Vanguard to Launch Two Active Municipal ETFs
Vanguard announced plans to introduce Vanguard Core Tax-Exempt Bond ETF (VCRM) and Vanguard Short Duration Tax-Exempt Bond ETF (VSDM), two active municipal ETFs that will be managed by Vanguard Fixed Income Group. Vanguard intends to launch the ETFs before the end of the year.
The ETFs will offer exposure to municipal bonds across sectors, states, and credit quality. Vanguard Core Tax-Exempt Bond ETF will offer all-curve exposure to primarily high-quality, investment-grade municipal bonds that offer tax-exempt income. The Vanguard Short Duration Tax-Exempt Bond ETF is expected to be a portfolio of short-duration and primarily high-quality, investment-grade municipal bonds that generate tax-exempt income with lower interest rate sensitivity.
Both ETFs will have an estimated expense ratio of 0.12%. Vanguard Short Duration Tax-Exempt Bond ETF will also have an estimated expense ratio of 0.12%.
The ETFs provide an active counterpart to Vanguard’s existing suite of passive municipal ETFs and build upon the firm’s active fixed income ETFs alongside the recently launched Vanguard Core Bond ETF and Vanguard Core Plus Bond ETF.
Vanguard’s municipal bond team comprises over 40 team members who manage more than $247 billion in municipal assets.