Best stocks to invest in – Vanguard Tax-Exempt Bond ETF (VTEB) Hits New 52-Week High



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For investors seeking momentum, Vanguard Tax-Exempt Bond ETF (VTEB) is probably on radar now. The fund just hit a 52-week high, and is up roughly 2.8% from its 52-week low price of $49.62/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.

VTEB in Focus    

VTEB provides exposure to the investment-grade segment of the U.S. municipal bond market. The product has 565 bonds in its portfolio. The fund has 5.5 years of average duration entailing moderate interest rate risk. The product charges investors 12 basis points in fees (see: all Municipal Bond ETFs here).

Why the Move?

Municipal bonds are great picks for investors seeking a steady stream of tax-free income. Usually the interest income from munis is exempted from federal tax and sometimes even state taxes, making these especially attractive to investors in the high tax bracket looking to reduce their tax liability.


So, investors concerned about taxes, might have picked this ETF.  With long-term U.S. treasury yields not moving up markedly post lift-off, and in fact declining in a few trading sessions, the flair for bond investing has not faded yet. All these explain the latest ascent in the Vanguard Tax-Exempt Bond ETF.

More Gains Ahead?

The operating environment for the muni bonds space looks moderate at the current level. While further Fed rate hikes could go against the fund, still-benign long-term treasury yields hold some promise for those who want to ride this surging ETF a little further.

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VANGD-TAX EX BD (VTEB): ETF Research Reports
 
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