Vanguard Short-Term Treasury Index Fund Admiral Shares

This fund is primarily designed to replicate the performance of the Bloomberg US Treasury 1–3 Year Bond Index using an indexing strategy. The underlying index consists of debt instruments issued by the U.S. Treasury, specifically those with remaining maturities from one to three years, and expressly excludes inflation-protected securities. Like other fixed-income investments, a key consideration is that an increase in interest rates typically causes the market value of the bonds within the portfolio to decline. However, this particular fund exhibits less sensitivity to such price shifts than those holding bonds with longer average durations. Furthermore, shifts in interest rates could eventually lead to a reduction in the income stream generated by the fund. A notable advantage is the minimal risk of default, as the bonds held are fully backed by the creditworthiness and guarantee of the United States government. This fund may be an appropriate choice for investors with near-term savings objectives who are comfortable with some level of price fluctuation.