Vanguard Tax-Exempt Bond ETF

Frequently Asked Questions About VTEB

What does VTEB invest in?

This index-tracking fund aims to mirror the performance of a specific benchmark, the Standard & Poor's National AMT-Free Municipal Bond Index, which represents the investment-grade segment of the U.S. municipal bond market. It achieves this by employing a sampling strategy, carefully selecting a portion of the index's holdings to replicate its overall characteristics. A minimum of 80% of its assets will be invested in securities included in this target index. Crucially, under typical market conditions, at least 80% of the fund's portfolio will consist of bonds generating income that is exempt from both federal income tax and the federal alternative minimum tax (AMT). A primary risk is its sensitivity to interest rate fluctuations: rising rates can lead to a decrease in bond prices, while falling rates may eventually reduce the income distributed by the fund. This fund is designed for investors seeking potentially tax-free federal income who are comfortable with moderate swings in both investment value and distributed income. To maintain diversification, for 75% of its total assets, the fund generally restricts its holdings: it won't acquire more than 10% of an issuer's voting securities, nor will it invest more than 5% of its total assets in a single issuer's securities. Exceptions to these limits apply when necessary to match the target index's composition or when investing in U.S. government or agency obligations.

What is the expense ratio of VTEB?

Vanguard Tax-Exempt Bond ETF (VTEB) charges an expense ratio of 0.03%. This is the annual fee deducted from fund assets to cover management and operations.

What is VTEB's dividend yield?

VTEB's trailing-twelve-month yield is 3.49%, calculated from the sum of dividends over the past year divided by the current price.

What is the duration of VTEB?

Effective duration measures VTEB's sensitivity to interest-rate changes: a duration of 6 means a 1% rate move shifts NAV by roughly 6% in the opposite direction. VTEB's current duration is published on the fund's factsheet on the issuer's website.

What is the credit quality of VTEB?

VTEB's credit quality breakdown (the share of holdings rated AAA through CCC and below) is published on the fund's factsheet. Higher-quality (investment-grade) funds yield less but carry less default risk than high-yield / junk bond funds.

What is the yield to maturity of VTEB?

Yield to maturity (YTM) is the total return you'd earn from VTEB if every bond in the portfolio is held to maturity at the current price. VTEB's YTM is published on the fund's factsheet on the issuer's website. It differs from the trailing-12-month yield because YTM reflects current bond prices rather than historical income paid.