JMSI vs VTEB

JMSICJPMorgan Sustainable Municipal Income ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

JMSI A muni fund where "sustainable" has a definition: at least 80% of assets in bonds funding affordable housing, hospitals, schools, water systems and transit. Actively run, value-oriented, tax-exempt income paid monthly.

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

JMSI The fund seeks current income exempt from federal income tax by investing in municipal bonds whose proceeds support positive social or environmental benefits.

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

• JMSI The screen is spelled out in the filings: affordable housing, healthcare, water and sewer, education, mass transit and issuer-designated green bonds, at least 80% of assets.sec.gov
• Active and value-oriented rather than index-tracking: roughly 300 municipal bonds picked by J.P. Morgan's muni team, with federally tax-exempt income distributed monthly.jpmorgan.com
• The ETF listed in 2023, but it carries forward a predecessor mutual fund whose record starts in 1993. Long-running strategy, newer packaging.jpmorgan.com
• The portfolio closely matches the mandate its own documents describe, so the sustainability label is doing real work.

• 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

• JMSI Cost runs above the category median. Broad index staples like VTEB and SCMB charge 0.03%, so the research and the screen are something you pay up for.
• "Sustainable" is defined by the adviser's own use-of-proceeds process, and the 80% policy can change on 60 days' written notice to shareholders.sec.gov
• A mid-size fund that trades moderately, so spreads can be wider than the giant muni index ETFs, and the bonds inside still carry rate and credit risk.

• 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 JMSI profile⁠

Full VTEB profile⁠