Vanguard to Launch New Bond ETF

By Janet Levaux

News December 22, 2022 at 02:07 PM

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Vanguard says it will roll out a new fixed income ETF in the first quarter of 2023.

The Vanguard Short-Term Tax-Exempt Bond ETF (VTES), a municipal bond index ETF, is set to have an estimated expense ratio of 0.07%. It will mainly invest in short-term municipal bonds and will track the S&P0-7 Year AMT-Free Muni Bond Index.

Stephen McFee, a portfolio manager in Vanguard Fixed Income Group who joined the firm in 2005, will manage the new fund. Among the municipal bond funds he currently manages is the Vanguard Tax-Exempt Bond Index Fund.

"The new Short-Term Tax-Exempt Bond ETF has been thoughtfully constructed for tax-sensitive investors with a short time horizon and low risk tolerance, in complement to our broad range of municipal bond strategies," according to Daniel Reyes, head of the Vanguard Portfolio Review Department.

Vanguard says its $199 billion municipal bond lineup includes actively managed national, state, high yield and money market funds, as well as the $20.8 billion Vanguard Tax-Exempt Bond ETF. The products are managed by a team of 40 portfolio managers, traders and analysts.

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