Category Review
Municipal bond funds are down for the year after a third-quarter selloff erased the first-half gain
Vanguard Tax-Exempt Bond ETF
$47.65+0.27 (+0.57%)
- 0.03%
- $49.0B
- −2.4%
- 3.58%
- 14.3M sh
- $47.32
- low $46.87high $51.18
The ETF.net VTEB Grade
A
Score 88 out of 100
- 1 of 63
Score 88 of 100 falls in the A band. A is 70 or higher, B 55 to under 70, C 40 to under 55, D 25 to under 40, F under 25.
Cost
The fund’s net expense ratio, ranked against its category.A99 out of 100Rank 1 of 63Mission
Whether the fund did what it promised, tested against its stated mandate.A100 out of 100Rank 1 of 59Risk
How the fund held up when markets fell: downside volatility, drawdowns and tail loss.B56 out of 100Rank 20 of 63Tradability
How easy the fund is to trade: daily volume, and how far its price strays from net asset value.A82 out of 100Rank 6 of 63Holdings
How concentrated the fund is, and how complete and current its disclosed holdings are.A85 out of 100Rank 8 of 63Durability
Whether the fund is likely to stay open, judged by its age, its assets and its issuer’s assets.A95 out of 100Rank 1 of 63
Our read on VTEB
AVanguard's national muni index fund, running since 2015 at three basis points, a tenth of what the typical muni ETF charges. Its benchmark screens for investment-grade bonds whose income is exempt from federal tax and the AMT.
VTEB seeks to track an index measuring the investment-grade segment of the U.S. municipal bond market. It uses passive sampling to approximate the index and generally invests in federally tax-exempt municipal securities.
Why people hold it
- Three basis points a year against a 0.30% muni-ETF median. On tax-exempt bonds, where coupons are modest, that fee gap is a real slice of the payout.
- The index holds only investment-grade munis whose interest is exempt from federal income tax and the alternative minimum tax, so the income carries no AMT surprise.fund-docs.vanguard.com
- A multi-billion-dollar fund and one of the most heavily traded in the muni category, which tends to show up as tight bid-ask spreads. Income is paid monthly.
- It has tracked its benchmark closely and sits among the strongest implementations in a crowded muni bond peer group.
Worth knowing
- Federal exemption, not blanket coverage. Income can still be taxable in your home state, which is why single-state funds like NYF exist alongside it.fund-docs.vanguard.com
- Credit quality is investment grade, so rates are the main swing factor: when muni yields rise, bond prices and the fund's share price fall.fund-docs.vanguard.com
- Sampling, not full replication. The fund owns a representative slice of a very large index rather than every bond in it.fund-docs.vanguard.com
VTEB Holdings
- Bonds
- 10,723
- 2%
- Vanguard Municipal Low Duration Fund 12/31/2049
Sectors
- Municipal100.0%
Geography
- United States100.00%
VTEB Performance
Shows how $10,000 changes over the selected period, with cash distributions reinvested at the closing price on each ex-dividend date.
VTEB$9,761
Returns run to the Oct 12, 2026 close, with cash distributions reinvested. Each period starts on the same date that many months or years earlier. Periods over one year show the average yearly return.
| Period | VTEB |
|---|---|
| Year to date | −3.3% |
| 1 month | −1.9% |
| 3 months | −5.1% |
| 1 year | −2.4% |
| 3 years | +2.8% |
| 5 years | 0.0% |
| 10 years | +1.6% |
Calendar-year total return with cash distributions hypothetically reinvested at the ex-dividend date’s closing price. The current year shows year to date.
| Year | Return bar | VTEB |
|---|---|---|
| 2026 YTD | −3.3% | |
| 2025 | +3.7% | |
| 2024 | +1.3% | |
| 2023 | +6.1% | |
| 2022 | −8.0% | |
| 2021 | +1.1% | |
| 2020 | +5.2% |
VTEB in the news
VTEB Dividends
- 3.58%
- $1.70
- $0.14 per share
- Monthly
Distribution history
VTEB Risk
- 5.6%
How it’s calculated: standard deviation
The sample standard deviation of monthly total returns, multiplied by the square root of 12.
Uses up to 36 complete months, with at least 12 required. Total returns include reinvested distributions.
- −0.29
How it’s calculated: Sharpe ratio
Subtract each month’s Treasury-bill return from the fund’s monthly total return.
Divide the average of those excess returns by their sample standard deviation, then multiply by the square root of 12.
Uses up to 36 complete months, with at least 12 required. Each month uses the Treasury yield quoted at the end of the previous month.
- −12.3%
How it’s calculated: maximum drawdown
The largest percentage decline from an earlier peak, using total returns with reinvested distributions.
Uses up to five years through the last close, with at least 12 months required.
- 0.95
How it’s calculated: beta
The beta figure is supplied by FMP. The comparison index depends on the fund’s broad asset class.
VTEB Cost
0.03%
VTEB0.03%
- The middle half of Other Municipal Bond funds
- Median 0.30%
No Other Municipal Bond fund charges less.
Other funds in Other Municipal Bond
- AMUBiShares National Muni Bond ETFExpense ratio 0.05%1 year return −2.2%
- ASCMBSchwab Municipal Bond ETFExpense ratio 0.03%1 year return −2.5%
- AVCRMVanguard Core Tax-Exempt Bond EExpense ratio 0.12%1 year return −1.3%
- ATFIState Street SPDR Nuveen ICE Municipal Bond ETFExpense ratio 0.23%1 year return −2.9%
- ACMFiShares California Muni Bond ETFExpense ratio 0.08%1 year return −2.3%