VALLEY FORGE, PA (March 9, 2023)—Vanguard today launched Vanguard Short-Term Tax-Exempt Bond ETF (Ticker: VTES). The new municipal bond index ETF is managed by Vanguard Fixed Income Group and is designed for tax-sensitive investors with a short-term time horizon and low interest rate risk tolerance.

“Vanguard Short-Term Tax-Exempt Bond ETF is built to optimize tax efficiency for investors seeking to allocate to the shorter end of the municipal bond market,” said Sara Devereux, global head of Vanguard Fixed Income Group. “The new ETF complements our broad fixed income lineup and provides clients with another avenue to tap our municipal bond team’s talent and capabilities.”

Vanguard Short-Term Tax-Exempt Bond ETF predominantly invests in short-term investment grade municipal bonds and will track the S&P^® 0-7 Year National AMT-Free Municipal Bond Index. The ETF has an expense ratio of 0.07%, compared to 0.56% for the average short-term bond fund.¹ Steve McFee, CFA^® who has been at Vanguard for 18 years, is the portfolio manager of Vanguard Short-Term Tax-Exempt Bond ETF.

Vanguard Fixed Income Group

For more than four decades, Vanguard Fixed Income Group has distinguished itself with deep investment capabilities, disciplined security selection processes, and rigorous risk management techniques, resulting in consistent, long-term performance. Vanguard’s track record reflects this, with 89% of Vanguard bond funds outperforming their peer group averages over the ten-year period ending December 31, 2022.² The new ETF is managed by the same municipal bond team that backs Vanguard Tax-Exempt Bond ETF (Ticker: VTEB), which has grown to more than $25 billion in assets and has delivered competitive performance with low tracking error to investors over the past seven years.³

###

About Vanguard

Founded in 1975, Vanguard is one of the world's leading investment management companies. The firm offers investments, advice, and retirement services to individual investors, institutions, and financial professionals. Vanguard operates under a unique, investor-owned structure where Vanguard fund shareholders own the funds, which in turn own Vanguard. As such, Vanguard adheres to a simple purpose: To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success. For more information, visit vanguard.com.

All figures as of January 31, 2023, unless stated otherwise.

¹ Source: Morningstar as of January 31, 2023

² For the ten-year period ended December 31, 2022, 80 of 90 Vanguard bond funds outperformed their peer group averages; results will vary for other time periods. Only funds with a minimum ten-year history were included in the comparisons. (Source: Lipper, a Thomson Reuters Company) Note that this competitive performance data represents past performance, which is not a guarantee of future results, and that all investments are subject to risks. For the most recent performance, visit our website at www.vanguard.com/performance.

³ Vanguard Short-Term Tax-Exempt Bond Fund, which is a multi-share class fund that includes Vanguard Short-Term Tax-Exempt Bond Index Fund Admiral Shares (VTEAX) and VTEB had net assets of $26.6 billion as of December 31, 2022. VTEB had a 5-year tracking error of 0.09% as of December 31, 2022. See the fund’s profile page for more information. Past performance does not guarantee future results.

For more information about Vanguard funds or ETF Shares, contact your financial advisor to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

All investing is subject to risk, including possible loss of principal. Diversification does not ensure a profit or protect against a loss.

Bond funds are subject to interest rate risk, which is the chance bond prices overall will decline because of rising interest rates, and credit risk, which is the chance a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline.

Although the income from a municipal bond fund is exempt from federal tax, you may owe taxes on any capital gains realized through the fund's trading or through your own redemption of shares. For some investors, a portion of the fund's income may be subject to state and local taxes, as well as to the federal Alternative Minimum Tax.

Vanguard Marketing Corporation, Distributor.