[SHIP LOGO VANGUARD/(R)/]
April 18, 2008
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
RE: VANGUARD VALLEY FORGE FUNDS--461(A) REQUEST FOR ACCELERATION OF
EFFECTIVENESS
FILE NO. 333-48863
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Commissioners:
Pursuant to Rule 461(a) under the Securities Act of 1933, Vanguard Valley Forge
Funds (the "Trust") and its distributor, Vanguard Marketing Corporation,
respectfully request that the effectiveness of the Trust's registration
statement on Form N-1A be accelerated to Monday, April 21, 2008 at 9:00 am.
Post-Effective Amendment No.38 to the registration statement was filed on
April 1, 2008.
Sincerely,
VANGUARD VALLEY FORGE FUNDS
__________________________________
Name: John J. Brennan (Heidi Stam)*
Title: Chairman and Chief Executive Officer
VANGUARD MARKETING CORPORATION, Distributor
__________________________________
Name: Michael Kimmel
Title: Secretary
cc: Christian Sandoe, Esq.
U.S. Securities and Exchange Commission
[SHIP LOGO VANGUARD/(R)/]
April 18, 2008
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
RE: VANGUARD MANAGED PAYOUT FUNDS - RESPONSE TO COMMENT ON USE OF
"SUBSCRIPTION PERIOD" IN PROSPECTUS SUPPLEMENT
FILE NO. 333-48863
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Dear Mr. Sandoe:
You have asked whether Vanguard's use of the term "subscription period" in the
Supplement to the prospectus of the Vanguard Managed Payout Funds is potentially
confusing or misleading. We believe that our use of the term subscription period
in the Supplement is appropriate, clear and accurate, and is also consistent
with the purpose and intent of a conventional subscription period. Moreover, our
use of the term subscription period in the Supplement will be properly
understood by Vanguard investors, who have witnessed or participated in our
style of subscription period in three separate offerings over the last eight
years.
THERE IS NO FEDERAL SECURITIES LAW DEFINITION OF SUBSCRIPTION PERIOD
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We could not identify any use of or definition for the term "subscription
period" in text of the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940,
the Trust Indenture Act of 1939 or the Securities Investor Protection Act of
1970. Black's Law Dictionary (6th ed.) includes certain terms that are similar
to the term subscription period, as follows:
o SUBSCRIBE. Literally to write underneath, as one's name. To sign at the
end of a document. Also, to agree in writing to furnish money or its
equivalent, or to agree to purchase some initial stock in a corporation.
o SUBSCRIPTION. The act of writing one's name under a written instrument;
the affixing of one's signature to any document, whether for the purpose of
authenticating or attesting it, of adopting its terms as one's own
expressions, or of binding one's self by an engagement which it contains. A
written contract by which one engages to take and pay for capital stock of
a corporation, or to contribute a sum of money for a designated purpose,
either gratuitously, as in the case of subscribing to a charity, or in
consideration of an equivalent to be rendered, as a subscription to a
periodical, a forthcoming book, a series of entertainments, or the like.
o SUBSCRIPTION CONTRACT. In general, any contract by which one becomes
bound to buy. In particular, a contract for the purchase of securities.
You described your understanding of the term subscription period to mean a
period during which a fund accepts orders and payments for the purchase of
shares, which payments are held in escrow or otherwise in cash until the end of
the period, when such payments are applied to the purchase of shares or returned
to investors. We agree that your description of the term fairly represents
common industry usage without being the exclusive manner by which subscriptions
are accepted over a limited period of time for the purchase of mutual fund
shares.
OUR USE OF THE TERM SUBSCRIPTION PERIOD IS APPROPRIATE, CLEAR AND ACCURATE
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Our use of the term subscription period is not limited to simply stating the
words "subscription period." The Supplement clearly defines in detail exactly
what we mean by our use of that term, as follows:
o THE SUPPLEMENT SAYS WHAT HAPPENS DURING THE SUBSCRIPTION PERIOD. During
the period, "each Fund will invest directly or indirectly in money market
instruments rather than follow its normal investment policies."
o THE SUPPLEMENT DESCRIBES THE EXPECTED BENEFITS OF THE SUBSCRIPTION
PERIOD. "This strategy should allow each Fund to accumulate sufficient
assets to construct a complete portfolio on a single day (May 5, 2008), and
is expected to reduce initial trading costs."
o THE SUPPLEMENT DETAILS HOW A PERSON CAN INVEST DURING THE SUBSCRIPTION
PERIOD. "During the subscription period, you may invest in a Fund online,
by telephone, or by mail through any means described in the Investing With
Vanguard section, including check, bank transfer, or exchange from a
different Vanguard fund account.
These disclosures fully explain in Plain English our approach to conducting a
subscription period. In our view, it will be impossible for any reasonable
investor to be confused or mislead by our use of the term subscription period in
the Supplement unless the investor did not read the Supplement.
OUR SUBSCRIPTION PERIOD APPROACH IS CONSISTENT WITH COMMON USAGE AND OUR OWN
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PRIOR USAGE
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Common industry use of the term subscription period is consistent
with Vanguard's use of that term because both usages contemplate (1) a fund's
solicitation for investment in its shares, (2) investors agreeing to purchase
fund shares and simultaneously delivering payment to be applied on a specified
date, (3) payment proceeds being held directly or indirectly in cash equivalents
during the specified period and (4) at the end of the period the fund either
commencing normal business operations or returning the payment proceeds to
investors. Whether an investor's purchase proceeds are held outside of a fund
(e.g., in cash escrow) or within the fund (e.g., in cash equivalents) prior to
the fund's commencement of normal business operations does not determine whether
the process creates what a reasonable investor will understand to be a
subscription period. In our view, both approaches boil down to the same thing -
that is, a period during which a fund accepts purchase orders and monies pending
a known date when the fund either uses the purchase proceeds to commence normal
business operations or returns the purchase proceeds to investors.
VANGUARD INVESTORS HAVE ALWAYS UNDERSTOOD VANGUARD'S SUBSCRIPTION PERIODS
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As you can see from the following table, Vanguard has used essentially identical
language to describe our subscription period approach in three separate fund
launches over the last eight years. We are using the same approach for the
Vanguard Managed Payout Funds. Our investors understand how we conduct
subscription periods - not only because our subscription period text is
appropriate, clear and accurate, but also because it is how Vanguard customarily
conducts subscription periods.
FUND DATE SUBSCRIPTION PERIOD TEXT
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VANGUARD INFLATION-PROTECTED June 5, 2000 Vanguard Inflation-Protected Securities Fund is holding
SECURITIES FUND a subscription period from June 5 through June 29, 2000.
During this period, the Fund will invest in money
market securities rather than follow its normal investment
policies. This strategy should allow the Fund to accumulate
sufficient assets to construct a representative portfolio on
a single day (June 29, 2000), and is expected to
significantly reduce initial trading costs.
During the subscription period, you may instruct
Vanguard in writing to exchange assets into the Fund from a
different Vanguard account. Assets to be exchanged will
remain in the originating account until the close of the
subscription period (June 29, 2000). VANGUARD WILL COMPLETE
YOUR EXCHANGE ONLY IF THERE ARE SUFFICIENT ASSETS IN THE
ORIGINATING ACCOUNT ON JUNE 29 TO MEET THE FUND'S MINIMUM
INITIAL INVESTMENT REQUIREMENT OF $3,000 ($1,000 FOR IRAS
AND UGMA/UTMA ACCOUNTS).
VANGUARD U.S. VALUE FUND June 5, 2000 Vanguard U.S. Value Fund is holding a subscription period
from June 5 through June 29, 2000. During this period, the
Fund will invest in money market securities rather than
follow its normal investment policies. This strategy should
allow the Fund to accumulate sufficient assets to construct
a representative portfolio on a single day (June 29, 2000),
and is expected to significantly reduce initial trading
costs.
During the subscription period, you may instruct
Vanguard in writing to exchange assets into the Fund from a
different Vanguard account. Assets to be exchanged will
remain in the originating account until the close of the
subscription period (June 29, 2000). Vanguard will complete
your exchange only if there are sufficient assets in the
originating account on June 29 to meet the Fund's minimum
initial investment requirement of $3,000 ($1,000 for IRAs
and UGMA/UTMA accounts)
VANGUARD STRATEGIC SMALL-CAP April 20,2006 Vanguard Strategic Small-Cap Equity Fund is Equity Fund
holding a subscription period from April 20, 2006 through
May 4, 2006. During this period, the Fund will invest
directly or indirectly in money market instruments rather
than follow its normal investment policies. This strategy
should allow the Fund to accumulate sufficient assets to
construct a representative portfolio on a single day (May 5,
2006), and is expected to reduce initial trading costs. The
Fund reserves the right to terminate the subscription period
prior to May 4, 2006, and immediately invest according to
its normal investment policies.
During the subscription period, you may invest in
the Fund online, by telephone, or by mail through any means
described in the Investing With Vanguard section, including
check, bank transfer, or exchange from a different Vanguard
fund account.
TANDY REQUIREMENTS
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As required by the SEC, each Fund acknowledges that:
o The Fund is responsible for the adequacy and accuracy of the
disclosure in the filing.
o Staff comments or changes in response to staff comments in the
filings reviewed by the staff do not foreclose the Commission from
taking any action with respect to the filing.
o The Fund may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
Please contact me at (610) 669-6893 with any questions or comments regarding our
filing.
Edward C. Delk
Principal, Securities Regulation, Legal Department
The Vanguard Group, Inc.
Overnight Delivery: 100 Vanguard Boulevard, Malvern, PA 19355
Standard Delivery: P.O. Box 2600, V26, Valley Forge, PA 19482
Phone: 610-669-6893
Mobile: 610-755-2879
Fax: 610-669-6600
E-mail: edward_delk@vanguard.com