Taking these preventative measures will protect fund shareholders and will help ensure that the yields of the funds remain competitive, said Bill McNabb, chief executive officer of Vanguard. It is quite possible that yields on government-backed securities, and consequently the Vanguard funds, will remain quite low for the foreseeable future. Shareholders may wish to consider switching to alternative Vanguard fund options that are consistent with their goals and risk tolerance.
Vanguard noted that the high demand for government-backed securities as a safe haven, coupled with cuts to interest rates by the