Vanguard has announced plans to introduce Vanguard Short-Term Tax-Exempt Bond ETF (Ticker: VTES), a municipal bond index ETF that will be managed by Vanguard Fixed Income Group. Vanguard intends to launch the ETF in the first quarter of 2023.
“Vanguard provides a broad yet carefully constructed lineup of investment options tailored to the needs of our diverse investor base with the goal of giving them the best chance for investment success,” says Daniel Reyes, head of Vanguard Portfolio Review Department. “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.”
The ETF is intended for investors seeking to generate tax-exempt yield in their portfolios while minimising interest rate sensitivity. It will predominantly invest in short-term investment grade municipal bonds and will track the S&P 0-7 Year AMT-Free Muni Bond index. The ETF will have an estimated expense ratio of 0.07 per cent, compared to 0.54 per cent for the average short-term bond fund.