Company Press Release

VALLEY FORGE, PA, May 11, 2011—To help retirement-minded investors take the first step toward securing a sound financial future, Vanguard is reducing the minimum investment requirement from $3,000 to $1,000 for the 12 funds in its index-based Target Retirement Fund series. Previously, only Vanguard STAR Fund, a balanced fund comprising 11 actively managed funds, was available to those with $1,000 to invest.

“Investing early and investing regularly are two of the most important things investors can do to help ensure their retirement readiness. By reducing the investment requirements on our target date funds, we hope to encourage more individuals to participate in the financial markets,” said Vanguard CEO Bill McNabb.

Designed to simplify investing for retirement, Vanguard Target Retirement Funds are funds-of-Vanguard-funds that automatically re-balance among asset classes and adjust to a more conservative allocation over time. Funds in the series directed toward those with a longer investment horizon, such as Vanguard Target Retirement 2050 Fund, provide investors with a portfolio of nearly 15,000 domestic and international securities represented by three broad-based index funds: Vanguard Total Stock Market Index Fund, Vanguard Total Bond Market II Index Fund, and Vanguard Total International Stock Index Fund*.

We believe that target date funds have been the single most important development in the past 25 years in terms of improving the retirement readiness of several generations of investors,” said Mr. McNabb. “These funds provide well-constructed, balanced investment programs, and research by Vanguard and others shows that asset allocation is the dominant factor in determining total return over the long term.”

Vanguard’s Target Retirement Funds feature weighted expense ratios ranging from 0.16% to 0.19% (or $1.60–$1.90 per $1,000 invested)—a fraction of the 1.17% average expense ratio ($11.70 per $1,000 invested) for all target-date funds, according to 2010 data from Lipper, Inc.

Since their introduction in 2003, Vanguard Target Retirement Funds have continued to grow in terms of assets and investor adoption. Vanguard Target Retirement Funds had aggregate assets of nearly $88 billion, and have led the industry for the past three years with $41 billion in target-date fund cash flow (source: Strategic Insight Simfund as of March 31, 2011).

Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the work-force. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date.

Vanguard Leverages Social Media to Educate Investors

Vanguard is using social media to help educate novice investors on saving for retirement. Among these efforts:

Charu Gross will join the panel of experts currently contributing to the Vanguard Blog (www.vanguardblog.com). Ms. Gross, of Vanguard’s Asset Management Services, hopes to engage a younger generation of investors by sharing her experiences as a Gen-Y’er trying to achieve her own investment goals.

Vanguard’s Facebook page (www.facebook.com/Vanguard) and YouTube channel (http://www.youtube.com/user/Vanguard) will begin offering additional tools and content to help fans learn about retirement investing.

Vanguard Standardizes Investment Minimums

Vanguard is standardizing the minimum investment requirement for Investor Shares of nearly all Vanguard funds at $3,000. Previously, investment requirements varied by fund, and ranged from $3,000–$25,000. This change reduces the minimum for 15 Vanguard funds, including some of Vanguard's oldest and largest actively managed funds, such as the $59 billion Vanguard Wellington Fund, the $38 billion Vanguard Windsor II Fund, and the $22 billion Vanguard Health Care Fund. (Note to editors: A full list of Vanguard funds with their former and new minimum investment requirements is available upon request.)

About Vanguard

Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world’s largest investment management companies and a leading provider of company-sponsored retirement plan services. Vanguard manages more than $1.7 trillion in U.S. mutual fund assets. Vanguard offers more than 170 funds to U.S. investors and more than 60 additional funds in non-U.S. markets.

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*Vanguard Target Retirement Funds with target retirement years ranging from 2020–2055 are currently invested in three funds: Vanguard Total Stock Market Index Fund, Vanguard Total Bond Market II Index Fund, and Vanguard Total International Stock Index Fund. Funds with earlier target retirement years may also include an allocation to Vanguard Inflation-Protected Securities Fund and/or Vanguard Prime Money Market Fund.

Mutual funds are subject to risks, including possible loss of principal. Investments in bonds are subject to interest rate, credit, and inflation risk. Foreign investing involves additional risks including currency fluctuations and political uncertainty. Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility.

Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.

All asset figures are as of April 30, 2011.

For more information about Vanguard funds, visit www.vanguard.com or call 877-662-7447 to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

Vanguard Marketing Corporation, Distributor. 

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