Vanguard Tax-Exempt Bond Index Fund Admiral Shares

Frequently Asked Questions About VTEAX

What does VTEAX invest in?

This index fund seeks to replicate the performance of a benchmark index representing the investment-grade portion of the U.S. municipal bond market. It achieves this by employing an indexing strategy designed to track the Standard & Poor’s National AMT-Free Municipal Bond Index, utilizing a sampling technique to align with key characteristics of the benchmark. All holdings are selected through this sampling process, ensuring that at least 80% of the fund's assets are invested in securities found within the index. Under typical circumstances, a minimum of 80% of the fund's assets will be dedicated to securities whose income is exempt from federal income taxes and the federal alternative minimum tax. A notable risk for the fund is that changes in interest rates can negatively impact it: rising rates may cause bond prices to fall, while declining rates could eventually reduce the fund's income. This fund may appeal to investors looking for potentially federal tax-exempt income who can tolerate moderate fluctuations in both price and income. Regarding 75% of its total assets, the fund is restricted from purchasing more than 10% of any issuer's outstanding voting securities, or investing over 5% of its total assets in a single issuer, unless doing so is essential to closely match its target index. These specific limitations do not extend to obligations issued by the U.S. government or its agencies.

What is the expense ratio of VTEAX?

Vanguard Tax-Exempt Bond Index Fund Admiral Shares (VTEAX) charges an expense ratio of 0.07%. This is the annual fee deducted from fund assets to cover management and operations.

What is VTEAX's dividend yield?

VTEAX's trailing-twelve-month yield is 3.45%, calculated from the sum of dividends over the past year divided by the current price.

What is the duration of VTEAX?

Effective duration measures VTEAX's sensitivity to interest-rate changes: a duration of 6 means a 1% rate move shifts NAV by roughly 6% in the opposite direction. VTEAX's current duration is published on the fund's factsheet on the issuer's website.

What is the credit quality of VTEAX?

VTEAX's credit quality breakdown (the share of holdings rated AAA through CCC and below) is published on the fund's factsheet. Higher-quality (investment-grade) funds yield less but carry less default risk than high-yield / junk bond funds.

What is the yield to maturity of VTEAX?

Yield to maturity (YTM) is the total return you'd earn from VTEAX if every bond in the portfolio is held to maturity at the current price. VTEAX's YTM is published on the fund's factsheet on the issuer's website. It differs from the trailing-12-month yield because YTM reflects current bond prices rather than historical income paid.