Vanguard Limited-Term Tax-Exempt Fund Investor Shares

This economical municipal bond fund is designed to provide revenue that is free from federal income taxes, making it particularly appealing to individuals in higher tax brackets. It primarily holds high-grade municipal debt with shorter maturities, maintaining an average duration, or interest rate sensitivity, of approximately two years, which is slightly longer than its Short-Term Tax-Exempt counterpart. A key risk involves interest rate movements; both increases and decreases in rates could lead to a decline in bond valuations or a future reduction in the fund's income. This fund is ideal for investors seeking a moderate level of federally tax-exempt earnings who are comfortable with some variability in their income stream and share price.