Vanguard Short-Term Tax-Exempt Bond ETF

Frequently Asked Questions About VTES

What does VTES invest in?

This fund's primary objective is to replicate the performance of a designated market index. This benchmark specifically measures the investment-grade segment of the U.S. municipal bond market, covering maturities from one month up to seven years. The fund pursues an indexing strategy, meticulously tracking the S&P 0-7 Year National AMT-Free Municipal Bond Index. It achieves this by employing a sampling methodology to closely mirror the index's core characteristics. All investment selections are made through this sampling process, ensuring that a minimum of 80% of the fund's total assets are invested in securities present within the underlying index. Typically, at least four-fifths (80%) of the fund's holdings aim to generate income exempt from both federal income taxes and the federal alternative minimum tax. Key risks include the impact of shifting interest rates. When rates climb, bond prices may fall, potentially decreasing the fund's value. Conversely, declining rates could eventually lead to reduced income for the fund. This offering may appeal to investors seeking federal tax-exempt income who are comfortable with moderate variations in both principal value and income generation. Regarding 75% of its total assets, the fund operates under specific diversification constraints: it is prohibited from acquiring more than 10% of the voting securities of any single issuer, and its exposure to any one issuer's securities generally cannot surpass 5% of its total assets. An exception to these limits is made when necessary to approximate the target index's composition. These particular restrictions do not apply to obligations issued by the U.S. government or its agencies and instrumentalities.

What is the expense ratio of VTES?

Vanguard Short-Term Tax-Exempt Bond ETF (VTES) charges an expense ratio of 0.05%. This is the annual fee deducted from fund assets to cover management and operations.

What is VTES's dividend yield?

VTES's trailing-twelve-month yield is 2.68%, calculated from the sum of dividends over the past year divided by the current price.

What is the duration of VTES?

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

What is the credit quality of VTES?

VTES'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 VTES?

Yield to maturity (YTM) is the total return you'd earn from VTES if every bond in the portfolio is held to maturity at the current price. VTES'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.