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VALLEY FORGE — Vanguard postponed plans Thursday to launch new municipal bond exchange-traded funds amid the continuing decline of muni prices.
The manager of more than $1.5 trillion in U.S. mutual fund assets said in a filing with the Securities and Exchange Commission that it was withdrawing its registration statements from last June to add short, intermediate- and long-term municipal bond index funds.
In a brief comment in the filing, the Valley Forge-based company said it has no plans to proceed with the offering "at this time."
A Vanguard spokesman emphasized that the move is a deferral, not a cancellation.
"We think the delay is prudent given the high level of volatility in the municipal bond market today," spokesman John Woerth said. "We think the volatility could affect the funds' abilities to track their benchmarks and deliver on their stated objectives."
Municipal bond funds are coming off their worst quarter since 1994, declining 4.6 percent from October through December, and reached a new 52-week low Wednesday. Investors have pulled an estimated $22.7 billion out of muni-bond mutual funds in the last nine weeks amid concerns about state and local governments defaulting on their bonds, among other issues.
The offering would have been Vanguard's first foray into indexed municipal funds.
