Tracking error is one means of measuring active manager performance against an appropriate market index.
Vanguard’s national municipal bond funds are actively managed, defined asset class funds. The funds include four municipal bond funds structured across four bond maturity levels: short, limited, intermediate, and long term bonds. In addition to these four portfolios, Vanguard manages state specific municipal bond funds and a high yield municipal bond fund.
Since 2000 Vanguard, in its annual reports, has reported the “most comparative benchmark” for each of the funds; prior to 2000 Vanguard measured all funds against the broad Municipal Bond Index. In 2012 Vanguard changed each fund’s benchmark index.
| Fund | Former Benchmark | New Benchmark | Retrofitted time series |
| Vanguard Short Term Municipal Fund | Barclays 3 year Municipal Bond Index | Barclays 1 year Municipal Bond Index | 1998-forward |
| Vanguard Limited Term Municipal Fund | Barclays 3 year Municipal Bond Index | Barclays 1-5 year Municipal Bond Index | 2001-forward |
| Vanguard Intermediate Term Municipal Fund | Barclays 7 year Municipal Bond Index | Barclays 1-15 year Municipal Bond Index | 2003-forward |
| Vanguard Long Term Municipal Fund | Barclays 10 year Municipal Bond Index | Barclays Municipal Bond Index | 1998-forward |
Short-Term Tax Exempt
Historical annual tracking error for investor and admiral shares. Vanguard used a longer duration benchmark for the fund from 1993 – 1997.
Limited-Term Tax Exempt
Historical annual tracking error for investor and admiral shares.
Intermediate-Term Tax Exempt
Historical annual tracking error for investor and admiral shares.
Long-Term Tax Exempt
Historical annual tracking error for investor and admiral shares
Barry Barnitz, an administrator of the John C. Bogle Center for Financial Literacy site.
