ETF Evaluator: Vanguard Short-Term Tax-Exmpt Bd ETF () Follow This ETF

Vanguard Short-Term Tax-Exmpt Bd ETF Overview

Vanguard Short-Term Tax-Exmpt Bd ETF (VTES) is a passively managed Municipal Bond Muni National Short exchange-traded fund (ETF). Vanguard launched the ETF in 2023.

The investment seeks to track the performance of the S&P 0-7 Year National AMT-Free Municipal Bond Index that measures the investment-grade segment of the U.S. municipal bond market with remaining maturities between one month and seven years. Under normal circumstances, the fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the bonds that make up the Target Index. The Target Index includes municipal bonds issued primarily by states, local governments, and agencies whose interest is exempt from U.S. federal income taxes and the federal alternative minimum tax (AMT). It is non-diversified.

About Vanguard Short-Term Tax-Exmpt Bd ETF (VTES)

There are 1 members of the management team with an average tenure of 2.83 years: Justin Schwartz (2023). Management tenure is more important for actively managed ETFs than passive index ETFs.

The ETF has 2 primary benchmarks: Bloomberg Municipal TR USD index with a weighting of 100% and S&P 0-7 Y Nat AMT-Free Municipal Bd USD index with a weighting of 100%. Vanguard Short-Term Tax-Exmpt Bd ETF has 3373 securities in its portfolio. The top 10 holdings constitute 2.5% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a nondiversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

Vanguard Short-Term Tax-Exmpt Bd ETF is part of the Fixed Income global asset class and is within the Municipal Bond ETF group. Vanguard Short-Term Tax-Exmpt Bd ETF has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0% There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 96.7% (96.7% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Vanguard Short-Term Tax-Exmpt Bd ETF has 3.3% of the portfolio in cash.

Assets Under Management

The fund has $2 billion in total assets, which is above the $1 billion average for the Muni National Short category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

VTES Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Vanguard Short-Term Tax-Exmpt Bd ETF expense ratio is low compared to funds in the Muni National Short category. Vanguard Short-Term Tax-Exmpt Bd ETF has an expense ratio of 0.05%, which is 76% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Vanguard Short-Term Tax-Exmpt Bd ETF has a portfolio turnover rate of 24%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 56% for the Muni National Short category.

Recently, in the month of July 2026, Vanguard Short-Term Tax-Exmpt Bd ETF returned -0.5%, which earned it a grade of F, as the Muni National Short category had an average return of -0.2%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.

Vanguard Short-Term Tax-Exmpt Bd ETF has a trailing yield of 2.75%, which is below the 2.91% category average. The fund normally distributes its income monthly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Vanguard Short-Term Tax-Exmpt Bd ETF Grades

Year to date, the ETF has returned 0.4%, 0.7 percentage points worse than the category, which translates into a grade of F. The fund has returned 2.0% over the past year (grade of F) and 2.9% over the past three years (grade of D).

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