VTEB: Exempt and Potential Higher Yield

The VTEB — the Vanguard Tax‑Exempt Bond Index Fund ETF — may be gaining renewed interest among investors seeking federally tax‑exempt income paired with low costs. The fund passively tracks the S&P National AMT‑Free Municipal Bond Index, which covers investment‑grade municipal bonds whose interest is exempt from U.S. federal tax and the alternative minimum tax. Here are the key details: VTEB currently offers a tax‑exempt yield around 3.2%‑3.3%, making it a solid source of after‑tax income. Credit quality is strong, with approximately 79% of the holdings rated AAA or AA, supporting the fund’s conservative stance. The fund’s expense ratio is ultra‑low at around 0.03%, significantly reducing drag on returns. The article argues that VTEB is well‑suited as a core conservative holding for medium‑ to long‑term investors seeking stability and potentially enhanced yield if interest rates decline. That said, investors should remain aware of the typical risks associated with municipal bond funds, including interest‑rate sensitivity, credit risk (even though high here), and potential regional/state exposure. The fund’s tax‑advantaged nature makes it more appealing for taxable accounts, especially for higher‑bracket investors. In short: if you’re prioritizing federally tax‑free income, high credit quality and low cost — and you’re comfortable with municipal bond exposures — VTEB presents a compelling option in today’s bond landscape. #MunicipalBonds #TaxExemptIncome #VanguardETF #FixedIncomeStrategy #SlimScan #GrowthStocks #CANSLIM