The municipal bond market has been deeply troubled over the past 18 months. Several localities and at least one state appear to be on the brink of default.

These troubles create significant opportunity for investors, particularly those who invest through well-run mutual fund. Vanguard sports one of the most capable management teams out there.

Vanguard’s muni-bond funds feature the lowest expense ratios in the business, which allows their managers to match competitors’ yields without assuming additional risk. As such, all of Vanguard’s funds tend to be conservatively managed, with a focus on consistent, long-term performance.

Before Vanguard managers make buy and sell decisions, they set their particular fund’s duration, a measure of the portfolio’s sensitivity to interest rates. Although each fund is unique, all are guided by the same overall outlook.

Vanguard fixed-income chief Bob Auwaerter, who’s headed the group since 1978, sets the family’s strategy on interest rates. He and the firm’s fixed-income analysts consider GDP growth, unemployment and inflation trends, and the Federal Reserve’s monetary policies to come up with an intermediate-term outlook.

The outlook isn’t particularly involved, boiling down to one of three levels: bullish, meaning interest rates are expected to fall, boosting bond prices; bearish, when rates are expected to rise, hurting bond prices; or neutral.

Over the past year the firm has moved from a bullish outlook toward a neutral one, but it remains on the bearish side. Vanguard shares the consensus view that the Fed’s hand will soon be forced into raising interest rates.

Duration strategy aside, the funds have some other elements in common. They all use a value approach to picking bonds, overweighting areas that appear inexpensive. Municipal issues of all stripes have sold off [over the past several months, enabling the Vanguard team to pick up extremely attractive bonds at low valuations.

All of the funds are diversified by sector, investing in a blend of muni bonds. They currently all share a bias for higher-quality bonds, which they’ve been able to pick up cheaply. But these bonds still offer impressive yields.

Risk-averse investors should consider Short-Term Tax Exempt (VWSTX), which has the shortest durations and thus the least exposure to interest-rate risk. It also provides the lowest yield. Limited-Term Tax Exempt (VMLTX) has a slightly longer duration and a higher yield.

Those willing to endure modest volatility for higher yields can look to Intermediate-Term Tax Exempt (VWITX) and Long-Term Tax Exempt (VWKTX), run by Michael Kobs and Reid Smith, respectively. These funds focus almost exclusively on high-quality bonds. Long-Term Tax Exempt has a slightly higher yield but also more interest rate risk.

Finally, investors who don’t mind a down quarter or two on the way to higher yields and total returns should consider High-Yield Tax Exempt (VWAHX). Despite its name, the fund isn’t solely a high-yield vehicle; manager Reid Smith invests only about a quarter of the portfolio in bonds rated BBB or worse. This commitment to credit quality is unusual for high-yield funds.

Although it hasn’t completely shielded the fund from the recent turmoil in the markets, it’s still a solid long-term bet for more risk-tolerant investors. And for those in the top tax brackets, the better than 5 percent tax-free yield is nothing to sneeze at.