Vanguard Tax-Exempt Muni Bond ETF - VTEB

Most of our emergency funding money is invested in muni fund called Vanguard Tax-Exempt Bond ETF (VTEB). It's exempt from federal income tax.

It's least expensive (0.06% expense ratio) muni ETF and contains highly diversified investment grade national muni bonds. It's weighted coupon is excellent (4.70%) and weighted duration is intermediate (hence less inflation sensitivity).

It's federal tax free annual total return has been above 3% since 2015 inception date. I have been lucky to get 5% annual return during last 3 years since I started investing in it.

It's based on broader S&P National Municipal Bond Index.

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