Vanguard to Launch First ETF in Nearly 2 Years
The new fund would track short-term municipal bonds.
Vanguard Group Inc., the second largest exchange-traded fund issuer in the U.S., is set to launch a new ETF for the first time in over 20 months as municipal bond ETFs have attracted record flows this year.
The Vanguard Short-Term Tax-Exempt Bond ETF (VTES) is poised to launch in the first quarter of 2023 and track an index of muni bonds with maturities between one month and seven years, according to a company statement. The fund is expected to charge an expense ratio of 0.07%.
Year to date, muni bond funds have lured nearly $29 billion, according to Bloomberg data. The top-performing muni bond ETF this year was the Vanguard Ultra Short Bond ETF (VUSB), which pulled in nearly $11 billion in the same time frame.
VTES would be the Malvern, Pennsylvania-based company’s second muni bond fund, following the launch of the Vanguard Tax-Exempt Bond ETF (VTEB) in 2015. It would also be the first ETF the firm launched since April 2021, when it unveiled VUSB.
Vanguard currently manages nearly $1.9 trillion across its 81 U.S.-listed ETFs, second only to BlackRock’s iShares unit, which has nearly $2.2 trillion in 392 funds, according to ETF.com data.
News of the prospective launch also comes just months after Vanguard announced for the first time that it would close an ETF. The Vanguard U.S. Liquidity Factor ETF (VFLQ) liquidated in November after the firm stated in September it had “not gained scale since its 2018 debut.”
Contact Shubham Saharan at [email protected]
