FMUN vs VCRM

FMUNAFidelity Systematic Municipal Bond Index ETF

VCRMAVanguard Core Tax-Exempt Bond E

In short

FMUN Fidelity's muni index fund runs on its own rules-based benchmark and charges 0.05% a year, a fraction of what the typical muni fund costs. Roughly 1,200 bonds, monthly payouts, all pointed at income the federal government doesn't tax.

VCRM Vanguard's active answer in a mostly-index category: managers working the whole muni curve for 0.12% a year, under half the muni ETF median fee. Monthly income, exempt from federal personal income taxes.

Stated mandate

FMUN The fund seeks high current income that is exempt from federal income tax. It normally invests at least 80% of assets in municipal securities whose interest is federally tax-exempt.

VCRM The fund seeks total return through current income exempt from federal personal income taxes and capital appreciation.

Why people hold it

• FMUN 0.05% a year against a roughly 0.30% median for muni bond funds. On tax-exempt income, that gap is the part you keep.
• Roughly 1,200 municipal bonds, so no single issuer or project carries the portfolio.
• Pays monthly, with at least 80% of assets in municipal securities whose interest is exempt from federal income tax.
• One of the stronger builds in the muni ETF group: passive, broad, and squarely inside its stated mandate.

• VCRM Active management priced at 0.12% a year, less than half the 0.30% median for muni ETFs.
• Run by Vanguard's Fixed Income Group, with all-curve exposure to primarily high-quality investment-grade munis spread across sectors, states and credit tiers.prnewswire.com
• Pays monthly, with income the fund seeks to keep exempt from federal personal income taxes.vanguard.com
• Sticks tightly to its stated mandate and grades among the strongest implementations in its muni peer group.

Worth knowing

• FMUN Thinly traded and modest in size next to the category's giants, so bid-ask spreads can run wider.
• The benchmark is Fidelity's own Systematic U.S. Municipal Bond Index, not a licensed outside yardstick.fidelity.com
• Muni prices move with interest rates, and the tax break targeted here is federal. State-specific relief is a different product, like NYF for New York.

• VCRM You pay up for the manager: index peers VTEB and SCMB run at 0.03%, a quarter of VCRM's 0.12%.
• Launched in November 2024, so there is only a short record to judge the active mandate on.
• All-curve exposure puts longer maturities in the mix, so prices move with rates. And the exemption is federal: state treatment of a national muni fund depends on where you live.prnewswire.com

Full FMUN profile⁠

Full VCRM profile⁠