At a glance
VCRM charges 0.12% a year, below the 0.27% average of the 7 funds most like it (the 3rd cheapest of 8). It has $1.80B in assets, the 8th largest of that group; it paid 1.28% of its price in distributions over the past 12 months, monthly. Its ten largest positions make up 6.0% of the fund, out of 2,396 in all.
The short version
Vanguard Core Tax-Exempt Bond ETF (VCRM) is an actively managed fund that buys US municipal bonds. The interest on these bonds is generally free from federal income tax and the alternative minimum tax. It charges 0.12% a year, less than half the 0.27% average of similar funds, though more than Vanguard's VTEB at 0.03%. It holds longer bonds than many muni funds and may put up to 20% in below-investment-grade bonds.
Price history
The interactive chart needs JavaScript.
VCRM — over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| VCRM official prospectus, to Dec 31, 2025 | — | +4.46% | — | — | — | +4.09% |
| VCRM price data to Oct 27, 2026 | -1.8% | — | — | — | — | — |
- The deepest fall in its price history was 6.3% (Jul 2, 2026 to Sep 29, 2026), not yet recovered.
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
Dividends and income
No distribution history is available for this fund.
Distributions through Oct 27, 2026.What's inside
As of Jul 31, 2026, the fund held 2,396 securities; the ten largest made up 5.98% of assets.
| Holding | Weight | |
|---|---|---|
| New Issuer: BB Company ID:041064767 Bonds and notes | 0.84% | |
| Black Belt Energy Gas District Class B Bonds and notes | 0.75% | |
| Commonwealth of Massachusetts Transportation Fund Revenue Bonds and notes | 0.67% | |
| Black Belt Energy Gas District Class B Bonds and notes | 0.64% | |
| Kentucky Public Energy Authority Bonds and notes | 0.56% | |
| Chicago O'Hare International Airport Bonds and notes | 0.56% | |
| Jefferson Sales Tax District Bonds and notes | 0.55% | |
| Black Belt Energy Gas District Class A Bonds and notes | 0.48% | |
| PEFA Inc Bonds and notes | 0.47% | |
| Texas Department of Housing & Community Affairs Bonds and notes | 0.46% | |
| Public Finance Authority Bonds and notes | 0.44% | |
| Energy Southeast A Cooperative District Bonds and notes | 0.44% | |
| Las Vegas Convention & Visitors Authority Bonds and notes | 0.43% | |
| Massachusetts Development Finance Agency Bonds and notes | 0.42% | |
| Grand Parkway Transportation Corp Bonds and notes | 0.41% |
By country
United States 98.47%By issuer
Municipalities 97.86%US government-sponsored enterprises 0.38%Companies 0.24%The bonds mature in 19 years on average (weighted by size), with an average coupon of 4.72%.
Source: N-PORT holdings report as of Jul 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Jul 31, 2026, investors added a net $532.7M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.54%, +0.87%, -1.61%.
How it works
VCRM does not track an index. Vanguard's managers pick the bonds. Its aim is total return, which means tax-exempt income plus price gains. Under a fundamental policy, at least 80% of net assets go into debt issued by US states, local governments or their agencies whose interest is exempt from federal income tax and the alternative minimum tax (AMT). The fund targets a dollar-weighted average maturity of 8 to 20 years. As of July 31, 2026, that average was 19 years, near the top of the range, and the average coupon was 4.72%.
Most of the money goes into investment-grade bonds, meaning Baa3 or higher by Moody's or unrated bonds the advisor judges to be of similar quality. Up to 20% can go into high-yield ("junk") munis. The fund is legally nondiversified, so it may put more into a single issuer than a diversified fund could. In practice it held 2,396 issues as of July 31, 2026, and its top ten made up just 5.98% of assets. The largest were University of Cincinnati general receipts bonds (0.84%), three Black Belt Energy Gas District issues, Massachusetts transportation fund revenue bonds and Chicago O'Hare airport bonds.
Since there is no index, there is no fixed rebalancing schedule. The managers buy and sell as they see fit. Portfolio turnover was 18%, according to the prospectus. The fund also held 1.62% in cash and a small position in interest-rate derivatives (0.03%).
What it really costs
- VCRM charges 0.12% a year, versus an average of 0.27% for the similar funds below (3rd of 8, cheapest first).
- Of that, 0.09% is the management fee; the rest covers other fund expenses.
- Using the prospectus's standard example, $10,000 invested would cost about $12 in the first year and $154 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| VCRM | $12 | $39 | $68 | $154 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
Its main job is monthly interest that is exempt from federal income tax, drawn from a broad mix of municipal bonds.
VCRM could add monthly tax-exempt income to a taxable account, where that exemption is worth the most. Its record is short. It launched on November 21, 2024, so it was not around for the 2008, 2020 or 2022 sell-offs. Its only full calendar year, 2025, returned 5.1%. Its deepest drop in the available price history was 6.3%, from July 2 to September 29, 2026, and it had not recovered as of October 27, 2026. Its bonds averaged 19 years to maturity, so rising rates can push the price down just when someone needs to sell.
The trailing 12-month yield was 1.28% as of October 27, 2026, paid monthly. That figure rests on a short price history. Costs are 0.12% a year, or $154 over 10 years in the SEC's $10,000 example. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors with taxable accounts who want monthly income free of federal income tax and the AMT, for 0.12% a year.
- People who want municipal bonds picked by a manager rather than an index, at far less than FMB's 0.65% fee.
- Holders comfortable with longer bonds and their rate swings; the average maturity was 19 years as of July 31, 2026.
Look elsewhere if
- Investors holding bonds in IRAs or 401(k)s, where tax-exempt interest brings no extra tax benefit.
- Cost-focused investors: Vanguard's VTEB charges 0.03% and iShares' MUB 0.05%, and both hold shorter bonds on average.
- Anyone who wants a long track record; the fund launched in November 2024 and has not been through a major bear market.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| VCRM this fund | 19 yrs | 0.12% | $1.80B | — | — |
| HYD VanEck High Yield Muni ETF | 19.2 yrs | 0.32% | $4.43B | +0.9% | +5.5% |
| HYMB SPDR Nuveen Bloomberg High Yield Municipal … | 20.5 yrs | 0.35% | $3.09B | -0.5% | +5.6% |
| PZA Invesco National AMT-Free Municipal Bond ETF | 22.5 yrs | 0.28% | $4.24B | -2.7% | +3.8% |
| FMB First Trust Managed Municipal ETF | 15.5 yrs | 0.65% | $2.05B | 0.0% | +4.3% |
| TFI SPDR Nuveen Bloomberg Municipal Bond ETF | 15.1 yrs | 0.23% | $3.12B | -0.8% | +3.9% |
| VTEB Vanguard Tax-Exempt Bond ETF | 14.5 yrs | 0.03% | $48.52B | +0.1% | +4.4% |
| MUB iShares National Muni Bond ETF | 13.5 yrs | 0.05% | $45.38B | -0.2% | +3.7% |
Questions investors ask
Is VCRM good for retirement income?
It may suit retirees who want monthly income free from federal income tax in a taxable account. The fund returned 5.1% in 2025, its first full year, and 4.09% a year from launch through December 31, 2025. But its record is short. It holds long bonds averaging 19 years to maturity, and it was down 1.8% for the year as of October 27, 2026. Its income and price can both move with interest rates.
What's the difference between VCRM and VTEB?
Both are Vanguard municipal bond ETFs, but VCRM is actively managed and costs 0.12% a year, while VTEB costs 0.03%. VCRM held longer bonds, averaging 19 years to maturity versus 14.5 for VTEB. It can also put up to 20% in junk-rated munis. VTEB is much larger, with about $48.5 billion in net assets, compared with about $1.8 billion for VCRM across all share classes, both as of July 31, 2026.
Does VCRM pay monthly dividends?
Yes. VCRM pays income monthly. Over the trailing 12 months it paid $0.94 per share, a yield of 1.28% as of October 27, 2026. Because the fund's price history is short, that trailing figure may not show the full income stream. Most of the interest is exempt from federal income tax and the AMT. State taxes may still apply, and any capital gains the fund distributes are taxable.
Does VCRM own junk bonds?
It can, but only up to 20% of assets. The prospectus says a majority of the fund is typically in investment-grade munis, meaning Baa3 or higher by Moody's or unrated bonds of similar quality. High-yield munis pay more but are more volatile, harder to sell and more likely to default. Funds such as HYD and HYMB focus on high-yield munis, which is a different strategy from VCRM's.
What is VCRM's expense ratio?
VCRM's expense ratio is 0.12% a year, which includes a 0.09% management fee. In the SEC's standard example, $10,000 invested with a 5% annual return would cost about $12 after one year, $39 after three, $68 after five and $154 after ten. That puts it 3rd lowest of 8 similar funds, whose average is 0.27%. Vanguard's VTEB (0.03%) and iShares' MUB (0.05%) cost less.