The $3.2 billion Vanguard Insured Long-Term Tax-Exempt Fund is being liquidated and folded into the $2.8 billion Vanguard Long-Term Tax-Exempt Fund.
Vanguard noted that because the credit rating agencies have downgraded six of the nine major bond insurers in the U.S. from AAA, the price of most bonds is discounting insurance on bonds. Sauter added that Vanguards own credit research team is assessing the crediworthiness of the firms municipal bond investments.