MMIN vs VTEB

MMINBNYLI MacKay Muni Insured ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

MMIN MacKay Shields has run this one since 2017 around a niche most muni ETFs ignore: insured municipal bonds, investment-grade paper carrying a bond insurer's policy. Actively managed, pays monthly, 0.30% net of a fee waiver.

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

MMIN The Fund seeks current income that is exempt from federal 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

• MMIN The hook is the insurance: bonds whose timely principal and interest are covered by an insurer's policy, layered on the issuer's own investment-grade credit.sec.govsec.gov 2
• Actively run, not indexed. MacKay Shields sets a macro view on rates and tax policy, then picks individual bonds through bottom-up credit research.sec.gov
• Income is the mandate: current income exempt from federal income tax, paid out monthly across roughly 230 bonds.

• 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

• MMIN Active insured munis cost more than plain beta: 0.30% net of a fee waiver (0.46% gross), near the category median, versus VTEB at 0.03% and MUB at 0.05%.
• Insurance covers timely principal and interest, not market value, share price or distributions, and fund shares are not insured. Insurer downgrades can hit prices.sec.govsec.gov 2
• More than 25% of assets can sit in munis linked by one economic, business or political development. Trading is moderate rather than heavy, so spreads can matter.sec.gov

• 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 MMIN profile⁠

Full VTEB profile⁠