Two years ago, the product team at Vanguard identified a gap in their lineup—municipal bond exchange-traded funds (ETFs)—and has been working to plug that hole ever since.
The first steps involved launching index-based municipal bond ETFs. Short-Term Tax-Exempt Bond ETF (VTES) was introduced in March 2023. In January, Vanguard released two more funds: Intermediate-Term Tax-Exempt Bond ETF (VTEI) and California Tax-Exempt Bond ETF (VTEC).
Today, Vanguard announced plans to launch two actively managed municipal bond ETFs: Short Duration Tax-Exempt Bond ETF (VSDM) and Core Tax-Exempt Bond ETF (VCRM).
When the ETFs launch later this year, they will be Vanguard’s first actively managed municipal bond ETFs. So, if you favor the ETF structure, this will offer you something “new” at Vanguard. But I expect these funds will be substantially similar to some of Vanguard’s legacy actively managed mutual funds.