Vanguard’s BSV and VTES Offer Distinct Short‑Term Bond Tradeoffs

Overview

• BSV charges a 0.03% expense ratio, has about $70.4 billion in assets, and posts a roughly 4.0% trailing taxable distribution yield.
• VTES charges a 0.05% expense ratio, holds about $2.0 billion, and reports a roughly 2.7% trailing tax‑exempt distribution yield.
• BSV is a tight, roughly 30‑security mix of investment‑grade U.S. Treasuries and corporate notes that concentrates yield in taxable income.
• VTES holds about 2,667 municipal bonds, applies an ESG screen, and delivers broadly diversified, tax‑exempt income that can benefit higher‑bracket investors in taxable accounts.
• Both funds target short maturities to limit interest‑rate sensitivity, so investors should weigh fee compounding, tax‑equivalent yields, and liquidity when deciding which fund to place in taxable versus tax‑advantaged accounts.