXF compounded at +3.13% per year against +2.98% for VTEB; over five years the annualized figures are -0.04% and +0.05% respectively. Across the full 8-year window we track, TAXF has the edge at +1.29% annualized vs +1.11%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
TAXF has been the more volatile fund, with annualized monthly volatility of 6.1% compared with 5.6% for VTEB. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -13.9% for TAXF and -17.0% for VTEB. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.98. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
TAXF charges 0.25% per year while VTEB charges 0.03%. On a $10,000 position that is $25 vs $3 annually, a gap of $22 per year that compounds over a long holding period. On income, TAXF currently yields 4.06% against 3.60% for VTEB.
Holdings Overlap
We hold position weights for 484 holdings in TAXF and 666 in VTEB, totalling 54.5% and 10.5% of the two funds. Neither is a share of a fund we can divide by, so no overlap percentage is shown here. Within what we can see, 64 positions appear in both.
64 positions in common, counted across the 484 positions we hold weights for in TAXF and 666 in VTEB, against full books of 1,580 and 10,724.
Top Shared Holdings
| Stock | Weight in TAXF | Weight in VTEB | Difference |
|---|---|---|---|
| FL ORLUTL 5 10/01/20Orlando Utilities Commission 5 10/01/2048 | 0.44% | 0.02% | 0.42% |
| AZ SALAGR 5.25 01/01Salt River Project Agricultural Improvement & Power District 5.25 01-01-2053 | 0.39% | 0.03% | 0.36% |
| IL ILS 5 11/01/2027Illinois St Regd N/c B/e 5.00000000 | 0.33% | 0.08% | 0.25% |
| MD MDS 5 06/01/2036State Of Maryland 5 06/01/2036 | 0.24% | 0.07% | 0.17% |
| NJ NJSTRN 5 01/01/20New Jersey Turnpike Authority 5 2033-01-01 | 0.25% | 0.00% | 0.25% |
| IL ILS 5.5 03/01/204State Of Illinois 5.50% 03/01/2042 | 0.19% | 0.04% | 0.15% |
| IA IASGEN 5 08/01/20Iowa Finance Authority, State Revolving Fund Revenue Bonds, Green Series 2024A 5 08/01/2034 | 0.18% | 0.05% | 0.13% |
| AZ SALAGR 5 01/01/20Salt River Project Agricultural Improvement & Power District 5 01/01/2048 | 0.22% | 0.00% | 0.22% |
| MN MNS 5 08/01/2033Minnesota St Trunk Hwy Ref Go Bds 2023 E | 0.17% | 0.04% | 0.13% |
| NY NYSHGR 4 03/15/20New York State Dormitory Authority 4.0% 03/15/2040 | 0.21% | 0.00% | 0.21% |
You are not choosing between two funds in isolation.
Whichever of TAXF and VTEB you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, TAXF or VTEB?
TAXF has an expense ratio of 0.25% while VTEB charges 0.03%. VTEB is the cheaper option, by $22 a year on a $10,000 investment.
Which performed better, TAXF or VTEB?
Over the past year TAXF returned -2.49% vs -2.02% for VTEB, so VTEB leads on 1-year performance. Over the longest common window we track (8 years), TAXF annualized +1.29% vs +1.11% for VTEB. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, TAXF or VTEB?
TAXF has been the more volatile fund at 6.1% annualized versus 5.6% for VTEB. Worst drawdown: TAXF -13.9% vs VTEB -17.0%.
Should I hold both TAXF and VTEB?
TAXF and VTEB have a monthly-return correlation of 0.98, so they move almost identically. What is left to separate them is the fee and the index each one tracks. This is information, not a recommendation.
Which pays a higher dividend, TAXF or VTEB?
TAXF yields 4.06% while VTEB yields 3.60%, so TAXF currently pays the higher dividend yield.
Is VTEB better than TAXF?
VTEB has a lower expense ratio. TAXF led over 3Y and the full window, VTEB over 1Y and 5Y. The two have moved almost in lockstep, correlation 0.98. Which one suits a particular account depends on what it is for. This is information, not a recommendation.