Vanguard takes steps to align municipal money market lineup with changing market dynamics

“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 our 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 have the opportunity to exchange into another Vanguard fund, including, but not limited to, Vanguard Municipal Money Market Fund. Shareholders may also choose to redeem shares prior to the liquidation date. On the liquidation date, the fund’s assets will be sold and the proceeds distributed to any remaining shareholders.

Key dates

• September 25, 2020. The funds are closed to all new investors.
• November 5, 2020. The funds will close to new investments from existing shareholders. Fund privileges, including checkwriting, alternative redemption fund, direct deposit, automatic investments and exchanges, directed dividend payments, automatic withdrawals, and required minimum distributions, will no longer be available. Checks presented for payment on the fund before November 5 will be honored if sufficient shares are available for payment.
• On or around November 24, 2020. At the close of business, the Pennsylvania and New Jersey Municipal Money Market Funds cease to operate.
  • All remaining proceeds will be distributed to shareholders by wire (using preferred banking instructions) or by check (using address of record), unless Vanguard receives other instructions by November 23, 2020.

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 oversee 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.

Read the prospectus updates for the Pennsylvania Municipal Money Market Fund and the New Jersey Municipal Money Market Fund.

Notes:

For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund 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.

Municipal money market funds: 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 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.

Vanguard Federal Money Market Fund: You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. 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.

All asset figures are as of August 31, 2020, unless otherwise noted.