SMB vs VTES

SMBAVanEck Short Muni ETF

VTESAVanguard Short-Term Tax-Exempt Bond ETF

In short

SMB A muni fund built for the short end: VanEck has run this AMT-free, short-maturity national portfolio since 2008, and it charges 0.07%, a fraction of what the typical muni bond ETF costs.

VTES Vanguard's muni ETF on a short leash: an AMT-free tax-exempt index, but capped at seven years to trim interest-rate sensitivity. Five basis points, roughly 2,700 bonds, income paid monthly.

Stated mandate

SMB The fund seeks to track the price and yield performance of the ICE Short AMT-Free Broad National Municipal Index before fees and expenses.

VTES The Fund seeks to track an index representing investment-grade U.S. municipal bonds with remaining maturities from one month through seven years.

Why people hold it

• SMB Charges 0.07% a year, well under the typical muni bond ETF fee. When the whole point is tax-free income, the fee line matters.
• The index is AMT-free by design, so the interest it targets is federally tax-exempt without the alternative minimum tax wrinkle.vaneck.com
• Short maturities mean rate swings move prices less than in long-dated muni funds. Roughly 300 bonds, with income paid monthly.
• Running since 2008, so it has an audited record through a full round trip in interest rates rather than a two-year backtest.

• VTES Costs 0.05% a year, a fraction of what the typical muni-bond fund in its category charges. One of the cheapest ways into tax-exempt bonds.
• Maturities run one month to seven years, so the portfolio moves less on rate swings than long-dated muni funds. Short duration is the whole point here.vanguard.com
• The index is AMT-free national investment-grade munis, so interest is federally tax-exempt and not caught by the alternative minimum tax.vanguard.com
• Roughly 2,700 bonds via index sampling, run by Vanguard's fixed income group, with distributions paid monthly. It tracks its benchmark closely.vanguard.com

Worth knowing

• SMB The short end of the muni curve is the low-income end. This portfolio is about damping rate moves, not maximizing the payout.
• It is a national fund, aimed at federal tax exemption only. State-level exemption is the job of single-state funds like NYF.vaneck.com
• Broad-maturity rivals VTEB and SCMB charge less and cover the whole curve. The short-maturity focus is the reason to look here.

• VTES Short maturities cut both ways. Vanguard's own materials describe moderate current income, the trade-off for less rate sensitivity than longer muni portfolios.vanguard.com
• It's a national fund, so it isn't structured to shelter state income tax the way single-state muni ETFs such as NYF are.
• Launched in 2023, it has a shorter live record than muni ETFs that have been trading for over a decade, including its broader sibling VTEB.

Full SMB profile⁠

Full VTES profile⁠