Vanguard Launches Short-Term Tax-Exempt Bond Index ETF

Vanguard on Thursday launched the Vanguard Short-Term Tax-Exempt Bond ETF (VTES), a municipal bond index ETF 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, which manages the fund.

“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,” she said.

 Vanguard Short-Term Tax-Exempt Bond ETF invests primarily 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, according to Vanguard.