Vanguard Takes Steps to Align Municipal Money Market Lineup with Changing Market Dynamic

The Vanguard Group

VALLEY FORGE, PA — Vanguard announced steps to align its money market lineup with changing market dynamics. Vanguard has a long history of refining its fund offerings in an effort to best meet investors’ needs and to adapt to shifting market dynamics.

After careful review, Vanguard determined that the limited supply of specific short-term municipal securities available in Pennsylvania (PA) and New Jersey (NJ) makes it no longer possible to meet the investment objectives and maintain the diversification and risk profile of the $1.8 billion Vanguard Pennsylvania Municipal Money Market Fund and the $1.2 billion Vanguard New Jersey Municipal Money Market Fund.

Vanguard has closed both funds to new investors and plans to liquidate each of the funds in November. Vanguard will continue to invest in the PA and NJ market universes as part of its national Municipal Money Market Fund and its PA and NJ long-term tax-exempt funds.

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“We are focused on providing a viable and thoughtful lineup of money market products, and we are confident that our streamlined suite of tax-exempt money market funds is well suited to meet investors’ cash management and tax-free income preferences,” said Greg Davis, Vanguard Chief Investment Officer.

“Due to the short supply of certain types of municipal securities available in Pennsylvania and New Jersey, we believe these specific municipal money markets no longer offer the market-depth needed to prudently provide these state-specific products in all market conditions.

“Our low expense ratios allow us to manage our funds in a conservative manner, and we will continue to act in the best interests of our clients to ensure our funds meet their specific investment objectives.”

Vanguard’s money market investment teams employ a conservative approach to fund design and investment philosophy, focusing on the highest-quality credit securities available.

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Vanguard municipal money market funds are overseen by a team of municipal bond investment professionals, including portfolio managers, senior credit research analysts, research associates, and traders.

The firm has a deep credit team that analyzes individual securities and collaborates closely with portfolio managers and traders.

The firm’s stringent investment protocols have enabled Vanguard funds to take on meaningfully less credit risk relative to peers over the years to ensure liquidity across a range of market conditions.

Shareholders of the funds are being notified and have the opportunity to move into another Vanguard fund, including its lineup of other money market funds, or redeem shares prior to the liquidation date, at which time the fund’s assets will be sold and the proceeds distributed.

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