Vanguard High-Yield Tax-Exempt Fund Investor Shares

This fund endeavors to deliver a significant and consistent stream of current income, free from federal personal income taxes. It predominantly allocates its assets (a minimum of 80%) to municipal bonds that are classified as investment-grade, either by recognized rating organizations or by the advisor's assessment. A smaller portion, up to 20% of its holdings, may be invested in bonds with a lower credit quality. Although there are no specific limits on the maturity of individual securities, the fund generally maintains a dollar-weighted average maturity ranging from 10 to 25 years. As a cost-effective municipal bond offering, it is particularly appealing to investors in higher tax brackets who are seeking federally tax-exempt earnings. The fund's potential for a higher yield, often linked to its exposure to lower credit quality bonds, means it carries an increased risk of price volatility due to the uncertain financial health of bond issuers. It is best suited for individuals who prioritize sustainable federally tax-exempt interest income, are willing to accept moderate risk to their principal, and wish to incorporate it as a supplementary component within an already diversified fixed income portfolio.