[VANGUARD SHIP LOGO/R/]
P.O. Box 2600
Valley Forge, PA 19482-2600
610-669-4294
Michael_Drayo@vanguard.com
July 11, 2008
Christian Sandoe, Esq.
U.S. Securities & Exchange Commission via electronic filing
100 F Street, N.E.
Washington, DC 20549
RE: Vanguard Montgomery Funds
File No. 333-145624
Dear Mr. Sandoe,
This letter responds to your July 7, 2008 comments on Post-Effective Amendment
No. 1 to the above-referenced registrant's registration statement that was filed
on May 23, 2008.
Comment 1: Prospectus - Fund Profile - Primary Risks
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Comment: Please clarify what is meant by the bracketed language under
Investment risk.
Response: The bracketed language is meant to disclose that the bottom-up
investment approach used by the Fund's advisors may
intentionally or unintentionally increase the Fund's
investment risk. For example, an advisor may select stocks for
the long portfolio that are value oriented, and select stocks
for the short portfolio that are growth oriented. The
selection of stocks with a value or growth orientation may be
intentional or unintentional. In this case, if growth oriented
stocks perform better than value oriented stocks, the Fund's
investment risk may increase.
Comment 2: Prospectus - Fund Profile Performance/Risk Information
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Comment: Please clarify that the performance shown in the performance
bar chart and table for periods prior to the date that
the Fund was reorganized as a Vanguard fund is the performance
of the Fund's predecessor fund, the Laudus Rosenberg
U.S. Large/Mid Capitalization Long/Short Equity Fund.
Response: We have made the requested clarification.
Comment 3: Prospectus - Plain Talk About Market Neutral Investing
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Comment: Please clarify whether the short portion of the Fund's
portfolio is expected to deliver the overall returns of the
stock market, plus additional performance unique to the
specific stocks the advisor has sold short.
Response: The short portion of the Fund's portfolio is expected to
deliver the inverse of the overall returns of the stock
market, plus additional performance unique to the specific
stocks the advisor has sold short. We have updated the
prospectus accordingly.
Comment 4: Prospectus - Investing With Vanguard - Frequent-Trading Limits
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Comment: Please clarify whether the Fund's frequent trading policy
applies to accounts that are under common control of the
investor, such as a joint account with the investor's spouse.
Response: The Fund's frequent trading policy is applied on an account by
account basis. For example, if an investor redeemed or
exchanged shares of a Fund in an individual account, the
investor would not be prohibited from purchasing shares in the
same Fund within 60 days of the previous redemption or
exchange if the transaction is conducted in a joint account
with the investor's spouse. The current disclosure accurately
reflects the Fund's policy.
Comment 5: Tandy Requirements
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As required by the SEC, the Fund acknowledges that:
- - The Fund is responsible for the adequacy and accuracy of the disclosure in
the filing.
- - 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.
- - 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 610-669-4294 with any questions or comments regarding the
above responses. Thank you.
Sincerely,
Michael J. Drayo
Associate Counsel
The Vanguard Group
Securities Regulation, Legal Department