Vanguard has filed with the U.S. Securities and Exchange Commission (SEC) to launch a new national municipal bond index fund with an exchange-traded fund (ETF) share class in the second quarter of 2015.
Dubbed as Vanguard Tax-Exempt Bond Index Fund, the tax-exempt index fund will provide investors exposure to investment-grade municipal bonds across the entire yield curve
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The fund will also provide a sustainable level of current income that is exempt from federal personal income taxes.
Benchmarked against the S&P National AMT-Free Municipal Bond Index, the fund will be available in three share classes: Investor Shares, Admiral Shares, and ETF Shares with estimated expenses ratio of 0.20%, 0.12%, and 0.12%, respectively.
Vanguard said that the investor Shares will need a minimum initial investment of $3,000, while Admiral Shares will require a minimum initial investment of $10,000.
Vanguard CEO Bill McNabb said: "For investors in high tax brackets, a high-quality, broadly diversified municipal bond fund or ETF can provide tax advantages as well as diversification from the risks of the equity market."
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