VTEB VS HYD: A Comprehensive Comparison of ETFs
4 min read
By Ron Koren, ETF Insider

VTEB VS HYD: A Comprehensive Comparison of ETFs

Exchange-Traded Funds (ETFs) have transformed the investment landscape, providing investors with access to diversified portfolios across various sectors and asset classes. In this comprehensive analysis, we will delve into a thorough comparison between two notable ETFs: VTEB (Vanguard Tax-Exempt Bond ETF) and HYD (VanEck Vectors High-Yield Municipal Index ETF). Our exploration will encompass essential aspects such as ticker symbols, full names, issuers, sectors, top holdings, capitalization, investment strategies, tracking methods, and exposure.

VTEB VS HYD: Overview

VTEB and HYD are two distinct ETFs targeting the municipal bond market, but they cater to different segments within this space. VTEB seeks to provide tax-exempt income by investing in investment-grade municipal bonds, while HYD focuses on high-yield municipal bonds. Understanding the contrasting nature of these ETFs can guide investors in aligning their portfolios with their income objectives and risk preferences.

VTEB VS HYD: Sectors and Top Holdings

VTEB's primary sector revolves around municipal bonds issued by various states and municipalities. Its holdings include bonds used to finance public infrastructure projects and services. On the other hand, HYD concentrates on high-yield municipal bonds, which often carry higher credit risk but also offer the potential for higher returns. Comparing the sectors and top holdings of VTEB and HYD enables investors to evaluate the trade-offs between safety and yield.

VTEB overlap VTEB VS HYD: A Comprehensive Comparison of ETFsVTEB overlap VTEB VS HYD: A Comprehensive Comparison of ETFs

VTEB VS HYD: Capitalization and Investment Strategy

VTEB, being an offering from Vanguard, boasts a substantial asset under management (AUM), reflecting its popularity among investors seeking tax-efficient income. Its strategy is to provide exposure to a broad range of investment-grade municipal bonds to generate tax-free interest. Conversely, HYD's strategy centers around capturing yield from high-yield municipal bonds, albeit with higher default risk. The differences in capitalization and investment strategy impact the potential risk-return profiles of these two ETFs.

VTEB VS HYD: Tracking and Exposure

VTEB tracks an index composed of investment-grade municipal bonds issued across various states and municipalities, aiming to replicate the performance of the Bloomberg Barclays Municipal Bond Index. HYD, on the other hand, tracks an index of high-yield municipal bonds, emphasizing bonds with lower credit quality but higher coupon payments. Investors looking for tax-efficient income or higher yield have the opportunity to choose between these two ETFs based on their risk appetite and income needs.


VTEB and HYD present investors with distinct avenues to tap into the municipal bond market, catering to different income objectives and risk tolerances. To gain deeper insights into the underlying holdings, correlations, and potential overlaps, investors can turn to tools like ETF insider. This user-friendly application offers comprehensive information about various financial instruments, aiding investors in making informed decisions.

Disclaimer: This article does not provide any investment advisory services.


Vanguard Tax-Exempt Bond ETF (VTEB) official website
VanEck Vectors High-Yield Municipal Index ETF (HYD) official website

VTEB ETF issuer
VTEB ETF official page

VTEB quote and analysis

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