SCNM vs VTEB

SCNMCSterling Capital National Municipal Bond ETF

VTEBAVanguard Tax-Exempt Bond ETF

In short

SCNM A boutique shop's take on national munis: income exempt from regular federal income taxes with capital preservation as the second job, measured against the Bloomberg U.S. Municipal Index. It opened in December 2025.

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

SCNM The Fund seeks current income exempt from regular federal income taxes while preserving capital.

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

• SCNM The mandate is plain: current income exempt from regular federal income taxes, with preserving capital as the stated second goal.
• National scope rather than single-state, so the portfolio isn't tied to one state's tax base the way a New York-only fund like NYF is.
• Benchmarked to the Bloomberg U.S. Municipal Index, the standard yardstick for the broad tax-exempt market, inside a plain 1940 Act ETF wrapper.

• 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

• SCNM At 0.35% it prices above the muni category median of 0.30%, and far above index heavyweights VTEB and SCMB at 0.03%. In tax-exempt bonds, fees bite a modest yield.
• It launched in December 2025, so there's little track record to judge, and early trading has been light compared with the category's household names.
• The exemption it targets is from regular federal income taxes. State and local tax treatment is a separate question for the holder.

• 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 SCNM profile⁠

Full VTEB profile⁠