Why We Upgraded Vanguard Ultra-Short Bond ETF

A new manager whose experience and skills fit better with Vanguard Ultra-Short Bond ETF’s VUSB strategy has lifted its People Pillar to Above Average and its overall Morningstar Medalist Rating to Bronze from Neutral.

Thanh Nguyen, who replaced Dan Shaykevich in January 2025 and has been with Vanguard since 2013, has a lot of experience trading asset-backed securities and spent nine years on the firm’s investment-grade corporate team; ABS and corporates are staples of this fund’s diet. Shaykevich still leads Vanguard’s emerging-market team. This fund sometimes dabbles in emerging-market debt, but only at the portfolio’s margins. So, Nguyen’s expertise with ABS and investment-grade corporates is a better fit for this team. She joins fund veteran Arvind Narayanan, who also co-leads the firm’s investment-grade corporate sector team, which includes seven traders and 22 analysts. Narayanan has improved the team’s collaboration, and Vanguard’s other resources are a plus, including in-house risk specialists and economists who can help in areas like liquidity management.

Key Morningstar Metrics for Vanguard Ultra-Short Bond ETF

Morningstar Medalist Rating: Bronze

Process Pillar: Average

People Pillar: Above Average

Parent Pillar: High

A Beneficial Index Change

A new index made SPDR Nuveen ICE Municipal Bond ETF TFI a better proxy of the municipal bond market and boosted its Process Pillar rating to Above Average from Below Average and its Medalist Rating to Bronze from Neutral.

The ETF switched its benchmark in June 2025 to the ICE 1+ Year AMT-Free Broad Municipal Index, which is composed of investment-grade bonds with over 12 months to maturity. This new index significantly expands the ETF’s investment universe. Previously, the portfolio did not own any bonds rated below AA or issues related to hospitals, housing, tobacco, or airlines.

While the fund’s 15% allocation to bonds rated below AA is well below the Morningstar Category average of 46%, it is now more consistent with other broad muni market index funds. The fund should be less risky than peers, continuing to tilt toward liquid and high-quality bonds. Its 6.8-year duration sits in the middle of the intermediate and long-term muni category averages.

Key Morningstar Metrics for SPDR Nuveen ICE Municipal Bond ETF

Morningstar Medalist Rating: Bronze

Process Pillar: Above Average

People Pillar: Above Average

Parent Pillar: Above Average

Poor Stock-Picking, Analyst Turnover Hit Rating

Questions about T. Rowe Price New Asia PRASX manager Anh Lu’s stock-picking and persistent analyst turnover prompted a People Pillar downgrade to Average from Above Average and dropped its Medalist Rating to Bronze from Silver.

Suspect stock-picking, particularly in China, has been the cause of the strategy’s underperformance since 2022. Some of Lu’s trades over the past year have appeared reactive, short-term, and contrary to the fund’s long-term focused investment process. This portfolio also has omitted some strong performers from Asia and China. A large analyst team of 25 still supports Lu, but analyst turnover has been persistent; the team lost 10 analysts in the past five years, most of whom focused on China.

Key Morningstar Metrics for T. Rowe Price New Asia

Morningstar Medalist Rating: Bronze

Process Pillar: Above Average

People Pillar: Average

Parent Pillar: High