UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-1530
Name of Registrant: Vanguard Explorer Fund
Address of Registrant: | P.O. Box 2600 |
| Valley Forge, PA 19482 |
|
|
Name and address of agent for service: | Heidi Stam, Esquire |
| P.O. Box 876 |
| Valley Forge, PA 19482 |
|
|
Registrant’s telephone number, including area code: (610) 669-1000
Date of fiscal year end: October 31
Date of reporting period: November 1, 2008 – April 30, 2009
Item 1: Reports to Shareholders |
> | For the fiscal half-year ended April 30, 2009, Vanguard Explorer Fund returned about –2%, underperforming the return of its benchmark index but besting the average return of its peer group. |
> | The broad stock market continued to sink in the early part of the period, then rallied before ending the six months returning about –7%. Small- and mid-capitalization stocks, the Explorer Fund’s focus, fared slightly better. |
> | The fund saw losses in six of its sectors and gains in four others. Health care and industrials had the largest negative influence, while consumer discretionary and information technology were leading positives. |
Contents |
|
|
|
Your Fund’s Total Returns | 1 |
President’s Letter | 2 |
Advisors’ Report | 6 |
Fund Profile | 13 |
Performance Summary | 14 |
Financial Statements | 15 |
About Your Fund’s Expenses | 28 |
Trustees Approve Advisory Arrangements | 30 |
Glossary | 33 |
Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the risks of investing in your fund are spelled out in the prospectus.
Your Fund’s Total Returns
Six Months Ended April 30, 2009 |
|
|
| Ticker | Total |
| Symbol | Returns |
Vanguard Explorer Fund |
|
|
Investor Shares | VEXPX | –2.32% |
Admiral™ Shares1 | VEXRX | –2.25 |
Russell 2500 Growth Index |
| 0.69 |
Average Small-Cap Growth Fund2 |
| –3.25 |
Your Fund’s Performance at a Glance |
|
|
| |
October 31, 2008–April 30, 2009 |
|
|
|
|
|
|
| Distributions Per Share | |
| Starting | Ending | Income | Capital |
| Share Price | Share Price | Dividends | Gains |
Vanguard Explorer Fund |
|
|
|
|
Investor Shares | $45.54 | $44.18 | $0.282 | $0.000 |
Admiral Shares | 42.45 | 41.10 | 0.367 | $0.000 |
1 A lower-cost class of shares available to many longtime shareholders and to those with significant investments in the fund.
2 Derived from data provided by Lipper Inc.
1
President’s Letter
Dear Shareholder,
Vanguard Explorer Fund returned about –2% for the fiscal half-year ended April 30, 2009. With stocks rallying toward the end of the period, the fund regained a bit of the significant ground it lost in 2008 and early 2009. The stocks selected by the fund’s investment advisors underperformed the market benchmark, but the fund did better than the average return of competing small-cap growth funds.
Volatile six months ends amid signs of hope
For the six months ended April 30, the broad U.S. stock market returned about –7%, while international stocks posted a positive return of about 1%. Although final results were far from impressive, they showed significant improvement from the beginning of the period.
Through the first four months of the period, stock markets worldwide moved lower as fallout from the financial crisis settled in all parts of the globe. In mid-March, however, things began to turn around. Investors gained confidence and started taking on more risk. Stocks continued to rally throughout April, with the U.S. stock market recording its biggest monthly gain since 1991.
2
Despite some encouraging signs, continued job losses and persistent uncertainty about the health of the financial sector—both in the United States and overseas—suggested that the road ahead could be bumpy.
Investor confidence boosted weakest bonds
The period was an erratic time for the fixed income market as well. After Lehman Brothers collapsed in September, investors steered clear of corporate bonds and instead sought safety in U.S. Treasury bonds—considered the safest, most liquid securities. The difference between the yields of Treasuries and those of corporate bonds surged to levels not seen since the 1930s.
Later in the period, optimism from the stock market provided a boost to corporate bonds. High-yield—or “junk”—bonds posted record gains for the month of April. For the six months, both the Barclays Capital U.S. Aggregate Bond Index and the broad municipal bond market returned about 8%.
In December, the Federal Reserve Board responded to the credit crisis by lowering its target for short-term interest rates to a range of 0% to 0.25%, an all-time low. After a meeting in late April, policymakers announced that lower rates had led to modest improvements in the credit market, but that conditions overall remained weak.
Market Barometer |
|
|
|
|
| Total Returns | |
| Periods Ended April 30, 2009 | ||
| Six Months | One Year | Five Years1 |
Stocks |
|
|
|
Russell 1000 Index (Large-caps) | –7.39% | –35.30% | –2.32% |
Russell 2000 Index (Small-caps) | –8.40 | –30.74 | –1.45 |
Dow Jones U.S. Total Stock Market Index | –6.97 | –34.37 | –1.86 |
MSCI All Country World Index ex USA (International) | 1.31 | –42.32 | 3.02 |
|
|
|
|
Bonds |
|
|
|
Barclays Capital U.S. Aggregate Bond Index |
|
|
|
(Broad taxable market) | 7.74% | 3.84% | 4.78% |
Barclays Capital Municipal Bond Index | 8.20 | 3.11 | 4.11 |
Citigroup 3-Month Treasury Bill Index | 0.19 | 1.01 | 3.05 |
|
|
|
|
CPI |
|
|
|
Consumer Price Index | –1.54% | –0.74% | 2.55% |
1 Annualized.
3
Weak selections in several sectors offset some better performers
The fund’s largest sector, on average, information technology (returning +4%), advanced modestly as investors anticipated increased orders of IT equipment and services with the economy’s eventual rebound. However, the fund’s holdings in the sector lagged the performance of IT stocks in the fund’s benchmark, the Russell 2500 Growth Index, which gained twice as much ground. This underperformance was cushioned somewhat by the fund’s relative overweighting in IT.
On the negative side of the ledger, the second-largest sector in the fund, on average, health care (returning –6%), was a leading contributor to the fund’s net loss for the six months. The fund’s health care holdings were also bested by those in the index.
The largest retail sector—consumer discretionary—advanced 11% as investors bet that consumers will increase discretionary spending when the recession ends. However, the fund’s holdings didn’t gain as much as those in the index, and the fund was underweighted in the sector, contributing to the fund’s overall relative underperformance.
The fund’s consumer staples stocks (–10%), a much smaller sector in the fund, also detracted from the fund’s relative performance as the sector itself actually advanced while the fund’s holdings retreated. The fund’s portfolio of financial and telecommunication services stocks (both returning –11%) also trailed the results of their respective index sectors.
Expense Ratios1 |
|
|
|
Your Fund Compared With Its Peer Group |
|
|
|
|
|
| Average |
| Investor | Admiral | Small-Cap |
| Shares | Shares | Growth Fund |
Explorer Fund | 0.51% | 0.32% | 1.61% |
1 The fund expense ratios shown are from the prospectus dated February 20, 2009, and represent estimated costs for the current fiscal year based on the fund’s current net assets. For the six months ended April 30, 2009, the annualized expense ratios were 0.57% for Investor Shares and 0.38% for Admiral Shares. The peer-group expense ratio is derived from data provided by Lipper Inc. and captures information through year-end 2008.
4
A word on expenses
On page 4, you’ll note our estimated expense ratio for fiscal 2009 and, in the footnote, the actual expense ratio for the first half of the fiscal year. Both figures are up significantly from fiscal 2008. The explanation is threefold.
First, as the value of fund assets has declined, the fund’s fixed expenses are expected to account for a modestly higher percentage of fund assets.
Second, the Vanguard funds’ contracts with external advisors typically include breakpoint pricing. As assets rise above a breakpoint threshold, advisory fees are paid at a lower rate. When assets fall below this threshold, as they did in the past six months, the rate can increase. Over time, breakpoint pricing has helped shareholders benefit from the economies of scale produced by growth in the fund’s assets.
Third, many of the Vanguard funds’ advisory contracts include a performance incentive-fee/penalty provision. If the advisor outperforms its benchmark, the firm’s fee increases; if it underperforms, the fee declines. The incentive fee structure helps ensure that the interests of the advisors and the funds’ shareholders remain aligned. Of course, even when the stock market’s performance is weak, an advisor’s performance can improve relative to the comparative benchmark, resulting in an increase in the performance adjustment. This was the case during the most recent six-month period. The fund’s financial statements include more information about the incentive fee.
Active approach has a place in a long-term portfolio
In 2008, the U.S. financial markets suffered their worst calendar year since the Great Depression, and stocks continued falling through early March 2009 before reversing course. Although it’s too early to say whether the rebound will stick, the events of the past few months demonstrate the importance of holding a balanced portfolio of stock, bond, and money market funds designed to fit your goals, time horizon, and tolerance for market volatility. Such a carefully constructed portfolio can offer some protection from the worst of a downturn while putting you in a position to take advantage of any recovery.
For actively managed funds, the same strategies that are used in an effort to produce market-beating returns can sometimes have the opposite effect. Over time, however, we remain confident that the diverse research methods employed by the Explorer Fund’s advisors in searching for promising small-cap companies can play a valuable role in a long-term investment program.
Thank you for entrusting your assets to Vanguard.
Sincerely,
F. William McNabb III
President and Chief Executive Officer
May 18, 2009
5
Advisors’ Report
For the fiscal half-year ended April 30, 2009, Vanguard Explorer Fund returned –2.32% for Investor Shares (–2.25% for the lower-cost Admiral Shares). Your fund is managed by seven independent advisors. The use of multiple advisors provides exposure to distinct, yet complementary, investment approaches, enhancing the fund’s diversification. It is not uncommon for different advisors to have different views about individual securities or the broader investment environment.
The table following this report lists the advisors, the percentage and amount of fund assets each manages, and brief descriptions of their investment strategies. The advisors have provided the following comments on their assessment of the investment environment during the past six months and the notable successes and shortfalls in their portfolios. These comments were prepared on May 19, 2009.
Granahan Investment
Management, Inc.
Portfolio Manager:
Jack Granahan, CFA, Managing Partner
Investment environment: During the six months ended April 30, 2009, the market fell sharply for four months and then rose significantly for the final two months. The recovery won back much of the previous four-month decline for the Explorer Fund, though not all of it. The severe global contraction born of excessive debt difficulties continued in late 2008 and early 2009, though there is rising optimism that things are bottoming. Massive monetary injections, fiscal stimulus programs, and corporate bailouts continue to be governments’ weapons of choice. Of these, the Chinese government stimulus program, which emphasizes domestic infrastructure, seems to be producing the most positive economic impact so far, with some benefits to our holdings. China’s financial strength and effective focus are likely important in enabling its effort to succeed.
A significant factor behind the recent market rebound is first-quarter earnings results that are in many cases matching or exceeding managements’ ultraconservative guidance, even though earnings comparisons remain negative. Companies’ cost controls and generally good balance sheets are positive signs in this contracting environment. Follow-through on this market recovery will at some point require a pickup in revenue growth, whether from moderating inventory reductions or increasing final demand.
Successes: In the flat market environment over the full six-month period, our strongest absolute gains were in the technology and consumer discretionary sectors, and, to a lesser degree, in materials and energy. Technology was strong, as many of these stocks hit their lows in November and certain leading companies continued or renewed their earnings growth.
6
Shortfalls: In contrast to our successes in consumer discretionary holdings, our worst sector performance was in consumer staples. Two supermarket holdings, Ruddick and Spartan Stores, had anemic relative rebounds recently because of slowing sales. Financial services was lackluster for us, as it contained two of our worst performers, Cash America International and Heartland Payment Systems.
Health care, our largest sector, slightly weakened our results amid fears that small biotechnology companies faced greater capital-raising risks. This offset positive performance in stocks such as Edwards Lifesciences and Align Technology. Our goal in this sector is to emphasize companies with differentiated products and services that have minimal exposure to government reimbursement and other related reforms.
Kalmar Investment Advisers
Portfolio Manager:
Ford B. Draper, Jr., President and
Chief Investment Officer
Investment environment: The last six months were volatile and challenging, including what we believe was the bear market low in early March. A dramatic two-month rally then commenced, as investors concluded that the worst credit crisis and recession in 70 years was stabilizing and that the unprecedented government fiscal and monetary intervention would successfully turn the tide. Nevertheless, hangover effects from massive consumer wealth destruction and the still-constrained, though improving, credit markets suggest a low-sloping economic recovery. But as always, markets have begun to recover well before the economy and corporate earnings rebound.
Successes: For the six months, our portfolio’s best relative performers were our energy holdings. Petrohawk Energy appreciated meaningfully, despite falling commodity prices, because of its powerfully building reserves. In other sectors, important individual contributors included, in health care, contact lens company Cooper Companies and, in IT, digital media management company Macrovision Solutions.
Shortfalls: Our health care holdings hurt returns as the Obama administration unveiled its initial plans to reshape the industry. Our most prominent losing stock in that group was Psychiatric Solutions, as the new political uncertainty overlaid a temporary operational problem.
7
Wellington Management
Company, LLP
Portfolio Manager:
Kenneth L. Abrams, Senior Vice President
and Partner
Investment environment: After six consecutive quarterly declines, markets returned to positive territory in April, as investors’ risk aversion abated amid moderating market volatility. Deteriorating global growth, troubles in the U.S. automotive industry, and rising concerns about a possible flu pandemic failed to overshadow increased investor optimism. U.S. equities rose in April, as investors shrugged off the drumbeat of deteriorating financial news and focused on encouraging signs that the economy may be starting to find its footing.
Successes: Over the last six months our portion of the fund benefited from favorable security selection in materials (notably, Ashland), energy (Denbury Resources), and health care (Health Management Associates). The latter posted first-quarter results that beat consensus expectations. The company is benefiting from successful efforts to turn around operations and control expenses.
Shortfalls: Detractors over the trailing six months included holdings in consumer discretionary (notably Service Corporation International), financials (Western Alliance Bancorporation), and industrials (Covanta Holding). Shares of Covanta declined on lower-than-expected earnings and lower earnings guidance from the company because of increased spending on growth initiatives and declines in recycled metals prices and truckload disposal fees. We continue to hold the stock based on the firm’s growth potential in the expanding global waste-to-energy industry.
Vanguard Quantitative Equity Group
Portfolio Manager:
James D. Troyer, CFA, Principal
Investment environment: The Explorer Fund’s benchmark, the Russell 2500 Growth Index, had a slightly positive return of 0.69% for the six months, but that meager return hid dramatic swings. The index twice dropped by around 25%, and twice rose by more than 30%, to end the six-month period nearly unchanged. When the market gyrates so wildly, our ability to add value beyond the index return declines. We seek to add value through differences in stock valuation; over the last six months, however, investors did not seem to be focusing on the relative value between stocks, but instead on whether they wanted any exposure to the stock market at all.
Successes: Media and technology stocks were successful during the period, led by Interpublic Group and PMC-Sierra.
Shortfalls: We stumbled in energy and health care, with Whiting Petroleum and WellCare Health Plans hurting performance.
8
AXA Rosenberg Investment
Management LLC
Portfolio manager:
William E. Ricks, Ph.D., Americas Chief
Executive and Chief Investment Officer
Investment environment: Global equity markets were extremely volatile, as global economies continued to face intense economic challenges. In a short six weeks in March and April, sentiment appears to have shifted sharply from risk averse to, possibly, overly exuberant, which was at odds with the more defensive posture of our portfolio. We remain focused on fundamental stock selection driven by earnings and valuation.
Successes: For some time, our portfolio has been overweighted in information technology, specifically software. It offers the rare combination of growth and stability, with superior profitability, strong balance sheets, and positive earnings outlooks. At the same time, we remain overweighted in some defensive sectors, such as health care and consumer staples. Overall, our valuation model remains neutral to modestly positive on many of these defensive sector stocks, while our earnings-forecast model finds them more attractive relative to other opportunities.
As the economy started to show signs of stabilization, consumer discretionary stocks led the rally in spring 2009, making it the second-best-performing sector for the six-month period. We have been overweighted in a number of the more defensive retailers, such as Big Lots, Dollar Tree, and NetFlix, which added significant value. In financials, our continuing underweighting in real estate-related companies benefited our portfolio over the six-month period, though it detracted in the recent rally, which was led by more beaten-down stocks.
Shortfalls: The March/April rally was driven by the cheapest, low-quality, high-beta stocks in sectors that had underperformed the market over the past several quarters—energy, financials, and materials.
Conversely, investors virtually ignored the higher-quality, lower-beta sectors that had outperformed during that same period, including telecommunications, health care, and consumer staples. Our stock selection was weak in information technology and consumer staples, particularly in overweightings that suffered significant price drops, such as Take-Two Interactive Software and Diamond Foods; and in underweightings that went up in price, such as Akamai Technologies and Whole Foods Market.
During April, we made modest sector and industry adjustments to the portfolio and began moving to a somewhat less-defensive posture.
9
Chartwell Investment Partners, L.P.
Portfolio Managers:
Edward N. Antoian, CFA, CPA,
Managing Partner
John A. Heffern, Managing Partner and
Senior Portfolio Manager
Investment environment: We continue to expect volatility in broad measures of economic activity and the underlying financial markets, but it is clear that there has been, and continues to be, a coordinated global response to the current crisis. There are indications that conditions are stabilizing, or at least “less bad.” Credit spreads have tightened in many areas, and some measures of economic activity indicate a bottoming. We expect a slow and unsteady recovery, but we see opportunities for investments in companies with strong franchises, exemplary cost control, and products that sell even when many industries continue to suffer.
Weakening price pressures and higher productivity will support growth stories in the new economy, and small- to mid-cap growth stocks often begin to do well at this stage in long economic cycles.
Successes: Consumer services and consumer staples were our top-performing sectors over the period. Casual-dining restaurant operators, such as Texas Roadhouse and The Cheesecake Factory, benefited from consumers’ shift to more moderately priced eating establishments. Dollar Tree, a discount retailer, was also able to take advantage of this phenomenon. Education providers, such as Apollo Group and Corinthian Colleges, did well early in the period, as enrollment rose as a result of accelerated workforce reduction. Our lack of exposure to underperforming real estate investment trusts (REITs) also helped relative results.
Shortfalls: Stock selection detracted from performance in both the health care and technology sectors. Gentiva Health Services, a provider of home health and related services, tumbled after the Obama administration announced its intention to cut $300 billion in Medicare payments over the next ten years to help create a reserve that would fund some level of universal health coverage. Even though the plan is highly controversial and needs several levels of approval to be put in place, its potential effects were enough to hurt the stock.
10
Century Capital Management, LLC
Portfolio Manager:
Alexander L. Thorndike, Chief Investment
Officer and Managing Partner
Investment environment: The aftermath of the global credit crisis continues to weaken investor confidence. The market’s reduced tolerance for risk and the lack of earnings visibility have led to above-average volatility. The longer-term effects of changing consumer behavior, increased government involvement in the economy, reduced availability of credit, and over-capacity in many industries remain ongoing concerns. We believe that the current deterioration in the gross domestic product (GDP) and company earnings are entering a bottoming phase, although these challenges are likely to hinder future economic growth. Recent improvements in productivity, retail sales, and consumer confidence are encouraging signs. Other leading economic indicators are improving, most notably, the money supply, the yield curve, and credit spreads. We believe these improvements should provide a more favorable backdrop for the equity markets going forward. Overall, we believe the economy is entering a period of sustained lower growth. In this environment, we expect that companies with a competitive advantage will gain accelerated market share versus their poorly financed, weaker competitors. We believe that credit constraints and industry consolidation will force out inferior companies, allowing market leaders to increase their market share and drive superior earnings growth.
Successes: Financial stocks were our best-performing sector for the period. For example, Eaton Vance and MFA Financial each posted strong gains. Internet software and services companies in the information technology sector, notably j2 Global Communications and Akamai Technologies, also performed well.
Shortfalls: Consumer discretionary, including consumer services and leisure companies, was our worst-performing sector for the period. Underperforming stocks in that sector included Matthews International and Scientific Games. The consumer staples sector, consisting largely of food and retailing companies, also lagged: Ralcorp Holdings and United Natural Foods were among the stocks that detracted from performance.
11
Vanguard Explorer Fund Investment Advisors |
| |||||
|
|
|
| |||
| Fund Assets Managed |
| ||||
Investment Advisor | % | $ Million | Investment Strategy |
| ||
Granahan Investment | 28 | 1,865 | Bases its investment process on the beliefs |
| ||
Management, Inc. |
|
| that earnings drive stock prices and that |
| ||
|
|
| small, dynamic companies with |
| ||
|
|
| exceptional growth prospects |
| ||
|
|
| have the greatest long-term potential. A |
| ||
|
|
| bottom-up, fundamental approach places |
| ||
|
|
| companies in one of three life-cycle |
| ||
|
|
| categories: pioneer, core growth, and |
| ||
|
|
| special situation. In each, the process looks |
| ||
|
|
| for companies with strong earnings |
| ||
|
|
| growth and leadership in their markets. |
| ||
Kalmar Investment | 14 | 984 | Employs a “growth-with-value” strategy |
| ||
Advisers |
|
| using creative, bottom-up research to |
| ||
|
|
| uncover vigorously growing, high-quality |
| ||
|
|
| businesses whose stocks can also be |
| ||
|
|
| bought at inefficiently valued levels. The |
| ||
|
|
| strategy has a dual objective of superior |
| ||
|
|
| returns with lower risk. |
| ||
Wellington Management | 14 | 976 | Conducts research and analysis of |
| ||
Company, LLP |
|
| individual companies to select |
| ||
|
|
| stocks believed to have exceptional growth |
| ||
|
|
| potential relative to their market valuations. |
| ||
|
|
| Each stock is considered individually |
| ||
|
|
| before purchase, and company |
| ||
|
|
| developments are continually monitored |
| ||
|
|
| for comparison with expectations for |
| ||
|
|
| growth. |
| ||
Vanguard Quantitative | 13 | 918 | Employs a quantitative fundamental |
| ||
Equity Group |
|
| management approach, using models |
| ||
|
|
| that assess valuation, market |
| ||
|
|
| sentiment, and earnings quality of |
| ||
|
|
| companies as compared with their peers. |
| ||
AXA Rosenberg Investment | 13 | 857 | Employs an investment philosophy |
| ||
Management LLC |
|
| grounded in fundamental analysis |
| ||
|
|
| using a two-part quantitative model: a |
| ||
|
|
| valuation model, which compares a stock’s |
| ||
|
|
| price to its fair value, and an earnings- |
| ||
|
|
| forecast model, which identifies companies |
| ||
|
|
| likely to have superior earnings. |
| ||
Chartwell Investment Partners, L.P. | 8 | 574 | Uses a bottom-up, fundamental, research- |
| ||
|
|
| driven stock-selection strategy focusing on |
| ||
|
|
| companies with sustainable growth, strong |
| ||
|
|
| management teams,competitive positions, |
| ||
|
|
| and outstanding product and service |
| ||
|
|
| offerings. These companies should |
| ||
|
|
| continually demonstrate growth in earnings. |
| ||
|
|
| per share |
| ||
Century Capital Management, LLC | 6 | 381 | Employs a fundamental, bottom-up |
| ||
|
|
| approach that attempts to identify |
|
|
| reasonably priced companies that |
|
|
| will grow faster than the overall market. |
|
|
| Companies also must have a superior |
|
|
| return on equity, high recurring revenues, |
|
|
| and improving margins. |
Cash Investments | 4 | 272 | These short-term reserves are invested by |
|
|
| Vanguard in equity index products to |
|
|
| simulate investment in stocks. Each |
|
|
| advisor also may maintain a modest |
|
|
| cash position. |
12
Explorer Fund
Fund Profile
As of April 30, 2009
Portfolio Characteristics |
|
| |
|
| Comparative | Broad |
| Fund | Index1 | Index2 |
Number of Stocks | 1,000 | 1,490 | 4,460 |
Median Market Cap | $1.6B | $1.7B | $23.4B |
Price/Earnings Ratio | 22.2x | 26.5x | 16.9x |
Price/Book Ratio | 2.0x | 2.3x | 1.9x |
Yield3 |
| 0.8% | 2.4% |
Investor Shares | 0.3% |
|
|
Admiral Shares | 0.5% |
|
|
Return on Equity | 14.9% | 15.8% | 20.0% |
Earnings Growth Rate | 17.2% | 17.7% | 14.8% |
Foreign Holdings | 2.5% | 0.0% | 0.0% |
Turnover Rate4 | 84% | — | — |
Expense Ratio5 |
| — | — |
Investor Shares | 0.51% |
|
|
Admiral Shares | 0.32% |
|
|
Short-Term Reserves | 2.6% | — | — |
Sector Diversification (% of equity exposure) | |||
|
| Comparative | Broad |
| Fund | Index1 | Index2 |
Consumer Discretionary | 14.7% | 17.1% | 10.2% |
Consumer Staples | 4.2 | 3.8 | 10.5 |
Energy | 6.1 | 6.7 | 11.9 |
Financials | 5.8 | 5.8 | 14.1 |
Health Care | 20.9 | 20.9 | 13.2 |
Industrials | 16.1 | 18.7 | 10.7 |
Information Technology | 25.8 | 20.3 | 18.3 |
Materials | 4.4 | 4.6 | 3.7 |
Telecommunication Services | 0.8 | 1.3 | 3.4 |
Utilities | 1.2 | 0.8 | 4.0 |
Volatility Measures6 |
| |
| Fund Versus | Fund Versus |
| Comparative Index1 | Broad Index2 |
R-Squared | 1.00 | 0.94 |
Beta | 0.93 | 1.12 |
Ten Largest Holdings7 (% of total net assets) | ||
|
|
|
The Dun & Bradstreet Corp. | research and consulting services | 0.8% |
Polycom, Inc. | communications equipment | 0.8 |
Cephalon, Inc. | biotechnology | 0.7 |
Stericycle, Inc. | environmental and facilities services | 0.7 |
Henry Schein, Inc. | health care distributors | 0.6 |
Riverbed Technology, Inc. | communications equipment | 0.6 |
MSC Industrial Direct Co., Inc. Class A | trading companies and distributors | 0.6 |
WMS Industries, Inc. | casinos and gaming | 0.6 |
GameStop Corp. Class A | computer and electronics retail | 0.6 |
O’Reilly Automotive, Inc. | automotive retail | 0.6 |
Top Ten |
| 6.6% |
Investment Focus
1 Russell 2500 Growth Index.
2 Dow Jones U.S. Total Stock Market Index.
3 30-day SEC yield for the fund; annualized dividend yield for the indexes. See the Glossary.
4 Annualized.
5 The fund expense ratios shown are from the prospectus dated February 20, 2009, and represent estimated costs for the current fiscal year based on the fund’s current net assets. For the six months ended April 30, 2009, the annualized expense ratios were 0.57% for Investor Shares and 0.38% for Admiral Shares.
6 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
7 The holdings listed exclude any temporary cash investments and equity index products.
13
Explorer Fund
Performance Summary
All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Fiscal-Year Total Returns (%): October 31, 1998–April 30, 2009
Average Annual Total Returns: Periods Ended March 31, 2009
This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.
| Inception Date | One Year | Five Years | Ten Years |
Investor Shares2 | 12/11/1967 | –37.21% | –5.55% | 3.36% |
Admiral Shares | 11/12/2001 | –37.11 | –5.40 | –0.353 |
1 Six months ended April 30, 2009.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
3 Return since inception.
Note: See Financial Highlights tables for dividend and capital gains information.
14
Explorer Fund
Financial Statements (unaudited)
Statement of Net Assets—Investments Summary
As of April 30, 2009
This Statement summarizes the fund’s holdings by asset type (common stocks, bonds, etc.) and by industry sector. Details are reported for each of the fund’s 50 largest individual holdings and for investments that, in total for any issuer, represent more than 1% of the fund’s net assets. The total value of smaller holdings is reported as a single amount within each category.
The fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the complete listing of the fund’s holdings is available electronically on Vanguard.com and on the Securities and Exchange Commission’s website (www.sec.gov), or you can have it mailed to you without charge by calling 800-662-7447. For the first and third fiscal quarters, the fund files the lists with the SEC on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).
|
|
| Market | Percentage |
|
|
| Value• | of Net |
|
| Shares | ($000) | Assets |
Common Stocks |
|
|
| |
Consumer Discretionary |
|
|
| |
* | WMS Industries, Inc. | 1,248,849 | 40,101 | 0.6% |
* | GameStop Corp. Class A | 1,284,605 | 38,744 | 0.6% |
* | O’Reilly Automotive, Inc. | 978,921 | 38,031 | 0.6% |
* | Dollar Tree, Inc. | 700,689 | 29,667 | 0.4% |
| DeVry, Inc. | 687,105 | 29,243 | 0.4% |
| Penske Automotive Group Inc. | 2,095,300 | 27,763 | 0.4% |
| Ross Stores, Inc. | 714,587 | 27,111 | 0.4% |
* | DreamWorks Animation SKG, Inc. | 968,967 | 23,265 | 0.3% |
| Consumer Discretionary—Other † |
| 686,954 | 10.1% |
|
|
| 940,879 | 13.8% |
Consumer Staples |
|
|
| |
| Ruddick Corp. | 1,076,650 | 27,627 | 0.4% |
| Consumer Staples—Other † |
| 242,647 | 3.6% |
|
|
| 270,274 | 4.0% |
Energy |
|
|
| |
* | Ultra Petroleum Corp. | 747,500 | 31,993 | 0.5% |
* | Atwood Oceanics, Inc. | 1,349,340 | 30,117 | 0.4% |
* | Petrohawk Energy Corp. | 1,175,450 | 27,741 | 0.4% |
* | Southwestern Energy Co. | 755,580 | 27,095 | 0.4% |
| Energy—Other † |
| 277,733 | 4.1% |
|
|
| 394,679 | 5.8% |
Exchange-Traded Funds |
|
|
| |
^,1 | Vanguard Small-Cap ETF | 1,165,083 | 50,623 | 0.7% |
^,1 | Vanguard Small-Cap Growth ETF | 713,200 | 32,115 | 0.5% |
^ | iShares Russell 2000 Index Fund | 581,700 | 28,224 | 0.4% |
|
|
| 110,962 | 1.6% |
|
|
|
|
|
Financials † |
| 336,244 | 4.9% |
15
Explorer Fund
|
|
| Market | Percentage |
|
|
| Value• | of Net |
|
| Shares | ($000) | Assets |
Health Care |
|
|
| |
* | Cephalon, Inc. | 755,175 | 49,547 | 0.7% |
* | Henry Schein, Inc. | 1,068,732 | 43,861 | 0.6% |
* | ResMed Inc. | 988,910 | 38,024 | 0.6% |
*,^ | IDEXX Laboratories, Inc. | 961,760 | 37,797 | 0.6% |
| The Cooper Companies, Inc. | 1,269,712 | 36,504 | 0.5% |
* | Edwards Lifesciences Corp. | 545,600 | 34,580 | 0.5% |
* | Isis Pharmaceuticals, Inc. | 1,816,749 | 28,487 | 0.4% |
| DENTSPLY International Inc. | 991,189 | 28,368 | 0.4% |
* | Haemonetics Corp. | 546,572 | 28,220 | 0.4% |
* | Qiagen NV | 1,609,300 | 26,521 | 0.4% |
* | Endo Pharmaceuticals Holdings, Inc. | 1,595,140 | 26,384 | 0.4% |
* | Community Health Systems, Inc. | 1,009,500 | 23,057 | 0.3% |
| Health Care—Other † |
| 953,011 | 14.0% |
|
|
| 1,354,361 | 19.8% |
Industrials |
|
|
| |
| The Dun & Bradstreet Corp. | 639,954 | 52,092 | 0.8% |
* | Stericycle, Inc. | 989,175 | 46,570 | 0.7% |
| MSC Industrial Direct Co., Inc. Class A | 993,590 | 40,588 | 0.6% |
| Equifax, Inc. | 1,138,084 | 33,187 | 0.5% |
| Ritchie Brothers Auctioneers Inc. | 1,074,530 | 24,069 | 0.4% |
| AMETEK, Inc. | 724,760 | 23,345 | 0.3% |
* | Teledyne Technologies, Inc. | 720,680 | 23,011 | 0.3% |
| Industrials—Other † |
| 789,672 | 11.5% |
|
|
| 1,032,534 | 15.1% |
Information Technology |
|
|
| |
* | Polycom, Inc. | 2,754,558 | 51,345 | 0.8% |
* | Riverbed Technology, Inc. | 2,375,400 | 43,517 | 0.6% |
*,^ | Alliance Data Systems Corp. | 798,772 | 33,445 | 0.5% |
* | Red Hat, Inc. | 1,887,813 | 32,603 | 0.5% |
* | Ariba, Inc. | 3,025,309 | 29,073 | 0.4% |
| FactSet Research Systems Inc. | 540,500 | 28,965 | 0.4% |
* | Concur Technologies, Inc. | 1,012,762 | 27,415 | 0.4% |
* | TiVo Inc. | 3,609,955 | 27,075 | 0.4% |
* | ON Semiconductor Corp. | 4,792,035 | 25,973 | 0.4% |
* | Hewitt Associates, Inc. | 797,441 | 25,008 | 0.4% |
* | Euronet Worldwide, Inc. | 1,494,990 | 24,189 | 0.4% |
* | PMC-Sierra Inc. | 3,037,900 | 24,060 | 0.4% |
* | FEI Co. | 1,331,402 | 22,873 | 0.3% |
* | salesforce.com, inc. | 534,200 | 22,869 | 0.3% |
| Information Technology—Other † |
| 1,242,148 | 18.1% |
|
|
| 1,660,558 | 24.3% |
Materials |
|
|
| |
| Sensient Technologies Corp. | 1,520,160 | 35,541 | 0.5% |
| Albemarle Corp. | 1,021,170 | 27,388 | 0.4% |
| AptarGroup Inc. | 780,550 | 24,220 | 0.4% |
| Materials—Other † |
| 192,002 | 2.8% |
|
|
| 279,151 | 4.1% |
|
|
|
|
|
Telecommunication Services † |
| 50,514 | 0.8% | |
|
|
|
|
|
Utilities † |
| 66,107 | 1.0% | |
Total Common Stocks (Cost $7,454,692) |
| 6,496,263 | 95.2%2 |
16
Explorer Fund
|
|
| Market | Percentage |
|
|
| Value• | of Net |
| Coupon | Shares | ($000) | Assets |
Temporary Cash Investments |
|
|
|
|
Money Market Fund |
|
|
|
|
3,4 Vanguard Market Liquidity Fund | 0.355% | 432,538,000 | 432,538 | 6.3% |
|
|
|
|
|
Repurchase Agreement † |
|
| 8,000 | 0.1% |
|
|
|
|
|
5 U.S. Government and Agency Obligations † |
| 27,284 | 0.4% | |
Total Temporary Cash Investments (Cost $467,799) |
| 467,822 | 6.8%2 | |
Total Investments (Cost $7,922,491) |
|
| 6,964,085 | 102.0% |
Other Assets and Liabilities |
|
|
|
|
Other Assets |
|
| 114,631 | 1.7% |
Liabilities4 |
|
| (251,967) | (3.7%) |
|
|
| (137,336) | (2.0%) |
Net Assets |
|
| 6,826,749 | 100.0% |
At April 30, 2009, net assets consisted of: |
|
| Amount |
| ($000) |
Paid-in Capital | 9,946,091 |
Overdistributed Net Investment Income | (13,979) |
Accumulated Net Realized Losses | (2,175,196) |
Unrealized Appreciation (Depreciation) |
|
Investment Securities | (958,406) |
Futures Contracts | 28,239 |
Net Assets | 6,826,749 |
|
|
Investor Shares—Net Assets |
|
Applicable to 111,015,443 outstanding $.001 par value shares of |
|
beneficial interest (unlimited authorization) | 4,904,156 |
Net Asset Value Per Share—Investor Shares | $44.18 |
|
|
|
|
Admiral Shares—Net Assets |
|
Applicable to 46,772,782 outstanding $.001 par value shares of |
|
beneficial interest (unlimited authorization) | 1,922,593 |
Net Asset Value Per Share—Admiral Shares | $41.10 |
• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $91,382,000.
† Represents the aggregate value, by category, of securities that are not among the 50 largest holdings and, in total for any issuer, represent 1% or less of net assets.
1 Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
2 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures investments, the fund’s effective common stock and temporary cash investment positions represent 98.0% and 4.0%, respectively, of net assets.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
4 Includes $93,835,000 of collateral received for securities on loan.
5 Securities with a value of $27,284,000 have been segregated as initial margin for open futures contracts. See accompanying Notes, which are an integral part of the Financial Statements.
17
Explorer Fund
Statement of Operations
| Six Months Ended |
| April 30, 2009 |
| ($000) |
Investment Income |
|
Income |
|
Dividends1,2 | 31,431 |
Interest2 | 1,981 |
Security Lending | 3,383 |
Total Income | 36,795 |
Expenses |
|
Investment Advisory Fees—Note B |
|
Basic Fee | 6,533 |
Performance Adjustment | 102 |
The Vanguard Group—Note C |
|
Management and Administrative—Investor Shares | 6,734 |
Management and Administrative—Admiral Shares | 1,023 |
Marketing and Distribution—Investor Shares | 795 |
Marketing and Distribution—Admiral Shares | 336 |
Custodian Fees | 53 |
Shareholders’ Reports—Investor Shares | 79 |
Shareholders’ Reports—Admiral Shares | 1 |
Trustees’ Fees and Expenses | 6 |
Total Expenses | 15,662 |
Expenses Paid Indirectly | (147) |
Net Expenses | 15,515 |
Net Investment Income | 21,280 |
Realized Net Gain (Loss)2 |
|
Investment Securities Sold | (1,264,688) |
Futures Contracts | (75,705) |
Foreign Currencies | (285) |
Realized Net Gain (Loss) | (1,340,678) |
Change in Unrealized Appreciation (Depreciation) |
|
Investment Securities | 1,102,791 |
Futures Contracts | 40,087 |
Foreign Currencies | 95 |
Change in Unrealized Appreciation (Depreciation) | 1,142,973 |
Net Increase (Decrease) in Net Assets Resulting from Operations | (176,425) |
1 Dividends are net of foreign withholding taxes of $135,000.
2 Dividend income, interest income, and realized net gain (loss) from affiliated companies of the fund were $1,549,000, $1,786,000, and ($8,493,000), respectively.
See accompanying Notes, which are an integral part of the Financial Statements.
18
Explorer Fund
Statement of Changes in Net Assets
Six Months Ended | Year Ended | |
| April 30, | October 31, |
| 2009 | 2008 |
| ($000) | ($000) |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net Investment Income | 21,280 | 46,416 |
Realized Net Gain (Loss) | (1,340,678) | (795,075) |
Change in Unrealized Appreciation (Depreciation) | 1,142,973 | (4,113,294) |
Net Increase (Decrease) in Net Assets Resulting from Operations | (176,425) | (4,861,953) |
Distributions |
|
|
Net Investment Income |
|
|
Investor Shares | (31,119) | (32,844) |
Admiral Shares | (17,117) | (19,834) |
Realized Capital Gain1 |
|
|
Investor Shares | — | (718,966) |
Admiral Shares | — | (293,376) |
Total Distributions | (48,236) | (1,065,020) |
Capital Share Transactions |
|
|
Investor Shares | 29,557 | 294,591 |
Admiral Shares | (27,220) | 92,430 |
Net Increase (Decrease) from Capital Share Transactions | 2,337 | 387,021 |
Total Increase (Decrease) | (222,324) | (5,539,952) |
Net Assets |
|
|
Beginning of Period | 7,049,073 | 12,589,025 |
End of Period2 | 6,826,749 | 7,049,073 |
1 Includes fiscal 2008 short-term gain distributions totaling $233,468,000. Short-term gain distributions are treated as ordinary income dividends for tax purposes.
2 Net Assets—End of Period includes undistributed (overdistributed) net investment income of ($13,979,000) and $13,262,000. See accompanying Notes, which are an integral part of the Financial Statements.
19
Explorer Fund
Financial Highlights
Investor Shares |
|
|
|
|
|
|
| Six |
|
|
|
|
|
| Months |
|
|
|
|
|
| Ended | Year Ended October 31, | ||||
For a Share Outstanding | April 30, |
|
|
|
|
|
Throughout Each Period | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 |
Net Asset Value, Beginning of Period | $45.54 | $83.93 | $80.26 | $76.67 | $67.01 | $63.17 |
Investment Operations |
|
|
|
|
|
|
Net Investment Income | .129 | .295 | .362 | .302 | .111 | (.050) |
Net Realized and Unrealized Gain (Loss) |
|
|
|
|
|
|
on Investments | (1.207) | (31.589) | 11.052 | 9.724 | 9.622 | 3.890 |
Total from Investment Operations | (1.078) | (31.294) | 11.414 | 10.026 | 9.733 | 3.840 |
Distributions |
|
|
|
|
|
|
Dividends from Net Investment Income | (.282) | (.310) | (.320) | (.230) | — | — |
Distributions from Realized Capital Gains | — | (6.786) | (7.424) | (6.206) | (.073) | — |
Total Distributions | (.282) | (7.096) | (7.744) | (6.436) | (.073) | — |
Net Asset Value, End of Period | $44.18 | $45.54 | $83.93 | $80.26 | $76.67 | $67.01 |
|
|
|
|
|
|
|
Total Return1 | –2.32% | –40.17% | 15.31% | 13.59% | 14.53% | 6.08% |
|
|
|
|
|
|
|
Ratios/Supplemental Data |
|
|
|
|
|
|
Net Assets, End of Period (Millions) | $4,904 | $5,026 | $8,937 | $8,517 | $7,836 | $7,302 |
Ratio of Total Expenses to |
|
|
|
|
|
|
Average Net Assets2 | 0.57%3 | 0.44% | 0.41% | 0.46% | 0.51% | 0.57% |
Ratio of Net Investment Income to |
|
|
|
|
|
|
Average Net Assets | 0.63%3 | 0.40% | 0.44% | 0.36% | 0.16% | (0.11%) |
Portfolio Turnover Rate | 84%3 | 112% | 90% | 96% | 80% | 82% |
1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Includes performance-based investment advisory fee increases (decreases) of 0.00%, (0.02%), (0.04%), (0.03%), (0.01%), and 0.02%.
3 Annualized.
See accompanying Notes, which are an integral part of the Financial Statements.
20
Explorer Fund
Financial Highlights
Admiral Shares |
|
|
|
|
|
|
| Six |
|
|
|
|
|
| Months |
|
|
|
|
|
| Ended | Year Ended October 31, | ||||
For a Share Outstanding | April 30, |
|
|
|
|
|
Throughout Each Period | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 |
Net Asset Value, Beginning of Period | $42.45 | $78.25 | $74.82 | $71.47 | $62.37 | $58.71 |
Investment Operations |
|
|
|
|
|
|
Net Investment Income | .155 | .385 | .478 | .422 | .215 | .040 |
Net Realized and Unrealized Gain (Loss) |
|
|
|
|
|
|
on Investments | (1.138) | (29.442) | 10.299 | 9.050 | 8.953 | 3.620 |
Total from Investment Operations | (.983) | (29.057) | 10.777 | 9.472 | 9.168 | 3.660 |
Distributions |
|
|
|
|
|
|
Dividends from Net Investment Income | (.367) | (.427) | (.437) | (.346) | — | — |
Distributions from Realized Capital Gains | — | (6.316) | (6.910) | (5.776) | (.068) | — |
Total Distributions | (.367) | (6.743) | (7.347) | (6.122) | (.068) | — |
Net Asset Value, End of Period | $41.10 | $42.45 | $78.25 | $74.82 | $71.47 | $62.37 |
|
|
|
|
|
|
|
Total Return | –2.25% | –40.07% | 15.53% | 13.79% | 14.70% | 6.23% |
|
|
|
|
|
|
|
Ratios/Supplemental Data |
|
|
|
|
|
|
Net Assets, End of Period (Millions) | $1,923 | $2,023 | $3,652 | $3,264 | $2,402 | $1,161 |
Ratio of Total Expenses to |
|
|
|
|
|
|
Average Net Assets1 | 0.38%2 | 0.26% | 0.23% | 0.28% | 0.34% | 0.43% |
Ratio of Net Investment Income to |
|
|
|
|
|
|
Average Net Assets | 0.82%2 | 0.58% | 0.62% | 0.54% | 0.33% | 0.04% |
Portfolio Turnover Rate | 84%2 | 112% | 90% | 96% | 80% | 82% |
1 Includes performance-based investment advisory fee increases (decreases) of 0.00%, (0.02%), (0.04%), (0.03%), (0.01%), and 0.02%.
2 Annualized.
See accompanying Notes, which are an integral part of the Financial Statements.
21
Explorer Fund
Notes to Financial Statements
Vanguard Explorer Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers two classes of shares: Investor Shares and Admiral Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size criteria.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments acquired over 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value.
2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).
3. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objective of maintaining full exposure to the stock market while maintaining liquidity. The fund may purchase or sell futures contracts to achieve a desired level of investment, whether to accommodate portfolio turnover or cash flows from capital share transactions. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market.
Futures contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized futures gains (losses).
22
Explorer Fund
4. Repurchase Agreements: The fund may invest in repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings.
5. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken on federal income tax returns for all open tax years (tax years ended October 31, 2005–2008) and for the period ended April 30, 2009, and has concluded that no provision for federal income tax is required in the fund’s financial statements.
6. Distributions: Distributions to shareholders are recorded on the ex-dividend date.
7. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.
8. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses) and shareholder reporting. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.
B. Granahan Investment Management, Inc., Kalmar Investment Advisers, Wellington Management Company, LLP, AXA Rosenberg Investment Management LLC, Chartwell Investment Partners, L.P., and Century Capital Management LLC, each provide investment advisory services to a portion of the fund for fees calculated at an annual percentage rate of average net assets managed by the advisor. The basic fees of Granahan Investment Management, Inc., Kalmar Investment Advisers, Wellington Management Company, LLP, and Chartwell Investment Partners, are subject to quarterly adjustments based on performance for the preceding three years relative to the Russell 2500 Growth Index. The basic fee for AXA Rosenberg Investment Management LLC is subject to quarterly adjustments based on performance since July 31, 2007, relative to the Russell 2500 Growth Index. In accordance with the advisory contract entered into with Century Capital Management LLC in June 2008, beginning August 1, 2009, the investment advisory fee will be subject to quarterly adjustments based on performance since October 31, 2008, relative to a 50/50 blend of the Russell 2500 Index and Russell 2500 Growth Index.
23
Explorer Fund
The Vanguard Group provides investment advisory services to a portion of the fund on an at-cost basis; the fund paid Vanguard advisory fees of $189,000 for the six months ended April 30, 2009.
For the six months ended April 30, 2009, the aggregate investment advisory fee represented an effective annual basic rate of 0.21% of the fund’s average net assets, before an increase of $102,000 (0.00%) based on performance.
C. The Vanguard Group furnishes at cost corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At April 30, 2009, the fund had contributed capital of $1,593,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.64% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.
D. The fund has asked its investment advisors to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the fund part of the commissions generated. Such rebates are used solely to reduce the fund’s management and administrative expenses. The fund’s custodian bank has also agreed to reduce its fees when the fund maintains cash on deposit in the non-interest-bearing custody account. For the six months ended April 30, 2009, these arrangements reduced the fund’s management and administrative expenses by $146,000 and custodian fees by $1,000. The total expense reduction represented an effective annual rate of 0.00% of the fund’s average net assets.
E. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.
During the six months ended April 30, 2009, the fund realized net foreign currency losses of $285,000, which decreased distributable net income for tax purposes; accordingly, such losses have been reclassified from accumulated net realized losses to overdistributed net investment income.
The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at October 31, 2008, the fund had available realized losses of $784,127,000 to offset future net capital gains through October 31, 2016. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending October 31, 2009; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.
At April 30, 2009, the cost of investment securities for tax purposes was $7,922,491,000. Net unrealized depreciation of investment securities for tax purposes was $958,406,000, consisting of unrealized gains of $557,083,000 on securities that had risen in value since their purchase and $1,515,489,000 in unrealized losses on securities that had fallen in value since their purchase.
24
Explorer Fund
At April 30, 2009, the aggregate settlement value of open futures contracts expiring in June 2009 and the related unrealized appreciation (depreciation) were:
|
| ($000) | |
| Number of | Aggregate | Unrealized |
| Long (Short) | Settlement | Appreciation |
Futures Contracts | Contracts | Value | (Depreciation) |
E-mini Russell 2000 Index | 2,500 | 121,675 | 18,777 |
S&P MidCap 400 Index | 120 | 33,600 | 6,607 |
E-mini S&P MidCap Index | 336 | 18,816 | 1,482 |
E-mini NASDAQ 100 Index | 646 | 18,004 | 1,373 |
Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.
F. During the six months ended April 30, 2009, the fund purchased $2,563,739,000 of investment securities and sold $2,521,483,000 of investment securities, other than temporary cash investments.
G. Capital share transactions for each class of shares were:
| Six Months Ended | Year Ended | ||
| April 30, 2009 | October 31, 2008 | ||
| Amount | Shares | Amount | Shares |
| ($000) | (000) | ($000) | (000) |
Investor Shares |
|
|
|
|
Issued | 403,122 | 10,177 | 981,528 | 15,527 |
Issued in Lieu of Cash Distributions | 30,645 | 746 | 742,180 | 10,728 |
Redeemed | (404,210) | (10,274) | (1,429,117) | (22,368) |
Net Increase (Decrease)—Investor Shares | 29,557 | 649 | 294,591 | 3,887 |
Admiral Shares |
|
|
|
|
Issued | 206,122 | 5,571 | 459,208 | 7,554 |
Issued in Lieu of Cash Distributions | 15,592 | 408 | 293,573 | 4,559 |
Redeemed | (248,934) | (6,874) | (660,351) | (11,114) |
Net Increase (Decrease)—Admiral Shares | (27,220) | (895) | 92,430 | 999 |
25
Explorer Fund
H. Certain of the fund’s investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company. Transactions during the period in securities of these companies were as follows:
|
| Current Period Transactions |
| ||
| Oct. 31, 2008 |
| Proceeds From |
| April 30, 2009 |
| Market | Purchases | Securities | Dividend | Market |
| Value | at Cost | Sold | Income | Value |
| ($000) | ($000) | ($000) | ($000) | ($000) |
Advanta Corp. Class A | 2,425 | — | 1,410 | 180 | — |
Hollywood Media Corp. | NA1 | 107 | 1,245 | — | — |
| 2,425 |
|
| 180 | — |
1 Not applicable because at October 31, 2008, the security was not an affiliated company of the fund.
I. In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” FAS 157 establishes a framework for measuring fair value and expands disclosures about fair-value measurements in financial statements.
The various inputs that may be used to determine the value of the fund’s investments are summarized in three broad levels. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).
26
Explorer Fund
The following table summarizes the fund’s investments as of April 30, 2009, based on the inputs used to value them:
| Investments | Futures |
| in Securities | Contracts |
Valuation Inputs | ($000) | ($000) |
Level 1—Quoted prices | 6,883,569 | 28,239 |
Level 2—Other significant observable inputs | 80,516 | — |
Level 3—Significant unobservable inputs | — | — |
Total | 6,964,085 | 28,239 |
The following table summarizes changes in investments valued based on Level 3 inputs during the six months ended April 30, 2009:
| Investments |
| in Securities |
Amount valued based on Level 3 Inputs | ($000) |
Balance as of October 31, 2008 | 4,568 |
Transfers in and/or out of Level 3 | (4,568) |
Balance as of April 30, 2009 | — |
27
About Your Fund’s Expenses
As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The accompanying table illustrates your fund’s costs in two ways:
• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”
• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
Six Months Ended April 30, 2009 |
|
|
|
| Beginning | Ending | Expenses |
| Account Value | Account Value | Paid During |
Explorer Fund | 10/31/2008 | 4/30/2009 | Period1 |
Based on Actual Fund Return |
|
|
|
Investor Shares | $1,000.00 | $976.80 | $2.79 |
Admiral Shares | 1,000.00 | 977.50 | 1.86 |
Based on Hypothetical 5% Yearly Return |
|
|
|
Investor Shares | $1,000.00 | $1,021.97 | $2.86 |
Admiral Shares | 1,000.00 | 1,022.91 | 1.91 |
1 The calculations are based on expenses incurred in the most recent six-month period. The fund’s annualized six-month expense ratios for that period are 0.57% for Investor Shares and 0.38% for Admiral Shares. The dollar amounts shown as “Expenses Paid” are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the number of days in the most recent 12-month period.
28
Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the account service fee described in the prospectus. If such a fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.”
The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.
29
Trustees Approve Advisory Arrangements
The board of trustees of Vanguard Explorer Fund has renewed the fund’s investment advisory arrangements with Granahan Investment Management, Inc.; The Vanguard Group, Inc. (through its Quantitative Equity Group); Wellington Management Company, LLP; AXA Rosenberg Investment Management LLC; Kalmar Investment Advisers; Chartwell Investment Partners, L.P.; and Century Capital Management, LLC. The board determined that the retention of the advisors was in the best interests of the fund and its shareholders.
The board based its decision upon an evaluation of each advisor’s investment staff, portfolio management process, and performance. The trustees considered the factors discussed below, among others. However, no single factor determined whether the board approved the arrangements. Rather, it was the totality of the circumstances that drove the board’s decision.
Nature, extent, and quality of services
The board considered the quality of the fund’s investment management over both the short and long term, and took into account the organizational depth and stability of each advisor. The board noted the following:
Granahan Investment Management, Inc. Founded in 1985, Granahan specializes in small-cap growth equity investing. The firm has advised a portion of the fund since 1990. The firm uses fundamental research to select a portfolio of 125–175 stocks with sustainable growth characteristics. The advisor achieves portfolio diversification through dedicated allocations to three categories of growth companies: core growth (40%–70% of subportfolio assets), companies with strong market positions, based on proprietary products or services; pioneers (15%–30%), companies with unique technology or innovations; and special value (15%–30%), companies with growth potential overlooked by the market.
Kalmar Investment Advisers. Kalmar, together with its parent company, Kalmar Investments Inc., founded in 1982, specializes in smaller-cap growth equity investing. The firm has advised a portion of the fund since 2005. Kalmar is a research-driven investment firm that is entirely focused on the management of “growth with value” smaller-cap equity portfolios. Kalmar believes that there is a high-reward and low-risk anomaly offered by the equity market in the stocks of solid, well-managed, rapidly growing smaller companies. Through independent fundamental research, Kalmar attempts to discover such companies, buy them at undervalued levels, and own them for the longer term.
Wellington Management Company, LLP. Founded in 1928, Wellington Management is among the nation’s oldest and most respected institutional investment managers. The firm has advised a portion of the fund since 1967. Using a bottom-up, fundamentally driven approach, Wellington Management invests opportunistically in a diversified portfolio of high-quality stocks. The advisor attempts to identify companies that are early in their growth cycle. The research-intensive approach is supported by the team’s deep and tenured analytical staff, which may also leverage Wellington Management’s deep industry research capabilities.
The Vanguard Group, Inc. Vanguard has been managing investments for more than three decades. The Quantitative Equity Group adheres to a sound, disciplined investment management process; the team has considerable experience, stability, and depth. Vanguard has managed a portion of the fund since 1997.
30
AXA Rosenberg Investment Management LLC. AXA Rosenberg is an independently operated subsidiary of the AXA Group, which was founded in 1985. The firm has advised a portion of the fund since 2007. AXA Rosenberg employs an investment philosophy grounded in fundamental analysis using a two-part quantitative model: a valuation model and an earnings-forecast model. The valuation model compares the current stock price of a company’s stock with its fair value calculated through an independent asset appraisal. The earnings-forecast model uses a mix of fundamental indicators and market data to identify companies that are likely to have superior year-ahead earnings. The two models are combined to develop an individual predicted return for each company. An optimized portfolio against the Russell 2500 Growth Index is the result.
Chartwell Investment Partners, L.P. Founded in 1997, Chartwell is an independent, employee-owned firm. The firm has advised a portion of the fund since 1997. The firm employs a bottom-up research-driven approach to invest in companies that have demonstrated strong earnings-per-share growth and have achieved strong competitive positions while serving a meaningful customer base. The team seeks to initiate investments opportunistically when the stocks are attractively valued, yet the team concentrates holdings in companies best positioned for rapid growth.
Century Capital Management, LLC. Century Capital is a Boston-based investment management boutique, owned by the investment professionals within the firm. The public equity team, led by chief investment officer Alexander L. Thorndike, oversees two mutual funds: a small-cap growth fund, Century Small Cap Select Fund, and a large-cap fund, Century Shares Trust Fund. The team also oversees small-cap growth and small/mid-cap growth portfolios for institutional investors. Century Capital employs a fundamental, bottom-up investment approach that seeks to identify reasonably priced companies that will grow faster than the overall market. Independent research is a core tenet. The ideal investment is a well-managed company, that is reasonably valued, in a noncapital-intensive business, with established products or services, a high return on equity, high recurring revenues, and improving margins.
The board concluded that each advisor’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangements.
Investment performance
The board considered the short- and long-term performance of the fund, including any periods of outperformance or underperformance of a relevant benchmark and peer group. The board concluded that each advisor has carried out the fund’s investment strategy in disciplined fashion, and that performance results have allowed the fund to remain competitive versus its benchmark and its average peer fund. Information about the fund’s most recent performance can be found in the Performance Summary section of this report.
Cost
The board concluded that the fund’s expense ratio was far below the average expense ratio charged by funds in its peer group. The board noted that the fund’s advisory fee rate was also well below the peer-group average. Information about the fund’s expense ratio appears in the About Your Fund’s Expenses section of this report as well as in the Financial Statements section, which also includes information about the advisory fee rate.
31
The board did not consider profitability of Granahan, Kalmar, Wellington Management, AXA Rosenberg, Chartwell, and Century Capital in determining whether to approve the advisory fees, because the firms are independent of Vanguard and the advisory fees are the result of arm’s-length negotiations. The board does not conduct a profitability analysis of Vanguard, because of Vanguard’s unique “at-cost” structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees, and produces “profits” only in the form of reduced expenses for fund shareholders.
The benefit of economies of scale
The board concluded that the fund’s shareholders benefit from economies of scale because of breakpoints in the advisory fee schedules for Granahan, Kalmar, Wellington Management, AXA Rosenberg, Chartwell, and Century Capital. The breakpoints reduce the effective rate of the fees as the fund’s assets managed by each firm increase.
The board also concluded that the fund’s low-cost arrangement with Vanguard ensures that the fund will realize economies of scale as it grows, with the cost to shareholders declining as the fund’s assets managed by Vanguard increase.
The board will consider whether to renew the advisory arrangements again after a one-year period.
32
Glossary
Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.
Earnings Growth Rate. The average annual rate of growth in earnings over the past five years for the stocks now in a fund.
Equity Exposure. A measure that reflects a fund’s investments in stocks and stock futures. Any holdings in short-term reserves are excluded.
Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.
Foreign Holdings. The percentage of a fund represented by stocks or depositary receipts of companies based outside the United States.
Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.
Median Market Cap. An indicator of the size of companies in which a fund invests; the midpoint of market capitalization (market price x shares outstanding) of a fund’s stocks, weighted by the proportion of the fund’s assets invested in each stock. Stocks representing half of the fund’s assets have market capitalizations above the median, and the rest are below it.
Price/Book Ratio. The share price of a stock divided by its net worth, or book value, per share. For a fund, the weighted average price/book ratio of the stocks it holds.
Price/Earnings Ratio. The ratio of a stock’s current price to its per-share earnings over the past year. For a fund, the weighted average P/E of the stocks it holds. P/E is an indicator of market expectations about corporate prospects; the higher the P/E, the greater the expectations for a company’s future growth.
R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.
Return on Equity. The annual average rate of return generated by a company during the past five years for each dollar of shareholder’s equity (net income divided by shareholder’s equity). For a fund, the weighted average return on equity for the companies whose stocks it holds.
Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.
33
Turnover Rate. An indication of the fund’s trading activity. Funds with high turnover rates incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The turnover rate excludes in-kind transactions, which have minimal impact on costs.
Yield. A fund’s 30-day SEC yield is derived using a formula specified by the U.S. Securities and Exchange Commission. Under the formula, data related to the fund’s security holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that period, which is then annualized and divided by the fund’s estimated average net assets over the calculation period. For the purposes of this calculation, a security’s income is based on its current market yield to maturity (in the case of bonds) or its projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized income, it will differ—at times significantly—from the fund’s actual experience. As a result, the fund’s income distributions may be higher or lower than implied by the SEC yield.
34
This page intentionally left blank.
The People Who Govern Your Fund
The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.
A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 157 Vanguard funds.
The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.
Chairman of the Board and Interested Trustee | Rajiv L. Gupta |
| Born 1945. Trustee Since December 2001.2 Principal |
| Occupation(s) During the Past Five Years: Retired |
John J. Brennan1 | Chairman and Chief Executive Officer of Rohm and |
Born 1954. Trustee Since May 1987. Chairman of | Haas Co. (chemicals); President of Rohm and Haas Co. |
the Board. Principal Occupation(s) During the Past Five | (2006–2008); Board Member of American Chemistry |
Years: Chairman of the Board and Director/Trustee of | Council; Director of Tyco International, Ltd. (diversified |
The Vanguard Group, Inc., and of each of the investment | manufacturing and services) and Hewlett-Packard Co. |
companies served by The Vanguard Group; Chief | (electronic computer manufacturing); Trustee of The |
Executive Officer and President of The Vanguard Group | Conference Board. |
and of each of the investment companies served by The |
|
Vanguard Group (1996–2008). |
|
| Amy Gutmann |
| Born 1949. Trustee Since June 2006. Principal |
Independent Trustees | Occupation(s) During the Past Five Years: President of |
| the University of Pennsylvania; Christopher H. Browne |
| Distinguished Professor of Political Science in the School |
Charles D. Ellis | of Arts and Sciences with Secondary Appointments |
Born 1937. Trustee Since January 2001. Principal | at the Annenberg School for Communication and the |
Occupation(s) During the Past Five Years: Applecore | Graduate School of Education of the University of |
Partners (pro bono ventures in education); Senior | Pennsylvania; Director of Carnegie Corporation of |
Advisor to Greenwich Associates (international business | New York, Schuylkill River Development Corporation, |
strategy consulting); Successor Trustee of Yale University; | and Greater Philadelphia Chamber of Commerce; |
Overseer of the Stern School of Business at New York | Trustee of the National Constitution Center. |
University; Trustee of the Whitehead Institute for |
|
Biomedical Research. |
|
| JoAnn Heffernan Heisen |
| Born 1950. Trustee Since July 1998. Principal |
Emerson U. Fullwood | Occupation(s) During the Past Five Years: Retired |
Born 1948. Trustee Since January 2008. Principal | Corporate Vice President, Chief Global Diversity Officer, |
Occupation(s) During the Past Five Years: Retired | and Member of the Executive Committee of Johnson & |
Executive Chief Staff and Marketing Officer for North | Johnson (pharmaceuticals/consumer products); Vice |
America and Corporate Vice President of Xerox | President and Chief Information Officer (1997–2005) |
Corporation (photocopiers and printers); Director of | of Johnson & Johnson; Director of the University |
SPX Corporation (multi-industry manufacturing), the | Medical Center at Princeton and Women’s Research |
United Way of Rochester, the Boy Scouts of America, | and Education Institute. |
Amerigroup Corporation (direct health and medical |
|
insurance carriers), and Monroe Community College |
|
Foundation. |
|
André F. Perold | F. William McNabb III1 |
|
Born 1952. Trustee Since December 2004. Principal | Born 1957. Chief Executive Officer Since August 2008. | |
Occupation(s) During the Past Five Years: George Gund | President Since March 2008. Principal Occupation(s) | |
Professor of Finance and Banking, Senior Associate | During the Past Five Years: Director of The Vanguard | |
Dean, and Director of Faculty Recruiting, Harvard | Group, Inc., since 2008; Chief Executive Officer and | |
Business School; Director and Chairman of UNX, Inc. | President of The Vanguard Group and of each of the | |
(equities trading firm); Chair of the Investment | investment companies served by The Vanguard Group | |
Committee of HighVista Strategies LLC (private | since 2008; Director of Vanguard Marketing Corporation; | |
investment firm). | Managing Director of The Vanguard Group (1995–2008) | |
|
|
|
|
|
|
Alfred M. Rankin, Jr. | Heidi Stam1 |
|
Born 1941. Trustee Since January 1993. Principal | Born 1956. Secretary Since July 2005. Principal | |
Occupation(s) During the Past Five Years: Chairman, | Occupation(s) During the Past Five Years: Managing | |
President, Chief Executive Officer, and Director of | Director of The Vanguard Group, Inc., since 2006; | |
NACCO Industries, Inc. (forklift trucks/housewares/ | General Counsel of The Vanguard Group since 2005; | |
lignite); Director of Goodrich Corporation (industrial | Secretary of The Vanguard Group and of each of the | |
products/aircraft systems and services). | investment companies served by The Vanguard Group | |
| since 2005; Director and Senior Vice President of | |
| Vanguard Marketing Corporation since 2005; Principal | |
J. Lawrence Wilson | of The Vanguard Group (1997–2006). | |
Born 1936. Trustee Since April 1985. Principal |
|
|
Occupation(s) During the Past Five Years: Retired |
|
|
Chairman and Chief Executive Officer of Rohm and | Vanguard Senior Management Team | |
Haas Co. (chemicals); Director of Cummins Inc. (diesel |
|
|
engines) and AmerisourceBergen Corp. (pharmaceutical |
|
|
distribution); Trustee of Vanderbilt University and of | R. Gregory Barton | Michael S. Miller |
Culver Educational Foundation. | Mortimer J. Buckley | James M. Norris |
| Kathleen C. Gubanich | Glenn W. Reed |
| Paul A. Heller | George U. Sauter |
Executive Officers |
|
|
|
|
|
| Founder |
|
Thomas J. Higgins1 |
|
|
Born 1957. Chief Financial Officer Since September |
|
|
2008. Principal Occupation(s) During the Past Five | John C. Bogle |
|
Years: Principal of The Vanguard Group, Inc.; Chief | Chairman and Chief Executive Officer, 1974–1996 | |
Financial Officer of each of the investment companies |
|
|
served by The Vanguard Group since 2008; Treasurer |
|
|
of each of the investment companies served by The |
|
|
Vanguard Group (1998–2008). |
|
|
|
|
|
|
|
|
Kathryn J. Hyatt1 |
|
|
Born 1955. Treasurer Since November 2008. Principal |
|
|
Occupation(s) During the Past Five Years: Principal of |
|
|
The Vanguard Group, Inc.; Treasurer of each of the |
|
|
investment companies served by The Vanguard |
|
|
Group since 2008; Assistant Treasurer of each of the |
|
|
investment companies served by The Vanguard Group |
|
|
(1988–2008). |
|
|
1 | These individuals are “interested persons” as defined in the Investment Company Act of 1940. |
2 | December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard State Tax-Exempt Funds. |
P.O. Box 2600
Valley Forge, PA 19482-2600
Connect with Vanguard® > www.vanguard.com
Fund Information > 800-662-7447 | All comparative mutual fund data are from Lipper |
| Inc. or Morningstar, Inc., unless otherwise noted. |
Direct Investor Account Services > 800-662-2739 |
|
| You can obtain a free copy of Vanguard’s proxy |
Institutional Investor Services > 800-523-1036 | voting guidelines by visiting our website, |
| www.vanguard.com, and searching for |
Text Telephone for People | “proxy voting guidelines,” or by calling Vanguard |
With Hearing Impairment > 800-952-3335 | at 800-662-2739. The guidelines are also |
| available from the SEC’s website, www.sec.gov. |
| In addition, you may obtain a free report on how |
| your fund voted the proxies for securities it owned |
This material may be used in conjunction | during the 12 months ended June 30. To get the |
with the offering of shares of any Vanguard | report, visit either www.vanguard.com or |
fund only if preceded or accompanied by | www.sec.gov. |
the fund’s current prospectus. |
|
| You can review and copy information about your |
CFA® is a trademark owned by CFA Institute. | fund at the SEC’s Public Reference Room in |
| Washington, D.C. To find out more about this |
| public service, call the SEC at 202-551-8090. |
| Information about your fund is also available on |
| the SEC’s website, and you can receive copies of |
| this information, for a fee, by sending a request in |
| either of two ways: via e-mail addressed to |
| publicinfo@sec.gov or via regular mail addressed |
| to the Public Reference Section, Securities and |
| Exchange Commission, Washington, |
| DC 20549-0102. |
|
|
|
|
| © 2009 The Vanguard Group, Inc. |
| All rights reserved. |
| Vanguard Marketing Corporation, Distributor. |
|
|
| Q242 062009 |
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
Common Stocks (95.2%)1 |
|
| |
Consumer Discretionary (13.8%) |
|
| |
* | WMS Industries, Inc. | 1,248,849 | 40,101 |
* | GameStop Corp. Class A | 1,284,605 | 38,744 |
* | O'Reilly Automotive, Inc. | 978,921 | 38,031 |
* | Dollar Tree, Inc. | 700,689 | 29,667 |
| DeVry, Inc. | 687,105 | 29,243 |
| Penske Automotive Group Inc. | 2,095,300 | 27,763 |
| Ross Stores, Inc. | 714,587 | 27,111 |
* | DreamWorks Animation SKG, Inc. | 968,967 | 23,265 |
* | Big Lots Inc. | 726,298 | 20,075 |
* | Tractor Supply Co. | 491,565 | 19,849 |
*,^ | Jos. A. Bank Clothiers, Inc. | 473,988 | 19,168 |
* | Penn National Gaming, Inc. | 558,385 | 18,996 |
| Service Corp. International | 4,137,200 | 18,741 |
* | Priceline.com, Inc. | 186,440 | 18,101 |
* | ITT Educational Services, Inc. | 178,440 | 17,981 |
| Aaron Rents, Inc. | 517,520 | 17,368 |
* | Marvel Entertainment, Inc. | 571,600 | 17,057 |
* | Capella Education Co. | 319,684 | 16,425 |
| John Wiley & Sons Class A | 452,850 | 15,352 |
| Nordstrom, Inc. | 662,900 | 15,001 |
* | LKQ Corp. | 866,180 | 14,708 |
* | Aeropostale, Inc. | 395,665 | 13,441 |
| Brinker International, Inc. | 757,466 | 13,422 |
| Autoliv, Inc. | 513,900 | 12,678 |
* | TRW Automotive Holdings Corp. | 1,416,000 | 12,206 |
*,^ | Netflix.com, Inc. | 269,135 | 12,194 |
^ | Royal Caribbean Cruises, Ltd. | 819,400 | 12,070 |
* | The Warnaco Group, Inc. | 396,950 | 11,448 |
*,^ | Life Time Fitness, Inc. | 602,034 | 11,294 |
| Guess ?, Inc. | 397,139 | 10,341 |
* | Bally Technologies Inc. | 385,120 | 10,082 |
| Matthews International Corp. | 282,500 | 8,848 |
* | Interpublic Group of Cos., Inc. | 1,397,500 | 8,748 |
| RadioShack Corp. | 613,318 | 8,636 |
* | Papa John's International, Inc. | 318,899 | 8,464 |
* | The Children's Place Retail Stores, Inc. | 296,509 | 8,433 |
| Abercrombie & Fitch Co. | 309,700 | 8,380 |
| Cracker Barrel Old Country Store Inc. | 251,039 | 8,186 |
| Darden Restaurants Inc. | 216,275 | 7,996 |
* | CEC Entertainment Inc. | 235,578 | 7,176 |
* | Urban Outfitters, Inc. | 363,775 | 7,090 |
| Advance Auto Parts, Inc. | 161,734 | 7,076 |
| Foot Locker, Inc. | 586,000 | 6,968 |
* | The Wet Seal, Inc. Class A | 1,800,400 | 6,860 |
| OfficeMax, Inc. | 913,200 | 6,803 |
* | Jack in the Box Inc. | 246,500 | 6,061 |
* | The Gymboree Corp. | 175,450 | 6,035 |
| PetSmart, Inc. | 262,330 | 6,002 |
* | Pre-Paid Legal Services, Inc. | 161,708 | 5,956 |
* | Fossil, Inc. | 294,470 | 5,936 |
* | Rent-A-Center, Inc. | 295,996 | 5,698 |
| Lennar Corp. Class A | 581,900 | 5,668 |
* | Jarden Corp. | 275,000 | 5,527 |
* | Deckers Outdoor Corp. | 97,340 | 5,502 |
| Strayer Education, Inc. | 28,000 | 5,303 |
* | Texas Roadhouse, Inc. | 463,038 | 5,269 |
| Cablevision Systems NY Group Class A | 306,900 | 5,266 |
* | Chipotle Mexican Grill, Inc. Class B | 79,750 | 5,224 |
* | Corinthian Colleges, Inc. | 333,232 | 5,132 |
* | True Religion Apparel, Inc. | 305,898 | 4,821 |
| Tupperware Brands Corp. | 187,665 | 4,697 |
1
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
| Family Dollar Stores, Inc. | 141,389 | 4,693 |
* | Exide Technologies | 862,548 | 4,684 |
* | Panera Bread Co. | 81,600 | 4,570 |
* | NVR, Inc. | 9,000 | 4,548 |
* | The Cheesecake Factory Inc. | 257,390 | 4,471 |
* | The Dress Barn, Inc. | 293,000 | 4,436 |
| Polaris Industries, Inc. | 122,920 | 4,112 |
| Genuine Parts Co. | 120,000 | 4,075 |
| Virgin Media Inc. | 511,610 | 3,950 |
* | Sonic Corp. | 361,512 | 3,948 |
* | Apollo Group, Inc. Class A | 62,225 | 3,917 |
| Pulte Homes, Inc. | 327,100 | 3,765 |
* | FGX International Holdings Ltd. | 324,534 | 3,739 |
| American Eagle Outfitters, Inc. | 244,980 | 3,631 |
* | Kohl's Corp. | 77,000 | 3,492 |
| Gannett Co., Inc. | 892,900 | 3,491 |
* | J. Crew Group, Inc. | 192,550 | 3,314 |
* | Denny's Corp. | 1,215,900 | 3,259 |
| The Buckle, Inc. | 84,200 | 3,147 |
| Weight Watchers International, Inc. | 119,700 | 2,978 |
* | Tenneco Automotive, Inc. | 958,527 | 2,933 |
| Burger King Holdings Inc. | 174,600 | 2,853 |
| Harte-Hanks, Inc. | 340,297 | 2,811 |
* | Red Robin Gourmet Burgers, Inc. | 114,303 | 2,806 |
| International Speedway Corp. | 102,280 | 2,422 |
* | Hot Topic, Inc. | 195,300 | 2,390 |
* | P.F. Chang's China Bistro, Inc. | 78,100 | 2,357 |
* | Carter's, Inc. | 109,680 | 2,345 |
| WABCO Holdings Inc. | 146,500 | 2,343 |
| Tiffany & Co. | 78,300 | 2,266 |
* | 99 Cents Only Stores | 197,800 | 2,124 |
| Tempur-Pedic International Inc. | 163,000 | 2,096 |
*,^ | K12 Inc. | 110,725 | 1,947 |
* | Starbucks Corp. | 127,000 | 1,836 |
| Finish Line, Inc. | 205,763 | 1,749 |
* | Buffalo Wild Wings Inc. | 40,000 | 1,562 |
| Phillips-Van Heusen Corp. | 52,800 | 1,533 |
*,^ | Fuel Systems Solutions, Inc. | 95,800 | 1,463 |
* | Wonder Auto Technology, Inc. | 216,644 | 1,458 |
| Wolverine World Wide, Inc. | 64,700 | 1,348 |
| Interactive Data Corp. | 53,300 | 1,198 |
* | Jo-Ann Stores, Inc. | 62,754 | 1,150 |
*,^ | Conn's, Inc. | 68,550 | 1,127 |
* | Kirkland's, Inc. | 157,400 | 1,078 |
* | Brink's Home Security Holdings, Inc. | 39,800 | 1,058 |
* | AutoNation, Inc. | 55,300 | 979 |
* | Carrols Restaurant Group Inc. | 161,681 | 957 |
* | Domino's Pizza, Inc. | 99,149 | 936 |
* | Systemax Inc. | 51,600 | 870 |
* | Mediacom Communications Corp. | 152,205 | 866 |
| Harman International Industries, Inc. | 45,220 | 823 |
| National CineMedia Inc. | 56,391 | 819 |
* | Citi Trends Inc. | 31,400 | 771 |
* | Iconix Brand Group Inc. | 45,440 | 648 |
* | Overstock.com, Inc. | 44,921 | 606 |
| CKE Restaurants Inc. | 62,900 | 602 |
* | Steiner Leisure Ltd. | 15,500 | 490 |
| Spartan Motors, Inc. | 58,700 | 474 |
*,^ | Bidz.com, Inc. | 107,100 | 441 |
* | hhgregg, Inc. | 26,420 | 439 |
* | Sally Beauty Co. Inc. | 51,900 | 384 |
* | Barry RG Corp Ohio | 60,390 | 364 |
*,^ | Chipotle Mexican Grill, Inc. | 4,400 | 357 |
| Monro Muffler Brake, Inc. | 12,850 | 321 |
2
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Lincoln Educational Services | 18,700 | 310 |
* | Einstein Noah Restaurant Group Inc. | 28,009 | 302 |
* | Steven Madden, Ltd. | 9,778 | 288 |
* | American Public Education, Inc. | 6,500 | 234 |
| Choice Hotels International, Inc. | 7,300 | 218 |
| Haverty Furniture Cos., Inc. | 14,160 | 154 |
* | Cavco Industries, Inc. | 6,380 | 150 |
* | Destination Maternity Corp. | 10,678 | 143 |
| Dover Downs Gaming & Entertainment, Inc. | 33,098 | 141 |
* | Town Sports International Holdings, Inc. | 39,800 | 137 |
* | Lumber Liquidators, Inc. | 9,100 | 136 |
| Cinemark Holdings Inc. | 10,957 | 97 |
| Hasbro, Inc. | 3,400 | 91 |
* | Smith & Wesson Holding Corp. | 10,000 | 72 |
| Value Line, Inc. | 1,076 | 30 |
* | Knology, Inc. | 4,187 | 30 |
* | Aristotle Corp | 7,030 | 24 |
* | Warner Music Group Corp. | 2,390 | 13 |
* | Culp, Inc. | 855 | 4 |
* | Midas Inc. | 110 | 1 |
* | Krispy Kreme Doughnuts, Inc. Warrants Exp. 3/2/12 | 8,183 | — |
|
|
| 940,879 |
Consumer Staples (4.0%) |
|
| |
| Ruddick Corp. | 1,076,650 | 27,627 |
| Church & Dwight, Inc. | 417,334 | 22,707 |
| Nu Skin Enterprises, Inc. | 1,430,735 | 18,342 |
* | United Natural Foods, Inc. | 799,834 | 18,220 |
* | Ralcorp Holdings, Inc. | 252,950 | 14,459 |
| PriceSmart, Inc. | 804,500 | 14,360 |
* | BJ's Wholesale Club, Inc. | 388,950 | 12,968 |
* | Chattem, Inc. | 215,000 | 11,806 |
| Tyson Foods, Inc. | 1,095,400 | 11,546 |
* | Central European Distribution Corp. | 503,340 | 11,275 |
| SUPERVALU Inc. | 576,100 | 9,419 |
* | Constellation Brands, Inc. Class A | 777,301 | 9,009 |
| The Pepsi Bottling Group, Inc. | 243,300 | 7,608 |
* | Energizer Holdings, Inc. | 122,008 | 6,991 |
| Diamond Foods, Inc. | 236,600 | 6,197 |
* | NBTY, Inc. | 197,200 | 5,109 |
| Spartan Stores, Inc. | 308,110 | 5,013 |
* | TreeHouse Foods Inc. | 185,488 | 4,932 |
*,^ | Green Mountain Coffee Roasters, Inc. | 66,800 | 4,830 |
| Cal-Maine Foods, Inc. | 182,319 | 4,826 |
* | Dean Foods Co. | 216,890 | 4,490 |
* | Smithfield Foods, Inc. | 452,600 | 3,910 |
| McCormick & Co., Inc. | 119,500 | 3,519 |
| J.M. Smucker Co. | 83,468 | 3,289 |
* | The Pantry, Inc. | 111,000 | 2,622 |
* | Winn-Dixie Stores, Inc. | 219,627 | 2,517 |
* | American Oriental Bioengineering, Inc. | 533,475 | 2,262 |
* | American Italian Pasta Co. | 65,918 | 2,072 |
* | Darling International, Inc. | 358,900 | 2,053 |
| Flowers Foods, Inc. | 83,480 | 1,928 |
* | Boston Beer Co., Inc. Class A | 64,600 | 1,718 |
* | Revlon, Inc. | 266,743 | 1,264 |
* | Elizabeth Arden, Inc. | 145,279 | 1,258 |
* | HQ Sustainable Maritime Industries, Inc. | 127,859 | 1,193 |
| Lancaster Colony Corp. | 22,500 | 986 |
| Herbalife Ltd. | 49,000 | 971 |
* | China Sky One Medical Inc. | 67,458 | 952 |
| Casey's General Stores, Inc. | 34,141 | 909 |
* | Prestige Brands Holdings Inc. | 131,701 | 851 |
*,^ | Star Scientific, Inc. | 167,000 | 822 |
| Alberto-Culver Co. | 34,200 | 762 |
3
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Overhill Farms Inc. | 115,963 | 510 |
* | Omega Protein Corp. | 141,517 | 451 |
* | Medifast, Inc. | 62,263 | 435 |
* | Hansen Natural Corp. | 10,500 | 428 |
* | Seneca Foods Corp. | 14,551 | 355 |
| Calavo Growers, Inc. | 15,800 | 225 |
| Lance, Inc. | 4,340 | 101 |
| Nash-Finch Co. | 2,600 | 76 |
| Inter Parfums, Inc. | 7,554 | 59 |
* | Schiff Nutrition International, Inc. | 8,800 | 42 |
|
|
| 270,274 |
Energy (5.8%) |
|
| |
* | Ultra Petroleum Corp. | 747,500 | 31,993 |
* | Atwood Oceanics, Inc. | 1,349,340 | 30,117 |
* | Petrohawk Energy Corp. | 1,175,450 | 27,741 |
* | Southwestern Energy Co. | 755,580 | 27,095 |
| Core Laboratories N.V. | 270,840 | 22,542 |
| Tidewater Inc. | 485,055 | 20,979 |
| XTO Energy, Inc. | 550,925 | 19,095 |
* | Oceaneering International, Inc. | 294,800 | 13,434 |
* | Tesco Corp. | 1,237,336 | 12,435 |
* | Comstock Resources, Inc. | 356,300 | 12,278 |
* | Encore Acquisition Co. | 419,300 | 12,239 |
| St. Mary Land & Exploration Co. | 649,025 | 11,598 |
* | Superior Energy Services, Inc. | 566,395 | 10,880 |
| Niko Resources Ltd. | 212,040 | 10,731 |
| Massey Energy Co. | 642,900 | 10,229 |
| Range Resources Corp. | 237,290 | 9,484 |
* | Denbury Resources, Inc. | 496,200 | 8,078 |
* | Lundin Petroleum AB | 1,218,417 | 7,923 |
* | Concho Resources, Inc. | 277,575 | 7,611 |
| CARBO Ceramics Inc. | 235,649 | 7,237 |
| CONSOL Energy, Inc. | 213,125 | 6,667 |
| Foundation Coal Holdings, Inc. | 305,300 | 4,958 |
| Tesoro Corp. | 309,000 | 4,712 |
* | SEACOR Holdings Inc. | 68,625 | 4,510 |
* | Clean Energy Fuels Corp. | 513,700 | 4,346 |
* | Whiting Petroleum Corp. | 126,400 | 4,141 |
| Frontier Oil Corp. | 325,500 | 4,137 |
* | Alpha Natural Resources, Inc. | 186,600 | 3,822 |
* | Weatherford International Ltd. | 215,000 | 3,575 |
* | EXCO Resources, Inc. | 300,000 | 3,534 |
^ | Frontline Ltd. | 172,200 | 3,466 |
* | National Oilwell Varco Inc. | 107,313 | 3,249 |
* | Matrix Service Co. | 320,300 | 3,068 |
* | Oil States International, Inc. | 149,703 | 2,829 |
* | Contango Oil & Gas Co. | 69,800 | 2,645 |
* | Gulfmark Offshore, Inc. | 94,100 | 2,529 |
| Teekay Tankers Ltd. | 178,513 | 2,153 |
* | Nabors Industries, Inc. | 137,600 | 2,093 |
* | Dresser Rand Group, Inc. | 78,000 | 1,921 |
| Walter Industries, Inc. | 76,866 | 1,753 |
| Berry Petroleum Class A | 90,300 | 1,488 |
* | Clayton Williams Energy, Inc. | 49,400 | 1,484 |
* | Arena Resources, Inc. | 50,000 | 1,434 |
| Atlas America, Inc. | 82,255 | 1,280 |
* | Bristow Group, Inc. | 39,600 | 901 |
* | Unit Corp. | 19,400 | 529 |
| Ship Finance International Ltd. | 53,500 | 462 |
* | Endeavor International Corp. | 275,600 | 438 |
* | Cal Dive International, Inc. | 55,300 | 438 |
* | PHI Inc. Non-Voting Shares | 34,300 | 388 |
* | GeoResources Inc. | 54,500 | 387 |
* | McMoRan Exploration Co. | 46,800 | 257 |
4
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
| Holly Corp. | 10,300 | 216 |
| Knightsbridge Tankers Ltd. | 14,900 | 197 |
* | Approach Resources Inc. | 24,600 | 175 |
^ | Nordic American Tanker Shipping Ltd. | 5,300 | 172 |
* | Mitcham Industries, Inc. | 35,409 | 159 |
* | Patriot Coal Corp. | 14,900 | 94 |
* | Vaalco Energy, Inc. | 17,700 | 84 |
| General Maritime Corp. | 6,800 | 68 |
* | CVR Energy, Inc. | 5,700 | 42 |
| Golar LNG Ltd. | 7,700 | 42 |
* | Double Eagle Petroleum Co. | 8,100 | 37 |
* | Prime Energy Corp. | 800 | 34 |
| DHT Maritime | 5,400 | 23 |
* | Gran Tierra Energy, Inc. | 9,100 | 23 |
|
|
| 394,679 |
Exchange-Traded Funds (1.6%) |
|
| |
^,2 | Vanguard Small-Cap ETF | 1,165,083 | 50,623 |
^,2 | Vanguard Small-Cap Growth ETF | 713,200 | 32,115 |
^ | iShares Russell 2000 Index Fund | 581,700 | 28,224 |
|
|
| 110,962 |
Financials (4.9%) |
|
| |
| Cash America International Inc. | 919,536 | 20,561 |
| MFA Mortgage Investments, Inc. REIT | 3,460,300 | 20,381 |
| Jefferies Group, Inc. | 875,563 | 17,135 |
| Waddell & Reed Financial, Inc. | 723,800 | 16,220 |
| Redwood Trust, Inc. REIT | 782,500 | 12,731 |
* | Nasdaq OMX Group, Inc. | 624,900 | 12,017 |
* | Affiliated Managers Group, Inc. | 211,140 | 12,003 |
| Discover Financial Services | 1,209,400 | 9,832 |
| RenaissanceRe Holdings Ltd. | 196,550 | 9,564 |
| Eaton Vance Corp. | 344,500 | 9,429 |
| AMB Property Corp. REIT | 479,800 | 9,159 |
| LaSalle Hotel Properties REIT | 752,000 | 8,994 |
| Comerica, Inc. | 417,400 | 8,757 |
| People's United Financial Inc. | 547,300 | 8,549 |
| CIT Group Inc. | 3,697,300 | 8,208 |
| Cullen/Frost Bankers, Inc. | 157,800 | 7,431 |
| Regency Centers Corp. REIT | 192,000 | 7,190 |
* | Navigators Group, Inc. | 155,600 | 7,061 |
| First American Corp. | 249,829 | 7,015 |
| Fidelity National Financial, Inc. Class A | 384,825 | 6,977 |
* | Stifel Financial Corp. | 135,550 | 6,673 |
| U-Store-It Trust REIT | 1,775,803 | 6,091 |
| Federated Investors, Inc. | 255,500 | 5,846 |
| UMB Financial Corp. | 120,200 | 5,502 |
| DiamondRock Hospitality Co. REIT | 720,400 | 4,675 |
* | ProAssurance Corp. | 97,300 | 4,275 |
* | EZCORP, Inc. | 337,425 | 4,181 |
| Tower Group, Inc. | 145,350 | 3,952 |
| QC Holdings Inc. | 595,285 | 3,816 |
* | Knight Capital Group, Inc. Class A | 240,600 | 3,727 |
| Validus Holdings, Ltd. | 160,000 | 3,584 |
* | Interactive Brokers Group, Inc. | 241,717 | 3,565 |
| Aon Corp. | 83,445 | 3,521 |
| Lazard Ltd. Class A | 123,860 | 3,381 |
| PartnerRe Ltd. | 48,995 | 3,341 |
| CapitalSource Inc. REIT | 1,069,249 | 3,304 |
| SEI Investments Co. | 231,300 | 3,245 |
* | The St. Joe Co. | 129,900 | 3,232 |
* | Signature Bank | 118,820 | 3,231 |
| Axis Capital Holdings Ltd. | 114,000 | 2,809 |
| Northern Trust Corp. | 43,325 | 2,355 |
* | Argo Group International Holdings | 72,385 | 2,026 |
| Brown & Brown, Inc. | 94,000 | 1,829 |
5
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Dollar Financial Corp. | 178,835 | 1,806 |
| Westamerica Bancorporation | 32,700 | 1,754 |
* | MSCI, Inc.-Class A Shares | 81,015 | 1,701 |
| Mid-America Apartment Communities, Inc. REIT | 45,100 | 1,668 |
| Washington REIT | 71,800 | 1,532 |
| Digital Realty Trust, Inc. REIT | 41,700 | 1,502 |
| Home Properties, Inc. REIT | 38,900 | 1,418 |
| The Hanover Insurance Group Inc. | 39,100 | 1,172 |
| Highwood Properties, Inc. REIT | 44,300 | 1,063 |
* | SVB Financial Group | 50,060 | 1,039 |
| TrustCo Bank NY | 172,000 | 1,032 |
* | Investment Technology Group, Inc. | 42,600 | 970 |
* | First Cash Financial Services, Inc. | 52,500 | 863 |
| Sun Communities, Inc. REIT | 56,600 | 829 |
| Associated Estates Realty Corp. REIT | 147,200 | 817 |
* | Broadpoint Securities Group | 178,400 | 769 |
| Rayonier Inc. REIT | 19,300 | 745 |
^ | Life Partners Holdings | 36,500 | 683 |
| PS Business Parks, Inc. REIT | 15,500 | 678 |
| Apartment Investment & Management Co. Class A REIT | 85,420 | 624 |
| Nationwide Health Properties, Inc. REIT | 24,800 | 612 |
* | Encore Capital Group, Inc. | 68,791 | 601 |
* | thinkorswim Group, Inc. | 57,200 | 543 |
* | Riskmetrics Group Inc. | 30,300 | 527 |
| Ventas, Inc. REIT | 16,300 | 467 |
| Capitol Federal Financial | 11,700 | 456 |
| Suffolk Bancorp | 17,500 | 448 |
| Saul Centers, Inc. REIT | 12,100 | 385 |
* | TradeStation Group, Inc. | 39,700 | 322 |
| Forest City Enterprise Class A | 36,900 | 311 |
| First Financial Bankshares, Inc. | 6,100 | 301 |
| Tanger Factory Outlet Centers, Inc. REIT | 7,900 | 263 |
| Walter Investment Management Corp. | 28,073 | 225 |
| Taubman Co. REIT | 8,800 | 210 |
| Hancock Holding Co. | 3,500 | 133 |
| Kilroy Realty Corp. REIT | 4,100 | 88 |
* | Bridge Capital Holdings | 15,766 | 81 |
* | PMA Capital Corp. Class A | 18,519 | 70 |
* | Cardtronics Inc. | 16,900 | 41 |
| Federal Realty Investment Trust REIT | 700 | 39 |
| Advance America, Cash Advance Centers, Inc. | 7,750 | 31 |
| Employers Holdings, Inc. | 3,300 | 28 |
| Amtrust Financial Services Inc. | 2,350 | 22 |
|
|
| 336,244 |
Health Care (19.8%) |
|
| |
* | Cephalon, Inc. | 755,175 | 49,547 |
* | Henry Schein, Inc. | 1,068,732 | 43,861 |
* | ResMed Inc. | 988,910 | 38,024 |
*,^ | IDEXX Laboratories, Inc. | 961,760 | 37,797 |
| The Cooper Companies, Inc. | 1,269,712 | 36,504 |
* | Edwards Lifesciences Corp. | 545,600 | 34,580 |
* | Isis Pharmaceuticals, Inc. | 1,816,749 | 28,487 |
| DENTSPLY International Inc. | 991,189 | 28,368 |
* | Haemonetics Corp. | 546,572 | 28,220 |
* | Qiagen NV | 1,609,300 | 26,521 |
* | Endo Pharmaceuticals Holdings, Inc. | 1,595,140 | 26,384 |
* | Community Health Systems, Inc. | 1,009,500 | 23,057 |
| PDL BioPharma Inc. | 3,140,128 | 22,452 |
* | Mettler-Toledo International Inc. | 347,215 | 21,399 |
* | Alkermes, Inc. | 2,780,092 | 21,268 |
| Pharmaceutical Product Development, Inc. | 1,079,046 | 21,160 |
* | Hologic, Inc. | 1,407,609 | 20,917 |
* | Vertex Pharmaceuticals, Inc. | 658,990 | 20,310 |
* | Regeneron Pharmaceuticals, Inc. | 1,510,822 | 20,033 |
6
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Align Technology, Inc. | 1,597,500 | 19,825 |
* | VCA Antech, Inc. | 781,830 | 19,561 |
* | Gen-Probe Inc. | 404,889 | 19,499 |
* | Covance, Inc. | 494,907 | 19,440 |
| Beckman Coulter, Inc. | 340,624 | 17,903 |
* | Health Management Associates Class A | 3,451,400 | 16,118 |
* | Psychiatric Solutions, Inc. | 826,225 | 16,021 |
* | Nektar Therapeutics | 2,772,600 | 15,527 |
* | Alexion Pharmaceuticals, Inc. | 455,917 | 15,237 |
* | Seattle Genetics, Inc. | 1,649,904 | 15,229 |
* | Watson Pharmaceuticals, Inc. | 490,900 | 15,188 |
* | Bruker BioSciences Corp. | 2,243,100 | 14,760 |
* | Sun Healthcare Group Inc. | 1,704,708 | 14,439 |
* | Medarex, Inc. | 2,415,900 | 14,302 |
* | Luminex Corp. | 857,400 | 14,070 |
* | HLTH Corp. | 1,223,053 | 13,454 |
* | Immucor Inc. | 822,610 | 13,400 |
| Martek Biosciences Corp. | 720,055 | 13,119 |
* | Bio-Rad Laboratories, Inc. Class A | 187,612 | 13,075 |
* | Varian Medical Systems, Inc. | 387,455 | 12,929 |
* | Patterson Companies, Inc. | 610,300 | 12,487 |
| Techne Corp. | 213,650 | 12,225 |
* | Health Net Inc. | 846,275 | 12,220 |
* | Coventry Health Care Inc. | 763,500 | 12,147 |
* | Celera Corp. | 1,418,205 | 11,473 |
* | MWI Veterinary Supply Inc. | 367,943 | 11,436 |
| Hikma Pharmaceuticals PLC | 1,915,019 | 10,986 |
* | Life Technologies Corp. | 293,484 | 10,947 |
* | ICU Medical, Inc. | 282,800 | 10,633 |
* | BioMarin Pharmaceutical Inc. | 803,219 | 10,329 |
| Universal Health Services Class B | 198,310 | 9,995 |
* | PAREXEL International Corp. | 918,860 | 9,106 |
| Owens & Minor, Inc. | 262,150 | 9,091 |
* | Catalyst Health Solutions, Inc. | 400,750 | 9,037 |
* | Warner Chilcott Ltd. | 900,278 | 8,814 |
* | Volcano Corp. | 658,800 | 8,690 |
* | Celgene Corp. | 202,710 | 8,660 |
| Omnicare, Inc. | 309,345 | 7,953 |
* | Myriad Genetics, Inc. | 202,194 | 7,843 |
| STERIS Corp. | 320,490 | 7,724 |
* | Cougar Biotechnology Inc. | 211,983 | 7,402 |
* | Kinetic Concepts, Inc. | 294,656 | 7,296 |
* | HMS Holdings Corp. | 238,200 | 7,141 |
* | Inverness Medical Innovations, Inc. | 217,541 | 7,024 |
* | Mylan Inc. | 523,777 | 6,940 |
* | Cyberonics, Inc. | 521,600 | 6,906 |
* | Cerner Corp. | 128,147 | 6,894 |
* | Sirona Dental Systems Inc. | 420,157 | 6,874 |
* | AMERIGROUP Corp. | 226,100 | 6,754 |
* | Amylin Pharmaceuticals, Inc. | 604,800 | 6,617 |
* | ICON PLC - ADR | 403,363 | 6,389 |
| Medicis Pharmaceutical Corp. | 380,100 | 6,108 |
* | Lincare Holdings, Inc. | 250,690 | 6,049 |
| PerkinElmer, Inc. | 388,838 | 5,665 |
| SSL International PLC | 804,459 | 5,640 |
* | ImmunoGen, Inc. | 809,800 | 5,628 |
* | Waters Corp. | 125,000 | 5,521 |
* | Eclipsys Corp. | 417,400 | 5,510 |
* | Exelixis, Inc. | 1,050,000 | 5,176 |
* | Onyx Pharmaceuticals, Inc. | 199,650 | 5,171 |
* | Masimo Corp. | 178,485 | 5,158 |
* | American Medical Systems Holdings, Inc. | 394,400 | 4,879 |
* | Eurand NV | 442,919 | 4,872 |
| Analogic Corp. | 133,680 | 4,866 |
7
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Amedisys Inc. | 144,744 | 4,855 |
* | OSI Pharmaceuticals, Inc. | 139,900 | 4,696 |
* | Dionex Corp. | 72,300 | 4,555 |
| Brookdale Senior Living Inc. | 411,300 | 4,241 |
* | Varian, Inc. | 121,806 | 4,022 |
| Teleflex Inc. | 91,940 | 3,952 |
* | Facet Biotech Corp. | 422,342 | 3,949 |
* | Cypress Bioscience, Inc. | 542,050 | 3,903 |
* | Durect Corp. | 1,583,700 | 3,864 |
* | Thoratec Corp. | 129,600 | 3,766 |
* | Gentiva Health Services, Inc. | 229,832 | 3,661 |
* | Wright Medical Group, Inc. | 263,950 | 3,629 |
* | Cubist Pharmaceuticals, Inc. | 217,008 | 3,602 |
* | CardioNet, Inc. | 165,255 | 3,429 |
* | Nuvasive, Inc. | 89,512 | 3,393 |
| Aetna Inc. | 145,700 | 3,207 |
* | Emergency Medical Services LP Class A | 91,018 | 3,171 |
| Invacare Corp. | 205,346 | 3,160 |
* | Impax Laboratories, Inc. | 570,900 | 3,020 |
* | Integra LifeSciences Holdings | 116,903 | 3,018 |
* | Kindred Healthcare, Inc. | 223,500 | 2,910 |
* | Centene Corp. | 151,300 | 2,779 |
| Chemed Corp. | 64,400 | 2,726 |
* | AthenaHealth Inc. | 83,106 | 2,643 |
* | Valeant Pharmaceuticals International | 150,000 | 2,514 |
| Shire PLC ADR | 65,000 | 2,423 |
* | Merit Medical Systems, Inc. | 151,900 | 2,356 |
* | Par Pharmaceutical Cos. Inc. | 212,800 | 2,283 |
* | The Medicines Co. | 226,600 | 2,261 |
* | Alnylam Pharmaceuticals Inc. | 119,200 | 2,190 |
* | Sepracor Inc. | 150,220 | 2,135 |
* | CorVel Corp. | 93,388 | 2,101 |
* | United Therapeutics Corp. | 31,550 | 1,982 |
* | Noven Pharmaceuticals, Inc. | 180,706 | 1,865 |
* | AMN Healthcare Services, Inc. | 270,300 | 1,862 |
* | PSS World Medical, Inc. | 127,200 | 1,847 |
* | LHC Group Inc. | 78,700 | 1,796 |
* | Questcor Pharmaceuticals, Inc. | 397,261 | 1,788 |
* | Orthovita, Inc. | 595,628 | 1,751 |
* | Millipore Corp. | 25,800 | 1,525 |
* | Maxygen Inc. | 256,614 | 1,501 |
* | Albany Molecular Research, Inc. | 141,387 | 1,380 |
* | King Pharmaceuticals, Inc. | 174,770 | 1,377 |
* | Emergent BioSolutions Inc. | 128,000 | 1,371 |
* | Orthofix International N.V. | 77,472 | 1,321 |
* | Enzon Pharmaceuticals, Inc. | 225,100 | 1,294 |
* | Molina Healthcare Inc. | 51,553 | 1,116 |
* | Res-Care, Inc. | 67,148 | 1,076 |
* | CONMED Corp. | 79,900 | 1,064 |
* | CryoLife Inc. | 192,500 | 1,045 |
* | Cantel Medical Corp. | 67,948 | 960 |
* | Harvard Bioscience, Inc. | 263,361 | 764 |
* | Idera Pharmaceuticals, Inc. | 126,920 | 763 |
| Atrion Corp. | 8,311 | 744 |
* | Kendle International Inc. | 76,690 | 683 |
* | Symmetry Medical Inc. | 94,000 | 682 |
* | Odyssey Healthcare, Inc. | 63,300 | 656 |
| Ensign Group Inc. | 41,600 | 645 |
| Perrigo Co. | 23,835 | 618 |
* | Matrixx Initiatives, Inc. | 30,176 | 517 |
| Young Innovations, Inc. | 32,048 | 497 |
* | Illumina, Inc. | 13,000 | 486 |
* | Auxilium Pharmaceuticals, Inc. | 17,500 | 401 |
* | Dendreon Corp. | 17,500 | 371 |
8
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Affymetrix, Inc. | 76,674 | 360 |
* | Caraco Pharmaceutical Laboratories, Ltd. | 79,968 | 358 |
* | Nabi Biopharmaceuticals | 95,300 | 328 |
* | Cardiac Science Corp. | 93,657 | 276 |
* | Immunomedics Inc. | 185,500 | 215 |
* | Osteotech, Inc. | 49,409 | 189 |
* | Neurocrine Biosciences, Inc. | 51,253 | 169 |
* | Cornerstone Therapeutics Inc. | 28,590 | 163 |
* | Sequenom, Inc. | 45,000 | 163 |
* | SonoSite, Inc. | 8,570 | 155 |
* | Kensey Nash Corp. | 6,900 | 144 |
* | Momenta Pharmaceuticals, Inc. | 12,200 | 137 |
* | Zoll Medical Corp. | 8,177 | 131 |
* | Accelrys Inc. | 28,800 | 130 |
* | Synovis Life Technologies, Inc. | 8,100 | 123 |
* | A.D.A.M., INC. | 37,336 | 121 |
| Hill-Rom Holdings, Inc. | 9,000 | 117 |
* | Hi-Tech Pharmacal Co., Inc. | 15,183 | 115 |
* | Cambrex Corp. | 37,079 | 86 |
*,^ | Osiris Therapeutics, Inc. | 6,400 | 81 |
* | Obagi Medical Products, Inc. | 13,000 | 78 |
*,^ | Acura Pharmaceuticals Inc. | 10,000 | 69 |
* | Capital Senior Living Corp. | 16,900 | 67 |
* | RehabCare Group, Inc. | 3,280 | 55 |
* | Dynacq Healthcare, Inc. | 10,770 | 38 |
* | Columbia Laboratories Inc. | 15,100 | 21 |
* | Repligen Corp. | 4,935 | 21 |
* | eResearch Technology, Inc. | 2,800 | 14 |
* | Anika Resh Inc. | 1,660 | 9 |
* | Cynosure Inc. | 859 | 5 |
|
|
| 1,354,361 |
Industrials (15.1%) |
|
| |
| The Dun & Bradstreet Corp. | 639,954 | 52,092 |
* | Stericycle, Inc. | 989,175 | 46,570 |
| MSC Industrial Direct Co., Inc. Class A | 993,590 | 40,588 |
| Equifax, Inc. | 1,138,084 | 33,187 |
| Ritchie Brothers Auctioneers Inc. | 1,074,530 | 24,069 |
| AMETEK, Inc. | 724,760 | 23,345 |
* | Teledyne Technologies, Inc. | 720,680 | 23,011 |
| Kennametal, Inc. | 1,082,910 | 22,146 |
| J.B. Hunt Transport Services, Inc. | 781,100 | 21,965 |
| UTI Worldwide, Inc. | 1,624,223 | 21,862 |
| Watsco, Inc. | 486,250 | 20,884 |
* | Waste Connections, Inc. | 725,650 | 18,707 |
* | SunPower Corp. Class B | 727,336 | 18,445 |
| McGrath RentCorp | 869,199 | 18,375 |
* | Corrections Corp. of America | 1,251,216 | 17,680 |
* | EnerSys | 1,013,730 | 17,284 |
| Lennox International Inc. | 539,300 | 17,198 |
* | Covanta Holding Corp. | 1,207,503 | 17,038 |
* | Genesee & Wyoming Inc. Class A | 567,250 | 17,017 |
* | Aecom Technology Corp. | 626,654 | 16,124 |
| Robert Half International, Inc. | 667,000 | 16,021 |
* | Tetra Tech, Inc. | 633,003 | 15,547 |
| Knight Transportation, Inc. | 867,100 | 15,330 |
* | GeoEye Inc. | 610,650 | 15,199 |
* | JetBlue Airways Corp. | 2,960,600 | 14,596 |
| Con-way, Inc. | 587,600 | 14,561 |
* | Clean Harbors Inc. | 282,140 | 14,135 |
* | American Superconductor Corp. | 544,700 | 13,999 |
* | RBC Bearings Inc. | 697,194 | 12,898 |
* | TrueBlue, Inc. | 1,205,500 | 11,705 |
* | The Advisory Board Co. | 614,180 | 11,448 |
| Healthcare Services Group, Inc. | 579,150 | 10,355 |
9
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
| Gamesa Corporacion Tecnologica SA | 527,270 | 9,952 |
| Pall Corp. | 374,100 | 9,880 |
| Watson Wyatt & Co. Holdings | 162,500 | 8,621 |
* | Axsys Technologies, Inc. | 200,949 | 8,422 |
* | General Cable Corp. | 308,100 | 8,362 |
* | MPS Group, Inc. | 1,028,445 | 8,269 |
| Roper Industries Inc. | 180,525 | 8,230 |
| W.W. Grainger, Inc. | 97,650 | 8,191 |
* | Resources Connection, Inc. | 389,400 | 7,613 |
* | Exponent, Inc. | 270,822 | 7,556 |
| Mine Safety Appliances Co. | 301,225 | 7,425 |
* | Shaw Group, Inc. | 218,282 | 7,319 |
* | Geo Group Inc. | 434,144 | 7,220 |
| Heartland Express, Inc. | 462,020 | 6,907 |
* | Atlas Air Worldwide Holdings, Inc. | 237,880 | 6,316 |
| KBR Inc. | 394,950 | 6,169 |
| Chicago Bridge & Iron Co. N.V. | 574,255 | 6,145 |
* | Sykes Enterprises, Inc. | 310,965 | 6,114 |
*,^ | Energy Conversion Devices, Inc. | 329,600 | 6,058 |
| HEICO Corp. | 210,200 | 6,035 |
* | Navigant Consulting, Inc. | 405,158 | 5,960 |
| American Ecology Corp. | 349,300 | 5,770 |
* | EMCOR Group, Inc. | 274,410 | 5,705 |
* | Quanta Services, Inc. | 242,125 | 5,504 |
* | URS Corp. | 120,900 | 5,327 |
* | FTI Consulting, Inc. | 94,821 | 5,204 |
| Barnes Group, Inc. | 353,190 | 5,001 |
* | AGCO Corp. | 202,800 | 4,928 |
* | Mobile Mini, Inc. | 358,990 | 4,918 |
| Triumph Group, Inc. | 116,095 | 4,798 |
* | Kadant Inc. | 388,650 | 4,796 |
* | Korn/Ferry International | 450,400 | 4,770 |
* | TransDigm Group, Inc. | 135,600 | 4,765 |
| Harsco Corp. | 170,700 | 4,703 |
| Bucyrus International, Inc. | 212,900 | 4,622 |
* | Esterline Technologies Corp. | 173,870 | 4,581 |
* | EnerNOC Inc. | 260,600 | 4,553 |
* | Iron Mountain, Inc. | 155,950 | 4,443 |
* | United Stationers, Inc. | 130,665 | 4,277 |
| GATX Corp. | 139,500 | 4,200 |
* | AerCap Holdings NV | 838,708 | 3,925 |
| Landstar System, Inc. | 108,050 | 3,848 |
* | IHS Inc. Class A | 92,900 | 3,842 |
* | Kirby Corp. | 121,800 | 3,759 |
*,^ | Allegiant Travel Co. | 68,775 | 3,579 |
| Granite Construction Co. | 90,050 | 3,552 |
* | Beacon Roofing Supply, Inc. | 220,294 | 3,503 |
| Deluxe Corp. | 222,800 | 3,231 |
* | Force Protection, Inc. | 420,200 | 3,202 |
* | RSC Holdings Inc. | 447,430 | 3,199 |
* | Delta Air Lines Inc. | 518,015 | 3,196 |
* | GrafTech International Ltd. | 360,200 | 3,166 |
| Flowserve Corp. | 45,435 | 3,085 |
* | Continental Airlines, Inc. Class B | 289,500 | 3,046 |
| EnergySolutions | 311,403 | 3,021 |
| Hubbell Inc. Class B | 90,600 | 3,008 |
| Ryder System, Inc. | 107,789 | 2,985 |
| Herman Miller, Inc. | 198,700 | 2,955 |
| Acuity Brands, Inc. | 100,500 | 2,888 |
* | Michael Baker Corp. | 84,701 | 2,846 |
* | CoStar Group, Inc. | 75,200 | 2,786 |
| Administaff, Inc. | 100,302 | 2,674 |
| The Brink's Co. | 88,900 | 2,520 |
* | UAL Corp. | 507,760 | 2,498 |
10
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Alliant Techsystems, Inc. | 29,300 | 2,334 |
* | Flow International Corp. | 1,279,300 | 2,328 |
| Knoll, Inc. | 310,700 | 2,200 |
* | Old Dominion Freight Line, Inc. | 76,300 | 2,148 |
| Robbins & Myers, Inc. | 110,400 | 2,092 |
* | Trex Co., Inc. | 177,300 | 1,941 |
* | Chart Industries, Inc. | 140,000 | 1,936 |
| Federal Signal Corp. | 236,992 | 1,841 |
| Comfort Systems USA, Inc. | 170,305 | 1,838 |
| Encore Wire Corp. | 76,501 | 1,671 |
* | AMR Corp. | 330,900 | 1,575 |
| Graham Corp. | 123,418 | 1,543 |
| The Toro Co. | 50,300 | 1,528 |
| AAON, Inc. | 77,400 | 1,508 |
* | American Reprographics Co. | 229,746 | 1,482 |
| Lincoln Electric Holdings, Inc. | 33,000 | 1,469 |
* | Mastec Inc. | 115,500 | 1,445 |
* | CRA International Inc. | 61,700 | 1,440 |
| Textainer Group Holdings Ltd. | 156,382 | 1,386 |
* | Stanley Inc. | 51,672 | 1,332 |
* | WESCO International, Inc. | 45,000 | 1,170 |
| Apogee Enterprises, Inc. | 86,300 | 1,156 |
* | K-Tron International, Inc | 13,968 | 1,123 |
| Donaldson Co., Inc. | 33,200 | 1,095 |
| VSE Corp. | 34,527 | 1,032 |
| The Standard Register Co. | 173,200 | 904 |
* | Huron Consulting Group Inc. | 17,500 | 839 |
* | TBS International Ltd. | 104,890 | 832 |
* | USA Truck, Inc. | 52,531 | 739 |
* | EnPro Industries, Inc. | 41,548 | 663 |
| The Timken Co. | 37,000 | 595 |
| Titan International, Inc. | 98,300 | 595 |
* | La Barge, Inc. | 67,800 | 559 |
| Mueller Industries Inc. | 23,400 | 514 |
* | Dynamex Inc. | 33,410 | 491 |
* | PRG-Schultz International, Inc. | 165,600 | 490 |
* | DynCorp International Inc. Class A | 31,100 | 474 |
* | GP Strategies Corp. | 117,140 | 469 |
* | Powell Industries, Inc. | 12,100 | 435 |
| Applied Industrial Technology, Inc. | 18,940 | 426 |
| Copa Holdings SA Class A | 13,500 | 414 |
| CIRCOR International, Inc. | 13,500 | 347 |
* | Cenveo Inc. | 54,800 | 259 |
* | China Architectural Engineering Inc. | 155,854 | 242 |
* | Standard Parking Corp. | 13,304 | 203 |
| Wabtec Corp. | 4,800 | 183 |
* | AMREP Corp. | 9,700 | 180 |
| Industrial Services of America, Inc. | 32,080 | 166 |
* | American Commercial Lines Inc. | 31,700 | 158 |
| CDI Corp. | 11,800 | 141 |
| TAL International Group, Inc. | 14,603 | 140 |
* | Sterling Construction Co., Inc. | 7,030 | 132 |
| Preformed Line Products Co. | 3,296 | 122 |
| Viad Corp. | 6,120 | 117 |
* | CBIZ Inc. | 14,800 | 116 |
* | Waste Services, Inc. | 19,100 | 103 |
* | Hawaiian Holdings, Inc. | 17,900 | 89 |
* | Pike Electric Corp. | 8,100 | 84 |
* | CAI International Inc. | 18,347 | 67 |
| Applied Signal Technology, Inc. | 3,000 | 59 |
* | Furmanite Corp. | 14,500 | 57 |
* | Altra Holdings Inc. | 9,400 | 51 |
| Valmont Industries, Inc. | 800 | 51 |
| Omega Flex Inc. | 2,700 | 42 |
11
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Advanced Battery Technologies Inc. | 12,200 | 34 |
* | First Advantage Corp. Class A | 1,024 | 15 |
|
|
| 1,032,534 |
Information Technology (24.3%) |
|
| |
* | Polycom, Inc. | 2,754,558 | 51,345 |
* | Riverbed Technology, Inc. | 2,375,400 | 43,517 |
*,^ | Alliance Data Systems Corp. | 798,772 | 33,445 |
* | Red Hat, Inc. | 1,887,813 | 32,603 |
* | Ariba, Inc. | 3,025,309 | 29,073 |
| FactSet Research Systems Inc. | 540,500 | 28,965 |
* | Concur Technologies, Inc. | 1,012,762 | 27,415 |
* | TiVo Inc. | 3,609,955 | 27,075 |
* | ON Semiconductor Corp. | 4,792,035 | 25,973 |
* | Hewitt Associates, Inc. | 797,441 | 25,008 |
* | Euronet Worldwide, Inc. | 1,494,990 | 24,189 |
* | PMC-Sierra Inc. | 3,037,900 | 24,060 |
* | FEI Co. | 1,331,402 | 22,873 |
* | salesforce.com, inc. | 534,200 | 22,869 |
* | Informatica Corp. | 1,392,364 | 22,139 |
* | Ingram Micro, Inc. Class A | 1,466,000 | 21,286 |
* | Microsemi Corp. | 1,584,698 | 21,267 |
* | Cymer, Inc. | 745,500 | 21,180 |
* | Blue Coat Systems, Inc. | 1,596,524 | 21,170 |
* | Verigy Ltd. | 1,916,700 | 21,084 |
* | NICE-Systems Ltd. ADR | 794,942 | 20,358 |
* | Affiliated Computer Services, Inc. Class A | 418,710 | 20,257 |
* | j2 Global Communications, Inc. | 843,744 | 20,241 |
* | Netezza Corp. | 2,329,700 | 18,847 |
| Syntel, Inc. | 661,386 | 18,334 |
* | F5 Networks, Inc. | 665,950 | 18,160 |
* | Macrovision Solutions Corp. | 890,120 | 17,998 |
* | MKS Instruments, Inc. | 1,118,550 | 17,505 |
* | Synopsys, Inc. | 759,628 | 16,545 |
* | VeriFone Holdings, Inc. | 2,184,800 | 16,408 |
* | Sybase, Inc. | 482,671 | 16,392 |
* | Varian Semiconductor Equipment Associates, Inc. | 633,550 | 16,213 |
* | NeuStar, Inc. Class A | 836,230 | 15,897 |
* | NetApp, Inc. | 861,675 | 15,769 |
* | Cadence Design Systems, Inc. | 2,739,960 | 15,289 |
| Intersil Corp. | 1,286,116 | 14,919 |
| Maxim Integrated Products, Inc. | 1,093,900 | 14,822 |
* | Sapient Corp. | 2,804,900 | 14,389 |
* | S1 Corp. | 2,268,305 | 14,064 |
* | Teradyne, Inc. | 2,362,100 | 14,031 |
| ADTRAN Inc. | 661,430 | 13,989 |
* | ATMI, Inc. | 885,285 | 13,979 |
* | Trimble Navigation Ltd. | 650,250 | 13,941 |
* | CyberSource Corp. | 934,800 | 13,657 |
* | Progress Software Corp. | 633,686 | 13,428 |
* | Littelfuse, Inc. | 813,750 | 13,337 |
* | Sycamore Networks, Inc. | 4,481,500 | 13,220 |
| Diebold, Inc. | 496,800 | 13,130 |
* | Skyworks Solutions, Inc. | 1,454,500 | 12,858 |
* | Starent Networks Corp. | 642,587 | 12,678 |
* | Solera Holdings, Inc. | 549,300 | 12,535 |
* | MICROS Systems, Inc. | 588,296 | 12,342 |
* | Western Digital Corp. | 521,000 | 12,254 |
| Amphenol Corp. Class A | 357,610 | 12,102 |
* | Digital River, Inc. | 304,170 | 11,686 |
* | ValueClick, Inc. | 1,060,765 | 11,244 |
| Xerox Corp. | 1,838,500 | 11,233 |
* | Compuware Corp. | 1,459,526 | 10,917 |
* | McAfee Inc. | 287,105 | 10,778 |
* | Cogent Inc. | 946,757 | 10,736 |
12
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | ANSYS, Inc. | 385,709 | 10,653 |
* | SuccessFactors Inc. | 1,194,400 | 10,403 |
* | Atmel Corp. | 2,608,345 | 10,016 |
* | Websense, Inc. | 549,617 | 9,800 |
* | QLogic Corp. | 680,720 | 9,653 |
* | VeriSign, Inc. | 466,595 | 9,603 |
| Jabil Circuit, Inc. | 1,180,880 | 9,565 |
* | Parametric Technology Corp. | 833,430 | 9,293 |
* | Metavante Technologies | 390,718 | 9,217 |
* | Net 1 UEPS Technologies, Inc. | 554,069 | 9,142 |
* | SAIC, Inc. | 504,750 | 9,136 |
| Heartland Payment Systems, Inc. | 997,667 | 8,021 |
* | EPIQ Systems, Inc. | 516,100 | 7,984 |
* | FLIR Systems, Inc. | 338,784 | 7,514 |
| Power Integrations, Inc. | 347,500 | 7,402 |
* | SPSS, Inc. | 234,025 | 7,231 |
* | Atheros Communications, Inc. | 417,200 | 7,184 |
| Broadridge Financial Solutions LLC | 364,300 | 7,049 |
* | Dolby Laboratories Inc. | 175,600 | 7,047 |
* | DemandTec, Inc. | 972,180 | 7,019 |
* | CACI International, Inc. | 176,744 | 6,990 |
* | Broadcom Corp. | 300,000 | 6,957 |
* | Acme Packet, Inc. | 899,626 | 6,936 |
* | Silicon Laboratories Inc. | 203,900 | 6,782 |
* | BMC Software, Inc. | 195,075 | 6,763 |
* | Akamai Technologies, Inc. | 302,850 | 6,669 |
| Altera Corp. | 382,250 | 6,235 |
* | DST Systems, Inc. | 172,064 | 6,224 |
* | EarthLink, Inc. | 807,610 | 6,122 |
* | Cypress Semiconductor Corp. | 746,851 | 5,923 |
* | PROS Holdings, Inc. | 915,394 | 5,913 |
* | Emulex Corp. | 556,249 | 5,824 |
^ | Quality Systems, Inc. | 107,800 | 5,780 |
* | Lawson Software, Inc. | 1,055,528 | 5,689 |
* | Integrated Device Technology Inc. | 1,046,586 | 5,683 |
* | LSI Corp. | 1,450,320 | 5,569 |
* | Sohu.com Inc. | 106,400 | 5,549 |
* | Quest Software, Inc. | 363,958 | 5,288 |
* | Convergys Corp. | 514,600 | 5,203 |
* | VistaPrint Ltd. | 147,320 | 5,060 |
* | Perot Systems Corp. | 356,584 | 5,014 |
* | Stratasys, Inc. | 532,000 | 4,980 |
* | Netlogic Microsystems Inc. | 147,300 | 4,801 |
* | Brooks Automation, Inc. | 771,300 | 4,797 |
* | Juniper Networks, Inc. | 220,000 | 4,763 |
* | OpNext, Inc. | 1,878,498 | 4,753 |
* | Diodes Inc. | 317,775 | 4,729 |
| Global Payments Inc. | 141,900 | 4,549 |
| Fair Isaac, Inc. | 263,370 | 4,430 |
* | Novell, Inc. | 1,168,854 | 4,395 |
| Marchex, Inc. | 939,900 | 4,248 |
* | Wind River Systems Inc. | 578,880 | 4,243 |
* | Hittite Microwave Corp. | 113,150 | 4,205 |
* | Forrester Research, Inc. | 163,900 | 4,165 |
* | Avnet, Inc. | 189,400 | 4,146 |
* | Marvell Technology Group Ltd. | 375,000 | 4,118 |
* | Commvault Systems, Inc. | 310,000 | 3,860 |
* | Data Domain, Inc. | 232,700 | 3,858 |
* | Silicon Motion Technology Corp. ADR | 1,197,900 | 3,845 |
* | SkillSoft PLC | 452,400 | 3,809 |
* | TIBCO Software Inc. | 583,718 | 3,689 |
* | Ceva, Inc. | 446,563 | 3,684 |
* | Multi-Fineline Electronix, Inc. | 183,500 | 3,683 |
* | Vocus, Inc. | 209,850 | 3,567 |
13
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Compellent Technologies, Inc. | 318,300 | 3,552 |
* | Oclaro Inc. | 3,455,800 | 3,421 |
* | Manhattan Associates, Inc. | 205,016 | 3,407 |
| Jack Henry & Associates Inc. | 185,610 | 3,345 |
* | AsiaInfo Holdings, Inc. | 199,100 | 3,335 |
* | Avocent Corp. | 227,792 | 3,289 |
* | Monolithic Power Systems | 168,350 | 3,114 |
* | Harmonic, Inc. | 424,600 | 3,112 |
* | Cognizant Technology Solutions Corp. | 123,150 | 3,053 |
* | FormFactor Inc. | 172,500 | 3,007 |
* | TriQuint Semiconductor, Inc. | 781,670 | 2,994 |
| IXYS Corp. | 312,078 | 2,977 |
* | Cirrus Logic, Inc. | 639,511 | 2,974 |
* | GSI Commerce, Inc. | 209,000 | 2,970 |
* | Gartner, Inc. Class A | 215,900 | 2,917 |
* | ACI Worldwide, Inc. | 168,024 | 2,902 |
* | EMS Technologies, Inc. | 142,550 | 2,716 |
* | Coherent, Inc. | 137,814 | 2,618 |
* | CSG Systems International, Inc. | 180,100 | 2,611 |
* | Blackboard Inc. | 75,160 | 2,558 |
* | JDA Software Group, Inc. | 180,309 | 2,544 |
* | 3Com Corp. | 624,910 | 2,531 |
* | OSI Systems Inc. | 130,100 | 2,439 |
* | ManTech International Corp. | 66,711 | 2,414 |
* | NetScout Systems, Inc. | 261,865 | 2,354 |
* | Harris Stratex Networks, Inc. Class A | 580,875 | 2,335 |
| Take-Two Interactive Software, Inc. | 230,700 | 2,095 |
* | Lexmark International, Inc. | 98,400 | 1,931 |
* | Anixter International Inc. | 48,300 | 1,921 |
* | AuthenTec, Inc. | 986,100 | 1,834 |
* | Radiant Systems, Inc. | 241,900 | 1,783 |
* | Activision Blizzard, Inc. | 165,500 | 1,782 |
* | Tech Data Corp. | 60,300 | 1,736 |
*,^ | Synaptics Inc. | 51,100 | 1,660 |
* | Super Micro Computer Inc. | 294,800 | 1,539 |
* | Zoran Corp. | 164,160 | 1,468 |
* | TNS Inc. | 83,088 | 1,400 |
| Ulticom, Inc. | 667,120 | 1,374 |
* | The Hackett Group Inc. | 607,300 | 1,366 |
| Pegasystems Inc. | 75,300 | 1,315 |
* | Tekelec | 83,500 | 1,294 |
* | Wright Express Corp. | 55,880 | 1,279 |
* | CPI International, Inc. | 114,610 | 1,255 |
* | TeleTech Holdings, Inc. | 84,000 | 1,115 |
* | ScanSource, Inc. | 44,600 | 1,102 |
* | Vignette Corp. | 131,700 | 1,088 |
* | Ultratech, Inc. | 77,427 | 1,047 |
* | RightNow Technologies Inc. | 132,192 | 998 |
* | Arris Group Inc. | 90,061 | 961 |
* | InterDigital, Inc. | 36,000 | 948 |
| iGATE Corp. | 242,799 | 920 |
* | Equinix, Inc. | 12,900 | 906 |
* | Oplink Communications, Inc. | 78,256 | 864 |
* | Veeco Instruments, Inc. | 114,771 | 831 |
* | Measurement Specialties, Inc. | 119,374 | 811 |
* | Airvana, Inc. | 139,300 | 793 |
| MAXIMUS, Inc. | 18,779 | 757 |
* | ViaSat, Inc. | 32,000 | 736 |
* | Tollgrade Communications, Inc. | 120,638 | 718 |
* | SeaChange International, Inc. | 108,281 | 679 |
* | Dynamics Research Corp. | 69,597 | 574 |
* | PC Mall, Inc. | 88,768 | 568 |
* | OPNET Technologies, Inc. | 65,887 | 567 |
* | Anaren, Inc. | 42,701 | 556 |
14
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
* | Mentor Graphics Corp. | 82,300 | 553 |
* | Semtech Corp. | 37,600 | 542 |
* | BigBand Networks Inc. | 88,700 | 520 |
* | Silicon Image, Inc. | 182,800 | 497 |
* | Gerber Scientific, Inc. | 122,673 | 485 |
* | NVE Corp. | 12,500 | 476 |
* | Computer Task Group, Inc. | 107,009 | 419 |
* | Insight Enterprises, Inc. | 65,799 | 376 |
* | Image Sensing Systems, Inc. | 38,500 | 373 |
* | Brocade Communications Systems, Inc. | 60,840 | 352 |
* | Keynote Systems Inc. | 44,219 | 341 |
* | SonicWALL, Inc. | 58,800 | 319 |
| Cass Information Systems, Inc. | 9,100 | 307 |
* | Pervasive Software Inc. | 60,268 | 296 |
* | Quantum Corp. | 258,900 | 272 |
* | Digi International, Inc. | 36,737 | 267 |
* | Techwell, Inc. | 36,000 | 265 |
* | Itron, Inc. | 5,700 | 262 |
* | Cabot Microelectronics Corp. | 9,000 | 259 |
| QAD Inc. | 96,398 | 256 |
* | TechTeam Global, Inc. | 42,119 | 219 |
* | Perceptron, Inc. | 58,898 | 213 |
* | WebMD Health Corp. Class A | 8,100 | 209 |
* | MIPS Technologies, Inc. | 61,100 | 203 |
| Daktronics, Inc. | 21,800 | 197 |
* | Nuance Communications, Inc. | 14,500 | 194 |
* | Actel Corp. | 15,394 | 190 |
* | Internet Gold-Golden Lines Ltd. | 39,949 | 190 |
* | Kopin Corp. | 63,000 | 173 |
* | Online Resources Corp. | 40,229 | 173 |
* | IntriCon Corp. | 48,000 | 146 |
* | GTSI Corp. | 32,226 | 145 |
* | Ness Technologies Inc. | 37,700 | 139 |
| MTS Systems Corp. | 6,204 | 131 |
| Micrel, Inc. | 17,000 | 128 |
* | Genpact, Ltd. | 14,200 | 127 |
* | Standard Microsystem Corp. | 7,292 | 116 |
* | Volterra Semiconductor Corp. | 10,000 | 115 |
* | Symmetricom Inc. | 19,920 | 99 |
* | DTS Inc. | 3,600 | 96 |
| Total System Services, Inc. | 7,004 | 87 |
* | Ebix, Inc. | 2,600 | 72 |
* | Inx Inc. | 20,568 | 71 |
* | Telecommunication Systems, Inc. | 6,900 | 68 |
| O.I. Corp. | 3,300 | 26 |
* | Datalink Corp. | 7,360 | 24 |
* | Dice Holdings Inc. | 6,100 | 24 |
* | White Electronic Designs Corp. | 3,600 | 16 |
* | Integral Systems, Inc. | 2,306 | 15 |
* | Cray, Inc. | 1,690 | 7 |
* | DSP Group Inc. | 600 | 4 |
* | MakeMusic! Inc. | 1,212 | 4 |
|
|
| 1,660,558 |
Materials (4.1%) |
|
| |
| Sensient Technologies Corp. | 1,520,160 | 35,541 |
| Albemarle Corp. | 1,021,170 | 27,388 |
| AptarGroup Inc. | 780,550 | 24,220 |
| FMC Corp. | 373,640 | 18,208 |
| Airgas, Inc. | 350,390 | 15,109 |
| International Flavors & Fragrances, Inc. | 426,468 | 13,306 |
| Arch Chemicals, Inc. | 520,019 | 12,574 |
* | OM Group, Inc. | 443,350 | 12,352 |
| Greif Inc. Class A | 233,000 | 10,548 |
15
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market |
|
|
| Value |
|
| Shares | ($000) |
|
|
|
|
| Ashland, Inc. | 449,000 | 9,860 |
| Eagle Materials, Inc. | 309,800 | 8,612 |
| RPM International, Inc. | 610,600 | 8,439 |
| Terra Industries, Inc. | 257,900 | 6,834 |
* | LSB Industries, Inc. | 528,288 | 6,329 |
| Scotts Miracle-Gro Co. | 164,252 | 5,547 |
| NewMarket Corp. | 87,520 | 5,514 |
| Rock-Tenn Co. | 137,300 | 5,184 |
| Schnitzer Steel Industries, Inc. Class A | 97,150 | 4,815 |
* | Fronteer Development Group, Inc. | 1,904,750 | 4,552 |
| Agrium, Inc. | 94,150 | 4,050 |
| Cytec Industries, Inc. | 200,483 | 3,982 |
| Ecolab, Inc. | 102,050 | 3,934 |
* | Pactiv Corp. | 178,125 | 3,894 |
| Compass Minerals International, Inc. | 77,400 | 3,732 |
| Silgan Holdings, Inc. | 76,400 | 3,552 |
| Steel Dynamics, Inc. | 265,700 | 3,308 |
| Ball Corp. | 82,800 | 3,123 |
| United States Steel Corp. | 104,400 | 2,772 |
| Worthington Industries, Inc. | 142,500 | 2,123 |
| Innophos Holdings Inc. | 133,900 | 1,986 |
* | Crown Holdings, Inc. | 82,100 | 1,810 |
*,^ | ShengdaTech Inc. | 477,077 | 1,727 |
| Innospec, Inc. | 133,012 | 1,045 |
* | GenTek, Inc. | 40,500 | 773 |
* | Bway Holding Co. | 71,222 | 664 |
*,^ | General Steel Holdings, Inc. | 80,800 | 470 |
| Wausau Paper Corp. | 52,217 | 456 |
* | Solutia Inc. | 87,800 | 330 |
| Nalco Holding Co. | 15,900 | 260 |
* | AEP Industries, Inc. | 5,523 | 112 |
* | WHX Corp. | 10,314 | 52 |
| Stepan Co. | 728 | 29 |
| Quaker Chemical Corp. | 1,600 | 19 |
| Myers Industries, Inc. | 1,628 | 16 |
|
|
| 279,151 |
Telecommunication Services (0.8%) |
|
| |
| Partner Communications Company Ltd. | 560,800 | 9,113 |
* | American Tower Corp. Class A | 282,305 | 8,966 |
* | Clearwire Corp. | 1,360,800 | 7,539 |
* | Premiere Global Services, Inc. | 476,900 | 5,026 |
* | SBA Communications Corp. | 180,525 | 4,549 |
* | Syniverse Holdings Inc. | 238,637 | 3,007 |
| NTELOS Holdings Corp. | 157,900 | 2,523 |
| Frontier Communications Corp. | 325,539 | 2,315 |
| Telephone & Data Systems, Inc. | 62,000 | 1,777 |
| USA Mobility, Inc. | 143,860 | 1,600 |
| Consolidated Communications Holdings, Inc. | 72,594 | 817 |
* | iPCS, Inc. | 55,900 | 812 |
* | NII Holdings Inc. | 47,919 | 774 |
* | General Communication, Inc. | 71,189 | 545 |
* | Centennial Communications Corp. Class A | 65,500 | 542 |
* | Cogent Communications Group, Inc. | 41,000 | 346 |
* | Virgin Mobile USA, Inc. Class A | 58,800 | 121 |
* | U.S. Cellular Corp. | 2,270 | 77 |
| Shenandoah Telecommunications Co. | 3,300 | 65 |
|
|
| 50,514 |
Utilities (1.0%) |
|
| |
| Ormat Technologies Inc. | 535,850 | 18,862 |
| UGI Corp. Holding Co. | 637,700 | 14,629 |
| ITC Holdings Corp. | 328,850 | 14,315 |
| CenterPoint Energy Inc. | 562,700 | 5,987 |
| NV Energy Inc. | 469,772 | 4,815 |
| EQT Corp. | 140,000 | 4,708 |
16
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2009
|
|
| Market | |||
|
|
| Value | |||
|
| Shares | ($000) | |||
|
|
|
| |||
| CMS Energy Corp. | 114,225 | 1,373 | |||
| DPL Inc. | 40,700 | 913 | |||
* | El Paso Electric Co. | 36,578 | 505 | |||
|
|
| 66,107 | |||
Total Common Stocks (Cost $7,454,692) |
| 6,496,263 | ||||
|
| Coupon |
|
|
| |
Temporary Cash Investments (6.8%)1 |
|
|
|
| ||
|
|
|
|
|
| |
|
|
|
|
|
| |
Money Market Fund (6.3%) |
|
|
|
| ||
3,4 | Vanguard Market Liquidity Fund | 0.355% |
| 432,538,000 | 432,538 | |
|
|
|
|
|
| |
|
|
|
| Face |
| |
|
|
| Maturity | Amount |
| |
|
|
| Date | ($000) |
| |
|
|
|
|
|
| |
Repurchase Agreement (0.1%) |
|
|
|
| ||
| Deutsche Bank Securities, Inc. |
|
|
|
| |
| (Dated 4/30/09, Repurchase Value $8,000,000, |
|
|
|
| |
| collateralized by Federal Home Loan Mortgage Corp. |
|
|
|
| |
| 6.500%, 4/1/38 and Federal National Mortgage Assn. |
|
|
|
| |
| 5.000%-7.000%, 5/1/18-10/1/38) | 0.170% | 5/1/09 | 8,000 | 8,000 | |
|
|
|
|
|
| |
U.S. Government and Agency Obligations (0.4%) |
|
|
| |||
5,6 | Federal Home Loan Bank | 0.210% | 9/28/09 | 5,000 | 4,994 | |
5,6 | Federal Home Loan Mortgage Corp. | 0.597% | 8/24/09 | 17,000 | 16,991 | |
5,6 | Federal National Mortgage Assn. | 0.501% | 6/8/09 | 5,000 | 4,999 | |
5,6 | Federal National Mortgage Assn. | 0.582% | 8/26/09 | 300 | 300 | |
|
|
|
|
| 27,284 | |
Total Temporary Cash Investments (Cost $467,799) |
|
| 467,822 | |||
Total Investments (102.0%) (Cost $7,922,491) |
|
| 6,964,085 | |||
Other Assets and Liabilities—Net (-2.0%)4 |
|
|
| (137,336) | ||
Net Assets (100%) |
|
|
| 6,826,749 | ||
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $91,382,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures investments, the fund's effective common stock and temporary cash investment positions represent 98.0% and 4.0%, respectively, of net assets.
2 Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
4 Includes $93,835,000 of collateral received for securities on loan.
5 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
6 Securities with a value of $27,284,000 have been segregated as initial margin for open futures contracts. ADR—American Depositary Receipt.
REIT—Real Estate Investment Trust.
17
This page intentionally left blank.
This page intentionally left blank.
© 2009 Vanguard Group. Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
| SNA242 062009 |
Item 2: Not Applicable.
Item 3: Not Applicable.
Item 4: Not Applicable.
Item 5: Not Applicable.
Item 6: Not Applicable.
Item 7: Not Applicable.
Item 8: Not Applicable.
Item 9: Not Applicable.
Item 10: Not Applicable.
Item 11: Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control Over Financial Reporting. There were no significant changes in Registrant’s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Item 12: Exhibits.
| (a) | Code of Ethics. |
| (b) | Certifications. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| VANGUARD EXPLORER FUND |
|
|
By: | /s/ F. WILLIAM MCNABB III* |
| F. WILLIAM MCNABB III |
| CHIEF EXECUTIVE OFFICER |
|
|
Date: June 16, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| VANGUARD EXPLORER FUND |
|
|
By: | /s/ F. WILLIAM MCNABB III* |
| F. WILLIAM MCNABB III |
| CHIEF EXECUTIVE OFFICER |
|
|
Date: June 16, 2009 |
| VANGUARD EXPLORER FUND |
|
|
By: | /s/ THOMAS J. HIGGINS* |
| THOMAS J. HIGGINS |
| CHIEF FINANCIAL OFFICER |
|
|
Date: June 16, 2009 |
* By: /s/ Heidi Stam
Heidi Stam, pursuant to a Power of Attorney filed on January 18, 2008, see file Number 2-29601, Incorporated by Reference; and pursuant to a Power of Attorney filed on September 26, 2008, see File Number 2-47371, Incorporated by Reference