Vanguard begun trading the Vanguard Tax-Exempt Bond Index Fund (NYSEArca: VTEB) on Tuesday, August 25, 2015.

FUND INFORMATION:

FUND OBJECTIVE:
The Vanguard Tax-Exempt Bond Index Fund seeks to track the performance the Standard & Poor’s National AMT-Free Municipal Bond Index.

REFERENCE INDEX:
The Standard & Poor’s National AMT-Free Municipal Bond Index measures the performance of the investment-grade segment of the U.S. municipal bond market.
This Index includes municipal bonds from issuers that are primarily state or local governments or agencies whose interest is exempt from U.S. federal income taxes and the federal alternative minimum tax (AMT). To be eligible for inclusion in the Index, each bond must have a rating of at least investment-grade, as determined by a nationally recognized statistical rating organization (e.g., at least BBB– by Fitch Ratings, Inc.); be denominated in U.S. dollars; and have a minimum par amount of $25 million. In addition, to be included in the Index, each bond must have a minimum term to maturity or call date greater than one calendar month.

Useful Links:
VTEB Home Page

ETFtrack Comment:
VTEB is Vanguard’s first municipal bond index product. Vanguard CEO Bill McNabb said in company’s press release: “Vanguard is a pioneer in index investing and a leader in municipal bond fund management. Our new fund enables us to leverage our experience and expertise in both these areas. Not only did we offer the first index mutual fund to individual investors, but we were also the first to offer investors a choice among municipal bond funds of differing maturities. We are pleased now to provide a low-cost tax-exempt option for investors who prefer an index approach.”