N-CSR 1 explorerfinal.htm explorerfinal.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-1530 
Name of Registrant: Vanguard Explorer Fund 
Address of Registrant: P.O. Box 2600 
Valley Forge, PA 19482 
Name and address of agent for service:  Heidi Stam, Esquire 
  P.O. Box 876 
  Valley Forge, PA 19482 
Registrant’s telephone number, including area code: (610) 669-1000 
Date of fiscal year end: October 31 
Date of reporting period: November 1, 2008 – October 31, 2009 
Item 1: Reports to Shareholders   


Vanguard Explorer™ Fund 
Annual Report 
October 31, 2009 


> For fiscal year 2009, Vanguard Explorer Fund’s Investor Shares returned

about 14%, a result that bested peer funds but trailed the fund’s

unmanaged benchmark.

> All but one sector in the fund posted gains as stocks bounced back from a

severe bear market.

> Information technology stocks, the fund’s largest position, accounted for

about half of the fund’s gains.

Contents   
 
Your Fund’s Total Returns  1 
President’s Letter  2 
Advisors’ Report  8 
Results of Proxy Voting  14 
Fund Profile  16 
Performance Summary  17 
Financial Statements  19 
Your Fund’s After-Tax Returns  32 
About Your Fund’s Expenses  33 
Glossary  35 

Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the risks of investing in your fund are spelled out in the prospectus.

Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Fiscal Year Ended October 31, 2009     
  Ticker  Total 
  Symbol  Returns 
Vanguard Explorer Fund     
Investor Shares  VEXPX  14.46% 
 AdmiralTM Shares1  VEXRX  14.66 
Russell 2500 Growth Index    18.21 
Small-Cap Growth Funds Average2    12.85 

Your Fund’s Performance at a Glance         
October 31, 2008–October 31, 2009         
      Distributions Per Share 
  Starting  Ending  Income  Capital 
  Share Price  Share Price  Dividends  Gains 
Vanguard Explorer Fund         
Investor Shares  $45.54  $51.77  $0.282  $0.000 
Admiral Shares  42.45  48.21  0.367  0.000 

1 A lower-cost class of shares available to many longtime shareholders and to those with significant investments in the fund.
2 Derived from data provided by Lipper Inc.

1


 

 

 

President’s Letter

Dear Shareholder,

Vanguard Explorer Fund’s Investor Shares returned about 14% for the fiscal year ended October 31, 2009. The fund trailed its benchmark, the Russell 2500 Growth Index, which returned about 18% for the period, but topped the average return for competing funds.

For the 12-month period, the majority of the fund’s advance came from two sectors: information technology and consumer discretionary. Meanwhile, fund holdings in health care and consumer staples underperformed those sectors as represented in the index.

If you own shares of the fund in a taxable account, you may wish to review the discussion on the fund’s after-tax returns that appears later in this report.

A vicious bear market quickly turned bullish

A year ago, the global financial system stood on the brink of collapse as the expanding U.S. credit crisis precipitated the deepest worldwide recession since World War II. Since then, markets have pulled back from the depths and, in fact, have rallied impressively. Although U.S. unemployment has risen to double digits and signs of a robust recovery are hard to find, the global economy has begun to revive. For the first time in more than a year, U.S. gross domestic product registered growth, as reported by the Commerce Department for the third quarter of calendar 2009.

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U.S. stocks recorded positive returns for the fiscal year ended October 31 as the market’s losses during the first four months of the period—marking the final plunge of a historic bear market—were erased by a remarkable rally beginning in March. Global stocks did even better, thanks to some renewed strength in developed markets and a powerful upswing in emerging markets that actually had some prognosticators worrying about a new asset bubble. Reminders of the markets’ travails are nevertheless apparent in the index returns for the past three years, where negative figures are the rule. Even the five-year returns for U.S. stocks as of October 31 were barely positive, further evidence of the long-term damage done by the collapse of the real estate bubble.

The bond market experienced an equally dramatic turnaround

The stock market’s rapid fall and recovery were matched by an equally dramatic turnaround in the bond market. At the end of 2008, as the credit markets virtually shut down, risk-averse investors flocked to U.S. Treasury bonds. The effect was to widen the difference between the lower yields of Treasuries and the higher yields of corporate bonds to a margin not seen since the Great Depression.

Central banks around the world responded to the economic slowdown by lowering interest rates and implementing other aggressive stimulus programs. Meanwhile, governments boosted spending in hopes of reversing the recessionary tide. As fears of a worldwide depression eased, investors’

Market Barometer       
  Average Annual Total Returns 
  Periods Ended October 31, 2009 
  One Year  Three Years  Five Years 
Stocks       
Russell 1000 Index (Large-caps)  11.20%  –6.84%  0.71% 
Russell 2000 Index (Small-caps)  6.46  –8.51  0.59 
Dow Jones U.S. Total Stock Market Index  11.34  –6.55  1.06 
MSCI All Country World Index ex USA (International)  34.79  –2.49  7.58 
 
Bonds       
Barclays Capital U.S. Aggregate Bond Index (Broad taxable market)  13.79%  6.35%  5.05% 
Barclays Capital Municipal Bond Index  13.60  4.17  4.15 
Citigroup 3-Month Treasury Bill Index  0.28  2.50  2.94 
 
CPI       
Consumer Price Index  –0.18%  2.32%  2.52% 

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appetite for risk returned to more normal levels. The receding pessimism raised demand for corporate bonds, raising their prices and bringing down their yields. Over the past 12 months, both taxable and municipal bonds returned more than 13%.

However, the Fed’s easy-money campaign had a predictable effect on short-term savings vehicles such as money market funds, whose yields track prevailing short-term rates. In December 2008, the Fed reduced its target for the federal funds rate, a benchmark for the interest rates paid by money market instruments and other very short-term securities, to between 0% and 0.25%. The Fed has said it expects to maintain its target at this level “for an extended period.”

Technology stocks boosted the fund’s return

Leading the Explorer Fund’s advance for the 12 months ended October 31 were information technology stocks (+26%), which made up about one-quarter of the fund’s holdings on average during the period.

The fund’s IT holdings advanced smartly as investors anticipated higher spending on hardware, software, and related services. Riverbed Technology Inc., a communications equipment provider, and Euronet Worldwide, an electronic transaction servicer that is one of the fund’s top ten holdings, were two of the best performers in this sector. However, the fund’s IT portfolio underperformed its counterpart in the Russell 2500 Growth

Expense Ratios1       
Your Fund Compared With Its Peer Group       
      Small-Cap 
  Investor  Admiral  Growth Funds 
  Shares  Shares  Average 
Explorer Fund  0.51%  0.32%  1.61% 

1 The fund expense ratios shown are from the prospectus dated February 20, 2009, and represent estimated costs for the current fiscal year
based on the fund’s net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the expense ratios were 0.54% for
Investor Shares and 0.34% for Admiral Shares. The peer-group expense ratio is derived from data provided by Lipper Inc. and captures
information through year-end 2008.

4


Index, even though it represented a greater portion of assets in the fund than in the index.

The fund was hampered a bit by some selections in health care, the second-largest sector in the portfolio. In particular, Explorer’s biotechnology holdings (–5%) proved to be a notable drag on performance, even as health care overall gained 10% in the fund.

The fund’s consumer staples stocks (+3%) performed tepidly. For example, because the fund had only a short-term, negligible position in Whole Foods Market, a stock that made a sizable contribution to the index’s return, the fund missed out as the high-end food retailer tripled in price on a much-improved sales outlook. The advisors’ selections in financials also held the fund

back. However, the effect was muted by the relatively small size of the consumer staples and financial sectors in the index and the fund.

On the other hand, the fund’s energy holdings (+13%)—particularly stocks of companies involved in oil and gas exploration—were solid performers. The fund’s advisors selected companies that took advantage of rising energy prices and advances in oil and gas extraction. The fund also got a boost from its materials stocks (+30%) as demand kicked back into gear after slowing during the depths of the recession.

Total Returns   
Ten Years Ended October 31, 2009   
  Average 
  Annual Return 
Explorer Fund Investor Shares  4.72% 
Russell 2500 Growth Index  1.56 
Small-Cap Growth Funds Average1  0.88 

The figures shown represent past performance, which is not a guarantee of future results. (Current performance
may be lower or higher than the performance data cited. For performance data current to the most recent month-
end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal
value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost.

1 Derived from data provided by Lipper Inc.

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For more information on the fund’s positioning and performance during the year, please see the Advisors’ Report that follows this letter.

A word on expenses

The fund’s expense ratio has risen over the past fiscal year. The explanation is threefold.

First, over the course of the year, the fund’s average net assets declined below their level in fiscal 2008, meaning the fund’s fixed expenses have accounted for a modestly higher percentage of fund assets. Second, the Vanguard funds' contracts with external advisors typically include breakpoint pricing. As assets rise above a breakpoint threshold, advisory fees are paid at a lower rate. When assets fall, a smaller portion of assets is subject to the lower rate, causing the overall rate to increase. Over time, breakpoint pricing has helped shareholders benefit from the economies of scale produced by growth in the fund’s assets.

Finally, Vanguard’s contracts with external advisors generally include incentive-fee provisions and penalties that are contingent on the advisors’ performance relative to their benchmarks. This fee structure helps to ensure that the interests of the fund shareholders and advisors remain aligned. Over the past year, the advisory fee penalty diminished as the fund’s relative performance improved. The fund’s financial statements include more information about Vanguard Explorer Fund’s incentive fee.

Long-term results, while diminished by the downturn, are still solid

When considering a fund’s past performance, Vanguard encourages investors to focus on long-term results. With that being said, an investment’s long-term track record can be distorted, for better or worse, by the most recent short-term results. Although the Explorer Fund delivered strong returns for the most recent 12-month period, the big losses that preceded this rebound have taken a big chunk from its long-term record.

Over the past ten years, the Explorer Fund’s Investor Shares have returned an average of nearly 5% annually. Just two years ago, at the end of the 2007 fiscal year, the fund had an average yearly return of about 10%. Although the long-term results have been noticeably weakened by the market’s recent historic downturn, the fund has performed significantly better than both its benchmark and peer group over the past ten years.

We continue to have confidence in Explorer’s advisors and their valuation-conscious approach to selecting small-company growth stocks. We believe that the fund will continue to provide solid results over the long term.

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A long-term perspective is still paramount

Although recent months have brought good news for both stock prices and investors, the losses realized in the not-so-distant past won’t be easily forgotten. And, although the stock market seems to be moving in the right direction for now, there’s really no way to be certain what the future will bring.

Uncertainty is the one thing that we can count on in the financial markets. Because of this, Vanguard encourages investors to continue to rely on time-tested principles, including maintaining a long-term perspective and sticking to your plan. By creating and staying with a well-balanced and diversified portfolio that is consistent with your long-term goals, time horizon, and risk tolerance, you’ll have a much better chance of achieving your financial objectives.

We believe that the Explorer Fund, with its low costs and diversification across small-cap growth companies, can be a valuable part of such a well-balanced portfolio.

Thank you for your continued confidence in Vanguard.

Sincerely,


F. William McNabb III
President and Chief Executive Officer
November 17, 2009

  7 


Advisors’ Report

For the fiscal year ended October 31, 2009, Vanguard Explorer Fund returned 14.46% for Investor Shares and 14.66% for the lower-cost Admiral Shares. Your fund is managed by seven independent advisors, a strategy that enhances the fund’s diversification by providing exposure to distinct, yet complementary, investment approaches. It’s not uncommon for different advisors to have different views about individual securities or the broader investment environment.

The table following this report lists the advisors, the amount and percentage of fund assets each manages, and brief descriptions of their investment strategies. The advisors have provided the following assessment of the investment environment during the past 12 months and the notable successes and shortfalls in their portfolios. These comments were prepared on November 20, 2009.

Granahan Investment
Management, Inc.

Portfolio Manager:
Jack Granahan, CFA, Managing Partner

Investment environment: The market rally that began in March has been robust, as fears of financial collapse have receded and appetite for risk has increased. Corporate managements have been generally cautious in giving earnings guidance. That, plus significant cost cutting, allowed many of their estimates to be exceeded through the end of September. At some point, as further cost cuts become more difficult, revenue growth will have to become stronger. In the third calendar quarter, 37% of the companies in our portfolio showed revenue growth.

The government’s huge liquidity injections and low rates, and resultant weaker dollar, also undoubtedly have contributed to higher equity prices.

Successes: Most of our biggest gains were in technology and health care, where it was possible to find some companies that were able to grow through the difficult economic conditions. In technology, stocks like SuccessFactors, Salesforce.com, and Concur all performed well as their on-demand software increased customer productivity and lowered costs. Other tech winners included Riverbed Technology and Blue Coat Systems in network optimization. Our strong contributors in health care included Edwards Lifesciences, whose minimally invasive heart valve product showed promise; Align Technology, which saw resilience in the sales of its Invisalign clear braces; and Medarex, which was acquired at a 90% price premium by Bristol-Myers.

Other sectors that recorded positive performance in our portfolio were industrials and energy, as both good stock selection and fortuitous underweighting helped.

Shortfalls: Consumer staples was our worst-performing sector, as two regional supermarkets, Ruddick and Spartan, were down in an otherwise positive sector. We added to Ruddick and recently began to sell our smaller Spartan position.

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The large consumer discretionary sector produced our highest absolute return for the year but lagged the benchmark sector. Holdings that penalized our portfolio included Skechers, a position we eliminated, and Marchex, which we have reduced.

Wellington Management
Company, LLP

Portfolio Manager:
Kenneth L. Abrams, Senior Vice President
and Equity Portfolio Manager

Investment environment: After months of declines, markets returned to positive territory in April and continued to march higher through the end of the period. With the Federal Reserve maintaining interest rates near zero, investors shifted back into riskier assets, and many stocks that had been punished during the financial crisis rebounded sharply. Signs of economic stabilization overshadowed concerns about high unemployment and weak home prices.

Successes: Our portion of the fund benefited from favorable selections in the materials, consumer discretionary, and information technology sectors. We received solid performances, for example, from holdings in Solutia, TRW Automotive, and Red Hat. Solutia shares gained on improving sales, higher manufacturing and utilization rates, and continued cost controls. TRW Automotive shares rallied in anticipation of a rebound in global auto production. And Red Hat has seen solid results as the firm’s

value-oriented product offerings proved compelling in the challenging market environment.

Shortfalls: Conversely, our industrials holdings—including Covanta and US Airways—were the primary detractors over the trailing 12 months. We eliminated our position in Covanta because we expect that recessionary pressures will lead to longer than expected weakness in the pricing of waste disposal and recycled metal. Shares of US Airways fell as the U.S. airline industry was hurt badly in 2009 by the global economic recession and resulting decline in passenger demand.

Kalmar Investment Advisers

Portfolio Manager:
Ford B. Draper, Jr., President and
Chief Investment Officer

Investment environment: The bear market bottom on March 9 was followed by an enormous rally that went nearly straight up before leveling off recently. Driving this was a pronounced shift in investor sentiment from despair to relief that the financial system and economy were recovering. The markets are now wrestling with the question of whether the recovery—and company earnings progress—will be weak or strong.

So far the rally has been led by a snap back in the smallest, least profitable, most cyclically stretched companies. In contrast, we will maintain our focus on high-quality, self-funding businesses that are increasing their competitive advantages. They should

9


grow even more powerfully if the recovery proves stronger than expected, but far more successfully than most if the recovery is anemic—a good combination.

Successes: In keeping with our bottom-up growth style, our largest contributors came from a mix of industries and were typified by companies that grew successfully despite the sinking economy. These included Rovi, Niko Resources, Cooper Companies, and EnerSys.

Shortfalls: Our largest detractor from relative returns was health care, as our holdings suffered from the uncertainty created by the debate over health care reform, and were affected by operational issues in companies such as Psychiatric Solutions and Immucor.

Vanguard Quantitative Equity Group

Portfolio Manager:
James D. Troyer, CFA, Principal

Investment environment: The panic of the first part of the year drove down all stocks, regardless of individual characteristics, as investors sought to exit the market. In March, the survival of companies that had almost ceased to exist seemed more likely, and these firms roared back to life. Unfortunately, many of these firms had attributes that our model does not seek, such as negative earnings, low margins, and low growth. Value-oriented stocks, which we prefer, were particularly out of favor during the year, presenting our investment process with a significant headwind.

While we are disappointed with our performance for the year, we are not surprised that we lagged during this period. All investment styles endure periods of underperformance. Our benchmark, the Russell 2500 Growth Index, returned 18.21% for the fiscal year. The index had dropped slightly more than 12% through the end of March, and then reversed course with a return of more than 34% for the remainder of the fiscal year.

Successes: We enjoyed success in industrials, with holdings such as Bucyrus International, and in telecommunications, including our position in Centennial Cellular.

Shortfalls: Pharmaceuticals and energy stocks were our least successful industries; our positions in Perrigo and Whiting Pete, for example, hurt performance.

AXA Rosenberg Investment
Management LLC

Portfolio manager:
William E. Ricks, Ph.D., Americas Chief
Executive and Chief Investment Officer

Investment environment: In late 2008, investors witnessed an unprecedented decline in earnings, which prompted record levels of analysts’ revisions. Company earnings became dramatically less certain because of the downward pressure from slowing economies. As a result, investors have shifted their attention to companies with more predictable earnings, albeit with lower earnings growth, over those

10


companies that have greater variability in their earnings outlook. This has driven investors to pay up for “certainty” in earnings and to deemphasize the price paid to purchase those earnings, which presented a challenge to our investment process.

The first few months of 2009 continued to represent a volatile and challenging market environment for active stock pickers. Two key factors were sharp moves in sentiment among sectors and a lack of price discipline exhibited by investors. In particular, previously battered securities sharply rebounded in March and led the rally that continued through the end of the third quarter.

Successes: Our underweighting of financials provided the portfolio with the best overall sector contribution. However, while the underweighting in the sector was rewarded, stock selection partially offset the benefit. Our most significantly underweighted positions were in miscellaneous financial firms and real estate investment trusts. REITs have been challenged in the current economic environment because vacancy rates have increased while their rental rates have declined. An underweight position in Taubman Centers, a retail REIT, aided performance. Within the sector, however, there was wide dispersion in performance.

Many of the troubled financial firms saw their fortunes improve dramatically over the most recent six months. Our proprietary earnings outlook for the sector

forecasted weak earnings, which prevented us from owning many of the high-risk stocks that rallied strongly.

In addition to financials, the energy sector also contributed to performance, because of both sector positioning and stock selection. Our relative performance was helped because we avoided stocks such as Penn Virginia (–45%) and Comstock Resources (–17%).

Shortfalls: The dramatic rally that started in March has been led by beaten-down stocks with poor trailing and forecasted earnings. As a result, stock selection within most sectors hurt our relative performance. Our most challenging sector was technology. Our portfolio’s overweighted position in software companies was driven by firms with strong balance sheets, low interest expense, reasonable valuation levels, and attractive longer-term earnings outlooks; these underperformed the benchmark’s software stocks. However, the earnings outlook for many of the companies that rallied strongly was, in fact, weak.

Chartwell Investment Partners, L.P.

Portfolio Managers:
Edward N. Antoian, CFA, CPA,
Managing Partner

John A. Heffern, Managing Partner and
Senior Portfolio Manager

Investment environment: Cost control amid still-tepid revenues has supported profit margins and fueled a rally in public market valuations. This focus on cost control is evident in the continued

11


weakness in national employment data. Capital and labor are two fundamental economic inputs, and it is clear that capital and profits are being protected at the expense of labor. We expect continued stability in corporate margins, but a sluggish recovery overall. Our stock selection is based on our expectation that enhanced incremental margins will drive superior investment performance as the year draws to a close and we look to further recovery in 2010.

Successes: Stock selection within consumer staples added value. Jarden, a manufacturer of consumer lifestyle products, performed particularly well. Energy and consumer services also helped relative performance.

Shortfalls: Three sectors accounted for nearly all of the portfolio’s underperformance: health care, technology, and industrials. Stock selection disappointed in health care, most notably within medical specialties, hospital and nursing management, and biotechnology. After a strong 2008, two consulting firms, FTI Consulting and Huron Consulting, weighed heavily on our industrials portfolio.

Century Capital Management, LLC

Portfolio Manager:
Alexander L. Thorndike, Chief Investment
Officer and Managing Partner

Investment environment: The pendulum has swung from the severe financial shock of last fall back toward a stabilized economy, and a prevailing rally in the

capital markets has helped improve investor sentiment. Corporate productivity and profitability are encouraging, but consumers remain challenged by high unemployment, high debt, and depressed housing prices. In our opinion, the credit markets and consumer spending will remain constrained for some time, which will have an impact on future economic growth.

We believe that high-quality, competitively advantaged companies will lead the market both in the near future and over the long term. These companies should be best positioned to experience market-share gains, pricing power, and profitable growth in an expansionary environment, and we have positioned the portfolio accordingly to take advantage of seismic shifts during a recovery.

Successes: Health care was our best-performing sector during the period. Top performers included Bruker and Brookdale Senior Living. Financials also contributed to performance, particularly MFA Financial and Eaton Vance.

Shortfalls: Consumer discretionary and consumer staples were our weakest sectors during the period. Matthews International and Ralcorp Holdings, for example, detracted from performance.


Vanguard Explorer Fund Investment Advisors

Fund Assets Managed  
Investment Advisor  %  $ Million  Investment Strategy 
Granahan Investment  25  1,960  Bases its investment process on the beliefs that 
Management, Inc.      earnings drive stock prices and that small, dynamic 
      companies with exceptional growth prospects 
      have the greatest long-term potential. A bottom-up, 
      fundamental approach places companies in one of 
      three life-cycle categories: pioneer, core growth, and 
      special situation. In each, the process looks for 
      companies with strong earnings growth and 
      leadership in their markets. 
Wellington Management  19  1,478  Conducts research and analysis of individual companies 
Company, LLP      to select stocks believed to have exceptional growth 
      potential relative to their market valuations. Each stock 
      is considered individually before purchase, and 
      company developments are continually monitored 
      for comparison with expectations for growth. 
Kalmar Investment Advisers  14  1,126  Employs a “growth-with-value” strategy using 
      creative, bottom-up research to uncover vigorously 
      growing, high-quality businesses whose stocks can be 
      bought while inefficiently valued. The strategy has a 
      dual objective of strong returns with lower risk. 
Vanguard Quantitative Equity Group  13  1,053  Employs a quantitative fundamental management 
      approach, using models that assess valuation, growth 
      prospects, management decisions, market sentiment, 
      and earnings quality of companies as compared 
      with their peers. 
AXA Rosenberg Investment  12  975  Employs an investment philosophy grounded in 
Management LLC      fundamental analysis using a two-part quantitative 
      model: a valuation model, which compares a stock’s 
      price to its fair value, and an earnings-forecast model, 
      which identifies companies likely to have superior 
      earnings. 
Chartwell Investment Partners, L.P.  8  644  Uses a bottom-up, fundamental, research-driven 
      stock-selection strategy focusing on companies with 
      sustainable growth, strong management teams, 
      competitive positions, and outstanding product and 
      service offerings. These companies should continually 
      demonstrate growth in earnings per share. 
Century Capital Management, LLC  7  524  Employs a fundamental, bottom-up approach that 
      attempts to identify reasonably priced companies that 
      will grow faster than the overall market. Companies 
      also must have a superior return on equity, high 
      recurring revenues, and improving margins. 
Cash Investments  2  169  These short-term reserves are invested by Vanguard 
      in equity index products to simulate investment in 
      stocks. Each advisor also may maintain a modest 
      cash position. 

 

+

13


Results of Proxy Voting

At a special meeting of shareholders on July 2, 2009, fund shareholders approved the following two proposals:

Proposal 1—Elect trustees for each fund.*

The individuals listed in the table below were elected as trustees for each fund. All trustees with the exception of Messrs. McNabb and Volanakis (both of whom already served as directors of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.

      Percentage 
Trustee  For  Withheld  For 
John J. Brennan  103,465,394  2,806,805  97.4% 
Charles D. Ellis  103,271,931  3,000,269  97.2% 
Emerson U. Fullwood  103,377,134  2,895,066  97.3% 
Rajiv L. Gupta  103,330,487  2,941,713  97.2% 
Amy Gutmann  103,464,972  2,807,228  97.4% 
JoAnn Heffernan Heisen  103,384,202  2,887,997  97.3% 
F. William McNabb III  103,465,892  2,806,307  97.4% 
Andre F. Perold  103,336,178  2,936,021  97.2% 
Alfred M. Rankin, Jr.  103,446,662  2,825,537  97.3% 
Peter F. Volanakis  103,513,635  2,758,565  97.4% 
* Results are for all funds within the same trust.       

Proposal 2—Update and standardize the funds’ fundamental policies regarding:
(a) Purchasing and selling real estate.
(b) Issuing senior securities.
(c) Borrowing money.
(d) Making loans.
(e) Purchasing and selling commodities.
(f) Concentrating investments in a particular industry or group of industries.
(g) Eliminating outdated fundamental investment policies not required by law.

The revised fundamental policies are clearly stated and simple, yet comprehensive, making oversight and compliance more efficient than under the former policies. The revised fundamental policies will allow the funds to respond more quickly to regulatory and market changes, while avoiding the costs and delays associated with successive shareholder meetings.

        Broker  Percentage 
Explorer Fund  For  Abstain  Against  Non-Votes  For 
2a  99,658,844  1,193,928  3,315,368  2,104,060  93.8% 
2b  98,828,846  1,332,443  4,006,843  2,104,068  93.0% 
2c  95,245,834  1,371,183  7,551,118  2,104,064  89.6% 
2d  97,146,896  1,351,338  5,669,899  2,104,066  91.4% 
2e  97,677,627  1,273,287  5,217,220  2,104,066  91.9% 
2f  99,392,168  1,259,395  3,516,572  2,104,065  93.5% 
2g  99,510,365  1,235,084  3,422,685  2,104,065  93.6% 

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Fund shareholders did not approve this proposal:

Proposal 3—Institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.

The trustees recommended a vote against the proposal because it called for procedures that duplicate existing practices and procedures of the Vanguard funds.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
Explorer Fund  11,570,118  4,697,780  87,900,228  2,104,073  10.9% 

15


Explorer Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics     
    Comparative  Broad 
  Fund  Index1  Index2 
Number of Stocks  1,089  1,569  4,310 
Median Market Cap  $1.8B  $1.9B  $28.3B 
Price/Earnings Ratio  71.3x  49.9x  30.3x 
Price/Book Ratio  2.2x  2.7x  2.1x 
Yield3    0.8%  1.9% 
Investor Shares  0.1%     
Admiral Shares  0.4%     
Return on Equity  13.7%  14.9%  19.4% 
Earnings Growth Rate  11.4%  12.8%  9.3% 
Foreign Holdings  3.5%  0.0%  0.0% 
Turnover Rate  95%  —  — 
Expense Ratio4    —  — 
Investor Shares  0.51%     
Admiral Shares  0.32%     
Short-Term Reserves  2.8%  —  — 

Sector Diversification (% of equity exposure) 
    Comparative  Broad 
  Fund  Index1 Index2 
Consumer Discretionary  16.0% 17.2%  10.0% 
Consumer Staples  3.6  4.7  10.3 
Energy  5.1  4.6  11.6 
Financials  7.3  8.6  16.3 
Health Care  17.8  19.1  11.9 
Industrials  15.1  14.8  10.4 
Information Technology  27.8  23.5  19.1 
Materials  5.9  4.8  3.8 
Telecommunication       
Services  0.7  1.6  2.8 
Utilities  0.7  1.1  3.8 

Volatility Measures5   
  Fund Versus  Fund Versus 
  Comparative Index1  Broad Index2 
R-Squared  0.99  0.95 
Beta  0.94  1.11 

Ten Largest Holdings6 (% of total net assets) 
 
Alliance Data  data processing and   
Systems Corp.  outsourced services  0.7% 
MSC Industrial  trading companies   
Direct Co., Inc. Class A  and distributors  0.7 
Euronet Worldwide Inc.  data processing   
  and outsourced   
  services  0.6 
ON Semiconductor Corp.  semiconductors  0.6 
Polycom, Inc.  communications   
  equipment  0.6 
TiVo Inc.  application software  0.6 
DeVry Inc.  education services  0.5 
Sapient Corp.  IT consulting   
  and other services  0.5 
Edwards Lifesciences Corp. health care  
  equipment  0.5 
Sensient Technologies Corp. specialty chemicals  0.5 
Top Ten    5.8% 

Investment Focus


1 Russell 2500 Growth Index.
2 Dow Jones U.S. Total Stock Market Index.
3 30-day SEC yield for the fund; annualized dividend yield for the indexes. See the Glossary.
4 The expense ratios shown are from the prospectuses dated February 20, 2009, and represent estimated costs for the current fiscal year
based on the fund’s net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the expense ratios were 0.54% for
Investor Shares and 0.34% for Admiral Shares.
5 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
6 The holdings listed exclude any temporary cash investments and equity index products.

16


Explorer Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009

Initial Investment of $10,000


  Average Annual Total Returns  Final Value 
  Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
Explorer Fund Investor Shares1  14.46%  0.54%  4.72%  $15,867 
Dow Jones U.S. Total Stock Market Index  11.34  1.06  0.06  10,056 
Russell 2500 Growth Index  18.21  2.00  1.56  11,680 
Small-Cap Growth Funds Average2  12.85  –0.18  0.88  10,914 

        Final Value 
      Since  of a $100,000 
  One Year  Five Years  Inception3  Investment 
Explorer Fund Admiral Shares  14.66%  0.71%  3.31%  $129,632 
Dow Jones U.S. Total Stock Market Index  11.34  1.06  2.19  118,874 
Russell 2500 Growth Index  18.21  2.00  3.32  129,724 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Derived from data provided by Lipper Inc.
3 Performance for the fund’s Admiral Shares and comparative standards is calculated since the Admiral Shares’ inception:
November 12, 2001.

17


Explorer Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

  Inception Date  One Year  Five Years  Ten Years 
Investor Shares1  12/11/1967  –3.83%  2.24%  5.62% 
Admiral Shares  11/12/2001  –3.66  2.41  4.112 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Return since inception.
See Financial Highlights for dividend and capital gains information.

18


Explorer Fund

Financial Statements

Statement of Net Assets—Investments Summary
As of October 31, 2009

This Statement summarizes the fund’s holdings by asset type. Details are reported for each of the fund’s 50 largest individual holdings and for investments that, in total for any issuer, represent more than 1% of the fund’s net assets. The total value of smaller holdings is reported as a single amount within each category.

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the complete listing of the fund’s holdings is available electronically on Vanguard.com and on the Securities and Exchange Commission’s website (www.sec.gov), or you can have it mailed to you without charge by calling 800-662-7447. For the first and third fiscal quarters, the fund files the lists with the SEC on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

      Market  Percentage 
      Value•  of Net 
    Shares  ($000)  Assets 
Common Stocks       
Consumer Discretionary       
  DeVry Inc.  765,356  42,317  0.5% 
*  WMS Industries Inc.  918,421  36,718  0.5% 
*  GameStop Corp. Class A  1,442,865  35,047  0.4% 
*  DreamWorks Animation SKG Inc. Class A  1,055,100  33,763  0.4% 
*  Warnaco Group Inc.  769,986  31,208  0.4% 
  Penske Auto Group Inc.  1,894,920  29,674  0.4% 
*  O’Reilly Automotive Inc.  795,121  29,642  0.4% 
  Consumer Discretionary—Other †    966,037  12.2% 
      1,204,406  15.2% 
Consumer Staples       
  Ruddick Corp.  1,301,060  34,764  0.4% 
  Nu Skin Enterprises Inc. Class A  1,426,850  32,475  0.4% 
  Consumer Staples—Other †    205,649  2.6% 
      272,888  3.4% 
Energy       
^  Core Laboratories NV  282,090  29,422  0.4% 
  Energy—Other †    352,063  4.4% 
      381,485  4.8% 
Exchange-Traded Funds       
1  Vanguard Small-Cap ETF  1,165,083  60,608  0.7% 
^,1  Vanguard Small-Cap Growth ETF  713,200  38,227  0.5% 
^  iShares Russell 2000 Index Fund  523,200  29,482  0.4% 
      128,317  1.6% 
Financials       
  Discover Financial Services  2,455,400  34,719  0.4% 
*  Jefferies Group Inc.  1,257,963  32,833  0.4% 
  Cash America International Inc.  984,600  29,794  0.4% 
  Financials—Other †    433,956  5.5% 
      531,302  6.7% 

19


Explorer Fund

      Market  Percentage 
      Value•  of Net 
    Shares  ($000)  Assets 
Health Care       
*  Edwards Lifesciences Corp.  538,850  41,459  0.5% 
*  ResMed Inc.  800,375  39,386  0.5% 
  Beckman Coulter Inc.  559,630  36,001  0.5% 
*  Henry Schein Inc.  680,188  35,934  0.4% 
*  Mettler-Toledo International Inc.  339,309  33,083  0.4% 
*  IDEXX Laboratories Inc.  644,360  32,940  0.4% 
*  ICON PLC ADR  1,303,082  32,186  0.4% 
  Cooper Cos. Inc.  1,106,730  31,000  0.4% 
*  QIAGEN NV  1,477,200  30,770  0.4% 
  DENTSPLY International Inc.  851,300  28,059  0.4% 
  Health Care—Other †    1,005,684  12.7% 
      1,346,502  17.0% 
Industrials       
  MSC Industrial Direct Co. Class A  1,237,140  53,259  0.7% 
*  Stericycle Inc.  710,600  37,214  0.5% 
^  Ritchie Bros Auctioneers Inc.  1,476,000  32,354  0.4% 
*  Corrections Corp. of America  1,226,054  29,352  0.4% 
  Equifax Inc.  1,002,684  27,453  0.3% 
  Industrials—Other †    960,653  12.1% 
      1,140,285  14.4% 
Information Technology       
*,^  Alliance Data Systems Corp.  1,075,756  59,145  0.7% 
*  Euronet Worldwide Inc.  2,026,474  47,926  0.6% 
*  ON Semiconductor Corp.  6,939,310  46,424  0.6% 
*  Polycom Inc.  2,151,338  46,189  0.6% 
*  TiVo Inc.  4,017,260  43,708  0.6% 
*  Sapient Corp.  5,096,458  41,485  0.5% 
*  Informatica Corp.  1,655,257  35,141  0.4% 
*  Ingram Micro Inc.  1,964,813  34,679  0.4% 
*  Red Hat Inc.  1,286,693  33,210  0.4% 
*  Teradyne Inc.  3,934,740  32,934  0.4% 
*  FEI Co.  1,379,593  32,848  0.4% 
*  Sybase Inc.  780,886  30,892  0.4% 
*  NICE Systems Ltd. ADR  990,595  30,679  0.4% 
*  Concur Technologies Inc.  851,687  30,354  0.4% 
  Factset Research Systems Inc.  473,800  30,347  0.4% 
*  PMC - Sierra Inc.  3,509,451  29,901  0.4% 
*  Ariba Inc.  2,440,485  28,847  0.4% 
*  MICROS Systems Inc.  1,046,239  28,165  0.4% 
  Information Technology—Other †    1,427,882  18.0% 
      2,090,756  26.4% 
Materials       
  Sensient Technologies Corp.  1,596,950  40,387  0.5% 
  Albemarle Corp.  1,021,170  32,249  0.4% 
*  Solutia Inc.  2,713,783  29,852  0.4% 
  Materials—Other †    344,123  4.3% 
      446,611  5.6% 
 
Telecommunication Services †    54,416  0.7% 
 
Utilities †    47,537  0.6% 
Total Common Stocks (Cost $7,330,799)    7,644,505  96.4%2 
Temporary Cash Investments       

20


Explorer Fund

      Market  Percentage 
      Value•  of Net 
  Coupon  Shares  ($000)  Assets 
Money Market Fund         
3,4 Vanguard Market Liquidity Fund  0.225%  370,767,569  370,768  4.7% 
 
5U.S. Government and Agency Obligations †      18,294  0.2% 
 
Repurchase Agreement †      12,000  0.2% 
Total Temporary Cash Investments (Cost $401,053)      401,062  5.1%2 
Total Investments (Cost $7,731,852)      8,045,567  101.5% 
Other Assets and Liabilities         
Other Assets      130,582  1.6% 
Liabilities4      (246,712)  (3.1%) 
      (116,130)  (1.5%) 
Net Assets      7,929,437  100.0% 
 
 
At October 31, 2009, net assets consisted of:         
        Amount 
        ($000) 
Paid-in Capital        9,860,604 
Overdistributed Net Investment Income        (4,365) 
Accumulated Net Realized Losses        (2,238,236) 
Unrealized Appreciation (Depreciation)         
Investment Securities        313,715 
Futures Contracts        (2,286) 
Foreign Currencies        5 
Net Assets        7,929,437 
 
Investor Shares—Net Assets         
Applicable to 109,676,526 outstanding $.001 par value shares of       
beneficial interest (unlimited authorization)        5,677,413 
Net Asset Value Per Share—Investor Shares        $51.77 
 
Admiral Shares—Net Assets         
Applicable to 46,709,709 outstanding $.001 par value shares of       
beneficial interest (unlimited authorization)        2,252,024 
Net Asset Value Per Share—Admiral Shares        $48.21 

• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $101,748,000.
† Represents the aggregate value, by category, of securities that are not among the 50 largest holdings and, in total for any issuer, represent
1% or less of net assets.
1 Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
2 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures
investments, the fund’s effective common stock and temporary cash investment positions represent 97.3% and 4.2%, respectively, of net
assets.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the
7-day yield.
4 Includes $111,157,000 of collateral received for securities on loan.
5 Securities with a value of $18,294,000 have been segregated as initial margin for open futures contracts.
ADR—American Depositary Receipt.
See accompanying Notes, which are an integral part of the Financial Statements.

21


Explorer Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Dividends1,2  56,491 
Interest2  2,652 
Security Lending  4,935 
Total Income  64,078 
Expenses   
Investment Advisory Fees—Note B   
Basic Fee  14,344 
Performance Adjustment  (376) 
The Vanguard Group—Note C   
Management and Administrative—Investor Shares  14,796 
Management and Administrative—Admiral Shares  2,122 
Marketing and Distribution—Investor Shares  1,338 
Marketing and Distribution—Admiral Shares  569 
Custodian Fees  169 
Auditing Fees  33 
Shareholders’ Reports and Proxies—Investor Shares  399 
Shareholders’ Reports and Proxies—Admiral Shares  83 
Trustees’ Fees and Expenses  16 
Total Expenses  33,493 
Expenses Paid Indirectly  (398) 
Net Expenses  33,095 
Net Investment Income  30,983 
Realized Net Gain (Loss)   
Investment Securities Sold2  (1,398,698) 
Futures Contracts  (4,735) 
Foreign Currencies  (375) 
Realized Net Gain (Loss)  (1,403,808) 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  2,374,912 
Futures Contracts  9,562 
Foreign Currencies  100 
Change in Unrealized Appreciation (Depreciation)  2,384,574 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,011,749 

1 Dividends are net of foreign withholding taxes of $237,000.
2 Dividend income, interest income, and realized net gain (loss) from affiliated companies of the fund were $1,549,000, $2,396,000, and
($8,493,000), respectively.

See accompanying Notes, which are an integral part of the Financial Statements.

22


Explorer Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  30,983  46,416 
Realized Net Gain (Loss)  (1,403,808)  (795,075) 
Change in Unrealized Appreciation (Depreciation)  2,384,574  (4,113,294) 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,011,749  (4,861,953) 
Distributions     
Net Investment Income     
Investor Shares  (31,118)  (32,844) 
Admiral Shares  (17,117)  (19,834) 
Realized Capital Gain1     
Investor Shares  —  (718,966) 
Admiral Shares  —  (293,376) 
Total Distributions  (48,235)  (1,065,020) 
Capital Share Transactions     
Investor Shares  (49,810)  294,591 
Admiral Shares  (33,340)  92,430 
Net Increase (Decrease) from Capital Share Transactions  (83,150)  387,021 
Total Increase (Decrease)  880,364  (5,539,952) 
Net Assets     
Beginning of Period  7,049,073  12,589,025 
End of Period2  7,929,437  7,049,073 

1 Includes fiscal 2008 short-term gain distributions totaling $233,468,000. Short-term gain distributions are treated as ordinary income
dividends for tax purposes.
2 Net Assets—End of Period includes undistributed (overdistributed) net investment income of ($4,365,000) and $13,262,000.

See accompanying Notes, which are an integral part of the Financial Statements.

23


Explorer Fund

Financial Highlights

Investor Shares           
 
For a Share Outstanding  Year Ended October 31 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $45.54  $83.93  $80.26  $76.67  $67.01 
Investment Operations           
Net Investment Income  .178  .295  .362  .302  .111 
Net Realized and Unrealized Gain (Loss)           
on Investments  6.334  (31.589)  11.052  9.724  9.622 
Total from Investment Operations  6.512  (31.294)  11.414  10.026  9.733 
Distributions           
Dividends from Net Investment Income  (.282)  (.310)  (.320)  (.230)  — 
Distributions from Realized Capital Gains  —  (6.786)  (7.424)  (6.206)  (.073) 
Total Distributions  (.282)  (7.096)  (7.744)  (6.436)  (.073) 
Net Asset Value, End of Period  $51.77  $45.54  $83.93  $80.26  $76.67 
 
Total Return1  14.46%  –40.17%  15.31%  13.59%  14.53% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $5,677  $5,026  $8,937  $8,517  $7,836 
Ratio of Total Expenses to           
Average Net Assets2  0.54%  0.44%  0.41%  0.46%  0.51% 
Ratio of Net Investment Income to           
Average Net Assets  0.38%  0.40%  0.44%  0.36%  0.16% 
Portfolio Turnover Rate  95%  112%  90%  96%  80% 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Includes performance-based investment advisory fee increases (decreases) of (0.01%), (0.02%), (0.04%), (0.03%), and (0.01%).

See accompanying Notes, which are an integral part of the Financial Statements.

24


Explorer Fund

Financial Highlights

Admiral Shares           
 
For a Share Outstanding  Year Ended October 31 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $42.45  $78.25  $74.82  $71.47  $62.37 
Investment Operations           
Net Investment Income  .246  .385  .478  .422  .215 
Net Realized and Unrealized Gain (Loss)           
on Investments  5.881  (29.442)  10.299  9.050  8.953 
Total from Investment Operations  6.127  (29.057)  10.777  9.472  9.168 
Distributions           
Dividends from Net Investment Income  (.367)  (.427)  (.437)  (.346)  — 
Distributions from Realized Capital Gains  —  (6.316)  (6.910)  (5.776)  (.068) 
Total Distributions  (.367)  (6.743)  (7.347)  (6.122)  (.068) 
Net Asset Value, End of Period  $48.21  $42.45  $78.25  $74.82  $71.47 
 
Total Return  14.66%  –40.07%  15.53%  13.79%  14.70% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $2,252  $2,023  $3,652  $3,264  $2,402 
Ratio of Total Expenses to           
Average Net Assets1  0.34%  0.26%  0.23%  0.28%  0.34% 
Ratio of Net Investment Income to           
Average Net Assets  0.58%  0.58%  0.62%  0.54%  0.33% 
Portfolio Turnover Rate  95%  112%  90%  96%  80% 

1 Includes performance-based investment advisory fee increases (decreases) of (0.01%), (0.02%), (0.04%), (0.03%), and (0.01%).

See accompanying Notes, which are an integral part of the Financial Statements.

25


Explorer Fund

Notes to Financial Statements

Vanguard Explorer Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers two classes of shares: Investor Shares and Admiral Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size criteria.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments acquired over 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value.

2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

3. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objective of maintaining full exposure to the stock market while maintaining liquidity. The fund may purchase or sell futures contracts to achieve a desired level of investment, whether to accommodate portfolio turnover or cash flows from capital share transactions. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

Futures contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized futures gains (losses).

26


Explorer Fund

4. Repurchase Agreements: The fund may invest in repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings.

5. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

6. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

7. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.

8. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses), shareholder reporting, and proxies. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.

B. Granahan Investment Management, Inc., Wellington Management Company, LLP, Kalmar Investment Advisers, AXA Rosenberg Investment Management LLC, Chartwell Investment Partners, L.P., and Century Capital Management, LLC, each provide investment advisory services to a portion of the fund for a fee calculated at an annual percentage rate of average net assets managed by the advisor. The basic fees of Chartwell Investment Partners, L.P., Granahan Investment Management, Inc., Kalmar Investment Advisers, and Wellington Management Company, LLP, are subject to quarterly adjustments based on performance for the preceding three years relative to the Russell 2500 Growth Index. The basic fee for AXA Rosenberg Investment Management LLC is subject to quarterly adjustments based on performance since July 31, 2007, relative to the Russell 2500 Growth Index. The basic fee for Century Capital Management, LLC, is subject to quarterly adjustments based on performance since October 31, 2008, relative to a 50/50 blend of the Russell 2500 Index and Russell 2500 Growth Index.

The Vanguard Group provides investment advisory services to a portion of the fund on an at-cost basis; the fund paid Vanguard advisory fees of $374,000 for the year ended October 31, 2009.

For the year ended October 31, 2009, the aggregate investment advisory fee represented an effective annual basic rate of 0.21% of the fund’s average net assets, before a decrease of $376,000 (0.01%) based on performance.

27


Explorer Fund

C. The Vanguard Group furnishes at cost corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At October 31, 2009, the fund had contributed capital of $1,761,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.70% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

D. The fund has asked its investment advisors to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the fund part of the commissions generated. Such rebates are used solely to reduce the fund’s management and administrative expenses. The fund’s custodian bank has also agreed to reduce its fees when the fund maintains cash on deposit in the non-interest-bearing custody account. For the year ended October 31, 2009, these arrangements reduced the fund’s management and administrative expenses by $391,000 and custodian fees by $7,000. The total expense reduction represented an effective annual rate of 0.01% of the fund’s average net assets.

E. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of October 31, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Common Stocks  7,596,435  48,070  — 
Temporary Cash Investments  370,768  30,294  — 
Futures Contracts—Assets1  527  —  — 
Futures Contracts—Liabilities1  (2,814)  —  — 
Total  7,964,916  78,364  — 

1 Represents variation margin on the last day of the reporting period.

28


Explorer Fund

The following table summarizes changes in investments valued based on Level 3 inputs during the year ended October 31, 2009:

  Investments in 
  Common Stocks 
Amount Valued Based on Level 3 Inputs  ($000) 
Balance as of October 31, 2008  4,568 
Transfers out of Level 3  (2,712) 
Change in Unrealized Appreciation (Depreciation)  (1,856) 
Balance as of October 31, 2009  — 

F. At October 31, 2009, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

      ($000) 
    Number of  Aggregate  Unrealized 
    Long (Short)  Settlement  Appreciation 
Futures Contracts  Expiration  Contracts  Value  (Depreciation) 
S&P MidCap 400 Index  December 2009  91  29,912  (1,137) 
E-mini NASDAQ 100 Index  December 2009  837  27,880  (378) 
E-mini Russell 2000 Index  December 2009  231  12,978  (771) 

Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.

G. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

During the year ended October 31, 2009, the fund realized net foreign currency losses of $375,000, which decreased distributable net income for tax purposes; accordingly, such losses have been reclassified from accumulated net realized losses to undistributed net investment income.

For tax purposes, at October 31, 2009, the fund had $15,403,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $2,229,101,000 to offset future net capital gains of $784,127,000 through October 31, 2016, and $1,444,974,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $7,743,448,000. Net unrealized appreciation of investment securities for tax purposes was $302,119,000, consisting of unrealized gains of $1,015,229,000 on securities that had risen in value since their purchase and $713,110,000 in unrealized losses on securities that had fallen in value since their purchase.

29


Explorer Fund

H. During the year ended October 31, 2009, the fund purchased $6,335,492,000 of investment securities and sold $6,284,295,000 of investment securities, other than temporary cash investments.

I. Certain of the fund’s investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company. Transactions during the period in securities of these companies were as follows:

     Current Period Transactions  
  Oct. 31, 2008    Proceeds from    Oct. 31, 2009 
  Market  Purchases  Securities  Dividend  Market 
  Value  at Cost  Sold  Income  Value 
  ($000)  ($000)  ($000)  ($000)  ($000) 
Advanta Corp. Class A  2,425  —  1,410  180  — 
Hollywood Media Corp.  NA1  107  1,245  —  NA1 
  2,425      180  — 

1 Not applicable—At October 31, 2008, and October 31, 2009, the issuer was not an affiliated company of the fund, but it was affiliated
during the period.

J. Capital share transactions for each class of shares were:

  Year Ended October 31, 
  2009  2008 
  Amount  Shares  Amount  Shares 
  ($000)  (000)  ($000)  (000) 
Investor Shares         
Issued  834,745  18,954  981,528  15,527 
Issued in Lieu of Cash Distributions  30,644  746  742,180  10,728 
Redeemed  (915,199)  (20,390)  (1,429,117)  (22,368) 
Net Increase (Decrease)—Investor Shares  (49,810)  (690)  294,591  3,887 
Admiral Shares         
Issued  411,846  10,050  459,208  7,554 
Issued in Lieu of Cash Distributions  15,592  408  293,573  4,559 
Redeemed  (460,778)  (11,416)  (660,351)  (11,114) 
Net Increase (Decrease)—Admiral Shares  (33,340)  (958)  92,430  999 

K. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 15, 2009, for potential recognition or disclosure in these financial statements.

30


Report of Independent Registered
Public Accounting Firm

To the Trustees and Shareholders of Vanguard Explorer Fund:

In our opinion, the accompanying statement of net assets--investments summary and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard Explorer Fund (the “Fund”) at October 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2009 by correspondence with the custodians and brokers and by agreement to the underlying ownership records of Vanguard Market Liquidity Fund, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania

December 15, 2009


Special 2009 tax information (unaudited) for Vanguard Explorer Fund

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $48,236,000 of qualified dividend income to shareholders during the fiscal year.

For corporate shareholders, 100.0% of investment income (dividend income plus short-term gains, if any) qualifies for the dividends-received deduction.

31


Your Fund’s After-Tax Returns

This table presents returns for your fund both before and after taxes. The after-tax returns are shown in two ways: (1) assuming that an investor owned the fund during the entire period and paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s distributions and sold all shares at the end of each period.

Calculations are based on the highest individual federal income tax and capital gains tax rates in effect at the times of the distributions and the hypothetical sales. State and local taxes were not considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures and estimates for 2009. (In the example, returns after the sale of fund shares may be higher than those assuming no sale. This occurs when the sale would have produced a capital loss. The calculation assumes that the investor received a tax deduction for the loss.)

The table shows returns for Investor Shares only; returns for other share classes will differ. Please note that your actual after-tax returns will depend on your tax situation and may differ from those shown. Also note that if you own the fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not subject to current taxes.

Finally, keep in mind that a fund’s performance—whether before or after taxes—does not guarantee future results.

Average Annual Total Returns: Explorer Fund Investor Shares1       
Periods Ended October 31, 2009       
  One  Five  Ten 
  Year  Years  Years 
Returns Before Taxes  14.46%  0.54%  4.72% 
Returns After Taxes on Distributions  14.34  –0.48  3.17 
Returns After Taxes on Distributions and Sale of Fund Shares  9.51  0.44  3.51 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.

32


About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.

A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

The accompanying table illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”

• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Six Months Ended October 31, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
Explorer Fund  4/30/2009  10/31/2009  Period1 
Based on Actual Fund Return       
Investor Shares  $1,000.00  $1,171.80  $2.79 
Admiral Shares  1,000.00  1,172.99  1.75 
Based on Hypothetical 5% Yearly Return       
Investor Shares  $1,000.00  $1,022.63  $2.60 
Admiral Shares  1,000.00  1,023.59  1.63 

1 The calculations are based on expenses incurred in the most recent six-month period. The fund’s annualized six-month expense ratios for
that period are 0.51% for Investor Shares and 0.32% for Admiral Shares. The dollar amounts shown as “Expenses Paid” are equal to the
annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent six-
month period, then divided by the number of days in the most recent 12-month period.

33


Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the account service fee described in the prospectus. If such a fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.

34


Glossary

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Earnings Growth Rate. The average annual rate of growth in earnings over the past five years for the stocks now in a fund.

Equity Exposure. A measure that reflects a fund’s investments in stocks and stock futures. Any holdings in short-term reserves are excluded.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

Foreign Holdings. The percentage of a fund represented by stocks or depositary receipts of companies based outside the United States.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

Median Market Cap. An indicator of the size of companies in which a fund invests; the midpoint of market capitalization (market price x shares outstanding) of a fund’s stocks, weighted by the proportion of the fund’s assets invested in each stock. Stocks representing half of the fund’s assets have market capitalizations above the median, and the rest are below it.

Price/Book Ratio. The share price of a stock divided by its net worth, or book value, per share. For a fund, the weighted average price/book ratio of the stocks it holds.

Price/Earnings Ratio. The ratio of a stock’s current price to its per-share earnings over the past year. For a fund, the weighted average P/E of the stocks it holds. P/E is an indicator of market expectations about corporate prospects; the higher the P/E, the greater the expectations for a company’s future growth.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

Return on Equity. The annual average rate of return generated by a company during the past five years for each dollar of shareholder’s equity (net income divided by shareholder’s equity). For a fund, the weighted average return on equity for the companies whose stocks it holds.

Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.

35


Turnover Rate. An indication of the fund’s trading activity. Funds with high turnover rates incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The turnover rate excludes in-kind transactions, which have minimal impact on costs.

Yield. A fund’s 30-day SEC yield is derived using a formula specified by the U.S. Securities and Exchange Commission. Under the formula, data related to the fund’s security holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that period, which is then annualized and divided by the fund’s estimated average net assets over the calculation period. For the purposes of this calculation, a security’s income is based on its current market yield to maturity (in the case of bonds) or its projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized income, it will differ—at times significantly—from the fund’s actual experience. As a result, the fund’s income distributions may be higher or lower than implied by the SEC yield.

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The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 156 Vanguard funds.

The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.

Interested Trustees  Emerson U. Fullwood 
  Born 1948. Trustee Since January 2008. Principal 
John J. Brennan1  Occupation(s) During the Past Five Years: Executive 
Born 1954. Trustee Since May 1987. Chairman of  Chief Staff and Marketing Officer for North America 
the Board. Principal Occupation(s) During the Past  and Corporate Vice President (retired 2008) of Xerox 
Five Years: Chairman of the Board and Director/Trustee  Corporation (photocopiers and printers); Director of 
of The Vanguard Group, Inc., and of each of the  SPX Corporation (multi-industry manufacturing), the 
investment companies served by The Vanguard Group;  United Way of Rochester, the Boy Scouts of America, 
Chief Executive Officer (1996–2008) and President  Amerigroup Corporation (direct health and medical 
(1989–2008) of The Vanguard Group and of each of the  insurance carriers), and Monroe Community College 
investment companies served by The Vanguard Group;  Foundation. 
Chairman of the Financial Accounting Foundation;   
Governor of the Financial Industry Regulatory Authority  Rajiv L. Gupta 
(FINRA); Director of United Way of Southeastern  Born 1945. Trustee Since December 2001.2 Principal 
Pennsylvania.  Occupation(s) During the Past Five Years: Chairman 
  and Chief Executive Officer (retired 2009) and President 
F. William McNabb III1  (2006–2008) of Rohm and Haas Co. (chemicals); Board 
Born 1957. Trustee Since July 2009. Principal  Member of American Chemistry Council; Director of 
Occupation(s) During the Past Five Years: Director of  Tyco International, Ltd. (diversified manufacturing and 
The Vanguard Group, Inc., since 2008; Chief Executive  services) and Hewlett-Packard Co. (electronic computer 
Officer and President of The Vanguard Group and of  manufacturing); Trustee of The Conference Board. 
each of the investment companies served by The   
Vanguard Group since 2008; Director of Vanguard  Amy Gutmann 
Marketing Corporation; Managing Director of The  Born 1949. Trustee Since June 2006. Principal 
Vanguard Group (1995–2008).  Occupation(s) During the Past Five Years: President of 
  the University of Pennsylvania; Christopher H. Browne 
  Distinguished Professor of Political Science in the School 
Independent Trustees  of Arts and Sciences with secondary appointments 
  at the Annenberg School for Communication and the 
Charles D. Ellis  Graduate School of Education of the University of 
Born 1937. Trustee Since January 2001. Principal  Pennsylvania; Director of Carnegie Corporation of 
Occupation(s) During the Past Five Years: Applecore  New York, Schuylkill River Development Corporation, 
Partners (pro bono ventures in education); Senior  and Greater Philadelphia Chamber of Commerce; 
Advisor to Greenwich Associates (international business  Trustee of the National Constitution Center. 
strategy consulting); Successor Trustee of Yale University;   
Overseer of the Stern School of Business at New York   
University; Trustee of the Whitehead Institute for   
Biomedical Research.   


JoAnn Heffernan Heisen  Executive Officers   
Born 1950. Trustee Since July 1998. Principal     
Occupation(s) During the Past Five Years: Corporate  Thomas J. Higgins1   
Vice President and Chief Global Diversity Officer since  Born 1957. Chief Financial Officer Since September 
2006 (retired 2008) and Member of the Executive  2008. Principal Occupation(s) During the Past Five 
Committee (retired 2008) of Johnson & Johnson  Years: Principal of The Vanguard Group, Inc.; Chief 
(pharmaceuticals/consumer products); Vice President  Financial Officer of each of the investment companies 
and Chief Information Officer of Johnson & Johnson  served by The Vanguard Group since 2008; Treasurer 
(1997–2005); Director of the University Medical Center  of each of the investment companies served by The 
at Princeton and Women’s Research and Education  Vanguard Group (1998–2008). 
Institute; Member of the Advisory Board of the Maxwell     
School of Citizenship and Public Affairs at Syracuse     
University.  Kathryn J. Hyatt1   
  Born 1955. Treasurer Since November 2008. Principal 
  Occupation(s) During the Past Five Years: Principal of 
F. Joseph Loughrey  The Vanguard Group, Inc.; Treasurer of each of the 
Born 1949. Trustee Since October 2009. Principal  investment companies served by The Vanguard 
Occupation(s) During the Past Five Years: President and  Group since 2008; Assistant Treasurer of each of the 
Chief Operating Officer since 2005 (retired 2009) and  investment companies served by The Vanguard Group 
Vice Chairman of the Board (2008–2009) of Cummins  (1988–2008).   
Inc. (industrial machinery); Director of SKF AB (industrial     
machinery), Hillenbrand, Inc. (specialized consumer     
services), Sauer-Danfoss Inc. (machinery), the Lumina  Heidi Stam1   
Foundation for Education, and the Columbus Community  Born 1956. Secretary Since July 2005. Principal 
Education Coalition; Chairman of the Advisory Council  Occupation(s) During the Past Five Years: Managing 
for the College of Arts and Letters at the University of  Director of The Vanguard Group, Inc., since 2006; 
Notre Dame.  General Counsel of The Vanguard Group since 2005; 
  Secretary of The Vanguard Group and of each of the 
  investment companies served by The Vanguard Group 
André F. Perold  since 2005; Director and Senior Vice President of 
Born 1952. Trustee Since December 2004. Principal  Vanguard Marketing Corporation since 2005; Principal 
Occupation(s) During the Past Five Years: George Gund  of The Vanguard Group (1997–2006). 
Professor of Finance and Banking, Harvard Business     
School; Chair of the Investment Committee of HighVista     
Strategies LLC (private investment firm).  Vanguard Senior Management Team 
 
Alfred M. Rankin, Jr.  R. Gregory Barton  Michael S. Miller 
Born 1941. Trustee Since January 1993. Principal  Mortimer J. Buckley  James M. Norris 
Occupation(s) During the Past Five Years: Chairman,  Kathleen C. Gubanich  Glenn W. Reed 
President, and Chief Executive Officer of NACCO  Paul A. Heller  George U. Sauter 
Industries, Inc. (forklift trucks/housewares/lignite);     
Director of Goodrich Corporation (industrial products/     
aircraft systems and services); Deputy Chairman of   
the Federal Reserve Bank of Cleveland; Trustee of     
University Hospitals of Cleveland, The Cleveland   Founder   
Museum of Art, and Case Western Reserve University.  John C. Bogle   
  Chairman and Chief Executive Officer, 1974–1996 
 
Peter F. Volanakis     
Born 1955. Trustee Since July 2009. Principal     
Occupation(s) During the Past Five Years: President     
since 2007 and Chief Operating Officer since 2005     
of Corning Incorporated (communications equipment);     
President of Corning Technologies (2001–2005); Director     
of Corning Incorporated and Dow Corning; Trustee of     
the Corning Incorporated Foundation and the Corning     
Museum of Glass; Overseer of the Amos Tuck School     
of Business Administration at Dartmouth College.     

1 These individuals are “interested persons” as defined in the Investment Company Act of 1940.
2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


P.O. Box 2600
Valley Forge, PA 19482-2600

Connect with Vanguard® > www.vanguard.com

Fund Information > 800-662-7447  All comparative mutual fund data are from Lipper Inc. 
  or Morningstar, Inc., unless otherwise noted. 
Direct Investor Account Services > 800-662-2739   
 
Institutional Investor Services > 800-523-1036  You can obtain a free copy of Vanguard’s proxy voting 
  guidelines by visiting our website, www.vanguard.com, 
Text Telephone for People  and searching for “proxy voting guidelines,” or by 
With Hearing Impairment > 800-749-7273  calling Vanguard at 800-662-2739. The guidelines are 
  also available from the SEC’s website, www.sec.gov. 
  In addition, you may obtain a free report on how your 
  fund voted the proxies for securities it owned during 
the 12 months ended June 30. To get the report, visit 
This material may be used in conjunction  either www.vanguard.com or www.sec.gov.
with the offering of shares of any Vanguard 
fund only if preceded or accompanied by   
the fund’s current prospectus.  You can review and copy information about your fund 
  at the SEC’s Public Reference Room in Washington, D.C. 
CFA® is a trademark owned by CFA Institute.  To find out more about this public service, call the SEC 
  at 202-551-8090. Information about your fund is also 
  available on the SEC’s website, and you can receive 
  copies of this information, for a fee, by sending a 
  request in either of two ways: via e-mail addressed to 
  publicinfo@sec.gov or via regular mail addressed to the 
  Public Reference Section, Securities and Exchange 
  Commission, Washington, DC 20549-1520. 
 
 
 
 
  © 2009 The Vanguard Group, Inc. 
  All rights reserved. 
  Vanguard Marketing Corporation, Distributor. 
  Q240 122009 


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
 
Common Stocks (96.4%)1     
Consumer Discretionary (15.2%)     
  DeVry Inc.  765,356  42,317 
*  WMS Industries Inc.  918,421  36,718 
*  GameStop Corp. Class A  1,442,865  35,047 
*  DreamWorks Animation SKG Inc. Class A  1,055,100  33,763 
*  Warnaco Group Inc.  769,986  31,208 
  Penske Auto Group Inc.  1,894,920  29,674 
*  O'Reilly Automotive Inc.  795,121  29,642 
*  LKQ Corp.  1,481,210  25,581 
  Nordstrom Inc.  733,200  23,301 
*  MGM Mirage  2,443,200  22,648 
*  TRW Automotive Holdings Corp.  1,442,224  22,571 
  American Eagle Outfitters Inc.  1,265,610  22,136 
*  Aeropostale Inc.  548,129  20,571 
*  Penn National Gaming Inc.  814,905  20,479 
*  NVR Inc.  30,044  19,897 
*  Tractor Supply Co.  434,676  19,430 
  Service Corp. International  2,819,700  19,371 
*  Life Time Fitness Inc.  839,210  18,085 
  Jarden Corp.  644,653  17,657 
*  Gymboree Corp.  412,148  17,545 
*  Capella Education Co.  248,472  17,120 
  Autoliv Inc.  496,400  16,669 
  Gentex Corp.  1,017,540  16,291 
*  Childrens Place Retail Stores Inc.  499,359  15,705 
  Aaron's Inc.  601,600  15,070 
  Talbots Inc.  1,586,790  14,392 
*,^  NetFlix Inc.  269,135  14,385 
  Mattel Inc.  751,100  14,218 
  ArvinMeritor Inc.  1,810,000  14,136 
*  Bally Technologies Inc.  339,660  13,379 
*  JOS A Bank Clothiers Inc.  305,640  12,525 
*  Texas Roadhouse Inc. Class A  1,281,804  12,139 
*  Tenneco Inc.  890,327  12,126 
*  priceline.com Inc.  76,850  12,126 
  Monro Muffler Brake Inc.  388,850  12,050 
  Darden Restaurants Inc.  393,071  11,914 
*  Urban Outfitters Inc.  378,533  11,878 
  Phillips-Van Heusen Corp.  295,300  11,856 
  Polaris Industries Inc.  281,400  11,839 
*  OfficeMax Inc.  1,015,200  11,604 
  Ross Stores Inc.  257,582  11,336 
*  Interpublic Group of Cos. Inc.  1,815,449  10,929 
*  ITT Educational Services Inc.  109,200  9,866 
  John Wiley & Sons Inc. Class A  268,738  9,465 
  Guess? Inc.  255,230  9,329 
  Lennar Corp. Class A  704,000  8,870 
*  Career Education Corp.  405,900  8,459 
  Cracker Barrel Old Country Store Inc.  251,039  8,322 
*  Kohl's Corp.  143,114  8,189 
*  CEC Entertainment Inc.  280,103  8,182 
  Hasbro Inc.  297,555  8,114 
*  Tempur-Pedic International Inc.  406,622  7,876 
*  Royal Caribbean Cruises Ltd.  381,300  7,714 
  Strayer Education Inc.  37,850  7,682 
*  Lumber Liquidators Inc.  353,074  7,503 
*  Cheesecake Factory Inc.  403,793  7,341 
  CKE Restaurants Inc.  813,800  7,121 
*  Jack in the Box Inc.  353,100  6,624 
  Tiffany & Co.  165,437  6,500 
  Matthews International Corp. Class A  176,000  6,465 
  Pool Corp.  329,900  6,459 

1


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
  Liz Claiborne Inc.  1,087,200  6,241 
  Rossi Residencial SA  932,500  6,156 
*  Brink's Home Security Holdings Inc.  197,570  6,121 
  Jones Apparel Group Inc.  337,370  6,036 
*  Steven Madden Ltd.  145,069  5,875 
*  Dress Barn Inc.  315,900  5,702 
  Williams-Sonoma Inc.  302,350  5,678 
*  Big Lots Inc.  221,140  5,540 
*  Dollar Tree Inc.  122,281  5,519 
  Cablevision Systems Corp. Class A  233,450  5,360 
*  Pre-Paid Legal Services Inc.  132,694  5,247 
  Tupperware Brands Corp.  110,693  4,983 
*  Panera Bread Co. Class A  81,600  4,894 
*  Dick's Sporting Goods Inc.  211,800  4,806 
*,^  K12 Inc.  292,415  4,690 
  Regis Corp.  284,170  4,615 
*  Wet Seal Inc. Class A  1,439,700  4,593 
  Advance Auto Parts Inc.  121,402  4,523 
*  Collective Brands Inc.  237,000  4,396 
*  Kirkland's Inc.  344,435  4,333 
  Coach Inc.  130,000  4,286 
  Genuine Parts Co.  120,000  4,199 
  Finish Line Inc. Class A  411,073  4,168 
*  FGX International Holdings Ltd.  300,000  3,957 
*  Fossil Inc.  144,900  3,873 
*  Timberland Co. Class A  235,982  3,818 
*  Coldwater Creek Inc.  661,518  3,804 
*  Sonic Corp.  400,669  3,746 
*  Valassis Communications Inc.  203,614  3,712 
*  Corinthian Colleges Inc.  219,300  3,478 
  Harte-Hanks Inc.  291,000  3,416 
*  Deckers Outdoor Corp.  37,700  3,381 
  Cato Corp. Class A  171,216  3,375 
*  Jo-Ann Stores Inc.  126,343  3,363 
^  Buckle Inc.  110,002  3,301 
*  Sally Beauty Holdings Inc.  488,058  3,294 
  Foot Locker Inc.  299,320  3,137 
*  True Religion Apparel Inc.  120,510  3,106 
  Big 5 Sporting Goods Corp.  204,721  3,020 
  RadioShack Corp.  174,426  2,946 
*  Marvel Entertainment Inc.  57,600  2,878 
*  Wonder Auto Technology Inc.  216,644  2,803 
*,^  Fuqi International Inc.  133,150  2,728 
*  Denny's Corp.  1,231,100  2,708 
*  Fuel Systems Solutions Inc.  82,400  2,698 
  Pulte Homes Inc.  295,500  2,662 
*  HSN Inc.  174,900  2,613 
  Burger King Holdings Inc.  146,700  2,517 
  Cooper Tire & Rubber Co.  156,243  2,384 
  Standard Motor Products Inc.  269,596  2,254 
*  BJ's Restaurants Inc.  135,000  2,155 
*  PF Chang's China Bistro Inc.  72,648  2,121 
*  99 Cents Only Stores  185,311  2,107 
*  Carter's Inc.  85,085  2,008 
  DineEquity Inc.  87,960  1,861 
*,^  Overstock.com Inc.  127,305  1,782 
*  HOT Topic Inc.  229,946  1,771 
*  Stein Mart Inc.  174,836  1,661 
*  Knology Inc.  164,431  1,653 
*  Buffalo Wild Wings Inc.  40,000  1,640 
*  Carrols Restaurant Group Inc.  241,068  1,565 
  Unifirst Corp.  34,144  1,436 
*  Citi Trends Inc.  53,438  1,407 
  Barnes & Noble Inc.  83,300  1,384 

2


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
  Interactive Data Corp.  48,800  1,283 
*  Mediacom Communications Corp. Class A  246,125  1,177 
  American Greetings Corp. Class A  57,212  1,164 
*  Retail Ventures Inc.  163,166  1,046 
*  AutoNation Inc.  60,000  1,034 
  MDC Holdings Inc.  28,730  937 
*  Isle of Capri Casinos Inc.  115,281  893 
  Books-A-Million Inc.  101,311  877 
  Thor Industries Inc.  33,300  873 
  National CineMedia Inc.  53,591  857 
*,^  Caribou Coffee Co. Inc.  102,808  842 
*  LodgeNet Interactive Corp.  155,962  756 
*  Smith & Wesson Holding Corp.  171,549  733 
*  Universal Electronics Inc.  35,193  725 
  Men's Wearhouse Inc.  29,100  674 
*  Red Robin Gourmet Burgers Inc.  37,700  630 
  CPI Corp.  51,473  585 
  Brinker International Inc.  46,157  583 
*  Dorman Products Inc.  39,853  583 
  PetMed Express Inc.  36,978  580 
*  Steiner Leisure Ltd.  15,500  573 
  Wolverine World Wide Inc.  21,700  555 
*  O'Charleys Inc.  74,601  523 
*  Famous Dave's Of America Inc.  81,398  500 
  Stage Stores Inc.  40,730  481 
*  G-III Apparel Group Ltd.  24,248  388 
*  Core-Mark Holding Co. Inc.  14,076  385 
*  Papa John's International Inc.  17,100  385 
  World Wrestling Entertainment Inc. Class A  28,931  384 
*  Lincoln Educational Services Corp.  18,700  371 
*  Destination Maternity Corp.  18,478  371 
*  AFC Enterprises Inc.  45,544  366 
*  China Automotive Systems Inc.  35,100  364 
*  Chipotle Mexican Grill Inc. Class B  4,400  352 
  PetSmart Inc.  14,014  330 
*  Carmike Cinemas Inc.  30,700  302 
^  Sturm Ruger & Co. Inc.  23,349  248 
  Choice Hotels International Inc.  7,300  218 
*  Domino's Pizza Inc.  29,307  215 
*  Systemax Inc.  15,776  213 
  WABCO Holdings Inc.  7,600  180 
  National Presto Industries Inc.  1,625  141 
*  California Pizza Kitchen Inc.  9,648  125 
*  Einstein Noah Restaurant Group Inc.  9,300  121 
*,^  Conn's Inc.  17,369  110 
*  Amerigon Inc.  16,200  104 
*  Town Sports International Holdings Inc.  26,894  80 
*  CTC Media Inc.  4,500  72 
  Sport Supply Group Inc.  5,700  59 
  Frisch's Restaurants Inc.  2,100  49 
*  Stamps.com Inc.  4,259  43 
*  Interval Leisure Group Inc.  3,194  36 
*  Mac-Gray Corp.  1,593  13 
*  Midas Inc.  1,463  12 
*  Culp Inc.  855  5 
*  Haverty Furniture Cos. Inc.  383  5 
*  Warner Music Group Corp.  246  1 
*  Krispy Kreme Doughnuts Inc. Warrants Exp. 03/02/2012  8,183  1 
      1,204,406 
Consumer Staples (3.4%)     
  Ruddick Corp.  1,301,060  34,764 
  Nu Skin Enterprises Inc. Class A  1,426,850  32,475 
*  Chattem Inc.  321,360  20,365 
*  Energizer Holdings Inc.  328,750  20,011 

3


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  United Natural Foods Inc.  783,004  18,878 
  Pricesmart Inc.  938,920  18,121 
  Herbalife Ltd.  410,370  13,809 
*  BJ's Wholesale Club Inc.  366,700  12,845 
*  Constellation Brands Inc. Class A  783,200  12,390 
  Lancaster Colony Corp.  196,694  9,555 
*  Central European Distribution Corp.  256,200  7,970 
  Diamond Foods Inc.  230,400  6,947 
*  Smithfield Foods Inc.  504,000  6,723 
*  Ralcorp Holdings Inc.  115,300  6,192 
*,^  Green Mountain Coffee Roasters Inc.  89,300  5,943 
*  Dean Foods Co.  316,073  5,762 
*  NBTY Inc.  131,169  4,776 
  Andersons Inc.  117,039  3,632 
*  Revlon Inc. Class A  402,949  3,397 
  Church & Dwight Co. Inc.  53,400  3,037 
*  American Italian Pasta Co.  109,667  2,980 
*  Boston Beer Co. Inc. Class A  64,505  2,451 
*,^  Orchids Paper Products Co.  124,024  2,220 
*  Darling International Inc.  293,700  2,041 
  Spartan Stores Inc.  142,520  2,018 
  Alberto-Culver Co. Class B  64,600  1,733 
*  Medifast Inc.  57,107  1,257 
*,^  American Oriental Bioengineering Inc.  295,330  1,170 
*  Pantry Inc.  79,767  1,126 
  Casey's General Stores Inc.  33,800  1,066 
*  Prestige Brands Holdings Inc.  131,701  890 
*  Bare Escentuals Inc.  69,500  878 
  Weis Markets Inc.  22,577  799 
*  Overhill Farms Inc.  140,243  766 
  Sanderson Farms Inc.  19,500  713 
*,^  Diedrich Coffee Inc.  32,473  708 
  Coca-Cola Bottling Co. Consolidated  15,703  705 
*  HQ Sustainable Maritime Industries Inc.  68,500  519 
  Calavo Growers Inc.  21,100  377 
  Village Super Market Inc. Class A  7,906  237 
  Schiff Nutrition International Inc.  16,600  96 
  Inter Parfums Inc.  7,554  93 
*,^  China Sky One Medical Inc.  7,400  88 
  J&J Snack Foods Corp.  2,150  84 
  B&G Foods Inc. Class A  10,480  82 
*  American Dairy Inc.  2,700  78 
*  National Beverage Corp.  6,119  67 
*  Nutraceutical International Corp.  4,982  54 
      272,888 
Energy (4.8%)     
^  Core Laboratories NV  282,090  29,422 
*  Ultra Petroleum Corp.  530,460  25,754 
*  Atwood Oceanics Inc.  713,460  25,321 
  Massey Energy Co.  780,600  22,708 
*  PetroHawk Energy Corp.  827,620  19,466 
  Niko Resources Ltd.  212,040  17,166 
  Frontier Oil Corp.  1,183,600  16,405 
*  Comstock Resources Inc.  365,900  15,035 
  CARBO Ceramics Inc.  255,769  14,934 
*  Southwestern Energy Co.  298,080  12,990 
  St Mary Land & Exploration Co.  339,545  11,578 
  XTO Energy Inc.  276,665  11,498 
*  Oceaneering International Inc.  224,109  11,452 
*  Clean Energy Fuels Corp.  983,200  11,405 
*  Tesco Corp.  1,229,247  10,670 
  World Fuel Services Corp.  202,753  10,310 
*  Dresser-Rand Group Inc.  330,941  9,753 
  Sunoco Inc.  268,000  8,254 

4


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  Whiting Petroleum Corp.  139,473  7,866 
*  Weatherford International Ltd.  437,790  7,674 
*  Venoco Inc.  600,053  7,561 
*  Alpha Natural Resources Inc.  218,252  7,414 
*  Dril-Quip Inc.  150,150  7,296 
  Cabot Oil & Gas Corp.  163,143  6,276 
*  Rex Energy Corp.  673,162  5,446 
*  Helix Energy Solutions Group Inc.  377,250  5,180 
  Tesoro Corp.  323,400  4,573 
*  Global Industries Ltd.  585,905  4,271 
*  SEACOR Holdings Inc.  50,200  4,080 
*  Tetra Technologies Inc.  294,533  2,786 
*  Unit Corp.  67,800  2,650 
*  Gulfmark Offshore Inc.  94,100  2,604 
*  Superior Energy Services Inc.  115,264  2,491 
*  James River Coal Co.  122,600  2,328 
*  Oil States International Inc.  62,710  2,160 
  Rowan Cos. Inc.  87,800  2,041 
*  Arena Resources Inc.  50,000  1,863 
  EXCO Resources Inc.  103,200  1,612 
*  Cal Dive International Inc.  193,830  1,489 
*  International Coal Group Inc.  296,700  1,214 
*  Geokinetics Inc.  40,534  652 
  Ship Finance International Ltd.  53,500  608 
*  Endeavour International Corp.  533,600  560 
*  CVR Energy Inc.  49,215  518 
*  Willbros Group Inc.  35,700  469 
^  Teekay Tankers Ltd. Class A  53,234  431 
*  ATP Oil & Gas Corp.  22,200  384 
*  Matrix Service Co.  41,300  366 
*,^  Isramco Inc.  3,920  325 
*  Gulfport Energy Corp.  39,900  304 
  Holly Corp.  10,300  299 
*  PHI Inc.  16,038  276 
*  Westmoreland Coal Co.  40,519  267 
*  TGC Industries Inc.  58,642  255 
*,^  Evergreen Energy Inc.  599,464  218 
  Toreador Resources Corp.  19,014  162 
*  Bolt Technology Corp.  12,627  128 
*  Trico Marine Services Inc.  17,394  106 
  Golar LNG Ltd.  7,700  93 
  Vaalco Energy Inc.  15,900  68 
      381,485 
Exchange-Traded Funds (1.6%)     
2  Vanguard Small-Cap ETF  1,165,083  60,608 
^,2  Vanguard Small-Cap Growth ETF  713,200  38,227 
^  iShares Russell 2000 Index Fund  523,200  29,482 
      128,317 
Financials (6.7%)     
  Discover Financial Services  2,455,400  34,719 
*  Jefferies Group Inc.  1,257,963  32,833 
  Cash America International Inc.  984,600  29,794 
  MFA Financial Inc.  3,252,000  24,130 
*  Stifel Financial Corp.  407,666  21,182 
  Comerica Inc.  627,500  17,413 
*  Affiliated Managers Group Inc.  267,840  17,005 
  Redwood Trust Inc.  1,193,500  16,637 
  Lazard Ltd. Class A  431,140  16,276 
  LaSalle Hotel Properties  836,000  14,346 
*  NASDAQ OMX Group Inc.  694,700  12,546 
  Huntington Bancshares Inc.  3,078,312  11,728 
  Endurance Specialty Holdings Ltd.  296,520  10,672 
  Waddell & Reed Financial Inc.  374,600  10,511 
  Och-Ziff Capital Management Group LLC Class A  820,150  9,948 

5


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

    Market 
    Value 
  Shares  ($000) 
RenaissanceRe Holdings Ltd.  182,900  9,602 
Umpqua Holdings Corp.  968,900  9,602 
U-Store-It Trust  1,653,953  9,428 
* Navigators Group Inc.  173,000  9,181 
* BR Malls Participacoes SA  756,800  8,115 
* TD Ameritrade Holding Corp.  407,234  7,860 
Entertainment Properties Trust  227,800  7,750 
MB Financial Inc.  423,106  7,565 
XL Capital Ltd. Class A  446,618  7,329 
* MSCI Inc. Class A  237,427  7,218 
* SLM Corp.  729,600  7,077 
* Piper Jaffray Cos.  152,320  7,066 
SEI Investments Co.  394,100  6,885 
Federated Investors Inc. Class B  255,500  6,707 
Cullen/Frost Bankers Inc.  142,800  6,682 
Wintrust Financial Corp.  221,100  6,237 
Assured Guaranty Ltd.  355,687  5,897 
Invesco Ltd.  267,893  5,666 
Prosperity Bancshares Inc.  156,000  5,583 
Zenith National Insurance Corp.  180,203  5,141 
* Broadpoint Gleacher Securities Inc.  799,325  5,092 
Popular Inc.  2,328,803  5,030 
BOK Financial Corp.  111,627  4,797 
* Signature Bank  148,820  4,697 
* First Cash Financial Services Inc.  242,064  4,159 
* Knight Capital Group Inc. Class A  240,600  4,054 
QC Holdings Inc.  736,309  3,829 
* Dollar Financial Corp.  193,035  3,623 
* St Joe Co.  148,266  3,549 
Axis Capital Holdings Ltd.  114,000  3,293 
Westamerica Bancorporation  60,205  2,878 
Validus Holdings Ltd.  112,500  2,846 
Digital Realty Trust Inc.  60,478  2,729 
Amtrust Financial Services Inc.  233,366  2,632 
TCF Financial Corp.  200,921  2,377 
Reinsurance Group of America Inc. Class A  48,893  2,254 
Advance America Cash Advance Centers Inc.  440,793  2,177 
City Holding Co.  67,101  2,051 
Equity Lifestyle Properties Inc.  41,800  1,942 
Mid-America Apartment Communities Inc.  43,900  1,924 
Health Care REIT Inc.  40,175  1,783 
* CB Richard Ellis Group Inc. Class A  171,949  1,780 
* Nelnet Inc. Class A  126,649  1,777 
* DuPont Fabros Technology Inc.  117,610  1,774 
Calamos Asset Management Inc. Class A  164,300  1,742 
Nationwide Health Properties Inc.  50,396  1,625 
* Credit Acceptance Corp.  47,083  1,618 
Washington Real Estate Investment Trust  53,700  1,434 
PS Business Parks Inc.  27,868  1,365 
Southside Bancshares Inc.  62,867  1,307 
Associated Estates Realty Corp.  136,785  1,247 
* Penson Worldwide Inc.  124,900  1,218 
Saul Centers Inc.  38,346  1,179 
Highwoods Properties Inc.  41,500  1,142 
BGC Partners Inc. Class A  229,270  1,107 
Getty Realty Corp.  44,735  1,096 
Trustco Bank Corp. NY  172,000  1,023 
* Ezcorp Inc. Class A  77,933  1,011 
Evercore Partners Inc. Class A  30,700  1,002 
Sun Communities Inc.  56,600  987 
Eaton Vance Corp.  33,800  960 
Marshall & Ilsley Corp.  160,960  856 
Rayonier Inc.  19,300  745 
* Safeguard Scientifics Inc.  71,400  695 

6


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

    Market 
    Value 
  Shares  ($000) 
* Cardtronics Inc.  69,830  695 
^ Life Partners Holdings Inc.  40,200  683 
* Encore Capital Group Inc.  45,004  674 
GAMCO Investors Inc.  13,933  588 
First Financial Bankshares Inc.  11,600  562 
FBL Financial Group Inc. Class A  27,460  553 
Suffolk Bancorp  17,500  489 
* Riskmetrics Group Inc.  30,300  445 
Capitol Federal Financial  14,501  440 
EastGroup Properties Inc.  11,100  409 
LTC Properties Inc.  15,000  356 
* American Safety Insurance Holdings Ltd.  23,256  345 
* TradeStation Group Inc.  39,700  306 
Tanger Factory Outlet Centers  7,900  301 
* International Assets Holding Corp.  15,207  274 
Hanover Insurance Group Inc.  3,510  148 
Park National Corp.  2,100  122 
Great Southern Bancorp Inc.  4,384  100 
First Mercury Financial Corp.  7,789  99 
TFS Financial Corp.  7,800  91 
Arrow Financial Corp.  3,482  89 
Kearny Financial Corp.  8,100  80 
* MarketAxess Holdings Inc.  6,700  80 
First of Long Island Corp.  3,100  75 
Ames National Corp.  3,471  73 
GFI Group Inc.  13,900  72 
Hancock Holding Co.  1,900  69 
SY Bancorp Inc.  3,000  67 
Wilshire Bancorp Inc.  9,000  63 
United Financial Bancorp Inc.  4,922  63 
Transatlantic Holdings Inc.  1,200  61 
* Hallmark Financial Services  6,510  50 
Rewards Network Inc.  2,412  26 
Enterprise Bancorp Inc.  1,000  11 
* Interactive Brokers Group Inc.  304  5 
NYMAGIC Inc.  103  1 
    531,302 
Health Care (17.0%)     
* Edwards Lifesciences Corp.  538,850  41,459 
* ResMed Inc.  800,375  39,386 
Beckman Coulter Inc.  559,630  36,001 
* Henry Schein Inc.  680,188  35,934 
* Mettler-Toledo International Inc.  339,309  33,083 
* IDEXX Laboratories Inc.  644,360  32,940 
* ICON PLC ADR  1,303,082  32,186 
Cooper Cos. Inc.  1,106,730  31,000 
* QIAGEN NV  1,477,200  30,770 
DENTSPLY International Inc.  851,300  28,059 
* Health Management Associates Inc. Class A  4,183,290  25,518 
* Bio-Rad Laboratories Inc. Class A  278,000  24,850 
* Regeneron Pharmaceuticals Inc.  1,547,324  24,293 
* Community Health Systems Inc.  776,100  24,276 
* Lincare Holdings Inc.  771,122  24,221 
* Bruker Corp.  2,155,440  23,365 
* Haemonetics Corp.  439,522  22,635 
* Nektar Therapeutics  2,666,100  21,649 
* Isis Pharmaceuticals Inc.  1,647,249  20,871 
* King Pharmaceuticals Inc.  2,020,900  20,472 
* BioMarin Pharmaceutical Inc.  1,269,798  19,758 
* Seattle Genetics Inc.  2,129,704  19,338 
* Alexion Pharmaceuticals Inc.  407,169  18,082 
Pharmaceutical Product Development Inc.  823,136  17,739 

7


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  PSS World Medical Inc.  872,450  17,641 
*  Cephalon Inc.  322,000  17,575 
*  Coventry Health Care Inc.  848,800  16,832 
  Hikma Pharmaceuticals PLC  2,128,879  16,454 
*  Alkermes Inc.  2,033,300  16,205 
*  Varian Medical Systems Inc.  387,455  15,878 
*  Exelixis Inc.  2,581,900  15,698 
*  Vertex Pharmaceuticals Inc.  458,347  15,382 
*  Align Technology Inc.  939,000  14,761 
*,^  Amedisys Inc.  359,074  14,288 
*  ICU Medical Inc.  400,250  14,009 
*  SXC Health Solutions Corp.  305,983  13,977 
*  Kindred Healthcare Inc.  920,400  13,530 
*  Parexel International Corp.  1,043,150  13,060 
*  Patterson Cos. Inc.  510,550  13,034 
*  Covance Inc.  242,307  12,522 
*  MWI Veterinary Supply Inc.  349,093  12,358 
*  Brookdale Senior Living Inc.  725,200  12,212 
*  Sirona Dental Systems Inc.  431,375  11,608 
*  Endo Pharmaceuticals Holdings Inc.  493,500  11,054 
*  Martek Biosciences Corp.  602,943  10,829 
*  Impax Laboratories Inc.  1,206,624  10,715 
*  IPC The Hospitalist Co. Inc.  347,424  10,527 
*  Luminex Corp.  693,200  10,204 
*  VCA Antech Inc.  426,330  10,155 
*  Kinetic Concepts Inc.  302,656  10,045 
*  Par Pharmaceutical Cos. Inc.  450,800  9,453 
*  Masimo Corp.  352,100  9,355 
*  Millipore Corp.  132,400  8,872 
*  Orthovita Inc.  2,430,744  8,508 
*  Inverness Medical Innovations Inc.  217,541  8,269 
*  Warner Chilcott PLC Class A  367,950  8,150 
*  Psychiatric Solutions Inc.  373,925  7,718 
*  Amylin Pharmaceuticals Inc.  692,200  7,642 
*  Cyberonics Inc.  513,800  7,430 
  Omnicare Inc.  329,800  7,147 
  Universal Health Services Inc. Class B  120,602  6,711 
*  Volcano Corp.  467,000  6,701 
  Invacare Corp.  297,578  6,675 
*  United Therapeutics Corp.  154,662  6,579 
  Quality Systems Inc.  107,800  6,578 
*  Mylan Inc.  391,900  6,364 
*  Emergency Medical Services Corp. Class A  127,618  6,128 
*  Life Technologies Corp.  129,780  6,122 
*  Immunogen Inc.  882,032  5,901 
*  Zimmer Holdings Inc.  110,987  5,835 
*  American Medical Systems Holdings Inc.  372,400  5,742 
*  Valeant Pharmaceuticals International  191,100  5,618 
*  Watson Pharmaceuticals Inc.  160,560  5,526 
*  Human Genome Sciences Inc.  280,300  5,239 
  PerkinElmer Inc.  280,548  5,221 
*  Eurand NV  393,769  5,206 
  Analogic Corp.  133,680  4,992 
  STERIS Corp.  170,000  4,974 
*  Dionex Corp.  73,200  4,969 
*  Catalyst Health Solutions Inc.  147,849  4,638 
*  Wright Medical Group Inc.  283,885  4,613 
*  Dendreon Corp.  180,582  4,563 
  PDL BioPharma Inc.  508,300  4,275 
*  Sun Healthcare Group Inc.  469,657  4,264 
  Meridian Bioscience Inc.  188,700  4,187 
*  NuVasive Inc.  114,512  4,156 
*  Myriad Genetics Inc.  158,974  3,860 
*  Healthsouth Corp.  251,865  3,680 

8


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  PharMerica Corp.  232,483  3,587 
*  RehabCare Group Inc.  188,186  3,528 
  Chemed Corp.  77,300  3,503 
*  Durect Corp.  1,529,800  3,228 
*  Cypress Bioscience Inc.  523,550  3,215 
*  Facet Biotech Corp.  185,662  3,180 
*  Savient Pharmaceuticals Inc.  244,774  3,084 
*  Odyssey HealthCare Inc.  213,970  2,983 
*  Express Scripts Inc.  35,410  2,830 
  Owens & Minor Inc.  69,000  2,821 
*  Centene Corp.  151,300  2,698 
*  Corvel Corp.  93,388  2,662 
*  Medicines Co.  369,020  2,653 
  Techne Corp.  42,100  2,632 
*  Tenet Healthcare Corp.  497,100  2,545 
*  Gentiva Health Services Inc.  104,832  2,516 
*  Greatbatch Inc.  127,431  2,507 
*  Orthofix International NV  77,472  2,479 
*  BioScrip Inc.  326,311  2,460 
*  Questcor Pharmaceuticals Inc.  532,961  2,420 
*  HMS Holdings Corp.  54,750  2,350 
*  Cantel Medical Corp.  141,552  2,273 
  Medicis Pharmaceutical Corp. Class A  106,600  2,257 
*  AMN Healthcare Services Inc.  270,300  2,249 
*  LHC Group Inc.  78,700  2,197 
*  Emergent Biosolutions Inc.  150,900  2,176 
*  Salix Pharmaceuticals Ltd.  117,360  2,158 
*  Medivation Inc.  84,291  2,151 
  Atrion Corp.  17,867  2,116 
*  Accelrys Inc.  378,016  2,053 
*  Cambrex Corp.  335,616  2,014 
*  Cubist Pharmaceuticals Inc.  113,500  1,923 
*  Enzon Pharmaceuticals Inc.  225,100  1,889 
*  athenahealth Inc.  49,906  1,877 
*  WellCare Health Plans Inc.  60,100  1,570 
*  Celera Corp.  247,305  1,531 
*  Cytokinetics Inc.  456,093  1,455 
*  Maxygen Inc.  256,614  1,432 
*  Affymetrix Inc.  269,774  1,411 
*,^  BioCryst Pharmaceuticals Inc.  143,252  1,279 
*  Hi-Tech Pharmacal Co. Inc.  64,083  1,169 
*  AMERIGROUP Corp.  52,228  1,152 
*  Harvard Bioscience Inc.  300,261  1,087 
*  Micromet Inc.  201,583  1,030 
*,^  Cell Therapeutics Inc.  1,048,000  996 
  America Service Group Inc.  71,422  937 
*,^  Novavax Inc.  201,822  775 
*  Symmetry Medical Inc.  94,000  749 
*  Immunomedics Inc.  185,500  660 
*  Sciclone Pharmaceuticals Inc.  254,431  626 
  Ensign Group Inc.  41,600  615 
*  Continucare Corp.  228,986  600 
*,^  Hemispherx Biopharma Inc.  388,500  563 
*  Quadramed Corp.  76,300  557 
*  Auxilium Pharmaceuticals Inc.  17,500  551 
*  Bio-Reference Labs Inc.  16,117  521 
  Perrigo Co.  13,000  483 
*  NovaMed Inc.  114,978  463 
*  Hanger Orthopedic Group Inc.  30,440  421 
*  Allied Healthcare International Inc.  153,859  409 
*  Aspect Medical Systems Inc.  33,415  400 
*  Kensey Nash Corp.  15,400  368 
*  Cornerstone Therapeutics Inc.  65,492  367 
*,^  BioDelivery Sciences International Inc.  81,979  326 

9


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  Providence Service Corp.  23,700  295 
*  OXiGENE Inc.  247,648  280 
*  US Physical Therapy Inc.  18,700  263 
*  Arqule Inc.  77,400  259 
*  RadNet Inc.  101,896  248 
*  Lannett Co. Inc.  34,400  231 
*,^  Virtual Radiologic Corp.  17,110  220 
*  Myriad Pharmaceuticals Inc.  39,743  219 
*  MAP Pharmaceuticals Inc.  24,400  201 
*  I-Flow Corp.  15,800  199 
*  Osteotech Inc.  43,450  188 
*  OncoGenex Pharmaceutical Inc.  6,200  180 
*  Insmed Inc.  221,100  155 
*  Abaxis Inc.  6,400  146 
*  Cardiac Science Corp.  38,760  136 
*  Cadence Pharmaceuticals Inc.  14,500  131 
*  Triple-S Management Corp. Class B  7,772  130 
*  Neurocrine Biosciences Inc.  51,253  114 
*  Chelsea Therapeutics International Inc.  38,371  106 
*  Santarus Inc.  31,200  96 
*  Thoratec Corp.  3,200  84 
  Young Innovations Inc.  3,243  77 
*  Inspire Pharmaceuticals Inc.  15,700  70 
*  Medical Action Industries Inc.  6,100  67 
*  Home Diagnostics Inc.  10,391  65 
*  Caraco Pharmaceutical Laboratories Ltd.  17,264  64 
*  Sangamo Biosciences Inc.  11,400  61 
*  Osiris Therapeutics Inc.  9,000  57 
  Advocat Inc.  6,693  56 
*  Allion Healthcare Inc.  5,970  38 
*  Cardiovascular Systems Inc.  4,802  23 
*  Dynacq Healthcare Inc.  4,900  16 
*  Mediware Information Systems  1,900  11 
      1,346,502 
Industrials (14.4%)     
  MSC Industrial Direct Co. Class A  1,237,140  53,259 
*  Stericycle Inc.  710,600  37,214 
^  Ritchie Bros Auctioneers Inc.  1,476,000  32,354 
*  Corrections Corp. of America  1,226,054  29,352 
  Equifax Inc.  1,002,684  27,453 
*  EnerSys  1,132,140  25,020 
  Kennametal Inc.  1,061,210  25,002 
*  JetBlue Airways Corp.  4,739,230  23,507 
  Watsco Inc.  429,860  22,017 
*  Gardner Denver Inc.  595,700  21,392 
*  SunPower Corp. Class B  964,936  20,900 
  UTi Worldwide Inc.  1,654,121  20,627 
  Lennox International Inc.  591,400  19,912 
*  GeoEye Inc.  752,670  19,095 
*  Resources Connection Inc.  1,101,080  19,016 
*  Genesee & Wyoming Inc. Class A  619,730  17,978 
  Dun & Bradstreet Corp.  233,820  17,901 
  Healthcare Services Group Inc.  852,770  16,842 
*  Clean Harbors Inc.  292,160  16,492 
  Con-way Inc.  499,870  16,491 
  WW Grainger Inc.  174,850  16,389 
  Chicago Bridge & Iron Co. NV  866,175  16,293 
  Belden Inc.  702,430  16,121 
*  Beacon Roofing Supply Inc.  1,118,898  16,067 
*  DigitalGlobe Inc.  699,380  15,617 
*  HUB Group Inc. Class A  614,300  15,271 
*  Teledyne Technologies Inc.  441,870  15,094 
*,^  Yingli Green Energy Holding Co. Ltd. ADR  1,285,700  14,888 
*  Advisory Board Co.  592,180  14,591 

10


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

    Market 
    Value 
  Shares  ($000) 
* RBC Bearings Inc.  673,494  14,487 
Gamesa Corp. Tecnologica SA  790,794  14,450 
Landstar System Inc.  397,550  14,010 
* Spirit Aerosystems Holdings Inc. Class A  837,600  13,335 
* Navistar International Corp.  368,696  12,219 
* TrueBlue Inc.  1,005,030  12,161 
* IHS Inc. Class A  228,050  11,804 
Knight Transportation Inc.  682,080  10,941 
* EnerNOC Inc.  361,220  10,378 
* Kirby Corp.  302,500  10,224 
* United Stationers Inc.  208,565  9,832 
* MPS Group Inc.  726,505  9,822 
AMETEK Inc.  276,570  9,650 
* Railamerica Inc.  807,920  9,509 
* US Airways Group Inc.  3,046,800  9,323 
* SYKES Enterprises Inc.  391,931  9,304 
McGrath RentCorp  448,389  8,856 
* American Superconductor Corp.  258,450  8,663 
* Owens Corning  389,440  8,611 
Woodward Governor Co.  365,750  8,599 
* Korn/Ferry International  530,400  8,465 
* ESCO Technologies Inc.  208,400  8,186 
* AerCap Holdings NV  932,408  7,814 
Timken Co.  334,400  7,367 
* Atlas Air Worldwide Holdings Inc.  276,921  7,280 
Deluxe Corp.  482,800  6,870 
Bucyrus International Inc. Class A  154,000  6,841 
* Hawaiian Holdings Inc.  951,752  6,748 
* Exponent Inc.  259,072  6,738 
Carlisle Cos. Inc.  216,453  6,719 
Watson Wyatt Worldwide Inc. Class A  153,800  6,703 
* Waste Connections Inc.  209,297  6,578 
Ingersoll-Rand PLC  205,000  6,476 
* Aecom Technology Corp.  246,904  6,232 
Hubbell Inc. Class B  143,643  6,109 
Granite Construction Inc.  210,850  6,022 
Manitowoc Co. Inc.  656,200  5,998 
Heartland Express Inc.  434,970  5,916 
* Moog Inc. Class A  231,407  5,778 
* FTI Consulting Inc.  139,476  5,692 
Harsco Corp.  170,700  5,375 
* Kadant Inc.  416,900  5,374 
* EMCOR Group Inc.  227,200  5,366 
TransDigm Group Inc.  135,600  5,313 
* Mobile Mini Inc.  358,990  5,205 
Crane Co.  183,590  5,113 
* Thomas & Betts Corp.  144,779  4,953 
* Navigant Consulting Inc.  346,426  4,933 
Mine Safety Appliances Co.  192,470  4,906 
* McDermott International Inc.  189,718  4,217 
* Shaw Group Inc.  162,600  4,172 
American Ecology Corp.  224,300  3,728 
* Flow International Corp.  1,517,700  3,658 
Curtiss-Wright Corp.  121,561  3,625 
* Chart Industries Inc.  179,100  3,541 
Copa Holdings SA Class A  77,697  3,281 
* Continental Airlines Inc. Class B  283,880  3,265 
* Airtran Holdings Inc.  763,183  3,228 
* Powell Industries Inc.  87,298  3,211 
* Alliant Techsystems Inc.  40,200  3,127 
* Michael Baker Corp.  87,301  3,117 
* Trex Co. Inc.  194,123  3,088 
Knoll Inc.  310,700  3,045 
Toro Co.  80,426  2,977 

11


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  CoStar Group Inc.  75,200  2,919 
  Brink's Co.  119,457  2,835 
*  Esterline Technologies Corp.  66,487  2,800 
  VSE Corp.  60,105  2,632 
  Robbins & Myers Inc.  108,400  2,515 
*  ICF International Inc.  84,000  2,407 
  Apogee Enterprises Inc.  178,786  2,367 
*  LaBarge Inc.  203,773  2,262 
  Pall Corp.  70,800  2,247 
  Goodrich Corp.  41,000  2,228 
*  CRA International Inc.  78,991  1,955 
*  Force Protection Inc.  427,700  1,882 
*  AZZ Inc.  53,633  1,837 
  Robert Half International Inc.  78,000  1,810 
*  AMR Corp.  330,900  1,784 
*  APAC Customer Services Inc.  267,620  1,726 
*  Allegiant Travel Co. Class A  42,882  1,617 
*  American Reprographics Co.  258,610  1,552 
  EnergySolutions Inc.  174,226  1,453 
*  Tetra Tech Inc.  55,700  1,433 
  AAON Inc.  77,400  1,394 
*  MasTec Inc.  115,500  1,363 
*  DynCorp International Inc. Class A  72,100  1,226 
  ABM Industries Inc.  64,552  1,212 
*  WESCO International Inc.  45,000  1,150 
*  ATC Technology Corp.  54,672  1,143 
  Cubic Corp.  32,230  1,119 
*  GenCorp Inc.  145,545  1,083 
  Standard Register Co.  225,314  1,075 
*  Armstrong World Industries Inc.  28,111  1,047 
*  Geo Group Inc.  47,025  995 
*  CBIZ Inc.  134,440  946 
*  Kforce Inc.  77,367  907 
*  GP Strategies Corp.  117,140  825 
*  Air Transport Services Group Inc.  318,000  824 
*  North American Galvanizing & Coating Inc.  143,550  721 
*  Avis Budget Group Inc.  84,000  706 
  Ampco-Pittsburgh Corp.  24,816  668 
*  GrafTech International Ltd.  48,440  654 
*  Sterling Construction Co. Inc.  39,430  636 
  G&K Services Inc. Class A  26,605  589 
  Textainer Group Holdings Ltd.  36,454  549 
  Graham Corp.  38,618  547 
*  Alaska Air Group Inc.  20,000  514 
*  Colfax Corp.  42,500  462 
*  USA Truck Inc.  39,535  444 
  Applied Signal Technology Inc.  18,600  381 
*  Orion Marine Group Inc.  17,046  325 
  Rollins Inc.  16,200  293 
*  On Assignment Inc.  44,400  268 
  Raven Industries Inc.  10,430  258 
  Primoris Services Corp.  32,616  239 
*  Old Dominion Freight Line Inc.  9,048  235 
  Administaff Inc.  7,260  180 
  GATX Corp.  5,700  155 
  CDI Corp.  12,650  154 
*  Republic Airways Holdings Inc.  18,749  150 
  Preformed Line Products Co.  3,696  142 
*  Waste Services Inc.  21,080  138 
  Herman Miller Inc.  8,400  130 
  Donaldson Co. Inc.  3,600  128 
*,^  Microvision Inc.  33,600  125 
*  SIFCO Industries Inc.  7,910  106 
*  Pike Electric Corp.  8,100  102 

12


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  Marten Transport Ltd.  5,600  98 
  Quanex Building Products Corp.  6,600  98 
  Multi-Color Corp.  6,705  89 
*  ICT Group Inc.  5,500  87 
*  Rush Enterprises Inc. Class A  7,970  87 
  Valmont Industries Inc.  1,200  87 
  Portec Rail Products Inc.  9,900  86 
*  COMSYS IT Partners Inc.  12,431  85 
  HEICO CORP.  2,200  84 
*  Altra Holdings Inc.  9,400  82 
  TAL International Group Inc.  5,100  60 
*  Advanced Battery Technologies Inc.  17,200  58 
*  LMI Aerospace Inc.  2,980  32 
      1,140,285 
Information Technology (26.4%)     
*,^  Alliance Data Systems Corp.  1,075,756  59,145 
*  Euronet Worldwide Inc.  2,026,474  47,926 
*  ON Semiconductor Corp.  6,939,310  46,424 
*  Polycom Inc.  2,151,338  46,189 
*  TiVo Inc.  4,017,260  43,708 
*  Sapient Corp.  5,096,458  41,485 
*  Informatica Corp.  1,655,257  35,141 
*  Ingram Micro Inc.  1,964,813  34,679 
*  Red Hat Inc.  1,286,693  33,210 
*  Teradyne Inc.  3,934,740  32,934 
*  FEI Co.  1,379,593  32,848 
*  Sybase Inc.  780,886  30,892 
*  NICE Systems Ltd. ADR  990,595  30,679 
*  Concur Technologies Inc.  851,687  30,354 
  Factset Research Systems Inc.  473,800  30,347 
*  PMC - Sierra Inc.  3,509,451  29,901 
*  Ariba Inc.  2,440,485  28,847 
*  MICROS Systems Inc.  1,046,239  28,165 
*  F5 Networks Inc.  607,049  27,250 
*  QLogic Corp.  1,547,305  27,140 
*  Verigy Ltd.  2,705,720  26,624 
*  Tellabs Inc.  4,358,280  26,237 
*  Rovi Corp.  934,859  25,755 
*  Microsemi Corp.  1,828,206  24,333 
*  Hewitt Associates Inc. Class A  669,390  23,777 
*  Parametric Technology Corp.  1,591,998  23,737 
*  j2 Global Communications Inc.  1,062,194  21,722 
*  VeriFone Holdings Inc.  1,615,390  21,485 
*  Starent Networks Corp.  634,553  21,410 
*  Salesforce.com Inc.  363,540  20,631 
  Maxim Integrated Products Inc.  1,202,900  20,052 
  Intersil Corp. Class A  1,525,600  19,146 
*  Take-Two Interactive Software Inc.  1,718,800  18,855 
*  Cadence Design Systems Inc.  2,991,090  18,276 
  ADTRAN Inc.  789,060  18,180 
  Syntel Inc.  494,537  17,719 
*  SuccessFactors Inc.  1,150,330  17,589 
*  WebMD Health Corp. Class A  515,791  17,568 
*  Synopsys Inc.  759,628  16,712 
*  Cymer Inc.  483,340  16,550 
*  Littelfuse Inc.  590,150  16,265 
*  Cognizant Technology Solutions Corp. Class A  416,352  16,092 
*  Silicon Laboratories Inc.  383,945  16,087 
*  NeuStar Inc. Class A  686,933  15,868 
*  Blue Coat Systems Inc.  710,665  15,834 
  Plantronics Inc.  655,977  15,816 
  Jabil Circuit Inc.  1,174,480  15,715 
*  S1 Corp.  2,561,595  15,370 
*  Cybersource Corp.  934,800  15,312 

13


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

    Market 
    Value 
  Shares  ($000) 
* Skyworks Solutions Inc.  1,466,713  15,298 
* 3Com Corp.  2,960,361  15,216 
* Atheros Communications Inc.  617,573  15,205 
* Atmel Corp.  4,042,160  15,037 
* Netlogic Microsystems Inc.  388,909  14,782 
* Netezza Corp.  1,545,070  14,276 
* MKS Instruments Inc.  880,000  13,763 
Amphenol Corp. Class A  319,918  12,835 
* Nuance Communications Inc.  969,063  12,704 
* Riverbed Technology Inc.  595,360  12,199 
* GSI Commerce Inc.  628,850  11,929 
* Progress Software Corp.  494,273  11,418 
* Acme Packet Inc.  1,141,328  11,174 
* ValueClick Inc.  1,128,365  11,103 
* Avnet Inc.  447,852  11,098 
* ATMI Inc.  717,945  10,877 
* Varian Semiconductor Equipment Associates Inc.  381,930  10,843 
* Brocade Communications Systems Inc.  1,247,275  10,702 
Power Integrations Inc.  339,660  10,597 
* EPIQ Systems Inc.  807,800  10,186 
Altera Corp.  510,250  10,098 
* Websense Inc.  620,540  9,966 
Xerox Corp.  1,309,800  9,850 
* CommVault Systems Inc.  499,950  9,849 
* Lawson Software Inc.  1,545,037  9,749 
* Art Technology Group Inc.  2,307,661  9,508 
* DemandTec Inc.  1,062,190  9,337 
* Hittite Microwave Corp.  252,050  9,275 
* Cypress Semiconductor Corp.  1,093,066  9,215 
* Trimble Navigation Ltd.  429,210  9,001 
* Cabot Microelectronics Corp.  276,100  8,830 
* Fairchild Semiconductor International Inc. Class A  1,148,800  8,593 
* Cogent Inc.  886,897  8,559 
* Compellent Technologies Inc.  466,220  8,550 
* Arris Group Inc.  833,131  8,548 
* Lexmark International Inc. Class A  334,596  8,532 
* Arrow Electronics Inc.  322,200  8,165 
* NetApp Inc.  300,148  8,119 
Broadridge Financial Solutions Inc.  381,000  7,929 
* Equinix Inc.  92,445  7,887 
* PROS Holdings Inc.  872,700  7,846 
* Compuware Corp.  1,074,800  7,588 
* Applied Micro Circuits Corp.  966,545  7,558 
Solera Holdings Inc.  229,277  7,387 
* BMC Software Inc.  188,692  7,012 
* Digital River Inc.  304,170  6,944 
* Marvell Technology Group Ltd.  493,575  6,772 
* JDA Software Group Inc.  341,110  6,768 
* Stratasys Inc.  418,510  6,604 
* Harris Stratex Networks Inc. Class A  1,019,635  6,424 
Earthlink Inc.  751,650  6,088 
* TIBCO Software Inc.  690,318  6,040 
* FLIR Systems Inc.  213,784  5,945 
* ANSYS Inc.  146,014  5,925 
* Sohu.com Inc.  106,400  5,916 
* Sycamore Networks Inc.  2,044,300  5,826 
Global Payments Inc.  114,566  5,640 
* Emulex Corp.  556,249  5,618 
* Avocent Corp.  221,850  5,517 
* McAfee Inc.  131,505  5,507 
* SkillSoft PLC ADR  572,625  5,486 
* Activision Blizzard Inc.  500,500  5,420 
* Multi-Fineline Electronix Inc.  196,500  5,355 
Fair Isaac Corp.  259,000  5,265 

14


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  Diodes Inc.  317,775  5,205 
*  VistaPrint NV  99,749  5,092 
  Diebold Inc.  165,100  4,993 
  Heartland Payment Systems Inc.  399,880  4,915 
*  Novell Inc.  1,168,854  4,781 
*  Blackboard Inc.  129,919  4,608 
*  Ceva Inc.  449,054  4,549 
*  VanceInfo Technologies Inc. ADR  293,846  4,437 
*  Semtech Corp.  286,490  4,432 
*  Cree Inc.  104,599  4,404 
*  AsiaInfo Holdings Inc.  199,100  4,392 
*  TriQuint Semiconductor Inc.  799,370  4,309 
  Jack Henry & Associates Inc.  182,500  4,210 
*  Constant Contact Inc.  244,000  4,043 
*  Gartner Inc.  215,900  4,020 
*  Tekelec  259,977  3,905 
*  Quest Software Inc.  221,527  3,715 
*  Actuate Corp.  727,641  3,645 
*  Cirrus Logic Inc.  744,501  3,603 
*  Oclaro Inc.  3,377,490  3,580 
*  TeleTech Holdings Inc.  192,026  3,435 
*  LivePerson Inc.  682,513  3,433 
*  Scansource Inc.  132,659  3,368 
*  Silicon Motion Technology Corp. ADR  942,100  3,278 
*  CSG Systems International Inc.  195,580  3,196 
*  RF Micro Devices Inc.  769,800  3,064 
*  Wright Express Corp.  109,584  3,058 
  Pegasystems Inc.  102,649  2,943 
*  Mantech International Corp. Class A  66,711  2,926 
*  OSI Systems Inc.  143,900  2,825 
*  Aruba Networks Inc.  348,333  2,724 
*  DST Systems Inc.  64,896  2,707 
*  Genpact Ltd.  222,659  2,652 
*  CACI International Inc. Class A  55,679  2,651 
*  Electronic Arts Inc.  143,000  2,608 
*  Tessera Technologies Inc.  116,771  2,582 
*  Sourcefire Inc.  125,350  2,545 
*  SAIC Inc.  142,055  2,516 
*  Switch & Data Facilities Co. Inc.  147,473  2,467 
  iGate Corp.  275,199  2,430 
*  Radiant Systems Inc.  241,900  2,380 
*  Convergys Corp.  218,790  2,374 
*  AuthenTec Inc.  959,690  2,370 
*,^  Synaptics Inc.  101,971  2,294 
*  LSI Corp.  429,960  2,201 
*  TNS Inc.  76,300  2,156 
*  Manhattan Associates Inc.  92,510  2,123 
*  Seachange International Inc.  310,826  2,104 
*  Cray Inc.  279,547  2,085 
*  Anixter International Inc.  48,300  2,021 
*  Ultratech Inc.  156,118  2,017 
*  MIPS Technologies Inc. Class A  497,275  1,964 
*  SYNNEX Corp.  76,190  1,960 
*  Oplink Communications Inc.  128,507  1,906 
*  Internet Gold-Golden Lines Ltd.  146,153  1,880 
*  Integrated Device Technology Inc.  306,600  1,803 
  Ulticom Inc.  667,120  1,761 
*  EMS Technologies Inc.  100,701  1,755 
*,^  STEC Inc.  78,321  1,670 
*  DealerTrack Holdings Inc.  100,000  1,648 
*  Kopin Corp.  363,612  1,614 
*  Brightpoint Inc.  218,769  1,612 
*  Zoran Corp.  171,960  1,525 
*  Insight Enterprises Inc.  144,299  1,518 

15


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  Juniper Networks Inc.  58,364  1,489 
*  Mercury Computer Systems Inc.  135,669  1,452 
*  Super Micro Computer Inc.  176,300  1,421 
  Marchex Inc. Class B  306,109  1,387 
*  Netgear Inc.  76,000  1,385 
*  SonicWALL Inc.  170,687  1,355 
*,^  China Security & Surveillance Technology Inc.  257,800  1,348 
*  Palm Inc.  108,205  1,256 
*  Acxiom Corp.  108,683  1,248 
*  Checkpoint Systems Inc.  87,486  1,187 
*  Advanced Micro Devices Inc.  251,000  1,155 
*  NCI Inc. Class A  42,586  1,146 
*  Netscout Systems Inc.  92,755  1,140 
*  CPI International Inc.  114,610  1,135 
*  Quantum Corp.  607,900  1,125 
*  Veeco Instruments Inc.  45,409  1,106 
*  Unisys Corp.  32,730  954 
*  Dynamics Research Corp.  69,597  892 
*  Anaren Inc.  60,802  889 
*  Global Cash Access Holdings Inc.  138,838  879 
*  Rambus Inc.  52,300  837 
*  Interactive Intelligence Inc.  46,872  786 
*  Smith Micro Software Inc.  86,304  784 
*  Online Resources Corp.  141,734  744 
*  InterDigital Inc.  36,000  740 
*  Saba Software Inc.  170,463  731 
*  Digi International Inc.  89,900  715 
  Opnet Technologies Inc.  65,322  712 
*  Keynote Systems Inc.  67,100  686 
*  Volterra Semiconductor Corp.  48,200  668 
*  Mentor Graphics Corp.  82,300  601 
*  Computer Task Group Inc.  85,106  593 
*  Maxwell Technologies Inc.  31,100  558 
  NIC Inc.  60,100  526 
*  Loral Space & Communications Inc.  18,822  497 
*  NVE Corp.  12,800  479 
*  Image Sensing Systems Inc.  38,500  469 
  QAD Inc.  96,398  440 
*  Entropic Communications Inc.  162,700  428 
*  Monolithic Power Systems Inc.  20,800  416 
*  IXYS Corp.  61,462  412 
*  Datalink Corp.  97,063  386 
*  Sigma Designs Inc.  28,620  344 
*  BigBand Networks Inc.  88,700  328 
*  PC Mall Inc.  43,650  309 
*  Travelzoo Inc.  22,110  306 
*  Pervasive Software Inc.  61,092  299 
*  Radisys Corp.  34,601  294 
*  Innodata Isogen Inc.  42,000  272 
*  GTSI Corp.  30,626  228 
*  ACI Worldwide Inc.  13,824  222 
*  Hackett Group Inc.  70,900  221 
*  Intellon Corp.  32,050  220 
*  Pixelworks Inc.  89,747  220 
*  Intermec Inc.  15,115  186 
*  Actel Corp.  15,394  183 
*  DSP Group Inc.  28,483  165 
*  Ebix Inc.  2,600  160 
*  White Electronic Designs Corp.  34,951  153 
*  Evolving Systems Inc.  24,042  153 
*  IntriCon Corp.  42,647  144 
*  INX Inc.  20,568  138 
*  Virtusa Corp.  14,162  127 
  Micrel Inc.  17,000  127 

16


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

      Market 
      Value 
    Shares  ($000) 
*  Amkor Technology Inc.  21,470  118 
*  DTS Inc.  3,600  102 
*  Symmetricom Inc.  19,920  95 
*  Tech Data Corp.  1,500  58 
*  StarTek Inc.  8,600  50 
*  SRA International Inc. Class A  1,530  29 
*  Exar Corp.  4,100  28 
*  MakeMusic Inc.  6,790  27 
*  Merrimac Industries Inc.  3,233  26 
  Keithley Instruments Inc.  7,200  23 
*  GSI Technology Inc.  2,661  10 
  Imergent Inc.  1,200  8 
*  Interphase Corp.  1,900  4 
*  PC-Tel Inc.  162  1 
      2,090,756 
Materials (5.6%)     
  Sensient Technologies Corp.  1,596,950  40,387 
  Albemarle Corp.  1,021,170  32,249 
*  Solutia Inc.  2,713,783  29,852 
*  Crown Holdings Inc.  894,652  23,842 
  Lubrizol Corp.  348,413  23,190 
  Cytec Industries Inc.  686,000  22,755 
  Silgan Holdings Inc.  422,900  22,731 
  Aptargroup Inc.  634,420  22,401 
  Greif Inc. Class A  296,250  15,855 
  Martin Marietta Materials Inc.  182,200  15,181 
  International Flavors & Fragrances Inc.  392,668  14,957 
  Nalco Holding Co.  694,575  14,690 
  Arch Chemicals Inc.  497,930  13,788 
  Eagle Materials Inc.  517,900  12,870 
  Rock-Tenn Co. Class A  266,053  11,653 
  Airgas Inc.  252,520  11,202 
  Olin Corp.  679,500  10,376 
*  OM Group Inc.  381,750  10,315 
  Ashland Inc.  263,947  9,117 
*  Fronteer Development Group Inc.  2,389,100  8,935 
  Ball Corp.  176,759  8,719 
  Scotts Miracle-Gro Co. Class A  207,198  8,416 
  NewMarket Corp.  79,070  7,393 
  RPM International Inc.  392,373  6,914 
  Stepan Co.  95,342  5,457 
*  Pactiv Corp.  226,179  5,222 
  Steel Dynamics Inc.  379,469  5,081 
  Compass Minerals International Inc.  77,400  4,824 
  Walter Energy Inc.  77,366  4,526 
*  LSB Industries Inc.  341,250  4,231 
  Terra Industries Inc.  116,400  3,698 
*  Clearwater Paper Corp.  48,149  2,180 
*  Buckeye Technologies Inc.  206,500  1,850 
  Innophos Holdings Inc.  86,761  1,679 
*  Bway Holding Co.  89,182  1,585 
  Worthington Industries Inc.  131,200  1,450 
*  Brush Engineered Materials Inc.  67,780  1,250 
*  Omnova Solutions Inc.  192,434  1,233 
*  Boise Inc.  228,063  1,090 
*  WR Grace & Co.  39,500  865 
*  PolyOne Corp.  126,100  704 
*  AEP Industries Inc.  14,639  511 
  Koppers Holdings Inc.  18,236  476 
*,^  General Steel Holdings Inc.  80,800  301 
  Wausau Paper Corp.  27,849  244 
  KMG Chemicals Inc.  16,975  209 
*  Domtar Corp.  2,360  99 

17


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

          Market 
          Value 
        Shares  ($000) 
  Balchem Corp.      2,100  58 
          446,611 
Telecommunication Services (0.7%)         
*  SBA Communications Corp. Class A      724,368  20,434 
*  Clearwire Corp. Class A      1,328,410  8,316 
*  Syniverse Holdings Inc.      468,689  8,029 
*  Premiere Global Services Inc.      508,898  3,801 
*  USA Mobility Inc.      340,242  3,709 
  NTELOS Holdings Corp.      196,800  2,972 
  Consolidated Communications Holdings Inc.      180,360  2,492 
*  General Communication Inc. Class A      221,465  1,362 
*  AboveNet Inc.      25,886  1,253 
*  Centennial Communications Corp.      99,400  841 
*  iPCS Inc.      19,400  463 
*  Cogent Communications Group Inc.      41,000  415 
*  Cincinnati Bell Inc.      79,100  244 
*  Virgin Mobile USA Inc. Class A      16,500  66 
  HickoryTech Corp.      2,070  19 
          54,416 
Utilities (0.6%)         
  ITC Holdings Corp.      363,900  16,165 
  UGI Corp.      533,600  12,742 
  Ormat Technologies Inc.      259,430  9,807 
  Centerpoint Energy Inc.      362,300  4,565 
  New Jersey Resources Corp.      50,019  1,761 
  American Water Works Co. Inc.      73,343  1,391 
  DPL Inc.      40,700  1,031 
  Consolidated Water Co. Inc.      5,100  75 
          47,537 
 
Total Common Stocks (Cost $7,330,799)        7,644,505 
 
 
    Coupon       
 
Temporary Cash Investments (5.1%)1         
Money Market Fund (4.7%)         
3,4  Vanguard Market Liquidity Fund  0.225%    370,767,569  370,768 
 
 
        Face   
      Maturity  Amount   
      Date  ($000)   
U.S. Government and Agency Obligations (0.2%)         
5,6  Federal Home Loan Bank Discount Notes  0.275%  2/19/10  17,300  17,294 
5,6  Freddie Mac Discount Notes  0.300%  12/28/09  1,000  1,000 
          18,294 
Repurchase Agreement (0.2%)         
  Deutsche Bank Securities, Inc.         
  (Dated 10/30/09, Repurchase Value $12,000,000,         
  collateralized by Federal National Mortgage Assn.         
  6.500%-7.000%, 12/1/37-11/1/38)  0.080%  11/2/09  12,000  12,000 
 
 
Total Temporary Cash Investments (Cost $401,053)        401,062 
 
Total Investments (101.5%) (Cost $7,731,852)        8,045,567 
4 Other Assets and Liabilities—Net (-1.5%)        (116,130) 
 
Net Assets (100%)        7,929,437 

* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $101,748,000.

18


Vanguard® Explorer Fund
Schedule of Investments
October 31, 2009

1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures
investments, the fund's effective common stock and temporary cash investment positions represent 97.3% and 4.2%, respectively, of net
assets.
2 Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day
yield.
4 Includes $111,157,000 of collateral received for securities on loan.
5 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
6 Securities with a value of $18,294,000 have been segregated as initial margin for open futures contracts.
ADR—American Depositary Receipt.
REIT—Real Estate Investment Trust.

19


Report of Independent Registered Public Accounting Firm

To the Trustees and Shareholders of Vanguard Explorer Fund:

We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements (not presented herein) of Vanguard Explorer Fund (the “Fund”) as of October 31, 2009 and for the year then ended and have issued our unqualified report thereon dated December 15, 2009. Our audit included an audit of the Fund’s schedule of investments as of October 31, 2009. This schedule of investments is the responsibility of the Fund’s management. Our responsibility is to express an opinion on this schedule of investments based on our audit.

In our opinion, the accompanying schedule of investments referred to above, when read in conjunction with the financial statements of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.

PricewaterhouseCoopers LLP
Philadelphia, PA
December 15, 2009

20


© 2009 Vanguard Group. Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.

SNA240 122009


Item 2: Code of Ethics. The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics was amended during the reporting period covered by this report to make certain technical, non-material changes.

Item 3: Audit Committee Financial Expert. The following members of the Audit Committee have been determined by the Registrant’s Board of Trustees to be Audit Committee Financial Experts serving on its Audit Committee, and to be independent: Charles D. Ellis, Rajiv L. Gupta, JoAnn Heffernan Heisen, André F. Perold, and Alfred M. Rankin, Jr.

Item 4: Principal Accountant Fees and Services.

(a) Audit Fees.

Audit Fees of the Registrant

Fiscal Year Ended October 31, 2009: $
Fiscal Year Ended October 31, 2008: $34,000

Aggregate Audit Fees of Registered Investment Companies in the Vanguard Group.

Fiscal Year Ended October 31, 2009: $3,354,640
Fiscal Year Ended October 31, 2008: $3,055,590

(b) Audit-Related Fees.

Fiscal Year Ended October 31, 2009: $876,210
Fiscal Year Ended October 31, 2008: $626,240

Includes fees billed in connection with assurance and related services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(c) Tax Fees.

Fiscal Year Ended October 31, 2009: $423,070
Fiscal Year Ended October 31, 2008: $230,400

Includes fees billed in connection with tax compliance, planning and advice services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group and related to income and excise taxes.


(d) All Other Fees.

Fiscal Year Ended October 31, 2009: $0
Fiscal Year Ended October 31, 2008: $0

Includes fees billed for services related to risk management and privacy matters. Services were provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(e) (1) Pre-Approval Policies. The policy of the Registrant’s Audit Committee is to consider and, if appropriate, approve before the principal accountant is engaged for such services, all specific audit and non-audit services provided to: (1) the Registrant; (2) The Vanguard Group, Inc.; (3) other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant; and (4) other registered investment companies in the Vanguard Group. In making a determination, the Audit Committee considers whether the services are consistent with maintaining the principal accountant’s independence.

     In the event of a contingency situation in which the principal accountant is needed to provide services in between scheduled Audit Committee meetings, the Chairman of the Audit Committee would be called on to consider and, if appropriate, pre-approve audit or permitted non-audit services in an amount sufficient to complete services through the next Audit Committee meeting, and to determine if such services would be consistent with maintaining the accountant’s independence. At the next scheduled Audit Committee meeting, services and fees would be presented to the Audit Committee for formal consideration, and, if appropriate, approval by the entire Audit Committee. The Audit Committee would again consider whether such services and fees are consistent with maintaining the principal accountant’s independence.

     The Registrant’s Audit Committee is informed at least annually of all audit and non-audit services provided by the principal accountant to the Vanguard complex, whether such services are provided to: (1) the Registrant; (2) The Vanguard Group, Inc.; (3) other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant; or (4) other registered investment companies in the Vanguard Group.

     (2) No percentage of the principal accountant’s fees or services were approved pursuant to the waiver provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) For the most recent fiscal year, over 50% of the hours worked under the principal accountant’s engagement were not performed by persons other than full-time, permanent employees of the principal accountant.


(g) Aggregate Non-Audit Fees.

Fiscal Year Ended October 31, 2009: $423,070
Fiscal Year Ended October 31, 2008: $230,400

Includes fees billed for non-audit services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(h) For the most recent fiscal year, the Audit Committee has determined that the provision of all non-audit services was consistent with maintaining the principal accountant’s independence.

Item 5: Not Applicable.

Item 6: Not Applicable.

Item 7: Not Applicable.

Item 8: Not Applicable.

Item 9: Not Applicable.

Item 10: Not Applicable.

Item 11: Controls and Procedures.

     (a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

     (b) Internal Control Over Financial Reporting. There were no significant changes in Registrant’s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Item 12: Exhibits.

(a) Code of Ethics.
(b) Certifications.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  VANGUARD EXPLORER FUND 
 
BY:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
 
Date: December 18, 2009 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  VANGUARD EXPLORER FUND 
 
BY:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
Date: December 18, 2009 
  VANGUARD EXPLORER FUND 
BY:  /s/ THOMAS J. HIGGINS* 
  THOMAS J. HIGGINS 
  CHIEF FINANCIAL OFFICER 
Date: December 18, 2009 

* By: /s/ Heidi Stam

Heidi Stam, pursuant to a Power of Attorney filed on July 24, 2009, see file Number
2-88373, and a Power of Attorney filed on October 16, 2009, see File Number 2-52698,
both Incorporated by Reference.