Vanguard today launched Vanguard Short-Term Tax-Exempt Bond ETF (Ticker: VTES). The new municipal bond index ETF is managed by Vanguard Fixed Income Group and is designed for tax-sensitive investors with a short-term time horizon and low interest rate risk tolerance.
“Vanguard Short-Term Tax-Exempt Bond ETF is built to optimize tax efficiency for investors seeking to allocate to the shorter end of the municipal bond market,” said Sara Devereux, global head of Vanguard Fixed Income Group. “The new ETF complements our broad fixed income lineup and provides clients with another avenue to tap our municipal bond team’s talent and capabilities.”
Vanguard Short-Term Tax-Exempt Bond ETF predominantly invests in short-term investment grade municipal bonds and will track the S&P® 0-7 Year National AMT-Free Municipal Bond Index. The ETF has an expense ratio of 0.07%, compared to 0.56% for the average short-term bond fund.1 Steve McFee, CFA® who has been at Vanguard for 18 years, is the portfolio manager of Vanguard Short-Term Tax-Exempt Bond ETF.
Vanguard Fixed Income Group
For more than four decades, Vanguard Fixed Income Group has distinguished itself with deep investment capabilities, disciplined security selection processes, and rigorous risk management techniques, resulting in consistent, long-term performance. Vanguard’s track record reflects this, with 89% of Vanguard bond funds outperforming their peer group averages over the ten-year period ending December 31, 2022.2 The new ETF is managed by the same municipal bond team that backs Vanguard Tax-Exempt Bond ETF (Ticker: VTEB), which has grown to more than $25 billion in assets and has delivered competitive performance with low tracking error to investors over the past seven years.3