Feb. 26, 2021

Retail | Vanguard High-Yield Tax-Exempt Fund

<span style="color:#000000;font-family:Arial;font-size:13pt;font-weight:bold;">Vanguard High-Yield Tax-Exempt Fund</span>

<span style="color:#000000;font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0%;">Investment Objective</span>

The Fund seeks to provide a high and sustainable level of current income that is exempt from federal personal income taxes.

<span style="color:#000000;font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0%;">Fees and Expenses</span>

The following table describes the fees and expenses you may pay if you buy, hold, and sell Investor Shares or Admiral Shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below.

<span style="color:#000000;font-family:Arial;font-size:8.5pt;font-weight:bold;margin-left:0%;">Shareholder Fees</span> <br/><span style="color:#000000;font-family:Arial;font-size:8.5pt;">(Fees paid directly from your investment)</span>

<span style="color:#000000;font-family:Arial;font-size:8.5pt;font-weight:bold;margin-left:0%;">Annual Fund Operating Expenses</span> <br/><span style="color:#000000;font-family:Arial;font-size:8.5pt;">(Expenses that you pay each year as a percentage of the value of your investment)</span>

<span style="color:#000000;font-family:Arial;font-size:9.5pt;margin-left:0%;">Examples</span>

The following examples are intended to help you compare the cost of investing in the Fund's Investor Shares or Admiral Shares with the cost of investing in other mutual funds. They illustrate the hypothetical expenses that you would incur over various periods if you were to invest $10,000 in the Fund's shares. These examples assume that the shares provide a return of 5% each year and that total annual fund operating expenses remain as stated in the preceding table. You would incur these hypothetical expenses whether or not you were to redeem your investment at the end of the given period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

<span style="color:#000000;font-family:Arial;font-size:9.5pt;margin-left:0%;">Portfolio Turnover</span>

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in more taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the previous expense examples, reduce the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 19% of the average value of its portfolio.

<span style="color:#000000;font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0%;">Principal Investment Strategies</span>

The Fund invests at least 80% of its assets in investment-grade municipal bonds, as determined by a nationally recognized statistical rating organization (NRSRO) (e.g., Baa or higher by Moody‘s Investors Service, Inc. (Moody’s)) or, if unrated, determined to be of comparable quality by the advisor. The Fund may invest up to 20% of its assets in less-than-investment-grade bonds, as determined by an NRSRO (e.g., Baa by Moody’s) or by the advisor. The Fund has no limitations on the maturity of individual securities but is expected to maintain a dollar-weighted average maturity of 10 to 25 years.

<span style="color:#000000;font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0%;">Principal Risks</span>

An investment in the Fund could lose money over short or long periods of time.You should expect the Fund's share price and total return to fluctuate within a wide range. The Fund is subject to the following risks, which could affect the Fund's performance, and the level of risk may vary based on market conditions:•  Credit risk , which is the chance that a bond issuer will fail to pay interest or principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Credit risk should be relatively moderate for the Fund because it invests a portion of its assets in moderate to low-quality bonds.•  Income risk , which is the chance that the Fund’s income will decline because of falling interest rates. Income risk should be low for the Fund because it invests primarily in long-term bonds.•  Interest rate risk , which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be high for the Fund because it invests primarily in long-term bonds, whose prices are more sensitive to interest rate changes than are the prices of shorter-term bonds.•  Call risk , which is the chance that during periods of falling interest rates, issuers of callable bonds may call (redeem) securities with higher coupon rates or interest rates before their maturity dates. The Fund would then lose any price appreciation above the bond’s call price and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund’s income. Such redemptions and subsequent reinvestments would also increase the Fund’s portfolio turnover rate. Call risk is generally high for high-yield bond funds.•  Extension risk , which is the chance that during periods of rising interest rates, certain debt securities will be paid off substantially more slowly than originally anticipated, and the value of those securities may fall. Extension risk is generally high for high-yield bond funds.•  Liquidity risk , which is the chance that the Fund may not be able to sell a security in a timely manner at a desired price.•  Manager risk , which is the chance that poor security selection will cause the Fund to underperform relevant benchmarks or other funds with a similar investment objective.•  Tax risk , which is the chance that all or a portion of the tax-exempt income from municipal bonds held by the Fund will be declared taxable, possibly with retroactive effect, because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state or local tax authorities, or noncompliant conduct of a bond issuer.•  Derivatives risk . The Fund may invest in derivatives and structured products such as tender option bonds and long-term municipal bonds combined with a demand feature (e.g., variable rate demand notes or VRDNs), which may involve risks different from, and possibly greater than, those of investments directly in the underlying securities or assets.An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

<span style="color:#000000;font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0%;">Annual Total Returns</span>

The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund's Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns of the share classes presented compare with those of a relevant market index, which has investment characteristics similar to those of the Fund. Keep in mind that the Fund's past performance (before and after taxes) does not indicate how the Fund will perform in the future. Updated performance information is available on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447.

<span style="color:#000000;font-family:Arial;font-size:8pt;font-weight:bold;">Annual Total Returns — Vanguard High-Yield Tax-Exempt Fund Investor Shares</span>

During the periods shown in the bar chart, the highest and lowest returns for a calendar quarter were:

<span style="color:#000000;font-family:Arial;font-size:8.5pt;font-weight:bold;">Average Annual Total Returns for Periods Ended December 31, 2020</span>

Actual after-tax returns depend on your tax situation and may differ from those shown in the preceding table. When after-tax returns are calculated, it is assumed that the shareholder was in the highest individual federal marginal income tax bracket at the time of each distribution of income or capital gains or upon redemption. State and local income taxes are not reflected in the calculations. Please note that after-tax returns are shown only for the Investor Shares and may differ for each share class. After-tax returns are not relevant for a shareholder who holds fund shares in a tax-deferred account, such as an individual retirement account or a 401(k) plan. Also, figures captioned Return After Taxes on Distributions and Sale of Fund Shares may be higher than other figures for the same period if a capital loss occurs upon redemption and results in an assumed tax deduction for the shareholder.