-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PZgek3PY/oXYPCTYskDhbigLNvSbQGA2TAaFt85j0vJAPw8QrX2wKTaNsFf7SNCQ TpIUs/re8+mLUzg3MoLksw== 0000893220-97-001441.txt : 19970819 0000893220-97-001441.hdr.sgml : 19970819 ACCESSION NUMBER: 0000893220-97-001441 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970818 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VANGUARD EXPLORER FUND INC CENTRAL INDEX KEY: 0000034066 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 510106626 STATE OF INCORPORATION: PA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 002-27203 FILM NUMBER: 97665843 BUSINESS ADDRESS: STREET 1: PO BOX 2600 STREET 2: VM #V34 CITY: VALLEY FORGE STATE: PA ZIP: 19482 BUSINESS PHONE: 6106696289 FORMER COMPANY: FORMER CONFORMED NAME: EXPLORER FUND INC DATE OF NAME CHANGE: 19900305 497 1 VANGUARD EXPLORER FUND FUND PROFILE 1 VANGUARD EXPLORER FUND FUND PROFILE August 18, 1997 [LOGO] 2 1 OBJECTIVE Vanguard Explorer Fund seeks to provide long-term capital growth. The Fund may not meet this objective. 2 INVESTMENT STRATEGY The Fund invests in stocks of small companies (that is, those with an average market value of less than $1 billion). These companies tend to be unseasoned but are considered to have favorable prospects for growth. In addition to investing in common stocks, the Fund may also invest, to a limited degree, in short-term fixed-income securities, and futures and options contracts. 3 RISKS The Fund's total return will fluctuate, so an investor could lose money over short or extended periods. More specifically, investors in the Fund are exposed to . . . - - A HIGH degree of stock market risk (the possibility that stock prices in general will decline over short or extended periods). Historical returns for the U.S. stock market (as measured by the Standard & Poor's 500 Composite Stock Price Index) show some of this market volatility. From 1926 to 1996, the S&P 500 Index provided an annualized total return of 10.7%, but provided a negative return--averaging -12.3%--in 20 of these 71 years. Annual returns for the period ranged from a low of -43.3% to a high of 53.9%. Because it emphasizes the stocks of smaller companies, the Fund is likely to perform differently than broader market benchmarks like the S&P 500 Index. 4 APPROPRIATENESS This Fund may be suitable for investors who . . . - - Are seeking long-term capital growth. - - Are willing to assume above-average investment risk. - - Want an aggressive growth fund as part of a balanced investment program. - - Plan to invest for at least five years. The Fund is not suitable for investors who . . . - - Are seeking current income. - - Cannot tolerate fluctuating share prices. 3 5 FEES AND EXPENSES Vanguard Explorer Fund--like all Vanguard funds--is offered on a pure no-load basis (that is, the Fund has no 12b-1 fees or charges to buy or sell shares). The Fund's operating expenses are deducted from its total assets before daily share prices and income distributions are calculated. The Fund's expense ratio for fiscal year 1996 was 0.63% of assets.
ANNUAL FUND OPERATING EXPENSES ------------------------------ Investment Advisory Fees................... 0.35% Distribution Costs......................... 0.02 Other Expenses............................. 0.26 ---- Total Operating Expenses .................. 0.63% ====
The following example illustrates the expenses that you would incur on a $1,000 investment over various periods, assuming (1) a 5% annual rate of return and (2) redemption at the end of each period.
1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- $6 $20 $35 $79
This example should not be considered a representation of past or future expenses or performance. Actual expenses may be higher or lower than those shown. 4 6 PAST PERFORMANCE PERFORMANCE ANNUAL RETURNS (%) 1987-1996
VANGUARD RUSSEL EXPLORER 2000 FUND INDEX* ---- ------ 1987 -6.9 -8.8 1988 25.8 24.9 1989 9.4 16.2 1990 -10.8 -19.5 1991 55.9 46.1 1992 13.0 18.4 1993 15.4 18.9 1994 0.5 -1.8 1995 26.6 28.4 1996 14.0 16.5
PERFORMANCE SUMMARY (Periods Ended June 30, 1997)
Average Annual Total Return Explorer Russell Fund 2000* ---- ----- 1 Year 7.5% 16.3% 5 Years 16.2% 17.9% 10 Years 11.6% 11.1%
Note: In evaluating past performance, it is important to consider that returns from stocks were close to their highest levels in history during the past ten years. Past performance is not indicative of future performance. Performance figures include the reinvestment of all dividends and any capital gains distributions. All returns are net of expenses. The performance data quoted represent past performance. The investment return and principal value of an investment will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. * The Russell 2000 Index is a diversified group of some 2,000 securities used to measure the performance of small-company stocks. An index is unmanaged; you cannot invest in an index. Frank Russell Company is the owner of trademarks and copyrights relating to the Russell Indexes. 5 7 INVESTMENT ADVISER The Fund employs four advisers; each runs its portion of the Fund independently of the others. The principals and firms responsible for advising the Fund are: 1) John J. Granahan, President of Granahan Investment Management, Inc., which managed 51.2% of the Fund's assets invested in equities as of August 13, 1997; 2) Kenneth L. Abrams, Vice President of Wellington Management Company, LLP (33.5% of equities); 3) Edward N. Antoian, Partner of Chartwell Investment Partners (7.6% of equities); and 4) George U. Sauter, Managing Director- Vanguard Core Management Group (7.7% of equities). Mr. Granahan has advised Explorer Fund since 1990. Mr. Abrams has overseen his firm's portion since 1994. Mr. Antoian and Mr. Sauter began overseeing their portions of the Fund's assets on August 1, 1997. 8 PURCHASES You may purchase shares by mail, wire, or exchange from another Vanguard fund. The minimum initial investment is $3,000 ($1,000 for IRAs and custodial accounts for minors). 9 REDEMPTIONS You may redeem shares by sending a letter to or calling Vanguard. The Fund's share price is expected to fluctuate and, at redemption, may be higher or lower than at the time of initial purchase, resulting in a taxable gain or loss. 10 DISTRIBUTIONS The Fund expects to pay dividend and capital gains distributions annually. These distributions can be automatically reinvested or received in cash. All distributions are taxable to you whether reinvested in additional shares or received in cash. 11 OTHER SERVICES - - Vanguard Fund Express(R)--electronic transfers between your bank account and the Fund. - - Vanguard Tele-Account(R)--around-the-clock access to Vanguard fund information, account balances, and some transactions by calling 1-800-662-6273 (ON-BOARD). - - Investor Information--toll-free access to Vanguard Associates by calling 1-800-662-7447 (SHIP). 6 [THE VANGUARD GROUP LOGO] Post Office Box 2600 Valley Forge, PA 19482 Toll-Free Investor Information 1-800-662-7447 World Wide Web http://www.vanguard.com E-mail online@vanguard.com This Fund Profile contains key information about the Fund. If you would like more information before you invest, please consult the Fund's accompanying prospectus. For details about the Fund's holdings or recent investment strategies, please review the Fund's most recent annual or semiannual report. The prospectus and reports can be obtained at no cost by calling Vanguard. (C) 1997 Vanguard Marketing Corporation, Distributor FP24 - 0897-13B -----END PRIVACY-ENHANCED MESSAGE-----