Valley Forge, Pa, December 22, 2022 /PRNewswire/ — Vanguard today announced plans to introduce the Vanguard Short Term Tax Exempt Bond ETF (Ticker: VTES), a municipal bond index ETF managed by Vanguard Fixed Income Group. Vanguard plans to launch the ETF in the first quarter of 2023.
“Vanguard offers a broad yet carefully constructed portfolio of investment options tailored to the needs of our diverse investor base with the goal of providing the best opportunity for investment success,” he said. Daniel ReyesHead of Vanguard Portfolio Evaluation Division. “The new short-term tax-free bond ETF is purpose-built for investors with a short-term horizon and risk appetite, complementing our broader municipal bond strategies.”
It is intended for investors who want to generate tax-free yield in their portfolios while reducing interest rates. It mainly invests in short-term investment grade municipal bonds and tracks the S&P® 0-7 year AMT-free muni bond index. The ETF has an estimated expense ratio of 0.07%, compared to 0.54%.1 For an average short-term bond fund.
Global fixed income leader
For more than 40 years, Vanguard Fixed Income Group has distinguished itself through deep investment capabilities, disciplined security selection processes and rigorous risk management techniques, resulting in consistent long-term performance. Vanguard’s track record is unmatched – 87% of Vanguard bond funds have outperformed their peer group average over a ten-year period. September 30, 2022.2
Vanguard 199 billion dollars The municipal bond lineup includes many actively managed national, provincial, high yield and money market funds, as well as the 20.8 billion dollars Vanguard Tax-Free Bond ETF (Ticker: VTEB). The new ETF complements existing actively managed time-limited and short-term tax-free mutual funds.
Vanguard’s municipal bond team includes 40 portfolio managers, traders and analysts who are engaged to explore their deep experience, scale and sophisticated processes in this fixed income market segment. Stephen McPhee, portfolio manager at Vanguard Fixed Income Group, manages the new fund. Mr. McPhee joined Vanguard in 2005 and currently manages several municipal bond funds, including the Vanguard Tax Exempt Bond Index Fund.
In the year Founded in 1975, Vanguard is one of the world’s leading investment management companies. The firm provides investment, advisory and retirement services to individual investors, institutions and financial professionals. Vanguard operates under a special investor ownership structure in which Vanguard fund shareholders own the fund, which in turn owns Vanguard. As such, Vanguard adheres to a simple objective: to provide all investors with a position to hold, to hold fairly, and to provide the best opportunity for investment success. For more information, visit vanguard.com.
All figures as November 30, 2022Unless otherwise.
1 Source: Lipper as December 31, 2021.
2 For the period of ten years is over. September 30, 2022, 75 of 86 Vanguard bond funds outperformed their peer group averages. The result will vary for another time. Only funds with a history of at least ten years are included in the comparisons. (Source: Leeper, Thomson Reuters Company) Please note that this competitive performance information represents past performance, is not a guarantee of future results, and that all investments are subject to risk. For the most recent performance, visit our website at www.vanguard.com/performance.
For more information about Vanguard Funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, fees, expenses and other important information are contained in the prospectus. Read and think carefully before investing.
Vanguard ETF shares cannot be purchased by the issuing fund except for very large sums of money in the millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. The investor may incur brokerage commissions when doing so and may pay more than net asset value when buying and receive less than net asset value when selling.
All investing is subject to risk, including the possibility that you may lose the money you invest.
A bond fund’s issuer may fail to make payments on time, and the bond’s value may decline as interest rates rise or the issuer’s ability to make payments declines. Investments in bonds are subject to interest rate, credit and inflation risks.
While income from a municipal bond fund is exempt from federal taxes, you may pay taxes on any capital gains from the fund’s trading or the redemption of your own shares. For some investors, a portion of the fund’s income may be subject to state and local taxes as well as the federal alternative minimum tax.
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