MINN vs VTEB

MINNCMairs & Power Minnesota Municipal Bond ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

MINN A muni fund with a ZIP code. MINN holds roughly 90 Minnesota bonds and seeks current income exempt from both federal and Minnesota income taxes, for 0.25% a year.

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

MINN The Fund seeks current income exempt from federal and Minnesota income taxes.

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

• MINN The mandate is unusually specific: income exempt from federal and Minnesota income taxes, not a national grab bag of 50 states' paper.
• At 0.25% a year it charges less than the median muni bond ETF (0.30%), which is rare for a single-state portfolio.
• Pays monthly and spreads exposure across roughly 90 bonds rather than a handful of issuers.
• Live since 2021, so there is a real multi-year record to read instead of a launch-week backtest.

• 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

• MINN A small, thinly traded fund. Trades can meet wider bid-ask spreads than the giants of the muni aisle.
• The Minnesota half of the tax break only does work for Minnesota taxpayers. Everyone else is paying a state-specific fee for federal exemption alone.
• National muni ETFs such as VTEB and SCMB run at 0.03%, so the state tilt costs roughly eight times the cheapest broad option.

• 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 MINN profile⁠

Full VTEB profile⁠