VTEB — Vanguard Tax-Exempt Bond ETF
Vanguard · Expense Ratio: 0.05% · US Bonds · roughly average for its US Bonds category
Key Facts
| Ticker | VTEB |
| Full Name | Vanguard Tax-Exempt Bond ETF |
| Provider | Vanguard |
| Expense Ratio | 0.05% |
| Category | US Bonds |
| Assets Under Management | $35B |
| Inception Year | 2015 (11 years ago) |
| Number of Holdings | 6,200 |
| Dividend Yield | ~3% (high) |
| Top Holdings | CA Muni, NY Muni, TX Muni |
What Is VTEB?
VTEB, managed by Vanguard, launched in 2015, is a major ETF with deep liquidity and tight bid-ask spreads in the US Bonds category. US bond market ETF providing fixed income exposure to government and corporate bonds. With $35B in assets under management, it benefits from deep institutional liquidity and tight bid-ask spreads.
VTEB in a FIRE Portfolio
Bonds and inflation-protected securities act as portfolio ballast — reducing volatility and providing stability during the distribution phase for FIRE investors.
Bonds stabilize your portfolio during stock market crashes. In a FIRE portfolio, a common allocation is 109% stocks / -9% bonds (the "109 minus your age" rule). Bond funds like VTEB provide the fixed-income portion of this allocation.
Cost Analysis: How VTEB's 0.05% Fee Affects Your FIRE Timeline
At 0.05%, VTEB is very cost-effective. Annual fees on a $100K investment: $50. Over 30 years, the fee drag shaves approximately 0.3% off your total returns. For a $1M FIRE portfolio, that's about $5,000 in cumulative fees — noticeable but reasonable for most investors.
Dividend Income Potential
With a high dividend yield of approximately 3%, here's what VTEB could generate in annual income at different portfolio sizes:
| Portfolio Value | Annual Dividend Income | Monthly Income |
|---|---|---|
| $100,000 | $3,000/year | $250/month |
| $250,000 | $7,500/year | $625/month |
| $500,000 | $15,000/year | $1,250/month |
| $1,000,000 | $30,000/year | $2,500/month |
Frequently Asked Questions About VTEB
What is the expense ratio for VTEB?
VTEB has an expense ratio of 0.05%. This is very cost-effective — on a $100K portfolio, annual fees are $50. Roughly average for its us bonds category.
Is VTEB good for a FIRE portfolio?
Bonds and inflation-protected securities act as portfolio ballast — reducing volatility and providing stability during the distribution phase for FIRE investors. Its 0.05% expense ratio is very cost-effective for the US Bonds category.
How does the 0.05% fee affect long-term returns?
At 0.05%, you'll pay $50/year per $100K invested. Over 30 years, fees reduce total returns by approximately 0.3%. Use the embedded calculator below to model the exact impact on your specific portfolio.
Similar ETFs in US Bonds
- BND — Vanguard Total Bond Market ETF (0.03% · Portfolio Hedge)
- AGG — iShares Core US Aggregate Bond ETF (0.03% · Portfolio Hedge)
- BNDX — Vanguard Total International Bond ETF (0.07% · Portfolio Hedge)
- BIV — Vanguard Intermediate-Term Bond ETF (0.04% · Portfolio Hedge)
- BSV — Vanguard Short-Term Bond ETF (0.04% · Portfolio Hedge)
- VCIT — Vanguard Intermediate-Term Corporate Bond ETF (0.04% · Portfolio Hedge)
- VCSH — Vanguard Short-Term Corporate Bond ETF (0.04% · Portfolio Hedge)
- MUB — iShares National Muni Bond ETF (0.05% · Portfolio Hedge)
- SHY — iShares 1-3 Year Treasury Bond ETF (0.15% · Portfolio Hedge)
- IEI — iShares 3-7 Year Treasury Bond ETF (0.15% · Portfolio Hedge)
- TLT — iShares 20+ Year Treasury Bond ETF (0.15% · Portfolio Hedge)
- GOVT — iShares US Treasury Bond ETF (0.05% · Portfolio Hedge)