Vanguard Explorer Fund Summary Prospectus
February 25, 2016
Investor Shares & Admiral Shares
Vanguard Explorer Fund Investor Shares (VEXPX)
Vanguard Explorer Fund Admiral Shares (VEXRX)
The Funds statutory Prospectus and Statement of Additional Information dated February 25, 2016, as may be amended or supplemented, are incorporated into and made part of this Summary Prospectus by reference.
Before you invest, you may want to review the Funds Prospectus, which contains more information about the Fund and its risks. You can find the Funds Prospectus and other information about the Fund online at www.vanguard.com/prospectus. You can also obtain this information at no cost by calling 800-662-7447 or by sending an email request to online@vanguard.com.
The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Investment Objective
The Fund seeks to provide long-term capital appreciation.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and hold Investor Shares or Admiral Shares of the Fund. Acquired Fund Fees and Expenses are expenses incurred indirectly by the Fund through its ownership of shares in other investment companies, such as business development companies. Business development company expenses are similar to the expenses paid by any operating company held by the Fund. They are not direct costs paid by Fund shareholders and are not used to calculate the Funds net asset value. They have no impact on the costs associated with Fund operations.
Shareholder Fees | ||
(Fees paid directly from your investment) | ||
Investor Shares | Admiral Shares | |
Sales Charge (Load) Imposed on Purchases | None | None |
Purchase Fee | None | None |
Sales Charge (Load) Imposed on Reinvested Dividends | None | None |
Redemption Fee | None | None |
Account Service Fee (for certain fund account balances below | $20/year | $20/year |
$10,000) |
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
Investor Shares | Admiral Shares | |
Management Fees | 0.46% | 0.32% |
12b-1 Distribution Fee | None | None |
Other Expenses | 0.02% | 0.02% |
Acquired Fund Fees and Expenses | 0.01% | 0.01% |
Total Annual Fund Operating Expenses1 | 0.49% | 0.35% |
1 Acquired Fund Fees and Expenses are not included in the Fund's financial statements, which provide a clearer picture of a fund's actual operating costs.
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Examples
The following examples are intended to help you compare the cost of investing in the Funds Investor Shares or Admiral Shares with the cost of investing in other mutual funds. They illustrate the hypothetical expenses that you would incur over various periods if you invested $10,000 in the Funds shares. These examples assume that the Shares provide a return of 5% each year and that total annual fund operating expenses remain as stated in the preceding table. You would incur these hypothetical expenses whether or not you redeem your investment at the end of the given period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
1 Year | 3 Years | 5 Years | 10 Years | |
Investor Shares | $50 | $157 | $274 | $616 |
Admiral Shares | $36 | $113 | $197 | $443 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in more taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the previous expense examples, reduce the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 62% of the average value of its portfolio.
Principal Investment Strategies
The Fund invests mainly in the stocks of small companies. These companies tend to be unseasoned but are considered by the Funds advisors to have superior growth potential. Also, these companies often provide little or no dividend income. The Fund uses multiple investment advisors.
Principal Risks
An investment in the Fund could lose money over short or even long periods. You should expect the Funds share price and total return to fluctuate within a wide range. The Fund is subject to the following risks, which could affect the Funds performance:
Stock market risk, which is the chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices.
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Investment style risk, which is the chance that returns from small-capitalization growth stocks will trail returns from the overall stock market. Historically, small-cap stocks have been more volatile in price than the large-cap stocks that dominate the overall market, and they often perform quite differently. Small companies tend to have greater stock volatility because, among other things, these companies generally have limited product lines and financial resources and may be more sensitive to changing economic conditions.
Manager risk, which is the chance that poor security selection will cause the Fund to underperform relevant benchmarks or other funds with a similar investment objective. In addition, significant investment in the information technology sector subjects the Fund to proportionately higher exposure to the risks of this sector.
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Annual Total Returns
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Funds Investor Shares has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns of the share classes presented compare with those of a relevant market index, which has investment characteristics similar to those of the Fund. Keep in mind that the Funds past performance (before and after taxes) does not indicate how the Fund will perform in the future. Updated performance information is available on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447.
Annual Total Returns Vanguard Explorer Fund Investor Shares
During the periods shown in the bar chart, the highest return for a calendar quarter was 19.79% (quarter ended June 30, 2009), and the lowest return for a quarter was 26.16% (quarter ended December 31, 2008).
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Average Annual Total Returns for Periods Ended December 31, 2015 | |||
1 Year | 5 Years | 10 Years | |
Vanguard Explorer Fund Investor Shares | |||
Return Before Taxes | 4.34% | 10.09% | 6.79% |
Return After Taxes on Distributions | 6.61 | 8.11 | 5.44 |
Return After Taxes on Distributions and Sale of Fund Shares | 0.72 | 7.89 | 5.37 |
Vanguard Explorer Fund Admiral Shares | |||
Return Before Taxes | 4.22% | 10.27% | 6.96% |
Russell 2500 Growth Index | |||
(reflects no deduction for fees, expenses, or taxes) | 0.19% | 11.43% | 8.49% |
Actual after-tax returns depend on your tax situation and may differ from those shown in the preceding table. When after-tax returns are calculated, it is assumed that the shareholder was in the highest individual federal marginal income tax bracket at the time of each distribution of income or capital gains or upon redemption. State and local income taxes are not reflected in the calculations. Please note that after-tax returns are shown only for the Investor Shares and may differ for each share class. After-tax returns are not relevant for a shareholder who holds fund shares in a tax-deferred account, such as an individual retirement account or a 401(k) plan. Also, figures captioned Return After Taxes on Distributions and Sale of Fund Shares may be higher than other figures for the same period if a capital loss occurs upon redemption and results in an assumed tax deduction for the shareholder.
Investment Advisors
Arrowpoint Asset Management, LLC (Arrowpoint Partners) Chartwell Investment Partners, LLC (Chartwell) Granahan Investment Management, Inc. (Granahan) Kalmar Investment Advisers (Kalmar) Stephens Investment Management Group, LLC (SIMG) Wellington Management Company LLP (Wellington Management) The Vanguard Group, Inc. (Vanguard)
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Portfolio Managers
Chad Meade, Partner and Portfolio Manager of Arrowpoint Partners. He has co-managed a portion of the Fund since 2014.
Brian Schaub, CFA, Partner and Portfolio Manager of Arrowpoint Partners. He has co-managed a portion of the Fund since 2014.
John A. Heffern, Managing Partner and Senior Portfolio Manager at Chartwell. He has managed a portion of the Fund since 2006.
Gary C. Hatton, CFA, Co-Founder and Chief Investment Officer of Granahan. He has co-managed a portion of the Fund since 1998.
Jane M. White, Co-Founder, President, and Chief Executive Officer of Granahan. She has co-managed a portion of the Fund since 2000.
Jennifer M. Pawloski, Vice President of Granahan. She has co-managed a portion of the Fund since 2014.
Ford B. Draper, Jr., President, Chief Investment Officer, and Founder of Kalmar. He has managed a portion of the Fund since 2005 (co-managed since 2014).
Dana F. Walker, CFA, Portfolio Manager at Kalmar. He has co-managed a portion of the Fund since 2014.
Ryan E. Crane, CFA, Chief Investment Officer of SIMG. He has managed a portion of the Fund since 2013.
Kenneth L. Abrams, Senior Managing Director and Equity Portfolio Manager at Wellington Management. He has managed a portion of the Fund since 1994.
Daniel J. Fitzpatrick, CFA, Senior Managing Director and Equity Research Analyst at Wellington Management. He has served as an associate portfolio manager for a portion of the Fund since 2014.
James P. Stetler, Principal of Vanguard. He has co-managed a portion of the Fund since 2012.
Michael R. Roach, CFA, Portfolio Manager at Vanguard. He has co-managed a portion of the Fund since 2012.
Binbin Guo, Ph.D., Principal of Vanguard and head of Equity Research and Portfolio Strategies of Vanguards Quantitative Equity Group. He has co-managed a portion of the Fund since 2016.
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Purchase and Sale of Fund Shares
You may purchase or redeem shares online through our website (vanguard.com), by mail (The Vanguard Group, P.O. Box 1110, Valley Forge, PA 19482-1110), or by telephone (800-662-2739). The minimum investment amount required to open and maintain a Fund account for Investor Shares or Admiral Shares is $3,000 or $50,000, respectively. The minimum investment amount required to add to an existing Fund account is generally $1. Institutional, financial intermediary, and Vanguard retail managed clients should contact Vanguard for information on special eligibility rules that may apply to them regarding Admiral Shares.
Tax Information
The Funds distributions may be taxable as ordinary income or capital gain. If you are investing through a tax-deferred retirement account, such as an IRA, special tax rules apply.
Payments to Financial Intermediaries
The Fund and its investment advisors do not pay financial intermediaries for sales of Fund shares.
Vanguard Explorer Fund Investor SharesFund Number 24 Vanguard Explorer Fund Admiral SharesFund Number 5024
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SP 24 022016