FTNJ vs VTEB

FTNJBFranklin New Jersey Municipal Income ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

FTNJ A New Jersey-only muni portfolio in an ETF wrapper: the mandate is current income exempt from both federal and New Jersey personal income tax, run off a Franklin strategy whose lineage goes back to 1990. Narrow by design, in a cohort ruled by national funds.

VTEB Vanguard'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.

Stated mandate

FTNJ The fund seeks a high level of current income exempt from federal income tax and New Jersey personal income tax.

VTEB 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

• FTNJ The cohort's biggest names are national portfolios or other single states. This one is built for New Jersey, targeting income exempt from federal and NJ personal income tax.
• Roughly 160 municipal bonds pointed at one clearly stated job: a high level of double tax-exempt current income for New Jersey taxpayers.
• The strategy's lineage runs back to 1990, so this is a long-tenured muni mandate in ETF clothing, not a ticker minted last week for a theme.
• It stays close to what the prospectus promises: a plain muni income portfolio with no leverage, no derivatives overlay, no structural surprises.

• VTEB 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.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

• FTNJ The 0.35% annual fee sits above the typical muni ETF's. Index giants like VTEB and MUB cost a fraction, though neither is New Jersey-specific.
• One state, about 160 bonds. Concentration is the price of the state tax break, so New Jersey budget and credit news lands harder here than in a national fund.
• A modest asset base and only moderate trading mean spreads can matter more than in the mega national muni funds, and payouts arrive on an irregular schedule.

• VTEB 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.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.vanguard.com
• Sampling, not full replication. The fund owns a representative slice of a very large index rather than every bond in it.vanguard.com

Full FTNJ profile⁠

Full VTEB profile⁠