Latest news with #PerryneDesai
Yahoo
29-05-2025
- Business
- Yahoo
Vanguard's 2 New Muni ETFs Have an Advantage Over Mutual Funds
Who wants some beta? Vanguard rounded out its municipal bond fund suite last week with a pair of passively managed tax-exempt funds: the Long-Term Tax-Exempt Bond and New York Tax-Exempt Bond ETFs. The strategies are new, not replicating existing mutual funds from the company's extensive product line. There are, however, two active mutual funds in the same category, the Admiral shares of which charge 9 basis points — the same fee charged by the passive ETFs. But there is still a draw for index-level returns, or beta. 'Some clients just want the beta,' along with the low cost and ease of operation with an ETF, said Perryne Desai, senior fixed income product manager for the two new funds. 'Now that bonds are actually yielding something and they are a safe harbor … there is no better time to be in fixed income. There's no better time to be in munis.' This story was originally published on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter. Vanguard has been building out its muni bond ETF line for two years, Jeff DeMaso, editor of The Independent Vanguard Adviser, said in a statement about the launch. With the additions, Vanguard has two dozen muni mutual funds and ETFs. The two new products 'won't turn heads but are practical additions to Vanguard's roster,' DeMaso said. And they don't necessarily offer a cost advantage over two existing active mutual funds, unless one takes into account the $50,000 minimum needed for Vanguard's Admiral shares — the Investor shares, which have a $3,000 minimum, charge 17 basis points for the Long-Term and 14 for the New York version. 'If you are willing to own a mutual fund (over an ETF), you can get Vanguard's active management for free,' DeMaso said. 'That's a good deal in my book.' Some of the details about the active funds: The Long-Term Tax-Exempt Fund, at $16.9 billion, has trailing returns of 0.26% over a year, 2.9% over three years, and 0.76% over five years, data from Morningstar show. The New York Long-Term Tax-Exempt Fund, at $5.1 billion, returned 0.28% over a year, 3.04% over three years, and 0.73% over five. Better for the Beta: The new ETFs are managed by Vanguard's fixed income group, whose track record in active management benefits the index team, Desai said, citing the example of the nearly 10-year-old Tax-Exempt Bond ETF, which has a beta of 0.97, according to Morningstar. 'Our tracking error is pretty darn tight, and in municipals, that's difficult to accomplish.' The post Vanguard's 2 New Muni ETFs Have an Advantage Over Mutual Funds appeared first on The Daily Upside.
Yahoo
23-05-2025
- Business
- Yahoo
Vanguard Introduces Pair of New Muni Bond ETFs: VTEL, MUNY
Vanguard, with roughly $2.9 trillion in 89 ETFs, is expanding its bond exchange-traded fund lineup with two new tax-exempt municipal bond ETFs, the asset management giant announced Thursday. Both the Vanguard Long-Term Tax-Exempt Bond ETF (VTEL) and the Vanguard New York Tax-Exempt Bond ETF (MUNY) are designed for investors looking to generate tax-exempt income through high-quality fixed income. Each ETF comes with a 0.09% expense ratio and may be attractive to investors who prefer passive management, according to a press release issued by Vanguard. 'This is a really great time for investing in muni bonds,' Perryne Desai, senior fixed-income product manager at Vanguard, told 'When you look at the long end of the curve, you're getting almost the same yield from a 30-year municipal product as you are in a Treasury product, and then you get the tax-equivalent benefit.' The introduction of these funds builds on years of launching similar products, starting with the flagship Vanguard Tax-Exempt Bond ETF (VTEB) in 2015. The firm then debuted the Vanguard Short-Term Tax-Exempt Bond ETF (VTES) in 2023, followed by the Vanguard Intermediate-Term Tax-Exempt Bond ETF (VTEI) and Vanguard California Tax-Exempt Bond ETF (VTEC) in 2024. The two funds introduced today 'represent the finality of that lineup build in a lot of ways,' Desai said. VTEL offers investors exposure to longer duration municipal bonds, low fees, tax efficiency and trading flexibility. 'We wanted to create the duration positioning for clients so they can choose where along the curve they'd like to invest, rather than having an all-curve product,' Desai added. 'Lots of people are very happy and comfortable in our VTEB product, but some like to break up duration into the various buckets—short, intermediate and long—and we wanted to make sure that they had the tools and the toolkit that they would want to use.' And like the California-specific VTEC, MUNY gives investors in a large, high-tax state the ability to access muni bonds from their state at a low cost. Vanguard's suite of muni products now includes six index ETFs, two active ETFs, 12 active mutual funds, one index mutual fund and three money market | © Copyright 2025 All rights reserved
