Vanguard New York Tax-Exempt Bond ETF (MUNY US) – Portfolio Construction Methodology

The underlying S&P New York AMT-Free Municipal USD10 Million Par Bond Index targets investment-grade, tax-exempt municipal bonds issued by New York state and local governments and agencies whose interest is exempt from U.S. federal income tax, federal AMT, and New York state income tax. Eligible bonds are USD-denominated, rated at least BBB–/Baa3 (using the lowest rating), have at least one calendar month to maturity, and maintain a minimum USD 10 million par amount outstanding. The index includes fixed-rate general obligation and revenue bonds and excludes taxable issues and securities in default. Constituents are weighted by market value of tax-exempt debt outstanding, so larger issuers and longer issues carry greater weight. The index is reconstituted and rebalanced monthly, adding newly issued qualifying bonds and removing issues that mature, fall below investment grade, or otherwise cease to meet tax-status or liquidity requirements.

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