N-Q 1 specializedfinal.htm QUARTERLY REPORT

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

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT COMPANY


Investment Company Act file number: 811-3916

Name of Registrant: Vanguard Specialized Funds

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: January 31

Date of reporting period: April 30, 2006

Item 1: Schedule of Investments



Vanguard Precious Metals and Mining Fund
Schedule of Investments
April 30, 2006
Shares Market
Value
($000)
Common Stocks (98.5%)    
Australia (15.6%)
Rio Tinto Ltd. 2,950,000  176,559 
BHP Billiton Ltd. 5,000,000  113,483 
Iluka Resources Ltd. 16,350,000  91,426 
CSR Ltd. 23,000,000  70,712 
Sims Group Ltd. 4,150,000  60,139 
Centennial Coal Co., Ltd. 15,775,000  41,201 
BlueScope Steel Ltd. 6,800,000  39,750 
St. Barbara Ltd. 20,000,000  9,950 
Tanami Gold NL 18,170,000  4,297 
Magnesium International Ltd. 1,678,671  706 
     608,223 
 
Canada (28.2%)
Meridian Gold Co. 6,300,000  204,750 
Aber Diamond Corp. 4,999,400  195,952 
Barrick Gold Corp. 5,275,165  160,060 
Centerra Gold Inc. 3,786,600  159,500 
First Quantum Minerals Ltd. 2,319,453  111,859 
Falconbridge Ltd. 1,997,000  79,306 
Agrium, Inc. 2,450,000  63,188 
Agnico-Eagle Mines Ltd. 1,700,000  62,202 
Inco Ltd. 1,000,000  56,470 
SouthernEra Diamonds, Inc. 4,937,400  2,115 
Southernera Diamonds, Inc Class A 2,085,500  1,005 
     1,096,407 
 
France (5.4%)
Eramet SLN 776,773  120,873 
Imerys SA 1,060,000  90,940 
     211,813 
 
Germany (2.8%)
K+S AG 1,209,773  109,095 
 
Papua New Guinea (1.3%)
Lihir Gold Ltd. 20,250,000  50,480 
Bougainville Copper Ltd. 2,000,000  1,312 
     51,792 
 
Peru (2.3%)
Compania de Minas Buenaventura S.A.u. ADR 2,900,000  88,131 
 
South Africa (15.6%)
Impala Platinum Holdings Ltd. ADR 4,625,000  218,023 
Anglo Platinum Ltd. ADR 2,127,400  204,835 
AngloGold Ashanti Ltd. ADR 1,800,000  98,424 
Gold Fields Ltd. ADR 2,425,000  61,619 
Northam Platinum Ltd. 4,490,000  22,820 
     605,721 
 
United Kingdom (15.7%)
Lonmin PLC 5,976,399  295,973 
Johnson Matthey PLC 3,875,000  103,397 
Rio Tinto PLC 1,525,000  83,814 
Vedanta Resources PLC 2,050,000  58,511 
Peter Hambro Mining PLC 1,832,368  54,853 
BHP Billiton PLC 600,000  12,300 
Kenmare Resources PLC 2,000,000  1,688 
Zambezi Resources Ltd. 4,895,833  1,314 
     611,850 
 
United States (11.6%)
Peabody Energy Corp. 2,300,000  146,878 
CONSOL Energy, Inc. 1,715,000  146,049 
FMC Corp. 1,000,000  63,560 
Arch Coal, Inc. 650,000  61,744 
Minerals Technologies, Inc. 552,000  31,585 
     449,816 
 
Total Common Stocks
 (Cost $2,245,371)    3,832,848  
Precious Metals (0.1%)
Platinum Bullion (In Ounces)
 (Cost $1,213) 2,009  2,313 
  Face    
  Amount    
  ($000)   
Temporary Cash Investment (4.2%)
Vanguard Market Liquidity Fund, 4.771%
 (Cost $162,051) 162,051,199  162,051  
Total Investments (102.8%)
 (Cost $2,408,635)    3,997,212  
Other Assets and Liabilities-Net (-2.8%)    (108,936)
Net Assets (100%) 3,888,276  
*Non-income-producing security.
^Part of security position is on loan to broker/dealers.
1 Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
ADR - American Depositary Receipt.

Investment Securities: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4:00 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 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. Precious metals are valued at the mean of the latest quoted bid and asked prices. 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.

At April 30, 2006, the cost of investment securities for tax purposes was $2,483,309,000. Net unrealized appreciation of investment securities for tax purposes was $1,513,903,000, consisting of unrealized gains of $1,526,278,000 on securities that had risen in value since their purchase and $12,375,000 in unrealized losses on securities that had fallen in value since their purchase.

Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates on the valuation date as employed by Morgan Stanley Capital International (MSCI) in the calculation of its indexes. As part of the fund’s fair value procedures, exchange rates may be adjusted if they change significantly before the fund’s pricing time but after the time at which the MSCI rates are determined (generally 11:00 a.m. Eastern time).

Affiliated Companies: 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
1/31/06
Market
Value
($000)		 Purchases at
Cost
($000)		 Proceeds from
Securities
Sold
($000)		 Dividend
Income
($000)
 4/30/06
Market
Value
($000)
Aber Diamond Corp. 159,477  43,550  - 961  195,952 
Centennial Coal Co. Ltd. n/a1  9,647  - 570  41,201 
Centerra Gold Inc. 134,269  5,390  - -  159,500 
Iluka Resources Ltd. 69,268  20,796  - 1,316  91,426 
Meridian Gold Inc. 156,285  16,728  - -  204,750 
Zambezi Resources Ltd. 1,049  -  - -  1,314 
  520,348 2,847   694,143


1 At January 31, 2006, the issuer was not an affiliated company of the fund.



Vanguard Health Care Fund
Schedule of Investments
April 30, 2006
Shares Market
Value
($000)
       Common Stocks (91.1%)    
       United States (61.8%)
       Biotechnology (11.1%)
    * Amgen, Inc. 9,989,355  676,279 
    * Gilead Sciences, Inc. 8,749,848  503,116 
    * Genzyme Corp. 7,314,840  447,376 
    * Genentech, Inc. 5,450,000  434,420 
    * MedImmune Inc. 8,400,000  264,348 
* ^ 1 Cephalon, Inc. 3,310,800  217,387 
    * Vertex Pharmaceuticals, Inc. 4,009,400  145,822 
    * Biogen Idec Inc. 2,000,000  89,700 
    * Millennium Pharmaceuticals, Inc. 7,741,300  70,291 
  * ^ Human Genome Sciences, Inc. 1,938,500  22,118 
           2,870,857 
       
       Chemicals (0.7%)
      Sigma-Aldrich Corp. 2,600,000  178,386 
       
       Food & Staples Retailing (2.6%)
      CVS Corp. 21,100,000  627,092 
      Walgreen Co. 1,000,000  41,930 
           669,022 
       
       Health Care Equipment & Supplies (7.8%)
       Health Care Equipment (7.2%)
      Becton, Dickinson & Co. 7,800,000  491,712 
      Medtronic, Inc. 9,102,000  456,192 
    * St. Jude Medical, Inc. 6,500,000  256,620 
      Baxter International, Inc. 5,300,000  199,810 
      Beckman Coulter, Inc. 2,776,600  142,606 
    * Thermo Electron Corp. 3,000,000  115,620 
    * Hospira, Inc. 2,145,070  82,692 
    * Ventana Medical Systems, Inc. 1,200,000  58,440 
      Biomet, Inc. 1,044,700  38,842 
      STERIS Corp. 850,000  19,567 
      Health Care Supplies (0.6%)
      DENTSPLY International Inc. 1,442,700  86,086 
    ^ Bausch & Lomb, Inc. 1,200,000  58,740 
           2,006,927 
       
       Health Care Providers & Services (15.9%)
       Health Care Distributors (6.3%)
      Cardinal Health, Inc. 12,036,708  810,672 
      McKesson Corp. 15,300,000  743,427 
    1 Owens & Minor, Inc. Holding Co. 2,200,000  70,114 
       Health Care Facilities (1.7%)
      HCA Inc. 6,850,000  300,647 
      Universal Health Services Class B 2,460,000  124,964 
       Health Care Services (3.5%)
      Quest Diagnostics, Inc. 4,300,000  239,639 
      IMS Health, Inc. 8,347,400  226,882 
* ^ 1 Cerner Corp. 4,400,000  174,460 
    * Laboratory Corp. of America Holdings 2,967,360  169,436 
    * Medco Health Solutions, Inc. 1,000,000  53,230 
  * 1 PAREXEL International Corp. 1,570,200  46,337 
       Managed Health Care (4.4%)
  * 1 Humana Inc. 9,677,500  437,229 
    * Coventry Health Care Inc. 4,750,000  235,933 
    * WellPoint Inc. 2,711,000  192,481 
      CIGNA Corp. 1,590,300  170,162 
      UnitedHealth Group Inc. 1,400,000  69,636 
    * Health Net Inc. 1,000,000  40,700 
           4,105,949 
       
       Household Products (0.5%)
      Colgate-Palmolive Co. 1,521,000  89,922 
      Kimberly-Clark Corp. 676,300  39,584 
           129,506 
       
       Insurance (0.1%)
      UnumProvident Corp. 1,252,500  25,438 
       
       Machinery (0.3%)
      Pall Corp. 2,404,600  72,571 
       
       Pharmaceuticals (22.8%)
      Eli Lilly & Co. 23,129,900  1,224,034 
      Schering-Plough Corp. 56,870,000  1,098,728 
  * 1 Forest Laboratories, Inc. 20,001,500  807,661 
      Pfizer Inc. 28,011,570  709,533 
      Abbott Laboratories 14,580,700  623,179 
      Wyeth 8,250,000  401,528 
      Bristol-Myers Squibb Co. 15,100,000  383,238 
      Allergan, Inc. 2,144,100  220,242 
      Johnson & Johnson 3,000,000  175,830 
    1 Perrigo Co. 5,322,320  84,944 
      Mylan Laboratories, Inc. 3,000,000  65,520 
    * Watson Pharmaceuticals, Inc. 2,200,000  62,568 
    * Barr Pharmaceuticals Inc. 900,000  54,495 
           5,911,500 
       
      Total United States    15,970,156  
       International (29.3%)
       Belgium (0.4%)
    ^ UCB SA 1,933,593  99,314 
       
       Canada (0.1%)
    * Axcan Pharma Inc. 1,356,900  18,224 
      Biovail Corp. 260,700  6,794 
           25,018 
       
       Denmark (0.2%)
    ^ Novo Nordisk A/S B Shares 700,000  45,140 
       
       France (4.5%)
    ^ Sanofi-Aventis 11,589,415  1,091,157 
  * ^ Ipsen Promesses 1,400,000  62,605 
           1,153,762 
       
       Germany (2.2%)
    ^ Bayer AG 8,144,656  374,261 
    ^ Schering AG 1,090,410  116,829 
    * Bayer AG ADR 1,100,000  49,665 
      Fresenius Medical Care AG ADR 645,400  25,823 
           566,578 
       
       Japan (9.9%)
      Takeda Pharmaceutical Co. Ltd. 10,900,000  664,941 
      Astellas Pharma Inc. 14,565,700  605,816 
      Eisai Co., Ltd. 9,453,700  430,091 
      Daiichi Sankyo Co., Ltd. 13,538,300  347,330 
      Chugai Pharmaceutical Co., Ltd. 8,834,500  190,759 
      Shionogi & Co., Ltd. 9,876,000  166,112 
      Tanabe Seiyaku Co., Ltd. 6,850,000  80,457 
      Ono Pharmaceutical Co., Ltd. 1,113,000  55,146 
      Olympus Corp. 1,000,000  28,535 
           2,569,187 
       
       Netherlands (0.5%)
      Akzo Nobel NV 2,400,000  138,070 
       
       Switzerland (7.2%)
    ^ Roche Holdings AG 6,123,977  937,182 
      Novartis AG (Registered) 13,719,880  784,106 
    ^ Serono SA Class B 210,641  137,859 
           1,859,147 
       
       United Kingdom (4.3%)
      AstraZeneca Group PLC 14,781,500  810,147 
      AstraZeneca Group PLC ADR 3,696,672  203,798 
      GlaxoSmithKline PLC ADR 1,642,381  93,419 
           1,107,364 
       
      Total International    7,563,580  
      Total Common Stocks
       (Cost $14,588,299)    23,533,736  
       Temporary Cash Investments (12.1%)
       Money Market Fund (3.2%)
    2 Vanguard Market Liquidity Fund, 4.771% 830,153,072  830,153 
       
        Face    
        Amount    
        ($000)   
       Commercial Paper (1.6%)
      General Electric Capital Corp.
      4.667%, 5/1/2006 210,000  210,000 
      4.809%, 5/18/2006 210,000  209,526 
           419,526 
       
       Repurchase Agreements (7.3%)
      Bank of America
      4.780%, 5/1/2006
      (Dated 4/28/2006, Repurchase Value $913,064,000
      collateralized by Federal National Mortgage Assn.,
      5.000%, 6/1/2035) 912,700  912,700 
      Deutsche Bank
      4.790%, 5/1/2006
      (Dated 4/28/2006, Repurchase Value $295,818,000
      collateralized by Federal National Mortgage Assn.,
      4.000%-6.500%, 4/1/2018-4/1/2036 and Federal Home Loan
      Mortgage Corp., 4.500%-6.000%, 4/1/2026-4/1/2036) 295,700  295,700 
      JPMorgan Securities Inc.
      4.780%, 5/1/2006
      (Dated 4/28/2006, Repurchase Value $306,622,000
      collateralized by Federal National Mortgage Assn.,
      4.500%-6.500%, 1/1/2018-10/1/2035 and Federal Home Loan
      Mortgage Corp., 4.000%-6.500%, 5/1/2018-8/1/2035) 306,500  306,500 
      SBC Warburg Dillon Read
      4.770%, 5/1/2006
      (Dated 4/28/2006, Repurchase Value $360,043,000
      collateralized by Federal National Mortgage Assn.,
      4.000%-6.500%, 8/1/2008-11/1/2035 and Federal Home Loan
      Mortgage Corp., 4.500%-8.500%, 2/1/2008-1/1/2022) 359,900  359,900 
           1,874,800 
       
      Total Temporary Cash Investments
       (Cost $3,124,479)    3,124,479  
       Total Investments (103.2%)
       (Cost $17,712,778)    26,658,215 
      Other Assets and Liabilities—Net (-3.2%)    (817,837)
      Net Assets (100.0%)    25,840,378 
*Non-income-producing security.
^ Part of security position is on loan to broker/dealers.
1 Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
ADR-American Depositary Receipt.


These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluting 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.

At April 30, 2006, the cost of investment securities for tax purposes was $17,712,778,000. Net unrealized appreciation of investment securities for tax purposes was $8,945,437,000, consisting of unrealized gains of $9,174,307,000 on securities that had risen in value since their purchase and $228,870,000 in unrealized losses on securities that had fallen in value since their purchase.

Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates on the valuation date as employed by Morgan Stanley Capital International (MSCI) in the calculation of its indexes. As part of the fund’s fair value procedures, exchange rates may be adjusted if they change significantly before the fund’s pricing time but after the time at which the MSCI rates are determined (generally 11:00 a.m. Eastern time).

Affiliated Companies: 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:



($000)
Current Period Transactions
1/31/2006
Market
Value		 Purchases at
Cost		 Proceeds from
Securities
Sold		 Dividend
Income		 4/30/2006
Market
Value
Cephalon, Inc. 238,843  -  4,401  -  217,387 
Cerner Corp. 207,000  -  9,503  -  174,460 
Forest Laboratories, Inc. 925,669  -  -  -  807,661 
Humana, Inc. 545,291  -  5,026  -  437,229 
McKesson Corp. 816,200  -  5,385  924  n/a* 
Owens & Minor, Inc. Holding Co. 68,860  -  -  330  70,114 
PAREXEL International Corp. 38,281  -  -  -  46,337 
Perrigo Co. 83,081  -  -  226  84,944 
  2,923,225 1,480 1,838,132


* At April 30, 2006, the security is still held but the issuer is no longer an affiliated company of the fund.



Vanguard Energy Fund
Schedule of Investments
April 30, 2006
Shares Market
Value
($000)
     Common Stocks (92.5%)    
     United States (49.6%)
     Energy Equipment & Services (14.6%)
     Oil & Gas Drilling (5.4%)
  * Transocean Inc. 2,887,500  234,090 
    GlobalSantaFe Corp. 3,178,200  194,538 
  * Nabors Industries, Inc. 2,206,400  82,365 
    Rowan Cos., Inc. 625,700  27,737 
    ENSCO International, Inc. 296,600  15,865 
    Patterson-UTI Energy, Inc. 450,200  14,568 
    Helmerich & Payne, Inc. 194,200  14,126 
     Oil & Gas Equipment & Services (9.2%)
    Schlumberger Ltd. 5,093,200  352,144 
  * Weatherford International Ltd. 3,996,600  211,540 
    Halliburton Co. 2,705,900  211,466 
    Baker Hughes, Inc. 2,563,000  207,167 
    BJ Services Co. 223,000  8,485 
  * Cooper Cameron Corp. 99,700  5,009 
         1,579,100 
     
     Gas Utilities (0.9%)
    Equitable Resources, Inc. 2,688,800  95,479 
     
     Oil, Gas & Consumable Fuels (34.0%)
     Coal & Consumable Fuels (3.9%)
    Peabody Energy Corp. 3,758,400  240,011 
    CONSOL Energy, Inc. 2,095,100  178,419 
     Integrated Oil & Gas (18.5%)
    ExxonMobil Corp. 9,700,500  611,908 
    Chevron Corp. 8,029,128  489,937 
    ConocoPhillips Co. 6,331,343  423,567 
    Marathon Oil Corp. 2,590,700  205,598 
    Occidental Petroleum Corp. 1,656,000  170,137 
    Amerada Hess Corp. 678,100  97,151 
     Oil & Gas Exploration & Production (6.5%)
    Anadarko Petroleum Corp. 1,107,400  116,078 
    Noble Energy, Inc. 2,532,400  113,907 
    EOG Resources, Inc. 1,612,300  113,232 
    Devon Energy Corp. 1,655,300  99,500 
    Cabot Oil & Gas Corp. 1,431,300  70,506 
  * Newfield Exploration Co. 1,579,600  70,450 
    XTO Energy, Inc. 1,484,100  62,852 
    Apache Corp. 329,800  23,429 
  * Forest Oil Corp. 358,000  13,092 
    Chesapeake Energy Corp. 283,400  8,978 
    Kerr-McGee Corp. 38,400  3,835 
  * Ultra Petroleum Corp. 40,700  2,603 
    Hugoton Royalty Trust 87,852  2,429 
  * Plains Exploration & Production Co. 6,100  225 
     Oil & Gas Refining & Marketing (4.7%)
    Valero Energy Corp. 5,600,842  362,599 
    Sunoco, Inc. 1,644,000  133,230 
    Tesoro Petroleum Corp. 203,800  14,250 
     Oil & Gas Storage & Transportation (0.4%)
    Williams Cos., Inc. 1,506,600  33,040 
    El Paso Corp. 195,300  2,521 
         3,663,484 
     
     Exchange-Traded Fund (0.1%)
  1 Vanguard Energy VIPERs 81,000  6,709 
    Total United States 5,344,772 
     International (42.9%)
     Argentina (0.2%)
    Tenaris SA ADR 397,400  18,241 
  * Petrobras Energia Participaciones SA ADR 401,929  4,731 
         22,972 
     
     Australia (3.1%)
    BHP Billiton Ltd. ADR 7,265,500  331,016 
     
     Brazil (2.0%)
    Petroleo Brasileiro ADR 1,793,800  177,281 
    Petroleo Brasileiro SA Pfd. 960,800  21,286 
    Petroleo Brasileiro SA 739,700  18,287 
         216,854 
     
     Canada (12.4%)
    Canadian Natural Resources Ltd. 4,391,300  264,356 
    Suncor Energy, Inc. 2,403,600  206,085 
    EnCana Corp. 3,056,000  152,953 
  * Canadian Oil Sands Trust 844,235  131,847 
    Talisman Energy, Inc. 2,266,386  127,705 
    Shell Canada Ltd. Class A 3,134,100  117,527 
  * Western Oil Sands Inc. 3,715,635  112,111 
  * Petro Canada 2,189,400  107,675 
    EnCana Corp. 539,700  26,914 
    Petro-Canada 499,400  24,512 
    Suncor Energy, Inc. 259,600  22,180 
    Canadian Natural Resources Ltd. 362,500  21,739 
    Imperial Oil Ltd. 85,200  9,237 
  * Nexen Inc. 97,900  5,708 
    TransCanada Corp. 175,400  5,169 
  * Cameco Corp. 97,000  3,938 
         1,339,656 
     
     China (1.0%)
    China Petroleum and Chemical Corp. ADR 1,068,500  68,704 
    PetroChina Co. Ltd. 20,130,000  22,505 
    Yanzhou Coal Mining Co. Ltd. H Shares 13,509,800  11,497 
    CNOOC Ltd. 6,318,600  5,201 
    China Petroleum & Chemical Corp. 4,340,000  2,776 
         110,683 
     
     France (3.7%)
    Total SA ADR 2,609,400  360,149 
    Total SA 161,544  44,512 
         404,661 
     
     India (0.1%)
* 2 Oil & Natural Gas Corp., Ltd. Warrants Exp. 6/30/06 234,300  6,746 
     
     Italy (2.6%)
    ENI SpA ADR 3,794,250  232,246 
    ENI SpA 1,457,891  44,545 
         276,791 
     
     Netherlands (0.5%)
    Fugro NV 1,394,300  58,370 
     
     Norway (3.7%)
    Statoil ASA ADR 5,885,900  192,940 
  * Norsk Hydro AS ADR 1,012,000  154,836 
  * Petroleum Geo-Services ASA 244,250  13,646 
  * Acergy SA 830,400  13,510 
    Norsk Hydro ASA 70,814  10,819 
    Statoil ASA 329,165  10,762 
         396,513 
     
     Russia (2.8%)
    OAO Lukoil Holding Sponsored ADR 1,632,800  147,932 
* ^ OAO Gazprom-Sponsored ADR 2,588,322  117,510 
  * Surgutneftegaz ADR 459,300  39,959 
         305,401 
     
     South Africa (0.9%)
    Sasol Ltd. Sponsored ADR 1,798,600  74,408 
    Sasol Ltd. 440,600  18,225 
         92,633 
     
     Spain (0.9%)
    Repsol YPF SA ADR 2,584,900  77,185 
    Repsol YPF SA 635,025  18,929 
         96,114 
     
     United Kingdom (9.0%)
    BP PLC ADR 3,878,800  285,945 
    BG Group PLC 20,515,887  272,476 
    Royal Dutch Shell PLC ADR Class B 2,398,426  171,272 
    Royal Dutch Shell PLC ADR Class A 2,017,800  137,473 
    BP PLC 4,778,004  58,218 
    Royal Dutch Shell PLC Class A 637,253  21,649 
    Royal Dutch Shell PLC Class B 589,391  20,941 
    Royal Dutch Shell PLC Class A (Amsterdam Shares) 117,600  4,017 
         971,991 
     
    Total International    4,630,401  
    Total Common Stocks
     (Cost $4,714,925)    9,975,173  
     Temporary Cash Investments (8.0%)
     Money Market Fund (3.0%)
  3 Vanguard Market Liquidity Fund, 4.771% 320,896,214  320,896 
     
      Face    
      Amount    
      ($000)   
     U.S. Agency Obligations (0.1%)
  4 Federal Home Loan Mortgage Corp.
  5 4.807%, 6/21/06 15,500  15,395 
     
     Repurchase Agreements (4.9%)
    Deutsche Bank, 4.790%, 5/1/06
    (Dated 4/28/06, Repurchase Value $526,410,000,
    collateralized by Federal Home Loan Mortgage Corp., 4.500%-7.500%,
    6/1/14-3/1/36, and Federal National Mortgage Assn., 4.500%-7.500%,
    7/1/10-4/1/36)
      526,200  526,200 
     
    Total Temporary Cash Investments
     (Cost $862,492)    862,491  
     Total Investments (100.5%)
    (Cost $5,577,417)    10,837,664  
    Other Assets and Liabilities-Net (-0.5%)    (50,195)
    Net Assets (100%)    10,787,469  
*Non-income-producing security.
^ Part of security position is on loan to broker/dealers.
1 Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
2 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. At April 30, 2006, the value of this security represented 0.1% 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 The issuer operates under a congressional charter; its securities are neither issued nor guaranteed by the U.S. government. If needed, access to additional funding from the U.S. Treasury (beyond the issuer's line of credit) would require congressional action.
5 Securities with a value of $15,395,000 have been segregated as initial margin for open futures contracts.
ADR - American Depositary Receipt.


Investment Securities: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4:00 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 evaluting 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.

At April 30, 2006, the cost of investment securities for tax purposes was $5,577,417,000. Net unrealized appreciation of investment securities for tax purposes was $5,260,247,000, consisting of unrealized gains of $5,264,264,000 on securities that had risen in value since their purchase and $4,017,000 in unrealized losses on securities that had fallen in value since their purchase.

Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates on the valuation date as employed by Morgan Stanley Capital International (MSCI) in the calculation of its indexes. As part of the fund’s fair value procedures, exchange rates may be adjusted if they change significantly before the fund’s pricing time but after the time at which the MSCI rates are determined (generally 11:00 a.m. Eastern time).

Futures Contracts: 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 95.1% and 5.4%, respectively, of net assets. Futures contracts are valued at their quoted daily settlement prices.

At April 30, 2006, the aggregate settlement value of open futures contracts expiring in June 2006 , and the related unrealized appreciation (depreciation) were:



($000)
Futures Contracts Number
of
Long Contracts		 Aggregate
Settlement
Value		 Unrealized
Appreciation
(Depreciation)
S&P 500 Index 672  221,071  3,636 
E-mini S&P 500 Index 990  65,137  47 


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



Vanguard REIT Index Fund
Schedule of Investments
April 30, 2006
Shares Market
Value
($000)
   Real Estate Investment Trusts (98.0%)    
  Simon Property Group, Inc. REIT 6,245,815  511,407 
  Equity Office Properties Trust REIT 11,887,943  383,980 
  Equity Residential REIT 8,434,194  378,442 
  ProLogis REIT 7,126,734  357,905 
  Vornado Realty Trust REIT 3,702,150  354,074 
  General Growth Properties Inc. REIT 6,638,528  311,679 
  Archstone-Smith Trust REIT 6,204,629  303,282 
  Boston Properties, Inc. REIT 3,292,945  290,668 
  Host Marriott Corp. REIT 13,559,663  285,024 
  Kimco Realty Corp. REIT 6,334,142  235,187 
  Avalonbay Communities, Inc. REIT 2,151,947  231,765 
  Public Storage, Inc. REIT 2,457,667  188,945 
  Developers Diversified Realty Corp. REIT 3,026,872  161,029 
  The Macerich Co. REIT 2,033,086  148,863 
  Duke Realty Corp. REIT 4,023,017  142,415 
  Regency Centers Corp. REIT 1,986,494  125,328 
  Apartment Investment & Management Co. Class A REIT 2,801,095  125,181 
  AMB Property Corp. REIT 2,501,118  125,031 
  SL Green Realty Corp. REIT 1,233,158  122,083 
  Liberty Property Trust REIT 2,582,664  115,445 
  United Dominion Realty Trust REIT 4,014,736  109,161 
  Health Care Properties Investors REIT 3,976,352  109,032 
  Federal Realty Investment Trust REIT 1,543,654  105,324 
  Camden Property Trust REIT 1,525,888  104,874 
  Reckson Associates Realty Corp. REIT 2,416,282  98,294 
  Weingarten Realty Investors REIT 2,483,205  97,863 
  Shurgard Storage Centers, Inc. Class A REIT 1,461,006  92,014 
  Hospitality Properties Trust REIT 2,104,948  90,723 
  Arden Realty Group, Inc. REIT 1,961,444  88,932 
  Ventas, Inc. REIT 2,719,379  88,842 
  Mack-Cali Realty Corp. REIT 1,811,470  81,915 
  BRE Properties Inc. Class A REIT 1,498,342  80,731 
  Pan Pacific Retail Properties, Inc. REIT 1,191,139  79,378 
  CarrAmerica Realty Corp. REIT 1,695,505  75,891 
  New Plan Excel Realty Trust REIT 3,050,551  75,196 
  Brandywine Realty Trust REIT 2,589,221  73,301 
  CBL & Associates Properties, Inc. REIT 1,772,383  70,877 
  Essex Property Trust, Inc. REIT 635,345  69,316 
  Trizec Properties, Inc. REIT 2,742,914  68,628 
  HRPT Properties Trust REIT 6,142,314  67,443 
^ Health Care Inc. REIT 1,788,976  62,256 
  Colonial Properties Trust REIT 1,245,349  61,321 
  Taubman Co. REIT 1,486,543  61,156 
  Kilroy Realty Corp. REIT 846,498  60,372 
  Alexandria Real Estate Equities, Inc. REIT 658,198  59,633 
  Realty Income Corp. REIT 2,607,462  59,111 
  Crescent Real Estate, Inc. REIT 2,810,794  56,216 
  Healthcare Realty Trust Inc. REIT 1,397,725  52,932 
  Mills Corp. REIT 1,656,650  52,864 
  First Industrial Realty Trust REIT 1,301,269  51,062 
  LaSalle Hotel Properties REIT 1,137,148  49,727 
  Post Properties, Inc. REIT 1,132,960  49,499 
  Corporate Office Properties Trust, Inc. REIT 1,164,842  48,341 
  Sunstone Hotel Investors, Inc. REIT 1,670,308  48,005 
^ Nationwide Health Properties, Inc. REIT 2,147,861  46,222 
^ Washington REIT 1,233,175  45,960 
  Home Properties, Inc. REIT 884,590  44,247 
  Maguire Properties, Inc. REIT 1,292,535  43,894 
  Pennsylvania REIT 1,074,691  43,589 
  American Financial Realty Trust REIT 3,767,164  42,870 
  Highwood Properties, Inc. REIT 1,344,120  42,394 
  Strategic Hotels and Resorts, Inc. REIT 1,714,840  38,893 
  BioMed Realty Trust, Inc. REIT 1,364,809  37,778 
  Senior Housing Properties Trust REIT 2,101,817  36,088 
  Cousins Properties, Inc. REIT 1,109,652  34,898 
^ Lexington Corporate Properties Trust REIT 1,521,280  32,799 
  FelCor Lodging Trust, Inc. REIT 1,497,143  32,413 
  Franklin Street Properties Corp. REIT 1,505,762  32,103 
  Mid-America Apartment Communities, Inc. REIT 604,673  32,048 
  Commercial Net Lease Realty REIT 1,507,269  31,728 
  Tanger Factory Outlet Centers, Inc. REIT 899,266  29,478 
  EastGroup Properties, Inc. REIT 644,368  28,784 
  Equity Lifestyle Properties, Inc. REIT 648,200  28,514 
  Entertainment Properties Trust REIT 681,665  27,860 
  Glimcher Realty Trust REIT 1,068,401  27,565 
  Inland Real Estate Corp. REIT 1,875,365  27,212 
  Spirit Finance Corp. REIT 2,331,550  27,046 
  Heritage Property Investment Trust REIT 693,414  26,780 
  Trustreet Properties, Inc. REIT 1,836,862  26,451 
  U-Store-It Trust REIT 1,418,289  25,926 
  Digital Realty Trust, Inc. REIT 918,832  25,911 
  DiamondRock Hospitality Co. REIT 1,796,279  25,705 
  Equity Inns, Inc. REIT 1,580,442  25,603 
* MeriStar Hospitality Corp. REIT 2,432,805  25,398 
  Equity One, Inc. REIT 1,099,585  25,268 
  PS Business Parks, Inc. REIT 476,215  24,739 
  Sovran Self Storage, Inc. REIT 500,553  24,602 
  Highland Hospitality Corp. REIT 1,729,969  22,317 
  Extra Space Storage Inc. REIT 1,387,879  21,817 
  Omega Healthcare Investors, Inc. REIT 1,659,296  21,222 
  Glenborough Realty Trust, Inc. REIT 966,919  20,257 
  Innkeepers USA Trust REIT 1,256,224  20,125 
  Acadia Realty Trust REIT 784,643  17,709 
  Sun Communities, Inc. REIT 506,376  16,483 
  Parkway Properties Inc. REIT 414,106  16,399 
  First Potomac REIT 586,714  16,187 
  Getty Realty Holding Corp. REIT 542,476  14,994 
  GMH Communities Trust REIT 1,161,877  14,291 
  Ramco-Gershenson Properties Trust REIT 492,738  13,319 
  Saul Centers, Inc. REIT 321,826  13,159 
  Investors Real Estate Trust REIT 1,274,817  12,073 
  Bedford Property Investors, Inc. REIT 446,199  12,029 
  Education Realty Trust, Inc. REIT 774,552  11,556 
  Urstadt Biddle Properties Class A REIT 646,448  10,809 
  Universal Health Realty Income REIT 327,951  10,547 
^ Affordable Residential Communities REIT 348,067  3,195 
  Urstadt Biddle Properties REIT 12,596  214 
  TOTAL REAL ESTATE INVESTMENT TRUSTS
   (Cost $5,991,244) 8,757,431  
   Temporary Cash Investment (2.4%)
1 Vanguard Market Liquidity Fund, 4.771%
   (Cost $220,757) 220,756,736  220,757  
   Total Investments (100.4%)
   (Cost $6,212,001) 8,978,188  
   Other Assets and Liabilities-Net (-0.4%) (38,191)
  Net Assets (100%) 8,939,997 
* Non-income-producing security.
^ Part of security position is on loan to broker/dealers.
1 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.


Investment Securities: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4:00 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 materially affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued by methods deemed by the board of trustees to represent fair value. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value.

At April 30, 2006, the cost of investment securities for tax purposes was $6,212,001,000. Net unrealized appreciation of investment securities for tax purposes was $2,766,187,000, consisting of unrealized gains of $2,794,088,000 on securities that had risen in value since their purchase and $27,901,000 in unrealized losses on securities that had fallen in value since their purchase.



Vanguard Dividend Growth Fund
Schedule of Investments
April 30, 2006
Shares Market
Value
($000)
   Common Stocks (99.3%)    
   Consumer Discretionary (16.4%)
  CBS Corp. 807,600  20,570 
  NIKE, Inc. Class B 251,300  20,566 
  TJX Cos., Inc. 770,900  18,602 
  The Gap, Inc. 845,200  15,290 
  McDonald's Corp. 432,900  14,965 
  The Walt Disney Co. 460,800  12,884 
  Carnival Corp. 268,800  12,585 
  Home Depot, Inc. 312,700  12,486 
  Gannett Co., Inc. 188,800  10,384 
  Clear Channel Communications, Inc. 345,300  9,851 
  The McGraw-Hill Cos., Inc. 175,300  9,757 
  Meredith Corp. 157,400  7,807 
       165,747 
   
   Consumer Staples (8.7%)
  Altria Group, Inc. 274,000  20,046 
  The Coca-Cola Co. 345,000  14,476 
  General Mills, Inc. 251,000  12,384 
  The Procter & Gamble Co. 201,700  11,741 
  Safeway, Inc. 402,600  10,117 
  Kimberly-Clark Corp. 169,200  9,903 
  Anheuser-Busch Cos., Inc. 202,900  9,045 
       87,712 
   
   Energy (9.5%)
  ExxonMobil Corp. 508,400  32,070 
^ Total SA ADR 180,600  24,926 
  Chevron Corp. 337,000  20,564 
  ConocoPhillips Co. 279,400  18,692 
       96,252 
   
   Financials (14.4%)
  Bank of America Corp. 541,000  27,007 
  Citigroup, Inc. 530,500  26,499 
  ACE Ltd. 416,800  23,149 
  American International Group, Inc. 334,400  21,820 
  State Street Corp. 280,400  18,316 
  Golden West Financial Corp. 208,100  14,956 
  Merrill Lynch & Co., Inc. 190,800  14,550 
       146,297 
   
  Health Care (13.0%)
  Abbott Laboratories 484,100  20,690 
  Baxter International, Inc. 483,800  18,239 
  AstraZeneca Group PLC ADR 330,600  18,226 
  Wyeth 371,500  18,081 
  Cardinal Health, Inc. 262,100  17,652 
  Novartis AG ADR 251,500  14,464 
  Eli Lilly & Co. 268,200  14,193 
  Medtronic, Inc. 206,100  10,330 
       131,875 
   
   Industrials (17.5%)
  General Electric Co. 883,400  30,557 
  Lockheed Martin Corp. 238,800  18,125 
  Emerson Electric Co. 209,000  17,755 
  Illinois Tool Works, Inc. 150,500  15,456 
  United Technologies Corp. 238,700  14,993 
  Honeywell International Inc. 352,000  14,960 
  Pitney Bowes, Inc. 332,400  13,911 
  Avery Dennison Corp. 214,000  13,375 
  General Dynamics Corp. 182,700  11,989 
  The Boeing Co. 132,300  11,040 
  United Parcel Service, Inc. 129,700  10,515 
  Parker Hannifin Corp. 61,300  4,968 
       177,644 
   
   Information Technology (13.2%)
  Microsoft Corp. 1,336,900  32,286 
  Nokia Corp. ADR 1,240,400  28,107 
  International Business Machines Corp. 308,600  25,410 
  Automatic Data Processing, Inc. 370,700  16,341 
  Hewlett-Packard Co. 383,000  12,436 
  Intel Corp. 507,000  10,130 
  Motorola, Inc. 419,100  8,948 
       133,658 
   
   Materials (2.2%)
  Weyerhaeuser Co. 176,200  12,417 
  Alcoa Inc. 291,100  9,833 
       22,250 
   
   Telecommunication Services (2.5%)
  AT&T Inc. 583,500  15,294 
  Verizon Communications Inc. 310,800  10,266 
       25,560 
   
   Utilities (1.9%)
  Exelon Corp. 259,900  14,035 
  FPL Group, Inc. 143,700  5,691 
       19,726 
   
  Total Common Stocks
   (Cost $814,972)    1,006,721  
   Temporary Cash Investments (2.3%)
   Money Market Fund (1.0%)
1 Vanguard Market Liquidity Fund, 4.771% 9,940,000  9,940 
   
   
    Face
Amount 		   
    ($000)   
   Repurchase Agreement (1.3%)
  Goldman Sachs & Co.
  4.780%, 5/1/06 (Dated 4/28/06,
  Repurchase Value $13,505,000, collateralized by
  Federal Home Loan Mortgage Corp., 6.500%, 4/1/36) 13,500  13,500 
   
  Total Temporary Cash Investments
   (Cost $23,440)    23,440  
   Total Investments (101.6%)
   (Cost $838,412)    1,030,161  
  Other Assets and Liabilities-Net (-1.6%)    (16,322)
  Net Assets (100%)    1,013,839 

^ Part of security position is on loan to broker/dealers.
1 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
ADR — American Depositary Receipt.

Investment Securities: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4:00 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 materially affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued by methods deemed by the board of trustees to represent fair value. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Other temporary cash investments are valued at amortized cost, which approximates market value.

At April 30, 2006, the cost of investment securities for tax purposes was $838,412,000. Net unrealized appreciation of investment securities for tax purposes was $191,749,000, consisting of unrealized gains of $207,778,000 on securities that had risen in value since their purchase and $16,029,000 in unrealized losses on securities that had fallen in value since their purchase.

Item 2: 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. During the last fiscal quarter, there was no significant change in the Registrant’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3:

 Exhibits.
(a) 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 SPECIALIZED FUNDS

BY: (signature)
(HEIDI STAM)
JOHN J. BRENNAN*
CHIEF EXECUTIVE OFFICER

Date: June 19, 2006

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 SPECIALIZED FUNDS

BY: (signature)
(HEIDI STAM)
JOHN J. BRENNAN*
CHIEF EXECUTIVE OFFICER

Date: June 19, 2006

VANGUARD SPECIALIZED FUNDS

BY: (signature)
(HEIDI STAM)
THOMAS J. HIGGINS*
TREASURER

Date: June 19, 2006

*By Power of Attorney. See File Number 2-31333, filed on January 23, 2006. Incorporated by Reference.