Which Is the Better Short-Term Bond ETF, Vanguard's VTES or VanEck's SMB?

Robert Izquierdo, The Motley Fool

Sat, August 15, 2026 astatine 11:54 AM CDT 4 min read

The VanEck Short Muni ETF (NYSEMKT:SMB) and Vanguard Short-Term Tax-Exempt Bond ETF (NYSEMKT:VTES) some people the short-end of the municipal enslaved market, offering national tax-exempt income with debased volatility.

Investors seeking to parkland currency successful a tax-advantaged mode often look to short-duration municipal bonds. These funds supply a buffer against involvement complaint swings portion keeping wealth accessible. While they stock akin goals of providing national tax-exempt income, differences successful issuer scale, expenses, and portfolio extent separate the 2 options.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from monthly returns implicit the disposable money past (up to 5 years). The 1-year instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The Vanguard money maintains a flimsy outgo vantage with a 0.05% disbursal ratio compared to 0.07% for the VanEck fund. This outgo ratio is simply a hallmark of Vanguard indexing, though the VanEck money has precocious provided a marginally higher trailing payout for yield-focused investors.

Performance & hazard examination

What's wrong

The VanEck Short Muni ETF tracks the ICE Short AMT-Free Broad National Municipal Index, focusing connected short-duration, tax-exempt municipal bonds. Its largest positions see the New York City Transitional Finance Authority astatine 1.05%, Indiana Finance Authority astatine 1.03%, and Charlotte-Mecklenburg Hospital Authority astatine 1.03%. The money holds 335 securities. It was launched successful 2008. It utilizes an ESG surface to filter its holdings. The VanEck Short Muni ETF has paid $0.48 per stock implicit the trailing 12 months, which connected its caller ~$17.27 stock terms works retired to a 2.8% yield.

The Vanguard Short-Term Tax-Exempt Bond ETF is simply a fixed income fund, tracking the S&P 0-7 Year National AMT-Free Municipal Bond Index. The money is highly diversified, holding 3,373 securities, and nary azygous presumption exceeds 0.49% of the portfolio. It was launched successful 2023. This money besides incorporates an ESG surface into its process. The Vanguard Short-Term Tax-Exempt Bond ETF has paid $2.76 per stock implicit the trailing 12 months, which connected its caller ~$100.95 stock terms works retired to a 2.7% yield.