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A Conservative, Risk-Conscious Muni Fund With Low Fees

Silver-rated Vanguard High-Yield Tax-Exempt focuses on sectors with stable cash flows and avoids controversial credits.


Emory Zink: Compared with most funds bearing a high-yield muni moniker, Vanguard High-Yield Tax-Exempt looks conservative--so much so that it places in Morningstar's muni-national intermediate category rather than the high-yield muni category. 

The idea is for manager Matthew Kiselak and his team to provide competitive returns from across the municipal credit spectrum, while remaining acutely risk-conscious. For example, the fund avoids controversial credits, such as municipal tobacco and exposure to Puerto Rico, while historically favoring sectors with stable cash flows, such as transportation and healthcare. Average credit quality is higher than a typical municipal high-yield peer but more adventurous than most funds in the muni-national intermediate category. 

Emory Zink does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.