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: 811-01530
Name of Registrant: | Vanguard Explorer Fund |
Address of Registrant: | P.O. Box 2600 |
Valley Forge, PA 19482 |
Name and address of agent for service: | Anne E. Robinson, 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, 2019—April 30, 2020
Item 1: Reports to Shareholders
Semiannual Report | April 30, 2020
Vanguard Explorer™ Fund
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See the inside front cover for important information about access to your fund’s annual and semiannual shareholder reports.
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Important information about access to shareholder reports
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your fund’s annual and semiannual shareholder reports will no longer be sent to you by mail, unless you specifically request them. Instead, you will be notified by mail each time a report is posted on the website and will be provided with a link to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change and do not need to take any action. You may elect to receive shareholder reports and other communications from the fund electronically by contacting your financial intermediary (such as a broker-dealer or bank) or, if you invest directly with the fund, by calling Vanguard at one of the phone numbers on the back cover of this report or by logging on to vanguard.com.
You may elect to receive paper copies of all future shareholder reports free of charge. If you invest through a financial intermediary, you can contact the intermediary to request that you continue to receive paper copies. If you invest directly with the fund, you can call Vanguard at one of the phone numbers on the back cover of this report or log on to vanguard.com. Your election to receive paper copies will apply to all the funds you hold through an intermediary or directly with Vanguard.
Contents
About Your Fund’s Expenses | 1 |
Financial Statements | 4 |
Trustees Approve Advisory Arrangements | 19 |
Liquidity Risk Management | 22 |
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.
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 any purchase, redemption, or account service fees described in the fund prospectus. If such fees were applied to your account, your costs would be higher. Your fund does not 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.
1
Six Months Ended April 30, 2020
Beginning | Ending | Expenses | ||||
Account Value | Account Value | Paid During | ||||
Explorer Fund | 10/31/2019 | 4/30/2020 | Period | |||
Based on Actual Fund Return | ||||||
Investor Shares | $1,000.00 | $922.76 | $2.01 | |||
Admiral™ Shares | 1,000.00 | 923.29 | 1.48 | |||
Based on Hypothetical 5% Yearly Return | ||||||
Investor Shares | $1,000.00 | $1,022.77 | $2.11 | |||
Admiral Shares | 1,000.00 | 1,023.32 | 1.56 |
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 0.42% for Investor Shares and 0.31% 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 (182/366).
2
Explorer Fund
Fund Allocation
As of April 30, 2020
Communication Services | 3.5 | % | |
Consumer Discretionary | 12.9 | ||
Consumer Staples | 2.5 | ||
Energy | 0.7 | ||
Financials | 5.6 | ||
Health Care | 24.2 | ||
Industrials | 18.3 | ||
Information Technology | 26.3 | ||
Materials | 2.2 | ||
Real Estate | 3.7 | ||
Utilities | 0.1 |
The table reflects the fund’s investments, except for short-term investments and derivatives. Sector categories are based on the Global Industry Classification Standard ("GICS"), except for the "Other" category (if applicable), which includes securities that have not been provided a GICS classification as of the effective report-ing period.
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard and Poor’s, a division of McGraw-Hill Companies, Inc. (“S&P”), and is licensed for use by Vanguard. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classification makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of its affiliates or any third party involved in making or compiling the GICS or any GICS classification have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
3
Explorer Fund
Financial Statements (unaudited)
Schedule of Investments—Investments Summary
As of April 30, 2020
This Statement summarizes the fund’s holdings by asset type. 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 files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) four times in each fiscal year. For the second and fourth quarters the complete list of the fund’s holdings is available on vanguard.com and on Form N-CSR, or you can have it mailed to you without charge by calling 800-662-7447. For the first and third quarters of each fiscal year, the complete list of the fund’s holdings is available as an exhibit to its reports on Form N-PORT. The fund’s Form N-CSR and Form N-PORT reports are available on the SEC’s website at www.sec.gov.
Market | Percentage | ||||||
Value• | of Net | ||||||
Shares | ($000) | Assets | |||||
Common Stocks | |||||||
Communication Services | |||||||
* | Live Nation Entertainment Inc. | 1,477,914 | 66,314 | 0.5% | |||
New York Times Co. Class A | 2,018,471 | 65,641 | 0.4% | ||||
Communication Services—Other † | 337,221 | 2.4% | |||||
469,176 | 3.3% | ||||||
Consumer Discretionary | |||||||
* | Burlington Stores Inc. | 702,074 | 128,262 | 0.9% | |||
* | Etsy Inc. | 1,618,489 | 104,991 | 0.7% | |||
* | Skechers USA Inc. Class A | 3,507,510 | 98,842 | 0.7% | |||
* | MercadoLibre Inc. | 149,406 | 87,180 | 0.6% | |||
Monro Inc. | 1,394,704 | 77,392 | 0.6% | ||||
Carter’s Inc. | 906,329 | 70,875 | 0.5% | ||||
*,1 | Houghton Mifflin Harcourt Co. | 7,198,968 | 11,518 | 0.1% | |||
Consumer Discretionary—Other † | 1,167,247 | 8.3% | |||||
1,746,307 | 12.4% | ||||||
Consumer Staples † | 341,889 | 2.4% | |||||
Energy † | 95,821 | 0.7% | |||||
Financials | |||||||
Tradeweb Markets Inc. Class A | 1,264,125 | 65,937 | 0.5% | ||||
* | SVB Financial Group | 334,017 | 64,522 | 0.5% | |||
Financials—Other † | 609,824 | 4.3% | |||||
740,283 | 5.3% | ||||||
Health Care | |||||||
* | ICON plc | 983,125 | 157,762 | 1.1% | |||
* | Insulet Corp. | 761,307 | 152,048 | 1.1% | |||
* | Penumbra Inc. | 490,853 | 87,038 | 0.6% | |||
*,1 | BioTelemetry Inc. | 1,814,169 | 84,740 | 0.6% |
4
Explorer Fund
Market | Percentage | ||||||
Value• | of Net | ||||||
Shares | ($000) | Assets | |||||
* | Haemonetics Corp. | 718,826 | 81,788 | 0.6% | |||
* | DexCom Inc. | 237,584 | 79,638 | 0.6% | |||
* | Mettler-Toledo International Inc. | 106,955 | 77,001 | 0.5% | |||
Hill-Rom Holdings Inc. | 663,543 | 74,642 | 0.5% | ||||
Encompass Health Corp. | 1,087,758 | 72,064 | 0.5% | ||||
* | Molina Healthcare Inc. | 429,361 | 70,402 | 0.5% | |||
* | ABIOMED Inc. | 357,824 | 68,434 | 0.5% | |||
STERIS plc | 478,311 | 68,159 | 0.5% | ||||
* | LHC Group Inc. | 513,863 | 66,797 | 0.5% | |||
* | Amedisys Inc. | 354,483 | 65,282 | 0.5% | |||
* | Globus Medical Inc. | 1,367,667 | 64,909 | 0.4% | |||
*,^,1 | Endologix Inc. | 1,055,952 | 998 | 0.0% | |||
Health Care—Other † | 2,014,649 | 14.3% | |||||
3,286,351 | 23.3% | ||||||
Industrials | |||||||
* | TriNet Group Inc. | 2,639,728 | 129,267 | 0.9% | |||
* | Trex Co. Inc. | 1,102,853 | 105,014 | 0.8% | |||
* | Kirby Corp. | 1,600,203 | 85,483 | 0.6% | |||
* | Clean Harbors Inc. | 1,470,719 | 78,581 | 0.6% | |||
* | Copart Inc. | 958,250 | 76,765 | 0.5% | |||
* | Sensata Technologies Holding plc | 2,000,289 | 72,771 | 0.5% | |||
Advanced Drainage Systems Inc. | 1,772,821 | 71,870 | 0.5% | ||||
Kennametal Inc. | 2,784,270 | 71,305 | 0.5% | ||||
John Bean Technologies Corp. | 921,844 | 70,742 | 0.5% | ||||
Rexnord Corp. | 2,497,365 | 68,103 | 0.5% | ||||
BWX Technologies Inc. | 1,202,908 | 63,826 | 0.5% | ||||
Industrials—Other † | 1,582,019 | 11.2% | |||||
2,475,746 | 17.6% | ||||||
Information Technology | |||||||
* | DocuSign Inc. Class A | 1,348,109 | 141,214 | 1.0% | |||
* | Five9 Inc. | 1,465,735 | 135,830 | 1.0% | |||
* | Fortinet Inc. | 984,070 | 106,024 | 0.8% | |||
* | HubSpot Inc. | 556,396 | 93,825 | 0.7% | |||
* | SVMK Inc. | 5,820,748 | 91,386 | 0.6% | |||
Power Integrations Inc. | 846,870 | 86,677 | 0.6% | ||||
* | Wix.com Ltd. | 585,375 | 76,573 | 0.5% | |||
*,1 | Cardtronics plc Class A | 2,943,250 | 67,400 | 0.5% | |||
* | Mimecast Ltd. | 1,613,450 | 65,990 | 0.5% | |||
* | Slack Technologies Inc. Class A | 2,467,169 | 65,849 | 0.5% | |||
* | Tower Semiconductor Ltd. | 3,352,578 | 64,487 | 0.5% | |||
* | GoDaddy Inc. Class A | 917,192 | 63,681 | 0.4% | |||
* | Ciena Corp. | 1,361,931 | 62,989 | 0.4% | |||
Information Technology—Other † | 2,440,397 | 17.3% | |||||
3,562,322 | 25.3% | ||||||
Materials † | 298,175 | 2.1% | |||||
Other | |||||||
^,2 | Vanguard Small-Cap ETF | 1,059,645 | 140,127 | 1.0% |
5
Explorer Fund
Market | Percentage | ||||||||
Value• | of Net | ||||||||
Shares | ($000) | Assets | |||||||
Real Estate | |||||||||
SBA Communications Corp. Class A | 301,256 | 87,340 | 0.6% | ||||||
Hannon Armstrong Sustainable Infrastructure Capital Inc. | 2,354,576 | 65,905 | 0.5% | ||||||
Real Estate—Other † | 330,518 | 2.3% | |||||||
483,763 | 3.4% | ||||||||
Utilities † | 14,120 | 0.1% | |||||||
Total Common Stocks (Cost $11,672,569) | 13,654,080 | 96.9% | |||||||
Coupon | |||||||||
Temporary Cash Investments | |||||||||
Money Market Fund | |||||||||
3,4 | Vanguard Market Liquidity Fund | 0.522% | 5,122,064 | 512,207 | 3.6% | ||||
Face | |||||||||
Maturity | Amount | ||||||||
Date | ($000) | ||||||||
Repurchase Agreement | |||||||||
Deutsche Bank Securities, Inc. (Dated 04/30/20, Repurchase Value $129,400,000,collateralized by Federal National Mortgage Assn. 4.500%, 9/1/48, and U.S. Treasury Note/Bond 2.875%, 5/15/49, with a value of $131,988,000) | 0.030% | 5/1/2020 | 129,400 | 129,400 | 0.9% | ||||
5U.S. Government and Agency Obligations † | 20,060 | 0.2% | |||||||
Total Temporary Cash Investments (Cost $661,474) | 661,667 | 4.7% | |||||||
Total Investments (Cost $12,334,043) | 14,315,747 | 101.6% | |||||||
Other Assets and Liabilities—Net4,5 | (224,495) | (1.6%) | |||||||
Net Assets | 14,091,252 | 100.0% |
Cost rounded to $000.
• | See Note A in Notes to Financial Statements. |
* | Non-income-producing security. |
^ | Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $226,322,000. |
† | 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 fund owns more than 5% of the outstanding voting securities of such company. |
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 | Collateral of $243,171,000 was received for securities on loan, of which $233,802,000 is held in Vanguard Market Liquidity Fund and $9,369,000 is held in cash. |
5 | Securities with a value of $14,569,000 and cash of $480,000 have been segregated as initial margin for open futures contracts. |
6
Explorer Fund
Derivative Financial Instruments Outstanding as of Period End | |||||
Futures Contracts | |||||
($000) | |||||
Value and | |||||
Number of | Unrealized | ||||
Long (Short) | Notional | Appreciation | |||
Expiration | Contracts | Amount | (Depreciation) | ||
Long Futures Contracts | |||||
E-mini Russell 2000 Index | June 2020 | 1,988 | 129,886 | 22,080 |
See accompanying Notes, which are an integral part of the Financial Statements.
7
Explorer Fund
Statement of Assets and Liabilities
As of April 30, 2020
($000s, except shares and per-share amounts) | Amount |
Assets | |
Investments in Securities, at Value | |
Unaffiliated Issuers (Cost $11,373,895) | 13,498,757 |
Affiliated Issuers (Cost $960,148) | 816,990 |
Total Investments in Securities | 14,315,747 |
Investment in Vanguard | 623 |
Cash | 9,379 |
Cash Collateral Pledged—Futures Contracts | 480 |
Foreign Currency, at Value (Cost $2) | 2 |
Receivables for Investment Securities Sold | 41,465 |
Receivables for Accrued Income | 2,747 |
Receivables for Capital Shares Issued | 8,419 |
Total Assets | 14,378,862 |
Liabilities | |
Payables for Investment Securities Purchased | 13,216 |
Collateral for Securities on Loan | 243,171 |
Payables to Investment Advisor | 5,670 |
Payables for Capital Shares Redeemed | 13,560 |
Payables to Vanguard | 6,523 |
Variation Margin Payable—Futures Contracts | 5,470 |
Total Liabilities | 287,610 |
Net Assets | 14,091,252 |
At April 30, 2020, net assets consisted of: | |
Paid-in Capital | 12,093,913 |
Total Distributable Earnings (Loss) | 1,997,339 |
Net Assets | 14,091,252 |
Investor Shares—Net Assets | |
Applicable to 34,308,453 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 3,064,865 |
Net Asset Value Per Share—Investor Shares | $89.33 |
Admiral Shares—Net Assets | |
Applicable to 132,650,630 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 11,026,387 |
Net Asset Value Per Share—Admiral Shares | $83.12 |
See accompanying Notes, which are an integral part of the Financial Statements.
8
Explorer Fund
Statement of Operations
Six Months Ended | |
April 30, 2020 | |
($000) | |
Investment Income | |
Income | |
Dividends—Unaffiliated Issuers1 | 52,452 |
Dividends—Affiliated Issuers | 1,469 |
Interest—Unaffiliated Issuers | 489 |
Interest—Affiliated Issuers | 3,376 |
Securities Lending—Net | 4,142 |
Total Income | 61,928 |
Expenses | |
Investment Advisory Fees—Note B | |
Basic Fee | 13,541 |
Performance Adjustment | 167 |
The Vanguard Group—Note C | |
Management and Administrative—Investor Shares | 3,873 |
Management and Administrative—Admiral Shares | 7,504 |
Marketing and Distribution—Investor Shares | 182 |
Marketing and Distribution—Admiral Shares | 421 |
Custodian Fees | 52 |
Shareholders’ Reports—Investor Shares | 32 |
Shareholders’ Reports—Admiral Shares | 50 |
Trustees’ Fees and Expenses | 12 |
Total Expenses | 25,834 |
Net Investment Income | 36,094 |
Realized Net Gain (Loss) | |
Investment Securities Sold—Unaffiliated Issuers | 65,546 |
Investment Securities Sold—Affiliated Issuers | (6,589) |
Futures Contracts | (56,553) |
Realized Net Gain (Loss) | 2,404 |
Change in Unrealized Appreciation (Depreciation) | |
Investment Securities—Unaffiliated Issuers | (1,160,564) |
Investment Securities—Affiliated Issuers | (88,361) |
Futures Contracts | 16,693 |
Change in Unrealized Appreciation (Depreciation) | (1,232,232) |
Net Increase (Decrease) in Net Assets Resulting from Operations | (1,193,734) |
1 | Dividends are net of foreign withholding taxes of $290,000. |
See accompanying Notes, which are an integral part of the Financial Statements.
9
Explorer Fund
Statement of Changes in Net Assets
Six Months Ended | Year Ended | ||
April 30, | October 31, | ||
2020 | 2019 | ||
($000) | ($000) | ||
Increase (Decrease) in Net Assets | |||
Operations | |||
Net Investment Income | 36,094 | 65,903 | |
Realized Net Gain (Loss) | 2,404 | 754,642 | |
Change in Unrealized Appreciation (Depreciation) | (1,232,232) | 659,185 | |
Net Increase (Decrease) in Net Assets Resulting from Operations | (1,193,734) | 1,479,730 | |
Distributions1 | |||
Investor Shares | (178,026) | (304,807) | |
Admiral Shares | (652,715) | (1,054,055) | |
Total Distributions | (830,741) | (1,358,862) | |
Capital Share Transactions | |||
Investor Shares | (35,251) | 68,365 | |
Admiral Shares | 62,483 | 862,924 | |
Net Increase (Decrease) from Capital Share Transactions | 27,232 | 931,289 | |
Total Increase (Decrease) | (1,997,243) | 1,052,157 | |
Net Assets | |||
Beginning of Period | 16,088,495 | 15,036,338 | |
End of Period | 14,091,252 | 16,088,495 |
1 | Certain prior period numbers have been reclassified to conform with current period presentation. |
See accompanying Notes, which are an integral part of the Financial Statements.
10
Explorer Fund
Financial Highlights
Investor Shares
Six Months | ||||||||
Ended | Year Ended October 31, | |||||||
For a Share Outstanding | April 30, | |||||||
Throughout Each Period | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | ||
Net Asset Value, Beginning of Period | $101.66 | $102.25 | $102.10 | $83.91 | $90.55 | $105.28 | ||
Investment Operations | ||||||||
Net Investment Income | .1831 | .3331 | .3251 | .4211 | .393 | .281 | ||
Net Realized and Unrealized Gain (Loss) on Investments | (7.321) | 8.234 | 11.192 | 21.657 | 1.581 | (.900) | ||
Total from Investment Operations | (7.138) | 8.567 | 11.517 | 22.078 | 1.974 | (.619) | ||
Distributions | ||||||||
Dividends from Net Investment Income | (.295) | (.286) | (.475) | (.318) | (.270) | (.152) | ||
Distributions from Realized Capital Gains | (4.897) | (8.871) | (10.892) | (3.570) | (8.344) | (13.959) | ||
Total Distributions | (5.192) | (9.157) | (11.367) | (3.888) | (8.614) | (14.111) | ||
Net Asset Value, End of Period | $89.33 | $101.66 | $102.25 | $102.10 | $83.91 | $90.55 | ||
Total Return2 | -7.72% | 10.15% | 12.12% | 27.10% | 2.47% | -0.62% | ||
Ratios/Supplemental Data | ||||||||
Net Assets, End of Period (Millions) | $3,065 | $3,520 | $3,420 | $3,520 | $3,324 | $3,863 | ||
Ratio of Total Expenses to Average Net Assets3 | 0.42% | 0.45% | 0.44% | 0.43% | 0.45% | 0.48% | ||
Ratio of Net Investment Income to Average Net Assets | 0.41% | 0.33% | 0.31% | 0.45% | 0.46% | 0.27% | ||
Portfolio Turnover Rate | 20% | 41% | 50% | 76% | 66% | 62% |
The expense ratio and net investment income ratio for the current period have been annualized.
1 Calculated based on average shares outstanding.
2 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
3 Includes performance-based investment advisory fee increases (decreases) of 0.00%, 0.03%, 0.02%, (0.01%), (0.02%), and (0.02%).
See accompanying Notes, which are an integral part of the Financial Statements.
11
Explorer Fund
Financial Highlights
Admiral Shares
Six Months | ||||||||
Ended | Year Ended October 31, | |||||||
For a Share Outstanding | April 30, | |||||||
Throughout Each Period | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | ||
Net Asset Value, Beginning of Period | $94.64 | $95.24 | $94.99 | $78.07 | $84.28 | $98.03 | ||
Investment Operations | ||||||||
Net Investment Income | .2201 | .4091 | .4181 | .4951 | .473 | .402 | ||
Net Realized and Unrealized Gain (Loss) on Investments | (6.803) | 7.648 | 10.405 | 20.145 | 1.455 | (.853) | ||
Total from Investment Operations | (6.583) | 8.057 | 10.823 | 20.640 | 1.928 | (.451) | ||
Distributions | ||||||||
Dividends from Net Investment Income | (.378) | (.393) | (.438) | (.403) | (.383) | (.324) | ||
Distributions from Realized Capital Gains | (4.559) | (8.264) | (10.135) | (3.317) | (7.755) | (12.975) | ||
Total Distributions | (4.937) | (8.657) | (10.573) | (3.720) | (8.138) | (13.299) | ||
Net Asset Value, End of Period | $83.12 | $94.64 | $95.24 | $94.99 | $78.07 | $84.28 | ||
Total Return2 | -7.67% | 10.27% | 12.24% | 27.25% | 2.60% | -0.48% | ||
Ratios/Supplemental Data | ||||||||
Net Assets, End of Period (Millions) | $11,026 | $12,569 | $11,616 | $9,514 | $7,496 | $7,577 | ||
Ratio of Total Expenses to Average Net Assets3 | 0.31% | 0.34% | 0.32% | 0.31% | 0.33% | 0.34% | ||
Ratio of Net Investment Income to Average Net Assets | 0.52% | 0.44% | 0.43% | 0.57% | 0.58% | 0.41% | ||
Portfolio Turnover Rate | 20% | 41% | 50% | 76% | 66% | 62% |
The expense ratio and net investment income ratio for the current period have been annualized.
1 Calculated based on average shares outstanding.
2 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
3 Includes performance-based investment advisory fee increases (decreases) of 0.00%, 0.03%, 0.02%, (0.01%), (0.02%), and (0.02%).
See accompanying Notes, which are an integral part of the Financial Statements.
12
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. Each of the share classes has different eligibility and minimum purchase requirements, and is designed for different types of investors.
Market disruptions associated with the COVID-19 pandemic have had a global impact, and uncertainty exists as to the long-term implications. Such disruptions can adversely affect assets of the fund and thus fund performance.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. 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 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.
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. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin
13
Explorer Fund
requirements to secure the fund’s performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any assets pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Schedule of Investments. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities 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 gains (losses) on futures contracts.
During the six months ended April 30, 2020, the fund’s average investments in long and short futures contracts represented 2% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
4. Repurchase Agreements: The fund enters into repurchase agreements with institutional counterparties. Securities pledged as collateral to the fund under repurchase agreements are held by a custodian bank until the agreements mature, and in the absence of a default, such collateral cannot be repledged, resold, or rehypothecated. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. The fund further mitigates its counterparty risk by entering into repurchase agreements only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master repurchase agreements with its counterparties. The master repurchase agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any repurchase agreements with that counterparty, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund. Such action may be subject to legal proceedings, which may delay or limit the disposition of collateral.
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 for all open federal income tax years (October 31, 2016–2019), and for the period ended April 30, 2020, 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. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
7. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are subject to termination by the fund at any time, and are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled before the opening of the market on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the event of a default, the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the
14
Explorer Fund
Statement of Assets and Liabilities for the return of the collateral, during the period the securities are on loan. Collateral investments in Vanguard Market Liquidity Fund are subject to market appreciation or depreciation. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan. During the term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
8. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group (“Vanguard”) participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and, effective May 2020, an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes, subject to the fund’s regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility; these fees are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under either facility bear interest at a rate based upon the higher of the one-month London Interbank Offered Rate (or an acceptable alternate rate, if necessary), federal funds effective rate, or overnight bank funding rate plus an agreed-upon spread, except that borrowings under the uncommitted credit facility may bear interest based upon an alternative rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the “Order”) from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund’s investment objective and investment policies. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one business day’s notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the six months ended April 30, 2020, the fund did not utilize the credit facilities or the Interfund Lending Program.
9. 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. Premiums and discounts on debt securities are amortized and accreted, respectively, to interest income over the lives of the respective securities, except for premiums on certain callable debt securities that are amortized to the earliest call date. 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.
15
Explorer Fund
B. The investment advisory firms Wellington Management Company LLP, ClearBridge Investments, LLC, Stephens Investment Management Group, LLC, and ArrowMark Colorado Holdings, LLC, each provide investment advisory services to a portion of the fund for a fee calculated at an annual percentage rate of average net assets managed by the advisor. The basic fees of Wellington Management Company LLP and ClearBridge Investments, LLC, are subject to quarterly adjustments based on performance relative to the Russell 2500 Growth Index for the preceding three years. The basic fees of Stephens Investment Management Group, LLC, and ArrowMark Colorado Holdings, LLC, are subject to quarterly adjustments based on performance relative to the Russell 2500 Growth Index for the preceding five years.
Vanguard provides investment advisory services to a portion of the fund as described below; the fund paid Vanguard advisory fees of $628,000 for the six months ended April 30, 2020.
For the six months ended April 30, 2020, the aggregate investment advisory fee paid to all advisors represented an effective annual basic rate of 0.17% of the fund’s average net assets, before a net increase of $167,000 (0.00%) based on performance.
C. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. Vanguard does not require reimbursement in the current period for certain costs of operations (such as deferred compensation/benefits and risk/insurance costs); the fund’s liability for these costs of operations is included in Payables to Vanguard on the Statement of Assets and Liabilities, and subsequently, in May 2020, such liability was fully paid to Vanguard. All other costs of operations payable to Vanguard are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At April 30, 2020, the fund had contributed to Vanguard capital in the amount of $623,000, representing less than 0.01% of the fund’s net assets and 0.25% of Vanguard’s capital received pursuant to the FSA. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
D. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value 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). Any investments valued with significant unobservable inputs are noted on the Schedule of Investments.
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Explorer Fund
The following table summarizes the market value of the fund’s investments and derivatives as of April 30, 2020, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | Total | ||||||
($000 | ) | ($000 | ) | ($000 | ) | ($000 | ) | ||
Investments | |||||||||
Assets | |||||||||
Common Stocks | 13,593,739 | 60,341 | — | 13,654,080 | |||||
Temporary Cash Investments | 512,207 | 149,460 | — | 661,667 | |||||
Total | 14,105,946 | 209,801 | — | 14,315,747 | |||||
Derivative Financial Instruments | |||||||||
Liabilities | |||||||||
Futures Contracts1 | 5,470 | — | — | 5,470 |
1 Represents variation margin on the last day of the reporting period.
E. As of April 30, 2020, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount | ||
($000 | ) | |
Tax Cost | 12,334,043 | |
Gross Unrealized Appreciation | 3,685,302 | |
Gross Unrealized Depreciation | (1,681,518) | |
Net Unrealized Appreciation (Depreciation) | 2,003,784 |
F. During the six months ended April 30, 2020, the fund purchased $3,027,759,000 of investment securities and sold $3,600,788,000 of investment securities, other than temporary cash investments.
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Explorer Fund
G. Capital share transactions for each class of shares were:
Six Months Ended | Year Ended | |||||||
April 30, 2020 | October 31, 2019 | |||||||
Amount | Shares | Amount | Shares | |||||
($000 | ) | (000 | ) | ($000 | ) | (000 | ) | |
Investor Shares | ||||||||
Issued | 339,050 | 4,044 | 455,601 | 4,726 | ||||
Issued in Lieu of Cash Distributions | 173,422 | 1,675 | 297,042 | 3,500 | ||||
Redeemed | (547,723) | (6,035) | (684,278) | (7,051) | ||||
Net Increase (Decrease)—Investor Shares | (35,251) | (316) | 68,365 | 1,175 | ||||
Admiral Shares | ||||||||
Issued | 941,675 | 10,733 | 2,130,012 | 23,355 | ||||
Issued in Lieu of Cash Distributions | 603,113 | 6,262 | 976,574 | 12,373 | ||||
Redeemed | (1,482,305) | (17,143) | (2,243,662) | (24,896) | ||||
Net Increase (Decrease)—Admiral Shares | 62,483 | (148) | 862,924 | 10,832 |
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 or the issuer is another member of The Vanguard Group. Transactions during the period in securities of these companies were as follows:
Current Period Transactions | ||||||||||||||||
Oct. 31, | Proceeds | Realized | April 30, | |||||||||||||
2019 | from | Net | Change in | Capital Gain | 2020 | |||||||||||
Market | Purchases | Securities | Gain | Unrealized | Distributions | Market | ||||||||||
Value | at Cost | Sold | (Loss) | App. (Dep.) | Income | Received | Value | |||||||||
($000 | ) | ($000 | ) | ($000 | ) | ($000 | ) | ($000 | ) | ($000 | ) | ($000 | ) | ($000 | ) | |
BioTelemetry Inc. | NA1 | 15,036 | 778 | (547) | 13,994 | — | — | 84,740 | ||||||||
Cardtronics plc | ||||||||||||||||
Class A | 110,834 | 10,741 | 25,003 | (989) | (28,183) | — | — | 67,400 | ||||||||
Endologix Inc. | 2,587 | — | — | — | (1,589) | — | — | 998 | ||||||||
Houghton Mifflin | ||||||||||||||||
Harcourt Co. | 45,222 | 1,255 | — | — | (34,959) | — | — | 11,518 | ||||||||
Vanguard Market | ||||||||||||||||
Liquidity Fund | 786,814 | NA2 | NA2 | 41 | 137 | 3,376 | — | 512,207 | ||||||||
Vanguard Small-Cap | ||||||||||||||||
ETF | 147,939 | 270,817 | 235,774 | (5,094) | (37,761) | 1,469 | — | 140,127 | ||||||||
Total | 1,093,396 | (6,589) | (88,361) | 4,845 | — | 816,990 |
1 Not applicable—at October 31, 2019, the issuer was not an affiliated company of the fund.
2 Not applicable—purchases and sales are for temporary cash investment purposes.
I. Management has determined that no other events or transactions occurred subsequent to April 30, 2020, that would require recognition or disclosure in these financial statements.
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Trustees Approve Advisory Arrangements
The board of trustees of Vanguard Explorer Fund has renewed the fund’s investment advisory arrangements with ArrowMark Colorado Holdings, LLC (ArrowMark Partners); ClearBridge Investments, LLC (ClearBridge); Stephens Investment Management Group, LLC (SIMG); Wellington Management Company LLP (Wellington Management); and The Vanguard Group, Inc. (Vanguard), through its Quantitative Equity Group. The board determined that renewing the fund’s advisory arrangements 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. This evaluation included information provided to the board by Vanguard’s Portfolio Review Department, which is responsible for fund and advisor oversight and product management. The Portfolio Review Department met regularly with the advisors and made monthly presentations to the board during the fiscal year that directed the board’s focus to relevant information and topics.
The board, or an investment committee made up of board members, also received information throughout the year during advisor presentations. For each advisor presentation, the board was provided with letters and reports that included information about, among other things, the advisory firm and the advisor’s assessment of the investment environment, portfolio performance, and portfolio characteristics.
In addition, the board received monthly reports, which included a Market and Economic Report, a Fund Dashboard Monthly Summary, and a Fund Performance Report.
Prior to their meeting, the trustees were provided with a memo and materials that summarized the information they received over the course of the year. They also 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 reviewed the quality of the fund’s investment management services over both the short and long term, and took into account the organizational depth and stability of each advisor. The board considered the following:
ArrowMark Partners. Founded in 2007, ArrowMark Partners offers a wide range of strategies, including equities, fixed income, and structured products, to institutional, high- net-worth, and retail investors. Using in-depth, fundamental research, the investment team seeks to identify companies that it believes can control their own economic destiny. These are companies with strong competitive advantages, high barriers to entry, large potential markets for their products, and high-quality businesses focused on future growth. In evaluating companies and constructing the portfolio, ArrowMark Partners places significant emphasis on understanding risk in the belief that avoiding large mistakes is the key to success in small-capitalization investing. ArrowMark Partners has managed a portion of the fund since 2014.
ClearBridge. ClearBridge, headquartered in New York, New York, is a global investment management firm rebranded in 2005, with a legacy dating back to 1962. The ClearBridge small/ mid-cap growth team is made up of seven members, with four portfolio managers and three analysts who collaborate closely across four strategies. The advisor seeks to invest in quality growth companies that have large, exploitable opportunities. There is a focus on companies that are category leaders (or have the ability to become market leaders), generate substantial free cash
19
flow, and display capital allocation discipline aimed at fueling long-term sustainable growth. The research process is disciplined and collaborative, with each team member executing on a shared investment philosophy and process. ClearBridge has managed a portion of the fund since 2017.
SIMG. Founded in 2005, SIMG is a subsidiary of Stephens Investments Holdings LLC, a privately held and family-owned company. SIMG specializes in equity investment management focused on small- and mid-cap growth companies. The team employs a disciplined, bottom-up investment selection process that combines rigorous fundamental analysis with quantitative screening, seeking to identify companies that will exhibit potential for superior earnings growth. There are two different types of stocks in which the team invests: core growth and earnings catalyst. The characteristic SIMG seeks for core growth stocks is consistent and predictable earnings growth that is generated by unique, defensible business models. For earnings catalyst stocks, SIMG looks for inflection points such as large earnings surprises or positive revisions to earnings estimates or guidance. The team generally requires all stocks to be profitable or on the cusp of profitability and exhibiting at least 12% earnings growth. SIMG has managed a portion of the fund since 2013.
Wellington Management. Founded in 1928, Wellington Management is among the nation’s oldest and most respected institutional investment managers. 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 with key success factors such as top market share, substantial insider ownership, and fully funded business plans. The investment team has the support of Wellington Management’s global industry analysts in conducting its research-intensive approach. Wellington Management has advised the fund since its inception in 1967.
Vanguard. Vanguard has been managing investments for more than four 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.
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 each advisor’s subportfolio, including any periods of outperformance or underperformance compared with a relevant benchmark index and peer group. The board concluded that the performance was such that each advisory arrangement should continue.
Cost
The board concluded that the fund’s expense ratio was well below the average expense ratio charged by funds in its peer group and that the fund’s advisory expense rates were also well below the peer-group average.
The board did not consider the profitability of ArrowMark Partners, ClearBridge, SIMG, or Wellington Management 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 structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees.
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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 ArrowMark Partners, ClearBridge, SIMG, and Wellington Management. The breakpoints reduce the effective rate of the fees as the fund’s assets managed by each advisor increase.
The board also concluded that the fund’s 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.
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Liquidity Risk Management
Vanguard funds (except for the money market funds) have adopted and implemented a written liquidity risk management program (the “Program”) as required by Rule 22e-4 under the Investment Company Act of 1940. Rule 22e-4 requires that each fund adopt a program that is reasonably designed to assess and manage the fund’s liquidity risk, which is the risk that the fund could not meet redemption requests without significant dilution of remaining investors’ interests in the fund.
Assessment and management of a fund’s liquidity risk under the Program take into consideration certain factors, such as the fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions, its short- and long-term cash-flow projections during both normal and reasonably foreseeable stressed conditions, and its cash and cash-equivalent holdings and access to other funding sources. As required by the rule, the Program includes policies and procedures for classification of fund portfolio holdings in four liquidity categories, maintaining certain levels of highly liquid investments, and limiting holdings of illiquid investments.
The board of trustees of Vanguard Explorer Fund approved the appointment of liquidity risk management program administrators responsible for administering Vanguard Explorer Fund’s Program and for carrying out the specific responsibilities set forth in the Program, including reporting to the board on at least an annual basis regarding the Program’s operation, its adequacy, and the effectiveness of its implementation for the past year (the “Program Administrator Report”). The board has reviewed the Program Administrator Report covering the period from December 1, 2018, through December 31, 2019 (the “Review Period”). The Program Administrator Report stated that during the Review Period the Program operated and was implemented effectively to manage the fund’s liquidity risk.
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You can review information about your fund on the SEC’s website, and you can receive copies of this information, for a fee, by sending a request via email addressed to publicinfo@sec.gov. |
© 2020 The Vanguard Group, Inc. | |
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Q242 062020 |
Item 2: Code of Ethics.
Not applicable.
Item 3: Audit Committee Financial Expert.
Not applicable.
Item 4: Principal Accountant Fees and Services.
(a) Audit Fees.
Not applicable.
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Investments.
Vanguard® ExplorerTM Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
Common Stocks (96.9%) | ||||||
Communication Services (3.3%) | ||||||
* | Live Nation Entertainment Inc. | 1,477,914 | 66,314 | |||
New York Times Co. Class A | 2,018,471 | 65,641 | ||||
Cinemark Holdings Inc. | 4,190,366 | 59,838 | ||||
* | Bandwidth Inc. Class A | 605,358 | 49,373 | |||
* | Pinterest Inc. Class A | 2,216,156 | 45,786 | |||
* | IAC/interactivecorp | 170,651 | 38,137 | |||
* | Take-Two Interactive Software Inc. | 302,867 | 36,662 | |||
* | Electronic Arts Inc. | 214,313 | 24,487 | |||
Roku Inc. | 115,987 | 14,061 | ||||
* | Glu Mobile Inc. | 1,699,295 | 13,255 | |||
* | Boingo Wireless Inc. | 812,401 | 11,325 | |||
* | Cargurus Inc. | 445,389 | 10,191 | |||
* | EverQuote Inc. Class A | 229,676 | 8,950 | |||
* | Zynga Inc. | 1,024,624 | 7,726 | |||
*,^ | Match Group Inc. | 64,957 | 4,999 | |||
National CineMedia Inc. | 1,420,998 | 4,689 | ||||
* | TechTarget Inc. | 196,482 | 4,582 | |||
* | Liberty TripAdvisor Holdings Inc. Class A | 599,574 | 1,409 | |||
Cardlytics Inc. | 17,000 | 764 | ||||
*,^ | Gogo Inc. | 329,834 | 538 | |||
* | MSG Networks Inc. | 37,795 | 449 | |||
469,176 | ||||||
Consumer Discretionary (12.4%) | ||||||
* | Burlington Stores Inc. | 702,074 | 128,262 | |||
* | Etsy Inc. | 1,618,489 | 104,991 | |||
* | Skechers U.S.A. Inc. Class A | 3,507,510 | 98,842 | |||
* | MercadoLibre Inc. | 149,406 | 87,180 | |||
Monro Inc. | 1,394,704 | 77,392 | ||||
Carter's Inc. | 906,329 | 70,875 | ||||
Domino's Pizza Inc. | 173,604 | 62,832 | ||||
Acushnet Holdings Corp. | 2,087,945 | 57,210 | ||||
* | Deckers Outdoor Corp. | 370,936 | 55,180 | |||
* | Chewy Inc. | 1,267,490 | 54,806 | |||
Wingstop Inc. | 458,607 | 53,781 | ||||
*,^ | Carvana Co. Class A | 668,000 | 53,513 | |||
Hanesbrands Inc. | 4,901,419 | 48,720 | ||||
* | Five Below Inc. | 539,500 | 48,641 | |||
* | Skyline Champion Corp. | 2,308,259 | 45,496 | |||
*,^ | Ollie's Bargain Outlet Holdings Inc. | 659,178 | 44,765 | |||
La-Z-Boy Inc. | 1,868,338 | 43,813 | ||||
^ | Levi Strauss & Co. Class A | 3,344,275 | 43,108 | |||
* | Sally Beauty Holdings Inc. | 4,417,255 | 42,892 | |||
* | Under Armour Inc. Class C | 4,308,786 | 39,942 | |||
* | frontdoor Inc. | 870,899 | 33,712 | |||
Core-Mark Holding Co. Inc. | 1,136,949 | 32,676 | ||||
Polaris Inc. | 399,821 | 28,359 | ||||
Aaron's Inc. | 705,822 | 22,523 | ||||
* | Dollar Tree Inc. | 280,998 | 22,387 | |||
* | Floor & Decor Holdings Inc. Class A | 480,101 | 20,356 | |||
Shutterstock Inc. | 531,126 | 20,183 | ||||
* | Planet Fitness Inc. Class A | 306,691 | 18,503 | |||
* | Bright Horizons Family Solutions Inc. | 155,595 | 18,119 | |||
* | TopBuild Corp. | 169,479 | 15,794 | |||
* | NVR Inc. | 4,747 | 14,716 | |||
*,^ | Farfetch Ltd. Class A | 999,579 | 13,234 | |||
* | Fox Factory Holding Corp. | 257,252 | 13,122 | |||
* | Grand Canyon Education Inc. | 150,701 | 12,963 | |||
Papa John's International Inc. | 169,747 | 12,208 | ||||
* | Lululemon Athletica Inc. | 52,507 | 11,734 | |||
*,1 | Houghton Mifflin Harcourt Co. | 7,198,968 | 11,518 | |||
Rent-A-Center Inc. | 577,217 | 11,490 |
1
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
Lithia Motors Inc. Class A | 100,370 | 11,097 | ||||
Chegg Inc. | 249,448 | 10,664 | ||||
* | Rh | 72,916 | 10,484 | |||
H&R Block Inc. | 608,416 | 10,130 | ||||
PulteGroup Inc. | 342,132 | 9,672 | ||||
Service Corp. International | 251,440 | 9,238 | ||||
* | Murphy USA Inc. | 86,421 | 9,230 | |||
Texas Roadhouse Inc. | 178,936 | 8,426 | ||||
Ulta Beauty Inc. | 36,637 | 7,984 | ||||
* | Grubhub Inc. | 126,208 | 6,031 | |||
* | SeaWorld Entertainment Inc. | 307,668 | 4,520 | |||
Kontoor Brands Inc. | 208,703 | 4,051 | ||||
* | Taylor Morrison Home Corp. Class A | 264,749 | 3,852 | |||
* | Helen of Troy Ltd. | 22,924 | 3,766 | |||
* | Boot Barn Holdings Inc. | 203,824 | 3,763 | |||
* | Asbury Automotive Group Inc. | 54,252 | 3,662 | |||
* | Zumiez Inc. | 170,204 | 3,598 | |||
KB Home | 131,324 | 3,446 | ||||
Lear Corp. | 34,506 | 3,370 | ||||
* | Everi Holdings Inc. | 638,032 | 3,158 | |||
* | Rubicon Project Inc. | 409,054 | 2,933 | |||
Gentex Corp. | 108,497 | 2,630 | ||||
Dine Brands Global Inc. | 47,752 | 2,120 | ||||
PetMed Express Inc. | 51,391 | 2,034 | ||||
* | Perdoceo Education Corp. | 152,241 | 1,979 | |||
Pool Corp. | 8,217 | 1,739 | ||||
* | Mattel Inc. | 190,106 | 1,658 | |||
*,^ | YETI Holdings Inc. | 43,829 | 1,210 | |||
* | Sleep Number Corp. | 39,959 | 1,195 | |||
Strategic Education Inc. | 7,500 | 1,195 | ||||
* | 1-800-Flowers.com Inc. Class A | 58,794 | 1,128 | |||
* | Funko Inc. Class A | 118,211 | 506 | |||
1,746,307 | ||||||
Consumer Staples (2.4%) | ||||||
* | Nomad Foods Ltd. | 2,407,962 | 49,628 | |||
Sanderson Farms Inc. | 321,439 | 43,761 | ||||
Casey's General Stores Inc. | 283,954 | 42,993 | ||||
Nu Skin Enterprises Inc. Class A | 1,412,345 | 41,255 | ||||
* | BJ's Wholesale Club Holdings Inc. | 1,532,800 | 40,328 | |||
* | Performance Food Group Co. | 1,336,035 | 39,213 | |||
* | Monster Beverage Corp. | 356,465 | 22,033 | |||
Calavo Growers Inc. | 362,429 | 21,021 | ||||
Coca-Cola Consolidated Inc. | 57,452 | 13,528 | ||||
^ | B&G Foods Inc. | 516,168 | 10,024 | |||
* | Pilgrim's Pride Corp. | 181,062 | 3,983 | |||
John B Sanfilippo & Son Inc. | 40,756 | 3,347 | ||||
Medifast Inc. | 27,158 | 2,061 | ||||
Lamb Weston Holdings Inc. | 32,255 | 1,979 | ||||
Reynolds Consumer Products Inc. | 59,048 | 1,915 | ||||
* | USANA Health Sciences Inc. | 17,590 | 1,569 | |||
J&J Snack Foods Corp. | 11,112 | 1,412 | ||||
* | elf Beauty Inc. | 99,209 | 1,297 | |||
* | Herbalife Nutrition Ltd. | 14,509 | 542 | |||
341,889 | ||||||
Energy (0.7%) | ||||||
Delek US Holdings Inc. | 1,877,184 | 43,832 | ||||
Cabot Oil & Gas Corp. | 844,593 | 18,260 | ||||
Viper Energy Partners LP | 1,652,764 | 15,337 | ||||
* | Apergy Corp. | 1,001,542 | 9,224 | |||
Parsley Energy Inc. Class A | 550,124 | 5,199 | ||||
CVR Energy Inc. | 109,507 | 2,612 | ||||
* | CONSOL Energy Inc. | 91,268 | 693 |
2
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
* | Renewable Energy Group Inc. | 26,753 | 664 | |||
95,821 | ||||||
Financials (5.3%) | ||||||
Tradeweb Markets Inc. Class A | 1,264,125 | 65,937 | ||||
* | SVB Financial Group | 334,017 | 64,522 | |||
Voya Financial Inc. | 1,377,426 | 62,218 | ||||
Assurant Inc. | 562,139 | 59,722 | ||||
MarketAxess Holdings Inc. | 126,814 | 57,702 | ||||
Synovus Financial Corp. | 2,315,875 | 48,657 | ||||
Nasdaq Inc. | 425,249 | 46,637 | ||||
Assured Guaranty Ltd. | 1,528,893 | 45,454 | ||||
Sterling Bancorp | 3,534,220 | 43,577 | ||||
LPL Financial Holdings Inc. | 566,135 | 34,093 | ||||
FirstCash Inc. | 438,548 | 31,505 | ||||
* | PRA Group Inc. | 883,725 | 24,514 | |||
* | Palomar Holdings Inc. Class A | 406,588 | 23,785 | |||
* | Encore Capital Group Inc. | 656,239 | 17,049 | |||
Primerica Inc. | 156,696 | 16,282 | ||||
WisdomTree Investments Inc. | 4,979,819 | 16,135 | ||||
MSCI Inc. Class A | 44,296 | 14,485 | ||||
Bank OZK | 524,529 | 11,865 | ||||
Walker & Dunlop Inc. | 228,300 | 8,774 | ||||
*,^ | Benefytt Technologies Inc. Class A | 273,068 | 7,135 | |||
* | Enova International Inc. | 384,011 | 6,160 | |||
Lazard Ltd. Class A | 167,957 | 4,619 | ||||
Erie Indemnity Co. Class A | 22,095 | 3,934 | ||||
Universal Insurance Holdings Inc. | 184,462 | 3,363 | ||||
Bank of NT Butterfield & Son Ltd. | 138,201 | 3,042 | ||||
Evercore Inc. Class A | 48,923 | 2,524 | ||||
First Financial Bankshares Inc. | 90,391 | 2,517 | ||||
OneMain Holdings Inc. | 90,174 | 2,183 | ||||
PennyMac Financial Services Inc. | 71,425 | 2,155 | ||||
CIT Group Inc. | 102,042 | 1,937 | ||||
Artisan Partners Asset Management Inc. Class A | 60,138 | 1,770 | ||||
Essent Group Ltd. | 55,912 | 1,527 | ||||
* | NMI Holdings Inc. Class A | 100,371 | 1,357 | |||
Alleghany Corp. | 2,225 | 1,187 | ||||
Cohen & Steers Inc. | 17,700 | 1,022 | ||||
Virtus Investment Partners Inc. | 11,539 | 938 | ||||
740,283 | ||||||
Health Care (23.3%) | ||||||
* | ICON plc | 983,125 | 157,762 | |||
* | Insulet Corp. | 761,307 | 152,048 | |||
* | Penumbra Inc. | 490,853 | 87,038 | |||
*,1 | BioTelemetry Inc. | 1,814,169 | 84,740 | |||
* | Haemonetics Corp. | 718,826 | 81,788 | |||
* | DexCom Inc. | 237,584 | 79,638 | |||
* | Mettler-Toledo International Inc. | 106,955 | 77,001 | |||
Hill-Rom Holdings Inc. | 663,543 | 74,642 | ||||
Encompass Health Corp. | 1,087,758 | 72,064 | ||||
* | Molina Healthcare Inc. | 429,361 | 70,402 | |||
* | ABIOMED Inc. | 357,824 | 68,434 | |||
STERIS plc | 478,311 | 68,159 | ||||
* | LHC Group Inc. | 513,863 | 66,797 | |||
* | Amedisys Inc. | 354,483 | 65,282 | |||
* | Globus Medical Inc. | 1,367,667 | 64,909 | |||
* | Omnicell Inc. | 855,675 | 62,379 | |||
* | Hologic Inc. | 1,016,268 | 50,915 | |||
* | Acadia Healthcare Co. Inc. | 2,101,997 | 50,469 | |||
* | BioMarin Pharmaceutical Inc. | 537,430 | 49,454 | |||
* | Catalent Inc. | 700,899 | 48,467 | |||
* | Integra LifeSciences Holdings Corp. | 940,878 | 48,032 | |||
* | Syneos Health Inc. | 821,675 | 45,841 |
3
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
* | IDEXX Laboratories Inc. | 164,862 | 45,766 | |||
* | Exact Sciences Corp. | 540,342 | 42,676 | |||
* | Repligen Corp. | 365,262 | 42,425 | |||
* | Merit Medical Systems Inc. | 1,034,736 | 42,238 | |||
* | PRA Health Sciences Inc. | 424,921 | 41,005 | |||
* | Biohaven Pharmaceutical Holding Co. Ltd. | 858,424 | 40,432 | |||
* | Kodiak Sciences Inc. | 712,309 | 38,856 | |||
* | Quidel Corp. | 278,054 | 38,650 | |||
* | HealthEquity Inc. | 634,416 | 35,699 | |||
* | Y-mAbs Therapeutics Inc. | 1,047,600 | 35,178 | |||
Cooper Cos. Inc. | 118,646 | 34,016 | ||||
* | ImmunoGen Inc. | 8,321,773 | 33,953 | |||
*,^ | Ligand Pharmaceuticals Inc. | 328,969 | 32,426 | |||
* | Theravance Biopharma Inc. | 1,108,584 | 32,326 | |||
ResMed Inc. | 206,734 | 32,110 | ||||
* | MEDNAX Inc. | 2,096,383 | 30,440 | |||
* | Apellis Pharmaceuticals Inc. | 862,554 | 29,560 | |||
* | Arena Pharmaceuticals Inc. | 584,300 | 28,613 | |||
* | Dicerna Pharmaceuticals Inc. | 1,442,000 | 28,407 | |||
* | Avanos Medical Inc. | 850,800 | 26,417 | |||
* | Pacira BioSciences Inc. | 638,128 | 26,348 | |||
* | iRhythm Technologies Inc. | 249,269 | 26,333 | |||
* | Deciphera Pharmaceuticals Inc. | 442,847 | 25,676 | |||
* | Ultragenyx Pharmaceutical Inc. | 420,290 | 25,398 | |||
* | PPD Inc. | 1,050,140 | 25,098 | |||
* | Ascendis Pharma A/S ADR | 179,480 | 24,361 | |||
Cerner Corp. | 347,538 | 24,116 | ||||
* | HMS Holdings Corp. | 828,844 | 23,767 | |||
* | Tandem Diabetes Care Inc. | 295,840 | 23,602 | |||
* | NuVasive Inc. | 385,592 | 23,475 | |||
* | Tricida Inc. | 732,055 | 22,145 | |||
* | Immunomedics Inc. | 723,950 | 21,994 | |||
Chemed Corp. | 48,577 | 20,236 | ||||
* | Illumina Inc. | 62,052 | 19,796 | |||
* | CRISPR Therapeutics AG | 401,124 | 19,735 | |||
* | Novocure Ltd. | 289,409 | 19,043 | |||
* | Neogen Corp. | 291,020 | 18,215 | |||
* | Exelixis Inc. | 685,956 | 16,940 | |||
* | Neurocrine Biosciences Inc. | 172,225 | 16,902 | |||
* | Agios Pharmaceuticals Inc. | 407,569 | 16,767 | |||
Bio-Techne Corp. | 73,744 | 16,592 | ||||
Bruker Corp. | 414,817 | 16,311 | ||||
* | Veeva Systems Inc. Class A | 85,448 | 16,303 | |||
* | Revance Therapeutics Inc. | 873,341 | 16,166 | |||
* | Intuitive Surgical Inc. | 28,504 | 14,562 | |||
* | Charles River Laboratories International Inc. | 98,688 | 14,277 | |||
* | Heron Therapeutics Inc. | 1,000,226 | 14,263 | |||
* | Integer Holdings Corp. | 190,803 | 14,207 | |||
* | Medpace Holdings Inc. | 177,846 | 14,203 | |||
* | Axogen Inc. | 1,378,442 | 13,440 | |||
* | STAAR Surgical Co. | 346,726 | 13,287 | |||
* | Align Technology Inc. | 57,399 | 12,332 | |||
* | Nevro Corp. | 104,658 | 12,312 | |||
* | Iovance Biotherapeutics Inc. | 378,168 | 12,158 | |||
* | Avantor Inc. | 720,410 | 12,110 | |||
* | Ironwood Pharmaceuticals Inc. Class A | 1,191,913 | 11,919 | |||
*,^ | Viking Therapeutics Inc. | 2,029,824 | 11,692 | |||
* | Masimo Corp. | 54,158 | 11,585 | |||
*,^ | Esperion Therapeutics Inc. | 286,487 | 11,345 | |||
* | Horizon Therapeutics plc | 296,804 | 10,697 | |||
* | Arrowhead Pharmaceuticals Inc. | 306,613 | 10,557 | |||
* | Ionis Pharmaceuticals Inc. | 185,258 | 10,287 | |||
* | Halozyme Therapeutics Inc. | 432,814 | 9,805 | |||
* | Puma Biotechnology Inc. | 921,370 | 9,260 |
4
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
* | Natera Inc. | 242,674 | 8,989 | |||
* | Teladoc Health Inc. | 53,998 | 8,888 | |||
* | Cytokinetics Inc. | 575,993 | 8,703 | |||
*,^ | DBV Technologies SA ADR | 1,396,307 | 8,685 | |||
* | Enanta Pharmaceuticals Inc. | 180,559 | 8,373 | |||
PerkinElmer Inc. | 90,223 | 8,168 | ||||
* | Qiagen NV | 184,254 | 7,682 | |||
Alnylam Pharmaceuticals Inc. | 57,321 | 7,549 | ||||
*,^ | Novavax Inc. | 376,523 | 6,826 | |||
* | Vanda Pharmaceuticals Inc. | 571,818 | 6,576 | |||
* | Veracyte Inc. | 232,013 | 6,257 | |||
* | Tenet Healthcare Corp. | 303,513 | 6,125 | |||
LeMaitre Vascular Inc. | 183,815 | 5,237 | ||||
Acceleron Pharma Inc. | 57,714 | 5,225 | ||||
* | Alkermes plc | 327,679 | 4,493 | |||
* | Voyager Therapeutics Inc. | 403,822 | 4,365 | |||
* | Change Healthcare Inc. | 366,123 | 4,262 | |||
* | ACADIA Pharmaceuticals Inc. | 87,601 | 4,232 | |||
Schrodinger Inc. | 89,289 | 4,143 | ||||
* | Global Blood Therapeutics Inc. | 53,095 | 4,063 | |||
* | MacroGenics Inc. | 533,955 | 3,844 | |||
* | Seattle Genetics Inc. | 27,100 | 3,719 | |||
*,^ | Eidos Therapeutics Inc. | 72,560 | 3,370 | |||
* | BioCryst Pharmaceuticals Inc. | 854,416 | 3,341 | |||
US Physical Therapy Inc. | 43,797 | 3,307 | ||||
* | Select Medical Holdings Corp. | 184,817 | 3,155 | |||
Ensign Group Inc. | 80,578 | 3,014 | ||||
West Pharmaceutical Services Inc. | 13,983 | 2,646 | ||||
* | Inovalon Holdings Inc. Class A | 150,641 | 2,636 | |||
* | Pennant Group Inc. | 132,631 | 2,625 | |||
* | Endo International plc | 543,546 | 2,500 | |||
Mesa Laboratories Inc. | 9,981 | 2,375 | ||||
* | Spectrum Pharmaceuticals Inc. | 773,904 | 2,244 | |||
Luminex Corp. | 61,241 | 2,208 | ||||
*,^ | Zynerba Pharmaceuticals Inc. | 545,001 | 2,109 | |||
* | ICU Medical Inc. | 9,554 | 2,095 | |||
* | Lantheus Holdings Inc. | 160,399 | 2,093 | |||
* | Precision BioSciences Inc. | 269,349 | 1,853 | |||
* | Silk Road Medical Inc. | 43,419 | 1,818 | |||
MyoKardia Inc. | 27,886 | 1,752 | ||||
Inspire Medical Systems Inc. | 24,398 | 1,748 | ||||
* | CytomX Therapeutics Inc. | 167,699 | 1,731 | |||
* | Jazz Pharmaceuticals plc | 12,086 | 1,333 | |||
* | Amphastar Pharmaceuticals Inc. | 77,004 | 1,305 | |||
* | CareDx Inc. | 51,359 | 1,304 | |||
* | Shockwave Medical Inc. | 30,236 | 1,213 | |||
* | Vericel Corp. | 82,301 | 1,193 | |||
* | Fluidigm Corp. | 508,836 | 1,140 | |||
* | Allscripts Healthcare Solutions Inc. | 167,460 | 1,089 | |||
* | Myriad Genetics Inc. | 69,670 | 1,077 | |||
*,^,1 | Endologix Inc. | 1,055,952 | 998 | |||
* | FibroGen Inc. | 25,369 | 936 | |||
* | NanoString Technologies Inc. | 27,258 | 866 | |||
* | Assertio Therapeutics Inc. | 879,479 | 770 | |||
* | Acorda Therapeutics Inc. | 775,332 | 746 | |||
* | Cyclerion Therapeutics Inc. | 73,838 | 286 | |||
3,286,351 | ||||||
Industrials (17.6%) | ||||||
* | TriNet Group Inc. | 2,639,728 | 129,267 | |||
* | Trex Co. Inc. | 1,102,853 | 105,014 | |||
* | Kirby Corp. | 1,600,203 | 85,483 | |||
* | Clean Harbors Inc. | 1,470,719 | 78,581 | |||
* | Copart Inc. | 958,250 | 76,765 | |||
* | Sensata Technologies Holding plc | 2,000,289 | 72,771 |
5
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
Advanced Drainage Systems Inc. | 1,772,821 | 71,870 | ||||
Kennametal Inc. | 2,784,270 | 71,305 | ||||
John Bean Technologies Corp. | 921,844 | 70,742 | ||||
Rexnord Corp. | 2,497,365 | 68,103 | ||||
BWX Technologies Inc. | 1,202,908 | 63,826 | ||||
Fortune Brands Home & Security Inc. | 1,204,582 | 58,061 | ||||
* | SPX FLOW Inc. | 1,781,417 | 58,021 | |||
Ingersoll Rand Inc. | 1,890,008 | 54,961 | ||||
EnerSys | 890,982 | 52,024 | ||||
IDEX Corp. | 336,860 | 51,752 | ||||
ABM Industries Inc. | 1,427,954 | 49,250 | ||||
Ritchie Bros Auctioneers Inc. | 1,091,772 | 47,044 | ||||
Woodward Inc. | 756,787 | 45,831 | ||||
TransUnion | 574,622 | 45,274 | ||||
GATX Corp. | 738,559 | 43,797 | ||||
* | AerCap Holdings NV | 1,546,632 | 43,491 | |||
Enerpac Tool Group Corp. Class A | 2,528,883 | 43,143 | ||||
* | Teledyne Technologies Inc. | 117,530 | 38,276 | |||
Watts Water Technologies Inc. Class A | 461,453 | 38,024 | ||||
Verisk Analytics Inc. Class A | 246,782 | 37,716 | ||||
* | United Rentals Inc. | 282,580 | 36,312 | |||
* | Mercury Systems Inc. | 368,824 | 32,884 | |||
* | Masonite International Corp. | 549,950 | 32,491 | |||
* | Chart Industries Inc. | 893,142 | 31,903 | |||
* | RBC Bearings Inc. | 242,081 | 30,667 | |||
* | XPO Logistics Inc. | 456,795 | 30,487 | |||
Tennant Co. | 485,897 | 28,751 | ||||
* | Kratos Defense & Security Solutions Inc. | 1,874,062 | 28,148 | |||
* | SiteOne Landscape Supply Inc. | 310,876 | 27,553 | |||
* | Proto Labs Inc. | 270,381 | 27,468 | |||
* | Middleby Corp. | 459,900 | 25,584 | |||
* | CoStar Group Inc. | 38,077 | 24,684 | |||
* | Axon Enterprise Inc. | 329,332 | 23,946 | |||
HEICO Corp. Class A | 280,089 | 20,259 | ||||
*,^ | Cimpress plc | 265,699 | 19,340 | |||
Rockwell Automation Inc. | 97,939 | 18,557 | ||||
IHS Markit Ltd. | 268,671 | 18,082 | ||||
* | Kornit Digital Ltd. | 533,339 | 17,694 | |||
Heartland Express Inc. | 902,959 | 17,689 | ||||
Matson Inc. | 562,777 | 17,018 | ||||
CH Robinson Worldwide Inc. | 234,515 | 16,627 | ||||
Forward Air Corp. | 309,727 | 15,982 | ||||
Armstrong World Industries Inc. | 194,194 | 14,968 | ||||
* | Generac Holdings Inc. | 148,285 | 14,449 | |||
Landstar System Inc. | 137,445 | 14,199 | ||||
* | Aerojet Rocketdyne Holdings Inc. | 327,478 | 13,472 | |||
JB Hunt Transport Services Inc. | 129,074 | 13,052 | ||||
EMCOR Group Inc. | 205,092 | 13,030 | ||||
Huntington Ingalls Industries Inc. | 67,892 | 12,995 | ||||
Rush Enterprises Inc. Class A | 307,836 | 11,544 | ||||
Albany International Corp. Class A | 211,229 | 10,802 | ||||
* | Atkore International Group Inc. | 440,377 | 10,719 | |||
Allison Transmission Holdings Inc. | 293,787 | 10,676 | ||||
Tetra Tech Inc. | 135,197 | 10,178 | ||||
Allegion plc | 98,868 | 9,940 | ||||
Korn Ferry | 339,854 | 9,798 | ||||
Robert Half International Inc. | 206,286 | 9,751 | ||||
* | Builders FirstSource Inc. | 523,720 | 9,610 | |||
Acuity Brands Inc. | 106,374 | 9,211 | ||||
* | HD Supply Holdings Inc. | 295,554 | 8,772 | |||
* | MasTec Inc. | 240,252 | 8,625 | |||
* | MRC Global Inc. | 1,538,970 | 8,249 | |||
* | GMS Inc. | 447,299 | 8,221 | |||
Simpson Manufacturing Co. Inc. | 102,987 | 7,425 |
6
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
Terex Corp. | 470,031 | 7,140 | ||||
* | AeroVironment Inc. | 112,165 | 6,759 | |||
MSA Safety Inc. | 57,009 | 6,415 | ||||
Alaska Air Group Inc. | 171,547 | 5,579 | ||||
Nordson Corp. | 33,483 | 5,388 | ||||
Universal Forest Products Inc. | 121,801 | 5,008 | ||||
* | FTI Consulting Inc. | 36,626 | 4,665 | |||
Exponent Inc. | 65,766 | 4,625 | ||||
* | American Woodmark Corp. | 86,240 | 4,434 | |||
Spirit AeroSystems Holdings Inc. Class A | 195,590 | 4,334 | ||||
Hubbell Inc. Class B | 32,758 | 4,076 | ||||
* | TrueBlue Inc. | 260,589 | 4,047 | |||
Kimball International Inc. Class B | 309,189 | 3,794 | ||||
Barrett Business Services Inc. | 77,419 | 3,787 | ||||
* | Herc Holdings Inc. | 102,756 | 2,901 | |||
* | Meritor Inc. | 130,302 | 2,671 | |||
Covanta Holding Corp. | 288,394 | 2,244 | ||||
* | Foundation Building Materials Inc. | 184,584 | 2,160 | |||
Herman Miller Inc. | 89,474 | 2,017 | ||||
Steelcase Inc. Class A | 176,914 | 1,937 | ||||
Sunrun Inc. | 134,260 | 1,884 | ||||
Triumph Group Inc. | 225,259 | 1,586 | ||||
HEICO Corp. | 17,720 | 1,552 | ||||
Hillenbrand Inc. | 71,654 | 1,501 | ||||
CoreLogic Inc. | 33,808 | 1,299 | ||||
Kaman Corp. | 30,935 | 1,199 | ||||
* | SPX Corp. | 14,152 | 540 | |||
2,475,746 | ||||||
Information Technology (25.3%) | ||||||
* | DocuSign Inc. Class A | 1,348,109 | 141,214 | |||
* | Five9 Inc. | 1,465,735 | 135,830 | |||
* | Fortinet Inc. | 984,070 | 106,024 | |||
* | HubSpot Inc. | 556,396 | 93,825 | |||
* | SVMK Inc. | 5,820,748 | 91,386 | |||
Power Integrations Inc. | 846,870 | 86,677 | ||||
* | Wix.com Ltd. | 585,375 | 76,573 | |||
*,1 | Cardtronics plc Class A | 2,943,250 | 67,400 | |||
* | Mimecast Ltd. | 1,613,450 | 65,990 | |||
* | Slack Technologies Inc. Class A | 2,467,169 | 65,849 | |||
* | Tower Semiconductor Ltd. | 3,352,578 | 64,487 | |||
* | GoDaddy Inc. Class A | 917,192 | 63,681 | |||
* | Ciena Corp. | 1,361,931 | 62,989 | |||
* | Inphi Corp. | 649,220 | 62,676 | |||
* | Proofpoint Inc. | 510,162 | 62,102 | |||
Entegris Inc. | 1,135,174 | 61,560 | ||||
* | Cornerstone OnDemand Inc. | 1,819,786 | 61,072 | |||
J2 Global Inc. | 732,311 | 59,054 | ||||
* | New Relic Inc. | 1,098,204 | 58,963 | |||
Science Applications International Corp. | 710,885 | 58,051 | ||||
* | First Solar Inc. | 1,315,196 | 57,882 | |||
* | Cadence Design Systems Inc. | 703,220 | 57,052 | |||
Teradyne Inc. | 851,472 | 53,251 | ||||
* | ON Semiconductor Corp. | 3,300,796 | 52,961 | |||
MKS Instruments Inc. | 521,340 | 52,254 | ||||
Monolithic Power Systems Inc. | 258,940 | 51,765 | ||||
LogMeIn Inc. | 568,714 | 48,602 | ||||
* | Arrow Electronics Inc. | 746,484 | 46,969 | |||
* | Manhattan Associates Inc. | 652,287 | 46,273 | |||
* | SolarWinds Corp. | 2,669,240 | 45,324 | |||
Jack Henry & Associates Inc. | 276,934 | 45,293 | ||||
* | RingCentral Inc. Class A | 197,344 | 45,099 | |||
* | Tyler Technologies Inc. | 132,018 | 42,337 | |||
MAXIMUS Inc. | 599,250 | 40,341 | ||||
* | RealPage Inc. | 612,267 | 39,485 |
7
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
* | Trade Desk Inc. Class A | 130,102 | 38,065 | |||
* | Cloudera Inc. | 4,556,885 | 37,731 | |||
* | IPG Photonics Corp. | 287,932 | 37,238 | |||
* | Pluralsight Inc. Class A | 2,185,992 | 35,938 | |||
*,^ | 2U Inc. | 1,493,464 | 35,470 | |||
*,^ | SunPower Corp. | 4,632,827 | 34,051 | |||
* | Envestnet Inc. | 527,256 | 32,964 | |||
* | Semtech Corp. | 674,784 | 30,527 | |||
Microchip Technology Inc. | 345,948 | 30,350 | ||||
* | Paycom Software Inc. | 113,711 | 29,681 | |||
Cognex Corp. | 489,283 | 27,028 | ||||
* | Fair Isaac Corp. | 74,116 | 26,158 | |||
Belden Inc. | 754,159 | 25,785 | ||||
Booz Allen Hamilton Holding Corp. Class A | 338,869 | 24,887 | ||||
* | FireEye Inc. | 2,107,124 | 24,253 | |||
* | Trimble Inc. | 696,894 | 24,133 | |||
* | Q2 Holdings Inc. | 301,400 | 24,028 | |||
* | Nuance Communications Inc. | 1,108,911 | 22,400 | |||
* | Dynatrace Inc. | 743,770 | 22,202 | |||
* | Silicon Laboratories Inc. | 226,312 | 22,002 | |||
* | Gartner Inc. | 182,439 | 21,676 | |||
* | Aspen Technology Inc. | 202,857 | 20,742 | |||
* | Qualys Inc. | 195,918 | 20,658 | |||
* | ANSYS Inc. | 77,741 | 20,355 | |||
* | EPAM Systems Inc. | 91,204 | 20,146 | |||
* | Lattice Semiconductor Corp. | 868,332 | 19,546 | |||
* | Shopify Inc. Class A | 30,891 | 19,532 | |||
FLIR Systems Inc. | 446,393 | 19,373 | ||||
* | PTC Inc. | 267,102 | 18,497 | |||
* | Paylocity Holding Corp. | 156,053 | 17,873 | |||
* | Enphase Energy Inc. | 362,108 | 16,957 | |||
* | Guidewire Software Inc. | 185,445 | 16,846 | |||
* | Smartsheet Inc. Class A | 312,980 | 16,500 | |||
* | CyberArk Software Ltd. | 165,663 | 16,361 | |||
* | WEX Inc. | 123,506 | 16,342 | |||
* | Palo Alto Networks Inc. | 83,128 | 16,335 | |||
* | Euronet Worldwide Inc. | 175,929 | 16,143 | |||
* | Zebra Technologies Corp. | 69,854 | 16,043 | |||
National Instruments Corp. | 403,178 | 15,490 | ||||
* | Atlassian Corp. plc Class A | 97,904 | 15,223 | |||
SS&C Technologies Holdings Inc. | 272,687 | 15,041 | ||||
* | Workiva Inc. Class A | 373,758 | 14,334 | |||
* | PROS Holdings Inc. | 403,822 | 13,887 | |||
* | Anaplan Inc. | 327,080 | 13,364 | |||
* | Square Inc. | 201,747 | 13,142 | |||
CDW Corp. | 115,215 | 12,766 | ||||
* | Zscaler Inc. | 190,028 | 12,747 | |||
* | Synaptics Inc. | 193,138 | 12,629 | |||
* | Rapid7 Inc. | 253,431 | 11,544 | |||
Jabil Inc. | 400,288 | 11,384 | ||||
* | Teradata Corp. | 428,354 | 10,533 | |||
Switch Inc. | 591,819 | 10,162 | ||||
* | Alteryx Inc. Class A | 89,059 | 10,080 | |||
* | Coupa Software Inc. | 56,381 | 9,928 | |||
* | 8x8 Inc. | 566,869 | 9,614 | |||
* | Diodes Inc. | 186,657 | 9,499 | |||
* | Unisys Corp. | 746,186 | 9,394 | |||
* | ChannelAdvisor Corp. | 815,033 | 8,419 | |||
TTEC Holdings Inc. | 215,146 | 8,386 | ||||
* | NCR Corp. | 404,694 | 8,304 | |||
* | Cirrus Logic Inc. | 100,866 | 7,625 | |||
CSG Systems International Inc. | 149,331 | 7,254 | ||||
* | A10 Networks Inc. | 1,008,438 | 6,888 | |||
* | SMART Global Holdings Inc. | 248,556 | 6,286 |
8
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
* | Everbridge Inc. | 53,637 | 5,974 | |||
CDK Global Inc. | 141,485 | 5,558 | ||||
Perspecta Inc. | 246,979 | 5,327 | ||||
* | Insight Enterprises Inc. | 98,117 | 5,327 | |||
* | SPS Commerce Inc. | 93,507 | 5,191 | |||
* | Box Inc. | 279,399 | 4,509 | |||
* | Ceridian HCM Holding Inc. | 67,633 | 3,988 | |||
* | Okta Inc. | 24,989 | 3,781 | |||
*,^ | GTT Communications Inc. | 332,441 | 3,776 | |||
* | eGain Corp. | 377,661 | 3,135 | |||
* | Cerence Inc. | 146,629 | 3,103 | |||
Hackett Group Inc. | 201,447 | 2,987 | ||||
*,^ | Paysign Inc. | 344,975 | 2,967 | |||
* | ePlus Inc. | 40,614 | 2,873 | |||
* | Domo Inc. | 145,324 | 2,827 | |||
* | Avid Technology Inc. | 376,722 | 2,645 | |||
* | Altair Engineering Inc. Class A | 71,290 | 2,352 | |||
* | Viavi Solutions Inc. | 194,342 | 2,348 | |||
* | Zuora Inc. Class A | 214,862 | 2,271 | |||
* | Diebold Nixdorf Inc. | 422,033 | 2,081 | |||
* | Digital Turbine Inc. | 300,090 | 1,758 | |||
* | Verint Systems Inc. | 40,287 | 1,722 | |||
* | Virtusa Corp. | 49,262 | 1,626 | |||
* | OSI Systems Inc. | 21,949 | 1,589 | |||
Fabrinet | 23,243 | 1,458 | ||||
* | Medallia Inc. | 67,861 | 1,458 | |||
* | Brightcove Inc. | 162,060 | 1,264 | |||
* | MicroStrategy Inc. Class A | 9,797 | 1,238 | |||
* | PagerDuty Inc. | 58,309 | 1,231 | |||
* | Model N Inc. | 41,782 | 1,206 | |||
* | Alarm.com Holdings Inc. | 24,966 | 1,117 | |||
* | Ichor Holdings Ltd. | 44,079 | 1,098 | |||
* | Sailpoint Technologies Holdings Inc. | 54,218 | 1,008 | |||
* | Perficient Inc. | 24,714 | 861 | |||
EVERTEC Inc. | 33,433 | 847 | ||||
* | ACI Worldwide Inc. | 28,874 | 791 | |||
3,562,322 | ||||||
Materials (2.1%) | ||||||
Smurfit Kappa Group plc | 1,917,978 | 60,341 | ||||
Louisiana-Pacific Corp. | 2,461,940 | 49,239 | ||||
Carpenter Technology Corp. | 1,395,922 | 30,948 | ||||
* | Summit Materials Inc. Class A | 2,001,401 | 30,241 | |||
Methanex Corp. | 1,148,603 | 18,240 | ||||
Royal Gold Inc. | 126,137 | 15,456 | ||||
Scotts Miracle-Gro Co. | 122,717 | 15,221 | ||||
Balchem Corp. | 162,847 | 14,532 | ||||
* | Element Solutions Inc. | 1,338,313 | 13,718 | |||
Avery Dennison Corp. | 99,566 | 10,991 | ||||
Graphic Packaging Holding Co. | 784,054 | 10,467 | ||||
Boise Cascade Co. | 263,927 | 8,253 | ||||
Sealed Air Corp. | 193,622 | 5,536 | ||||
* | Verso Corp. | 305,357 | 4,241 | |||
* | Axalta Coating Systems Ltd. | 200,169 | 3,951 | |||
Novagold Resources Inc. | 319,147 | 3,571 | ||||
Silgan Holdings Inc. | 42,479 | 1,465 | ||||
HB Fuller Co. | 31,721 | 1,167 | ||||
* | AdvanSix Inc. | 49,027 | 597 | |||
298,175 | ||||||
Other (1.0%) | ||||||
^,2 | Vanguard Small-Cap ETF | 1,059,645 | 140,127 | |||
Real Estate (3.4%) | ||||||
SBA Communications Corp. Class A | 301,256 | 87,340 | ||||
Hannon Armstrong Sustainable Infrastructure Capital Inc. | 2,354,576 | 65,905 |
9
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
Shares | Market Value ($000 | ) | ||||
PS Business Parks Inc. | 420,625 | 54,298 | ||||
Life Storage Inc. | 613,138 | 53,705 | ||||
JBG SMITH Properties | 1,521,422 | 51,652 | ||||
Jones Lang LaSalle Inc. | 363,060 | 38,332 | ||||
CoreSite Realty Corp. | 217,120 | 26,313 | ||||
Xenia Hotels & Resorts Inc. | 2,529,999 | 24,541 | ||||
Americold Realty Trust | 529,710 | 16,204 | ||||
American Homes 4 Rent Class A | 557,610 | 13,461 | ||||
GEO Group Inc. | 857,604 | 10,874 | ||||
National Health Investors Inc. | 187,901 | 10,346 | ||||
Omega Healthcare Investors Inc. | 223,222 | 6,507 | ||||
iStar Inc. | 316,375 | 3,170 | ||||
EastGroup Properties Inc. | 27,582 | 2,924 | ||||
Four Corners Property Trust Inc. | 105,868 | 2,370 | ||||
Alexander's Inc. | 7,471 | 2,355 | ||||
National Storage Affiliates Trust | 76,156 | 2,169 | ||||
Iron Mountain Inc. | 84,462 | 2,042 | ||||
^ | Tanger Factory Outlet Centers Inc. | 255,222 | 1,919 | |||
RMR Group Inc. Class A | 64,317 | 1,908 | ||||
American Finance Trust Inc. | 231,627 | 1,786 | ||||
Equity LifeStyle Properties Inc. | 27,218 | 1,641 | ||||
Terreno Realty Corp. | 25,253 | 1,384 | ||||
Newmark Group Inc. Class A | 158,897 | 617 | ||||
483,763 | ||||||
Utilities (0.1%) | ||||||
NRG Energy Inc. | 183,764 | 6,162 | ||||
American States Water Co. | 50,521 | 4,010 | ||||
Northwest Natural Holding Co. | 30,658 | 1,996 | ||||
South Jersey Industries Inc. | 68,287 | 1,952 | ||||
14,120 | ||||||
Total Common Stocks (Cost $11,672,569) | 13,654,080 |
Coupon | ||||||||||
Temporary Cash Investments (4.7%) | ||||||||||
Money Market Fund (3.6%) | ||||||||||
3,4 | Vanguard Market Liquidity Fund | 0.522% | 5,122,064 | 512,207 |
Maturity Date | Face Amount ($000 | ) | ||||||||
Repurchase Agreement (0.9%) | ||||||||||
Deutsche Bank Securities, Inc. (Dated 04/30/20, Repurchase Value $129,400,000, collateralized by Federal National Mortgage Assn. 4.500%, 9/1/48, and U.S. Treasury Note/Bond 2.875%, 5/15/49, with a value of $131,988,000) | 0.030% | 5/1/2020 | 129,400 | 129,400 | ||||||
U.S. Government and Agency Obligations (0.2%) | ||||||||||
5 | United States Cash Management Bill | 0.135% | 7/14/20 | 700,000 | 700 | |||||
5 | United States Cash Management Bill | 0.210% | 9/15/20 | 2,700,000 | 2,698 | |||||
5 | United States Cash Management Bill | 0.116% | 9/29/20 | 6,000,000 | 5,997 | |||||
5 | United States Treasury Bill | 0.135% | 6/4/20 | 1,670,000 | 1,670 | |||||
5 | United States Treasury Bill | 0.087% | 9/24/20 | 9,000,000 | 8,995 | |||||
20,060 | ||||||||||
Total Temporary Cash Investments (Cost $661,474) | 661,667 | |||||||||
Total Investments (101.6%) (Cost $12,334,043) | 14,315,747 | |||||||||
Other Assets and Liabilities—Net (-1.6%)4,5 | (224,495 | ) | ||||||||
Net Assets (100%) | 14,091,252 | |||||||||
Cost rounded to $000. |
10
Vanguard® Explorer Fund
Schedule of Investments
April 30, 2020
* | Non-income-producing security. |
^ | Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $226,322,000. |
1 | Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company. |
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 | Collateral of $243,171,000 was received for securities on loan, of which $233,802,000 is held in Vanguard Market Liquidity Fund and $9,369,000 is held in cash. |
5 | Securities with a value of $14,569,000 and cash of $480,000 have been segregated as initial margin for open futures contracts. |
ADR—American Depositary Receipt. |
11
© 2020 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor. SNA242 062020 |
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
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: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13: Exhibits.
(a) | 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/ MORTIMER J. BUCKLEY*
___________________________
MORTIMER J. BUCKLEY
CHIEF EXECUTIVE OFFICER
Date: June 18, 2020
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/ MORTIMER J. BUCKLEY*
___________________________
MORTIMER J. BUCKLEY
CHIEF EXECUTIVE OFFICER
Date: June 18, 2020
VANGUARD EXPLORER FUND
BY: /s/ JOHN BENDL*
___________________________
JOHN BENDL
CHIEF FINANCIAL OFFICER
Date: June 18, 2020
* By: /s/ Anne E. Robinson
Anne E. Robinson, pursuant to a Power of Attorney filed on January 18, 2018 (see file Number 33-32216) and a Power of Attorney filed on October 30, 2019 (see file Number 811-02554), Incorporated by Reference.