MMMA vs VTEB

MMMABNYLI MacKay Muni Allocation ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

MMMA A December 2025 debut from MacKay's muni team: mostly long-dated investment-grade munis with room for up to 40% high yield. Active credit picking in a corner of the market most funds index. 0.35% 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

MMMA The Fund seeks current income that is exempt from regular U.S. 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

• MMMA Built long on purpose. Predominantly long-duration investment-grade munis, the slice of the curve where tax-exempt yields are richest, chosen by MacKay's muni desk.nylim.com
• Credit flexibility is written into the mandate: at least 60% investment-grade munis, with up to 40% available for opportunistic non-investment-grade bonds.nylim.comstreetinsider.com
• 0.35% net of a fee waiver (0.72% gross) lands near the muni category median, even though a human team is underwriting every bond.
• Roughly 50 positions, so the team's credit calls actually move the portfolio instead of washing out across thousands of CUSIPs.

• 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

• MMMA Index rivals cost far less: VTEB and SCMB charge 0.03%, MUB 0.05%. Active muni research is the thing you are paying the difference for.
• Long duration swings both ways. When rates move, prices here move more than a short or intermediate muni fund's.nylim.com
• Launched December 2025, still small and thinly traded. New-fund disclosures note there is no assurance it reaches an economically viable size.nylim.com

• 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 MMMA profile⁠

Full VTEB profile⁠