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

VALLEY FORGE, Pa., Sept. 25, 2020 /PRNewswire/ -- Vanguard today 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 money market universes as part of its national Municipal Money Market Fund and its PA and NJ long-term tax-exempt funds.

"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. 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 research 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.

Vanguard: A fixed income leader
With more than $1.9 trillion in global assets under management, Vanguard Fixed Income Group is one of the largest bond and money market fund managers, and the largest provider of municipal bond funds in the industry. Vanguard launched its first municipal bond funds in 1977 and now oversees more than 100 global mandates on behalf of Vanguard investors, including active and indexed domestic and international bonds, municipal bonds, money market securities, and stable value assets. Vanguard's unique structure and continued focus on low costs enables Vanguard fund managers to avoid taking on undue risk to boost returns or sacrifice quality to reach for yield.

About Vanguard
Vanguard is one of the world's largest investment management companies. As of August 31, 2020, Vanguard managed $6.6 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers more than 422 funds to its more than 30 million investors worldwide. For more information, visit vanguard.com.

Asset figures as of August 31, 2020 unless otherwise noted.

For more information about Vanguard funds, visit vanguard.com/fundprospectus 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.

All investing is subject to risk, including the possible loss of the money you invest.

The fund is only available to retail investors (natural persons). You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. 

In order to provide for an orderly liquidation and satisfy redemptions in anticipation of the liquidation, the fund may deviate from its investment objective and strategies as the liquidation date approaches.

Shareholders should consult their own tax advisors about any tax liability resulting from any investment decision including, but not limited to, redemption, exchanging shares for shares of another fund, or the receipt of liquidation proceeds.

Vanguard Marketing Corporation, Distributor.

SOURCE Vanguard

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