Vanguard Expands Active Roster With Proposed International Core Stock Fund

VALLEY FORGE, PA (July 18, 2019)-Vanguard today filed a preliminary registration with the U.S. Securities and Exchange Commission for Vanguard International Core Stock Fund. The new actively managed fund will be managed by Wellington Management Company LLP (Wellington Management) and is expected to be available to investors in the fourth quarter of 2019.

Vanguard, one of the largest providers of actively managed funds in the asset management industry, has been expanding its actively managed roster over the past two years, introducing a suite of factor ETFs, an ESG fund, a commodities fund, two global balanced funds, and two fixed income funds -Vanguard Global Credit Bond Fund and Vanguard Emerging Markets Bond Fund.

A low-cost, diversified entrant to the market

Vanguard International Core Stock Fund will offer broad equity exposure to both developed and emerging non-U.S. markets, blending growth and value styles and diversifying across a range of sectors. The fund will seek to provide long-term capital appreciation and hold approximately 60-100 stocks, with no individual positions representing greater than 5% of the portfolio. It is expected to have moderate overweight or underweight allocations to sectors and regions relative to the MSCI ACWI ex USA Index.

Wellington Management will employ a multi-disciplinary approach that identifies potential attractive, high-return opportunities by leveraging the full breadth and depth of Wellington Management's global resources, including: Global Industry Analyst research; positions held by Wellington Management's investment boutique teams; investment ideas from Wellington Management's quantitative research teams; macro-economic research; and ESG research that emphasizes positive governance practices.

Wellington Management's approach can be characterized as opportunistic and does not emphasize any particular investment style or factor. The team seeks to build an "all weather" portfolio that prioritizes stock specific alpha potential, limiting the portfolio's other risk exposures through a sophisticated and centralized risk management approach.

The estimated expense ratios for Vanguard International Core Stock Fund will be 0.35% for Admiral Shares and 0.45% for Investor Shares, both considerably lower than the asset-weighted average expense ratio of 0.75% for the industry's foreign large-blend fund category¹.

Global expertise and experience

Founded in 1928 and managing more than $1 trillion in assets, Wellington Management is a world-class investment organization, which has deep, global research capabilities across geographies and a long history of investing in non-U.S. markets. The firm is Vanguard's longest-serving external advisor, and has managed the industry's oldest balanced fund, the $100 billion Vanguard Wellington™ Fund, for more than 90 years.

Wellington Management has a deep bench of talent, and the portfolio managers for Vanguard International Core Stock Fund have more than 50 years of combined investment management expertise:

• Kenneth (Kenny) L. Abrams, senior managing director and equity portfolio manager. A long-time portfolio manager for Vanguard Explorer™ Fund, Mr. Abrams has employed Wellington Management's Global Perspectives strategy for 12 years with a focus on mid-and small-capitalization companies. Mr. Abrams joined Wellington Management in 1986. He earned his MBA in finance and his BA in economics and German literature from Stanford University.
• F. Halsey Morris, CFA, senior managing director and global industry analyst. Mr. Morris joined Wellington Management in 2008 and before that served as an equity analyst for BlackRock and a research analyst for State Street Research and Management Company. He earned an MBA in corporate strategy and finance from the Wharton School of the University of Pennsylvania and a BA in English from Dartmouth College.

Vanguard's active leadership

Vanguard partners with some of the world's top asset managers to oversee a full roster of active stock, bond, and balanced mandates. Today, Vanguard's actively managed mutual funds represent $1.3 trillion; $620 billion of which is managed by external advisors, including traditional active equity, bond, and balanced assets; $660 billion by managed the Vanguard Fixed Income Group, including taxable and tax-exempt bonds, and money market funds; and $40 billion managed by the Vanguard Quantitative Equity Group.

The firm has more than 40 years of experience in selecting and partnering with active managers, employing a time-tested approach to build long-term relationships with premier managers around the globe. Vanguard currently partners with 25 advisors, including PRIMECAP Management Company, Baillie Gifford Overseas Ltd, and Pzena Investment Management, LLC.

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About Vanguard

Vanguard is one of the world's largest investment management companies. As of June 30, 2019, Vanguard managed $5.6 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 417 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.

All figures are as of June 30, 2019 unless otherwise noted.

1 Source: Morningstar, Inc., as of March 31, 2019.

A registration statement relating to Vanguard International Core Stock Fund has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

For more information about Vanguard funds, visit www.vanguard.com, or call 800-662-7447, to obtain a prospectus or, if available, a summary 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. Copies of the final prospectus can be obtained from Vanguard. Please note that a preliminary prospectus is subject to change.

All investing is subject to risk, including the possible loss of the money you invest. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. Investments in securities issued by non-U.S. companies and governments are subject to risks including country/regional risk and currency risk. Diversification does not ensure a profit or protect against a loss.

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