AUSM vs VTES

AUSMBAllspring Ultra Short Municipal ETF

VTESAVanguard Short-Term Tax-Exempt Bond ETF

In short

AUSM An actively run muni cash sleeve in ETF clothing: Allspring aims to keep average effective maturity at one year or less, hunting federally tax-exempt income at the sleepy end of the curve. Fee is 0.19%, with no waiver involved.

VTES Vanguard's muni ETF on a short leash: an AMT-free tax-exempt index, but capped at seven years to trim interest-rate sensitivity. Five basis points, roughly 2,700 bonds, income paid monthly.

Stated mandate

AUSM The Fund seeks current income exempt from federal income tax while preserving capital. It invests principally in short-term municipal securities and generally expects a dollar-weighted average effective maturity of one year or less.

VTES The Fund seeks to track an index representing investment-grade U.S. municipal bonds with remaining maturities from one month through seven years.

Why people hold it

• AUSM Targets a dollar-weighted average effective maturity of one year or less, parking the portfolio at the money-market end of the muni curve, and pays income monthly.sec.gov
• Active, not index-shadowing: the desk works security selection, sector rotation, duration and yield-curve positioning, and may use futures to manage duration.allspringglobal.comsec.gov
• At 0.19% with no waiver involved, the fee lands in line with the typical short-muni fund even though a human team is picking the bonds.
• At least 80% of net assets stay in munis whose interest is exempt from federal income tax, a policy only shareholders can vote to change.sec.gov

• VTES Costs 0.05% a year, a fraction of what the typical muni-bond fund in its category charges. One of the cheapest ways into tax-exempt bonds.
• Maturities run one month to seven years, so the portfolio moves less on rate swings than long-dated muni funds. Short duration is the whole point here.vanguard.com
• The index is AMT-free national investment-grade munis, so interest is federally tax-exempt and not caught by the alternative minimum tax.vanguard.com
• Roughly 2,700 bonds via index sampling, run by Vanguard's fixed income group, with distributions paid monthly. It tracks its benchmark closely.vanguard.com

Worth knowing

• AUSM Launched in 2025 and thinly traded, so the track record is thin too and spreads can widen when size shows up.
• Index-tracking neighbors cost less: VTES at 0.05% and SUB at 0.07% run short tax-exempt portfolios for a sliver of the price.
• Up to 20% of assets can pay AMT-subject interest and up to 10% can sit below investment grade, so tax-exempt is not absolute and credit risk is not zero.sec.gov

• VTES Short maturities cut both ways. Vanguard's own materials describe moderate current income, the trade-off for less rate sensitivity than longer muni portfolios.vanguard.com
• It's a national fund, so it isn't structured to shelter state income tax the way single-state muni ETFs such as NYF are.
• Launched in 2023, it has a shorter live record than muni ETFs that have been trading for over a decade, including its broader sibling VTEB.

Full AUSM profile⁠

Full VTES profile⁠