2024 VMSXX p045 Glossary Flashcards
Average Maturity
The average length of time until bonds held by a fund reach maturity and are repaid. In general, the longer the average maturity, the more a fund’s share price fluctuates in response to changes in market interest rates. In calculating average maturity, a fund uses a bond’s maturity or, if applicable, an earlier date on which the advisor believes it is likely that a maturity-shortening device (such as a call, put, refunding, prepayment, or redemption provision or an adjustable coupon rate) will cause the bond to be repaid.
Bloomberg 1 Year Municipal Bond Index
An index that includes investment-grade tax-exempt bonds that are issued by state and local governments and have maturities of 1 to 2 years.
Bloomberg 1–5 Year Municipal Bond Index.
An index that includes most investment-grade tax-exempt bonds that are issued by state and local governments and have maturities of 1 to 5 years.
Bloomberg 1–15 Year Municipal Bond Index
An index that includes investment-grade tax-exempt bonds that are issued by state and local governments and have maturities of 1 to 15 years.
Bloomberg Municipal Bond Index
An index that includes most investment-grade tax-exempt bonds that are issued by state and local governments.
Capital Gains Distributions.
Payments to mutual fund shareholders of gains realized on securities that a fund has sold at a profit, minus any realized losses.
Cash Equivalent Investments.
Cash deposits, short-term bank deposits, and money market instruments that include U.S. Treasury bills and notes, bank certificates of deposit (CDs), repurchase agreements, commercial paper, and banker’s acceptances.
Coupon Rate
The interest rate paid by the issuer of a debt security until its maturity. It is expressed as an annual percentage of the face value of the security.
Dividend Distributions
Payments to mutual fund shareholders of income from interest or dividends generated by a fund’s investments.
Expense Ratio
A fund’s total annual operating expenses expressed as a percentage of the fund’s average net assets. The expense ratio includes management and administrative expenses, but it does not include the transaction costs of buying and selling portfolio securities.
Face Value
The amount to be paid at a bond’s maturity; also known as the par value or principal.
Fixed Income Security
An investment, such as a bond, representing a debt that must be repaid by a specified date, and on which the borrower may pay a fixed, variable, or floating rate of interest.
Inception Date
The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is generally measured from the inception date. A debt security whose credit quality is considered by independent bond rating agencies, or through independent analysis conducted by a fund’s advisor, to be sufficient to ensure timely payment of principal and interest under current economic circumstances. Debt securities rated in one of
Investment-Grade Bond.
For funds with a subscription period, the inception date is the day after that period ends. Investment performance is generally measured from the inception date. A debt security whose credit quality is considered by independent bond rating agencies, or through independent analysis conducted by a fund’s advisor, to be sufficient to ensure timely payment of principal and interest under current economic circumstances. Debt securities rated in one of interest under current economic circumstances. Debt securities rated in one of the four highest rating categories are considered investment-grade. Other debt securities may be considered by an advisor to be investment-grade.
Joint Committed Credit Facility
Each Fund participates, along with other funds managed by Vanguard, in a committed credit facility provided by a syndicate of lenders pursuant to a credit agreement that may be renewed annually; each lenders pursuant to a credit agreement that may be renewed annually; each lenders pursuant to a credit agreement that may be renewed annually; each lenders pursuant to a credit agreement that may be renewed annually; each lenders pursuant to a credit agreement that may be renewed annually; each Vanguard fund is individually liable for its borrowings, if any, under the credit facility. The amount and terms of the committed credit facility are subject to approval by the Funds’ board of trustees and renegotiation with the lender syndicate on an annual basis.
