VIA EDGAR
August 22, 2007
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Vanguard Montgomery Funds - Vanguard Market Neutral Fund File Number
811-22114
Laudus Trust - Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short
Equity Fund File Number 811-05547
Ladies and Gentlemen:
On behalf of Vanguard Montgomery Funds ("Vanguard Trust"), a Delaware statutory
trust, and Laudus Trust ("Laudus Trust"), a Massachusetts business trust, we
hereby transmit for filing pursuant to the Securities Act of 1933, as amended
("1933 Act"), and the Investment Company Act of 1940, as amended, the notice of
special meeting, prospectus/proxy statement on Form N-14 (the "Prospectus/Proxy
Statement") and form of proxy card relating to a special meeting of Laudus
Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund ("Laudus Fund"),
a series of Laudus Trust. The shareholders of Laudus Fund are being solicited
with respect to a reorganization of their fund into Vanguard Market Neutral Fund
("Vanguard Fund"), a series of Vanguard Trust (the "Reorganization").
As explained in the Prospectus/Proxy Statement, the investment objectives,
policies and restrictions of the Vanguard Fund and the Laudus Fund are similar.
The Vanguard Fund will seek to provide long-term capital appreciation while
limiting exposure to general stock market risk, while the Laudus Fund's
investment objective seeks to increase the value of a shareholder's investment
through bull markets and bear markets using strategies that are designed to
limit exposure to general equity market risk.
In addition, as explained in the Prospectus/Proxy Statement, the investment
advisory arrangements for the Vanguard Fund will be similar to the current
advisory arrangements for the Laudus Fund. Currently, the Laudus Fund is managed
by Charles Schwab Investment Management, Inc. ("CSIM") and is sub-advised by AXA
Rosenberg Investment Management LLC ("AXA Rosenberg"). If the shareholders of
the Laudus Fund approve the Reorganization, AXA Rosenberg would serve as an
investment adviser for the Vanguard Fund, carrying out an investment program for
its allocated portion of the portfolio of the Vanguard Fund that is
substantially similar to the investment program of the Laudus Fund. The Vanguard
Group, Inc. ("Vanguard") would replace CSIM as overall manager of the Vanguard
Fund and also would provide investment advisory services on an at-cost basis
through its Quantitative Equity Group under a multimanager arrangement. In that
capacity, Vanguard would manage a separate portion of the portfolio of the
Vanguard Fund.
Securities and Exchange Commission
August 22, 2007
Page 2
The disclosure in the section entitled "Additional Information About Vanguard(R)
Market Neutral Fund" is substantially similar to the disclosure made in other
Vanguard funds' registration statements, and the disclosures in the Statement of
Additional Information in the sections entitled, "Investment Policies,"
"Investment Limitations," "Share Price," "Purchase and Redemption of Shares,"
"Management of the Fund," "Portfolio Transactions," and "Proxy Voting
Guidelines" are also substantially similar to the disclosures made in other
Vanguard funds' registration statements reviewed by the staff.
Pursuant to Rule 488 under the 1933 Act, the registration statement designates
an effective date of September 21, 2007. Please be advised that, as the special
meeting is scheduled to be held on November 21, 2007, we propose to prepare
definitive materials and mail those materials to Laudus Fund shareholders on the
earliest date practicable. We do not believe that the proposed Reorganization
presents any novel issues and request that the staff give expedited review to
the Prospectus/Proxy Statement.
Should the staff have any questions or comments regarding the enclosed
materials, please call the undersigned at (610) 503-5693.
Sincerely,
Natalie S. Bej
Senior Counsel
Enclosures
cc: Christian Sandoe, Esq.
Securities and Exchange Commission
Barry P. Barbash, Esq.
Willkie Farr & Gallagher LLP