NYF vs VTEB

NYFAiShares New York Muni Bond ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

NYF New York in one ticker: roughly 900 investment-grade, AMT-free munis from the Empire State, at a fee that undercuts most muni funds. Running since 2007, and it tracks its index closely.

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

NYF The fund seeks to track the ICE AMT-Free New York Plus Municipal Index, which represents investment-grade, tax-exempt U.S. dollar debt issued primarily by New York and its political subdivisions. It uses indexing and representative sampling rather than active security selection.

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

• NYF At 0.09% a year it charges less than the typical muni bond ETF, which is unusual for single-state exposure (narrower usually means pricier).
• Follows the ICE AMT-Free New York Plus Municipal Index with very little drift, using representative sampling rather than picking bonds by hand.sec.gov
• Launched in 2007, one of the original New York muni ETFs and now a multi-billion-dollar fund that pays monthly.
• Income is tax-exempt at the federal level and for New York State, and the index screens out AMT bonds.ishares.com

• 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

• NYF One state's credit story: New York and its subdivisions drive the portfolio, so Albany and City Hall budget news matters more here than in a national muni fund.
• The state tax break only reaches New York taxpayers. Elsewhere you get the federal exemption alone.ishares.com
• Muni prices move with interest rates, and this trades less actively than national heavyweights like MUB and VTEB, so spreads can run wider.

• 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 NYF profile⁠

Full VTEB profile⁠