Morningstar gives Vanguard Tax-Exempt Bond ETF, the second biggest muni ETF, a gold rating, the research firm’s highest.
Money is pouring into municipal bond exchange-traded funds, as the improved financial condition of municipalities, sparked by monetary and fiscal stimulus, has investors enthusiastic.
Muni ETF assets totaled $80 billion as of Sept. 30, up from less than $50 billion two years ago, according to Federal Reserve. Citigroup forecasts that total will grow more than 50%, to $125 billion by the end of next year, the Wall Street Journal reports.
iShares National Muni Bond ETF (MUB) – Get iShares National Muni Bond ETF Report is the largest muni bond ETF, with $24.9 billion in assets, according to ETF Data Base. Morningstar analyst Neal Kosciulek gives the fund a silver rating, the research firm’s second highest after gold.
“iShares National Muni Bond ETF is a good choice for low-cost exposure to the investment-grade, tax-exempt bond market,” he wrote.
“The fund provides broad, market-value weighted exposure to the municipal-bond market. It tracks the S&P National AMT-Free Municipal Bond Index, which includes investment-grade municipal bonds with at least one month until maturity and $25 million in face value … The strategy’s best feature is its modest fee. At 0.07% the fund’s expense ratio is 49 basis points lower than the category average.”
Vanguard Tax-Exempt Bond ETF (VTEB) – Get Vanguard Tax-Exempt Bond ETF Report is the second largest muni bond ETF, with $14.9 billion in assets. Kosciulek rates it gold.
“Vanguard Tax-Exempt Bond is a great option for low-cost exposure to the investment-grade, tax-exempt bond market,” he wrote.
“The fund provides broad, market-value-weighted exposure to the municipal-bond market. It tracks the S&P National AMT-Free Municipal Bond Index, which includes investment-grade municipal bonds with at least one month until maturity and $25 million in face value.”
Its fee is only 0.06%.
etftrends.com
by Dan Weil
DEC 23, 2021