Vanguard Ultra Short-Term Tax-Exempt Fund 

The primary objective of this fund is to generate ongoing income that is exempt from federal personal income taxes, while striving for limited fluctuations in its share price. A substantial portion, specifically at least 75%, of the fund's holdings consists of high-quality municipal bonds. These are defined as securities within the top three credit-rating tiers from nationally recognized statistical rating organizations, or those deemed of comparable quality by the advisor if unrated. Up to 20% of the portfolio may be allocated to medium-grade quality bonds, as determined by either a rating agency or the advisor. The final 5% can be invested in securities with lower credit ratings or those assessed by the advisor as having similar quality, even without a formal rating. This fund offers the potential for a higher yield than a typical money market fund, primarily because it invests in longer-maturity securities. However, this increased yield potential is accompanied by a correspondingly greater level of risk. Changes in interest rates can affect the fund: declining rates may lead to reduced income for its short-term bond holdings, while rising rates could exert downward pressure on the fund's share price. This offering may appeal to investors who desire a modest, federally tax-exempt income stream and are comfortable with some degree of income and share price volatility.