As a result of the credit crisis, Valley Forge, Pa.-based Vanguard Group yesterday said it will merge its $3.2 billion Vanguard Insured Long-Term Tax-Exempt Fund into its $2.8 billion Vanguard Long-Term Tax-Exempt Fund effective Dec. 12, 2008.

"The municipal bond market has changed to a point where insured bonds provide little, if any, additional benefit over high-quality uninsured credits," Gus Sauter, Vanguard's chief investment officer, said in the release posted on the firm's Web site yesterday. "We concluded that a fund focused solely on insured bonds no longer provides tangible benefits. Shareholders will be better served by merging the two portfolios to create a single, well-diversified, high-quality fund."

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