Vanguard Massachusetts Tax-Exempt Fund
Summary Prospectus
March 27, 2024
Investor Shares
Vanguard Massachusetts Tax-Exempt Fund Investor Shares (VMATX)
The Fund’s statutory Prospectus and Statement of Additional
Information dated March 27, 2024, as may be amended or
supplemented, are incorporated into and made part of this Summary
Prospectus by reference.
Before you invest, you may want to review the Fund’s Prospectus,
which contains more information about the Fund and its risks. You can
find the Fund’s Prospectus and other information about the Fund
online at www.vanguard.com/prospectus and
https://personal.vanguard.com/us/literature/reports/MFs. You can also
obtain this information at no cost by calling 800-662-7447 or by
sending an email request to online@vanguard.com.
The Securities and Exchange Commission (SEC) has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to the contrary
is a criminal offense.
Investment Objective
The Fund seeks to provide a high level of current income that is exempt from
both federal and Massachusetts personal income taxes. The Fund is intended for
Massachusetts residents only.
Fees and Expenses
The following tables describe the fees and expenses you may pay if you buy,
hold, and sell 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 tables and example below.
Shareholder Fees
(Fees paid directly from your investment)
Sales Charge (Load) Imposed on Purchases None
Purchase Fee None
Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fee None
Account Service Fee Per Year
(for certain fund account balances below $5,000,000) $25
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
Management Fees 0.12%
12b-1 Distribution Fee None
Other Expenses 0.01%
Total Annual Fund Operating Expenses 0.13%
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Example
The following example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. It illustrates the
hypothetical expenses that you would incur over various periods if you were to
invest $10,000 in the Fund’s shares. This example assumes that the Fund
provides 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:
1 Year 3 Years 5 Years 10 Years
$13 $42 $73 $166
Portfolio Turnover
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 example, reduce the Fund’s
performance. During the most recent fiscal year, the Fund’s portfolio turnover
rate was 77% of the average value of its portfolio.
Principal Investment Strategies
The Fund invests primarily in high-quality municipal bonds issued by
Massachusetts state and local governments, as well as by regional governmental
and public financing authorities. Under normal circumstances, at least 80% of the
Fund’s assets will be invested in securities whose income is exempt from federal
and Massachusetts state taxes. Although the Fund has no limitations on the
maturities of individual securities, its dollar-weighted average maturity is
expected to be between 10 and 25 years.
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Principal Risks
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:
• State-specific risk, which is the chance that developments in Massachusetts,
such as tax, legislative, or political changes, will adversely affect the securities
held by the Fund or that are available for investment by the Fund. Because the
Fund invests primarily in securities issued by Massachusetts and its
municipalities, it is more vulnerable to the credit risk and unfavorable
developments in Massachusetts than are funds that invest in municipal securities
of many states. Unfavorable developments in any economic sector may have
far-reaching ramifications on the overall Massachusetts municipal market.
• 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.
• 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 long-term
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 long-term bond funds.
• 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.
• 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.
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• 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.
• Nondiversification risk, which is the chance that the Fund’s performance may
be hurt disproportionately by the poor performance of relatively few securities.
The Fund is considered nondiversified, which means that it may invest a greater
percentage of its assets in the securities of particular issuers as compared with
diversified mutual funds.
• 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.
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.
Annual Total Returns
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 has
varied from one calendar year to another over the periods shown. The table
shows how the average annual total returns of the Fund compare with those of
relevant market indexes, which have 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.
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Annual Total Returns — Vanguard Massachusetts Tax-Exempt Fund Investor Shares
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
15%
10.29
10% 8.68 7.18
6.02 6.47
3.95
5% 1.96
0.45
0%
–0.12
-5%
-10%
–10.72
-15%
During the periods shown in the bar chart, the highest and lowest returns for a
calendar quarter were:
Total Return Quarter
Highest 8.55% December 31, 2023
Lowest -6.85% March 31, 2022
Average Annual Total Returns for Periods Ended December 31, 2023
1 Year 5 Years 10 Years
Vanguard Massachusetts Tax-Exempt Fund
Investor Shares
Return Before Taxes 7.18% 2.45% 3.25%
Return After Taxes on Distributions 7.18 2.36 3.16
Return After Taxes on Distributions and Sale of Fund Shares 5.56 2.51 3.19
Bloomberg MA Municipal Bond Index
(reflects no deduction for fees, expenses, or taxes) 5.61% 1.97% 2.74%
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses, or taxes) 6.40 2.25 3.03
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 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.
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Investment Advisor
The Vanguard Group, Inc. (Vanguard)
Portfolio Managers
Grace Boraas, Portfolio Manager at Vanguard. She has co-managed the Fund
since 2023.
Stephen M. McFee, CFA, Portfolio Manager at Vanguard. He has managed the
Fund since 2020 (co-managed since 2023).
Purchase and Sale of Fund Shares
You may purchase or redeem shares online through our website
(vanguard.com), by mail (The Vanguard Group, P.O. Box 982901, El Paso, TX
79998-2901), or by telephone (800-662-2739). The minimum investment amount
required to open and maintain a Fund account for Investor Shares is $3,000. The
minimum investment amount required to add to an existing Fund account is
generally $1. Financial intermediaries, institutional clients, and Vanguard-advised
clients should contact Vanguard for information on special eligibility rules that
may apply to them regarding Investor Shares. If you are investing through an
intermediary, please contact that firm directly for information regarding
your eligibility.
Tax Information
The Fund’s distributions may be taxable as ordinary income or capital gain. A
majority of the income dividends that you receive from the Fund are expected to
be exempt from federal and state income taxes. However, a portion of the Fund’s
distributions may be subject to federal, state, or local income taxes or the federal
alternative minimum tax.
Payments to Financial Intermediaries
The Fund and its investment advisor do not pay financial intermediaries for sales
of Fund shares.
CFA® is a registered trademark owned by CFA Institute.
“Bloomberg®” and the Bloomberg MA Municipal Bond Index and Bloomberg Municipal Bond
Index (the “Indices”) are service marks of Bloomberg Finance L.P. and its affiliates, including
Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively,
“Bloomberg”), and have been licensed for use for certain purposes by Vanguard.
Vanguard Massachusetts Tax-Exempt Fund (the “Fund”) is not sponsored, endorsed, sold or
promoted by Bloomberg. Bloomberg does not make any representation or warranty, express or
implied, to the owners of or counterparties to the Fund or any member of the public regarding
the advisability of investing in securities or commodities generally or in the Fund particularly. The
only relationship of Bloomberg to Vanguard is the licensing of certain trademarks, trade names
and service marks and of the Indices, which are determined, composed and calculated by BISL
without regard to Vanguard or the Fund. Bloomberg has no obligation to take the needs of
Vanguard or the owners of the Fund into consideration in determining, composing or calculating
the Indices. Bloomberg is not responsible for and has not participated in the determination of the
timing, price, or quantities of the Fund to be issued. Bloomberg shall not have any obligation or
liability, including, without limitation, to customers of the Fund, in connection with the
administration, marketing or trading of the Fund.
BLOOMBERG DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS
OF THE INDICES OR ANY DATA RELATED THERETO AND SHALL HAVE NO LIABILITY FOR
ANY ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN. BLOOMBERG DOES NOT
MAKE ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
VANGUARD, OWNERS OF THE FUND OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE INDICES OR ANY DATA RELATED THERETO. BLOOMBERG DOES NOT MAKE
ANY EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
USE WITH RESPECT TO THE INDICES OR ANY DATA RELATED THERETO. WITHOUT
LIMITING ANY OF THE FOREGOING, TO THE MAXIMUM EXTENT ALLOWED BY LAW,
BLOOMBERG, ITS LICENSORS, AND ITS AND THEIR RESPECTIVE EMPLOYEES,
CONTRACTORS, AGENTS, SUPPLIERS, AND VENDORS SHALL HAVE NO LIABILITY OR
RESPONSIBILITY WHATSOEVER FOR ANY INJURY OR DAMAGES—WHETHER DIRECT,
INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR OTHERWISE—ARISING IN
CONNECTION WITH THE FUND OR INDICES OR ANY DATA OR VALUES RELATING
THERETO—WHETHER ARISING FROM THEIR NEGLIGENCE OR OTHERWISE, EVEN IF
NOTIFIED OF THE POSSIBILITY THEREOF.
Vanguard Massachusetts Tax-Exempt Fund Investor Shares—Fund Number 168
To request additional information about the Fund, please visit vanguard.com or contact us at 800-662-7447.
© 2024 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.
SP 168 032024
