| |
Transaction
Fee on Purchases and Sales |
|
Transaction
Fee on Reinvested Dividends |
|
Transaction
Fee on Conversion to ETF Shares |
|
| |
Management
Fees |
|
12b-1
Distribution Fee |
|
Other
Expenses |
|
Total
Annual Fund Operating Expenses |
|
1
Year |
3
Years |
5
Years |
10
Years |
$ |
$ |
$ |
$ |
|
Total
Return |
Quarter |
|
|
|
|
- |
|
|
1
Year |
5
Years |
Since
Fund
Inception |
Fund
Inception
Date |
Vanguard
Tax-Exempt Bond Index Fund
ETF
Shares |
|
|
|
|
Based
on NAV |
|
|
|
|
Return Before
Taxes |
- |
|
|
|
Return After
Taxes on Distributions |
- |
|
|
|
Return After
Taxes on Distributions and Sale of
Fund
Shares |
- |
|
|
|
Based
on Market Price |
|
|
|
|
Return Before
Taxes |
- |
|
|
|
S&P
National AMT-Free Municipal Bond
Index
(reflects no
deduction for fees, expenses,
or
taxes) |
- |
|
|
|
Plain
Talk About Fund Expenses |
All funds
have operating expenses. These expenses, which are deducted
from a
fund’s gross income, are expressed as a percentage of the net assets
of the
fund. Assuming that operating expenses remain as stated in the Fees
and
Expenses section, Vanguard Tax-Exempt Bond Index Fund ETF Shares’
expense
ratio would be 0.05%, or $0.50 per $1,000 of average net assets.
The
average expense ratio for general municipal funds in 2021 was 0.75%,
or $7.50
per $1,000 of average net assets (derived from data provided by
Lipper, a
Thomson Reuters Company, which reports on the fund
industry). |
Plain
Talk About Costs of Investing |
Costs
are an important consideration in choosing an ETF. That is because
you,
as a shareholder, pay a proportionate share of the costs of operating a
fund
and any transaction costs incurred when the fund buys or sells
securities.
These costs can erode a substantial portion of the gross income
or
the capital appreciation a fund achieves. Even seemingly small differences
in
expenses can, over time, have a dramatic effect on a fund’s
performance. |
Type
of Bond (Maturity) |
After
a 1%
Increase |
After
a 1%
Decrease |
After
a 2%
Increase |
After
a 2%
Decrease |
Short-Term
(2.5 years) |
$977 |
$1,024 |
$954 |
$1,049 |
Intermediate-Term
(10 years) |
922 |
1,086 |
851 |
1,180 |
Long-Term
(20 years) |
874 |
1,150 |
769 |
1,328 |
Plain
Talk About Bonds and Interest Rates |
As
a rule, when interest rates rise, bond prices fall. The opposite is also
true:
Bond
prices go up when interest rates fall. Why do bond prices and interest
rates
move in opposite directions? Let’s assume that you hold a bond
offering
a 4% yield. A year later, interest rates are on the rise and bonds of
comparable
quality and maturity are offered with a 5% yield. With
higher-yielding
bonds available, you would have trouble selling your 4% bond
for
the price you paid—you would probably have to lower your asking price.
On
the other hand, if interest rates were falling and 3% bonds were being
offered,
you should be able to sell your 4% bond for more than you
paid. |
Plain
Talk About Bond Maturities |
A
bond is issued with a specific maturity date—the date when the issuer
must
pay back the bond’s principal (face value). Bond maturities range from
less
than 1 year to more than 30 years. Typically, the longer a bond’s
maturity,
the
more price risk you, as a bond investor, will face as interest rates
rise—but
also the higher the potential yield you could receive. Longer-term
bonds
are generally more suitable for investors willing to take a greater risk
of
price fluctuations to get higher and more stable interest income.
Shorter-term
bond investors should be willing to accept lower yields and
greater
income variability in return for less fluctuation in the value of their
investment.
The stated maturity of a bond may differ from the effective
maturity
of a bond, which takes into consideration that an action such as a
call
or refunding may cause bonds to be repaid before their stated
maturity
dates. |
Plain
Talk About Callable Bonds |
Although
bonds are issued with clearly defined maturities, in some cases the
bond
issuer has a right to call in (redeem) the bond earlier than its maturity
date. When
a bond is called, the bondholder may have to replace it with
another
bond with a lower yield than the original bond. One way for bond
investors
to protect themselves against call risk is to purchase a bond early
in its
lifetime, long before its call date. Another way is to buy bonds with
lower
coupon rates or interest rates, which make them less likely to
be
called. |
Plain
Talk About Credit Quality |
A
bond’s credit quality rating is an assessment of the issuer’s ability to
pay
interest
on the bond and, ultimately, to repay the principal. The lower the
credit
quality, the greater the perceived chance that the bond issuer will
default,
or fail to meet its payment obligations. All things being equal, the
lower
a bond’s credit quality, the higher its yield should be to compensate
investors
for assuming additional risk. |
Plain
Talk About Derivatives |
Derivatives
can take many forms. Some forms of derivatives—such as
exchange-traded
futures and options on securities, commodities, or
indexes—have
been trading on regulated exchanges for decades. These
types
of derivatives are standardized contracts that can easily be bought and
sold
and whose market values are determined and published daily. On the
other
hand, non-exchange-traded derivatives—such as certain swap
agreements—tend
to be more specialized or complex and may be more
difficult
to accurately value. |
Plain
Talk About Vanguard’s Unique Corporate Structure |
Vanguard
is owned jointly by the funds it oversees and thus indirectly by the
shareholders
in those funds. Most other mutual funds are operated by
management
companies that are owned by third parties—either public or
private
stockholders—and not by the funds they
serve. |
Plain
Talk About Distributions |
As
a shareholder, you are entitled to your portion of a fund’s income from
interest
as well as capital gains from the fund’s sale of investments. Income
consists
of interest the fund earns from its money market and bond
investments.
The portion of such dividends that is exempt from federal
income
tax will be designated as “exempt-interest dividends.” Capital gains
are
realized whenever the fund sells securities for higher prices than it paid
for
them. These capital gains are either short-term or long-term, depending
on
whether the fund held the securities for one year or less or for more than
one
year. |
Vanguard
Fund |
Inception
Date |
|
Vanguard
Fund
Number |
CUSIP
Number |
Vanguard
Tax-Exempt Bond Index Fund |
|
|
|
|
ETF
Shares |
8/21/2015 |
|
4391 |
922907746 |
|
Year Ended October
31, | ||||
For a
Share Outstanding Throughout Each Period |
2022 |
2021 |
2020 |
2019 |
2018 |
Net
Asset Value, Beginning of Period |
$54.63 |
$54.17 |
$53.52 |
$50.12 |
$51.65 |
Investment
Operations |
|
|
|
|
|
Net
Investment Income1 |
1.009 |
.937 |
1.129 |
1.262 |
1.161 |
Net
Realized and Unrealized Gain (Loss) on Investments |
(7.119) |
.467 |
.660 |
3.380 |
(1.595) |
Total from
Investment Operations |
(6.110) |
1.404 |
1.789 |
4.642 |
(.434) |
Distributions |
|
|
|
|
|
Dividends
from Net Investment Income |
(.940) |
(.944) |
(1.139) |
(1.242) |
(1.096) |
Distributions
from Realized Capital Gains |
— |
— |
— |
— |
— |
Total
Distributions |
(.940) |
(.944) |
(1.139) |
(1.242) |
(1.096) |
Net
Asset Value, End of Period |
$47.58 |
$54.63 |
$54.17 |
$53.52 |
$50.12 |
Total
Return |
-11.30% |
2.60% |
3.38% |
9.36% |
-0.85% |
Ratios/Supplemental
Data |
|
|
|
|
|
Net
Assets, End of Period (Millions) |
$20,759 |
$14,139 |
$9,397 |
$6,126 |
$3,509 |
Ratio of
Total Expenses to Average Net Assets |
0.05%2 |
0.05% |
0.06% |
0.06% |
0.08% |
Ratio of
Net Investment Income to Average Net Assets |
1.97% |
1.70% |
2.10% |
2.41% |
2.28% |
Portfolio
Turnover Rate3 |
23% |
11% |
8% |
18% |
22% |
|
|
1 |
Calculated
based on average shares outstanding. |
2 |
The
ratio of expenses to average net assets for the period net of reduction
from custody fee offset arrangements
was
0.05%. |
3 |
Excludes
the value of portfolio securities received or delivered as a result of
in-kind purchases or redemptions of
the
fund’s capital shares, including ETF Creation Units.
|