[SHIP] VANGUARD /(R)/
P.O. Box 2600
Valley Forge, PA 19482-2600
610-669-2689
nathan_m_will@vanguard.com
August 6, 2008
Christian Sandoe, Esq.
U.S. Securities & Exchange Commission via electronic filing
100 F Street, N.E.
Washington, DC 20549
RE: VANGUARD EXPLORER FUND
File No. 2-27203
Dear Mr. Sandoe,
The following responds to your comments of July 28, 2008 on the post-effective
amendment of the registration statement of the above-referenced registrant. You
commented on Post-Effective Amendment No. 83 that was filed on June 12, 2008.
COMMENT 1: PROSPECTUS AND SAI FINANCIAL INFORMATION AND DATES
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Comment: Will Vanguard's 485(b) filing include updated financials and relevant
dates?
Response: Yes, our 485(b) filing will include updated financials and relevant
dates.
COMMENT 2: SAI PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES
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Comment: Please confirm that March 31, 2007, is the most recent date as of which
complete and non-material portfolio holdings are disclosed to the listed
parties.
Response: We have modified the disclosure as follows (new text is capitalized):
"Vanguard [complete/non-material] portfolio holdings information is CURRENTLY
disclosed to the following . . ."
COMMENT 3: SAI INVESTMENT ADVISORY SERVICES CENTURY CAPITAL OTHER ACCOUNTS
MANAGED
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Comment: The current disclosure does not indicate whether the advisory fee paid
to Mr. Thorndike for other accounts that he manages is based on account
performance.
Response: We have modified the disclosure as follows (new text is capitalized):
"As of May 31, 2008, Mr. Thorndike also managed 2 other registered investment
companies with total assets of $911 million (NONE FOR WHICH THE ADVISORY FEE WAS
BASED ON ACCOUNT PERFORMANCE) and 34 other accounts with total assets of $627
million (NONE FOR WHICH THE ADVISORY FEE WAS BASED ON ACCOUNT PERFORMANCE).
COMMENT 4: SAI INVESTMENT ADVISORY SERVICES KALMAR DESCRIPTION OF COMPENSATION
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Comment: The current disclosure states that one of the quantitative components
of a Kalmar portfolio manager's bonus is based on the contribution of the
individual's research ideas to the "success of [the] managed portfolios in
absolute and index-relative terms for short-term (1 year) and long-term (2-5
year) periods." Please clarify whether this "success" is measured against the
relevant benchmarks on a pre-tax or post-tax basis.
Response: We have confirmed with Kalmar that this refers to pre-tax investment
success, and, accordingly, we have modified the disclosure as follows (new text
is underlined):
"The quantitative component, which generally comprises 60-70% of the bonus, is
based on the specific contribution of the individual's research ideas to the
pre-tax success of managed portfolios in absolute and index-relative terms for
short-term (1 year) and long-term (2-5 year) periods."
COMMENT 5: SAI INVESTMENT ADVISORY SERVICES VANGUARD DESCRIPTION OF COMPENSATION
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Comment: The current disclosure states that one of the factors on which a
Vanguard portfolio manager's bonus is based is how successfully the portfolio
manager outperforms the Russell 2500 Growth Index. Please clarify whether this
outperformance is measured on a pre-tax or post-tax basis.
Response: As described earlier in the relevant paragraph, a Vanguard portfolio
manager's bonus is determined by a number of factors. One factor is the gross,
pre-tax performance of a fund relative to expectations for how the fund should
have performed, given its objective, policies, strategies, and limitations, and
the market environment during the measurement period. As a result, we have not
modified the disclosure.
Comment: Tandy Requirements
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As required by the SEC, the Funds acknowledge 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) 669-2689 with any questions or comments regarding the
above responses. Thank you.
Sincerely,
Nathan M. Will
Associate Counsel
Securities Regulation, Legal Department