chesterfinal.htm - Generated by SEC Publisher for SEC Filing

0000932471-17-004658.txt : 20170724 0000932471-17-004658.hdr.sgml : 20170724 20170724090156 ACCESSION NUMBER: 0000932471-17-004658 CONFORMED SUBMISSION TYPE: POS EX PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20170724 DATE AS OF CHANGE: 20170724 EFFECTIVENESS DATE: 20170724 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VANGUARD CHESTER FUNDS CENTRAL INDEX KEY: 0000752177 IRS NUMBER: 232311358 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: POS EX SEC ACT: 1933 Act SEC FILE NUMBER: 002-92948 FILM NUMBER: 17977624 BUSINESS ADDRESS: STREET 1: PO BOX 2600 STREET 2: V26 CITY: VALLEY FORGE STATE: PA ZIP: 19482 BUSINESS PHONE: 6106691000 MAIL ADDRESS: STREET 1: P.O. BOX 2600 STREET 2: V26 CITY: VALLEY FORGE STATE: PA ZIP: 19482 FORMER COMPANY: FORMER CONFORMED NAME: VANGUARD PRIMECAP FUND/ DATE OF NAME CHANGE: 20011121 FORMER COMPANY: FORMER CONFORMED NAME: VANGUARD/PRIMECAP FUND INC DATE OF NAME CHANGE: 19940608 FORMER COMPANY: FORMER CONFORMED NAME: PRIMECAP FUND INC DATE OF NAME CHANGE: 19920703 POS EX 1 chesterfinal.htm VANGUARD CHESTER FUNDS POS EX chesterfinal.htm - Generated by SEC Publisher for SEC Filing

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT 2-92948 UNDER

THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 80

and

REGISTRATION STATEMENT (NO. 811-04098) UNDER THE INVESTMENT COMPANY

ACT OF 1940

Amendment No. 81

VANGUARD CHESTER FUNDS

(Exact Name of Registrant as Specified in Declaration of Trust)

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

(Address of Principal Executive Office)

Registrant’s Telephone Number (610) 669-1000

Anne E. Robinson, Esquire

P.O. Box 876

Valley Forge, PA 19482

It is proposed that this filing will become effective immediately upon filing pursuant to Rule 462(d).

Explanatory Note

This Post-Effective Amendment consists of the following:

1. Facing Sheet of the Registration Statement

2. Part C to the Registration Statement (including Signatures page)

3. Exhibit (n) to Item 28 to the Registration Statement

This Post-Effective Amendment is being filed solely to file Amended and Restated By-Laws as

Exhibit (n) to Item 28 to this Registration Statement on Form N-1A (the“Registration Statement”).

Parts A and B of Post-Effective Amendment No. 78 to the Registration Statement, dated

July 12, 2017, and filed pursuant to Rule 485(b) under the Securities Act of 1933, are incorporated

by reference.

PART C

VANGUARD CHESTER FUNDS

OTHER INFORMATION

Item 28. Exhibits

(a)	Articles of Incorporation, Amended and Restated Agreement and Declaration of Trust, filed with Post-Effective Amendment No. 76 on April 17, 2017, is hereby incorporated by reference.
(b)	By-Laws, Amended and Restated By-Laws, filed with Post-Effective Amendment No. 79, dated July 12, 2017, is hereby incorporated by reference.
(c)	Instruments Defining Rights of Security Holders, reference is made to Articles III and V of the Registrant’s Amended and Restated Agreement and Declaration of Trust, refer to Exhibit (a) above.
(d)	Investment Advisory Contracts, for PRIMECAP Management Company, filed with Post- Effective Amendment No. 37 dated January 31, 2007, is hereby incorporated by reference.
	The Vanguard Group, Inc., provides investment advisory services to the Vanguard Target Retirement Funds and the Vanguard Institutional Target Retirement Funds at cost pursuant to the Fifth Amended and Restated Funds’ Service Agreement, refer to Exhibit (h) below.
(e)	Underwriting Contracts, not applicable.
(f)	Bonus or Profit Sharing Contracts, reference is made to the section entitled “Management of the Funds” in Part B of this Registration Statement.
(g)	Custodian Agreements, for The Bank of New York Mellon and for JPMorgan Chase Bank, filed with Post-Effective Amendment No. 73 dated January 27, 2017, are hereby incorporated by reference.
(h)	Other Material Contracts, Fifth Amended and Restated Funds’ Service Agreement, filed with Post-Effective Amendment No. 43 on June 3, 2010, is hereby incorporated by reference.
(i)	Legal Opinion, not applicable.
(j)	Other Opinions, Consent of Independent Registered Public Accounting Firm, filed with Post- Effective Amendment No. 76 on April 17, 2017, is hereby incorporated by reference.
(k)	Omitted Financial Statements, not applicable.
(l)	Initial Capital Agreements, not applicable.
(m)	Rule 12b-1 Plan, not applicable.
(n)	Rule 18f-3 Plan, is filed herewith.
(o)	Reserved.
(p)	Codes of Ethics, for The Vanguard Group, Inc., filed with Post-Effective Amendment No. 63 dated January 27, 2015, are hereby incorporated by reference. For PRIMECAP Management Company, filed with Post-Effective Amendment No. 73 dated January 27, 2017, is hereby incorporated by reference.

Item 29. Persons Controlled by or under Common Control with Registrant

Registrant is not controlled by or under common control with any person.

Item 30. Indemnification

The Registrant’s organizational documents contain provisions indemnifying Trustees and officers against liability incurred in their official capacities. Article VII, Section 2 of the Amended and Restated Agreement and Declaration of Trust provides that the Registrant may indemnify and hold harmless each and every Trustee and officer from and against any and all claims, demands, costs, losses, expenses, and damages whatsoever arising out of or related to the performance of his or her duties as a Trustee or officer. Article VI of the By-Laws generally provides that the Registrant shall indemnify its Trustees and officers from any liability arising out of their past or present service in that capacity. Among other things, this provision excludes any liability arising by reason of willful misfeasance, bad faith, gross negligence, or the reckless disregard of the duties involved in the conduct of the Trustee’s or officer’s office with the Registrant.

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Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the Securities Act) may be permitted for directors, officers, or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 31. Business and Other Connections of Investment Advisers

PRIMECAP Management Company (PRIMECAP) is an investment adviser registered under the Investment Advisers Act of 1940, as amended (the Advisers Act). The list required by this Item 31 of officers and directors of PRIMECAP, together with any information as to any business, profession, vocation, or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated herein by reference from Form ADV filed by PRIMECAP pursuant to the Advisers Act (SEC File No. 801–19765).

The Vanguard Group, Inc. (Vanguard), is an investment adviser registered under the Advisers Act. The list required by this Item 31 of officers and directors of Vanguard, together with any information as to any business, profession, vocation, or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated herein by reference from Form ADV filed by Vanguard pursuant to the Advisers Act (SEC File No. 801-11953).

Item 32. Principal Underwriters

(a)	Vanguard Marketing Corporation, a wholly owned subsidiary of The Vanguard Group, Inc., is the principal underwriter of each fund within the Vanguard group of investment companies, a family of more than 190 mutual funds.
(b)	The principal business address of each named director and officer of Vanguard Marketing Corporation is 100 Vanguard Boulevard, Malvern, PA 19355.


Name	Positions and Office with Underwriter	Positions and Office with Funds
F. William McNabb III	Director and Chairman	Chairman and Chief Executive Officer
Glenn W. Reed	Director	None
Mortimer J. Buckley	Director and Senior Vice President	None
Martha G. King	Director and Senior Vice President	None
Chris D. McIsaac	Director and Senior Vice President	None
Anne E. Robinson	Director and Senior Vice President	Secretary
Karin Risi	Director and Managing Director	None
Thomas Rampulla	Director and Senior Vice President	None
Michael Rollings	Director	Treasurer
Aisling Murphy	Chief Compliance Officer	None
John T. Marcante	Chief Information Officer	None
Matthew Benchener	Principal	None
John Bendl	Principal	None
Jack Brod	Principal	None
Saundra K. Cusumano	Principal	None
James M. Delaplane Jr.	Principal	None
Kathleen A. Graham-Kelly	Principal	None
Phillip Korenman	Principal	None
Mike Lucci	Principal	None
Alba E. Martinez	Principal	None
Brian McCarthy	Principal	None

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Name		Positions and Office with Underwriter	Positions and Office with Funds
Frank Satterthwaite		Principal	None
Salvatore L. Pantalone		Financial and Operations Principal and Treasurer	None
Amy M. Laursen		Financial and Operations Principal	None
Timothy P. Holmes		Annuity and Insurance Officer	None
Jeff Seglem		Annuity and Insurance Officer	None
Michael L. Kimmel		Assistant Secretary	None
Beth Morales Singh		Assistant Secretary	None
Caroline Cosby		Secretary	None

(c)	Not applicable.

Item 33. Location of Accounts and Records

The books, accounts, and other documents required to be maintained by Section 31 (a) of the Investment Company Act of 1940, as amended, and the rules promulgated thereunder will be maintained at the offices of the Registrant, 100 Vanguard Boulevard, Malvern, PA 19355; the Registrant’s Transfer Agent, The Vanguard Group, Inc., 100 Vanguard Boulevard, Malvern, PA 19355; the Registrant’s Custodians, The Bank of New York Mellon, One Wall Street, New York, NY 10286 and JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017-2070; and the Registrant’s investment advisors at their respective locations identified in Part B of this Registration Statement.

Item 34. Management Services

Other than as set forth in the section entitled “Management of the Funds” in Part B of this Registration Statement, the Registrant is not a party to any management-related service contract.

Item 35. Undertakings

Not applicable.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant hereby certifies that it has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Valley Forge and the Commonwealth of Pennsylvania, on the 24th day of July, 2017.

VANGUARD CHESTER FUNDS
BY:___________/s/ F. William Mc Nabb III*_________

F. William McNabb III
Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the date indicated:


Signature	Title	Date

/s/ F. William McNabb III*	Chairman and Chief Executive	July 24, 2017
	Officer
F. William McNabb
/s/ Emerson U. Fullwood*	Trustee	July 24, 2017
Emerson U. Fullwood
/s/ Rajiv L. Gupta*	Trustee	July 24, 2017
Rajiv L. Gupta
/s/ Amy Gutmann*	Trustee	July 24, 2017
Amy Gutmann
/s/ JoAnn Heffernan Heisen*	Trustee	July 24, 2017
JoAnn Heffernan Heisen
/s/ F. Joseph Loughrey*	Trustee	July 24, 2017
F. Joseph Loughrey
/s/ Mark Loughridge*	Trustee	July 24, 2017
Mark Loughridge
/s/ Scott C. Malpass*	Trustee	July 24, 2017
Scott C. Malpass
/s/ André F. Perold*	Trustee	July 24, 2017
André F. Perold
/s/ Peter F. Volanakis*	Trustee	July 24, 2017
Peter F. Volanakis
/s/ Thomas J. Higgins*	Chief Financial Officer	July 24, 2017
Thomas J. Higgins

*By: /s/ Anne E. Robinson

Anne E. Robinson, pursuant to a Power of Attorney filed on October 4, 2016, see File Number 33-32548, Incorporated by Reference.

C-4


INDEX TO EXHIBITS
Rule 18F-3 Plan		Ex-99.N

EX-99.N 18F-3 PLAN 2 multipleclassplanvanguardfun.htm MULTI-CLASS PLAN multipleclassplanvanguardfun.htm - Generated by SEC Publisher for SEC Filing

VANGUARD FUNDS
MULTIPLE CLASS PLAN

I. INTRODUCTION

This Multiple Class Plan (the “Plan”) describes seven separate classes of shares that may be offered by investment company members of The Vanguard Group (collectively the “Funds,” individually a “Fund”). The Plan explains the separate arrangements for each class, how expenses are allocated to each class, and the conversion features of each class. Each Fund may offer any one or more of the specified classes.

The Plan has been approved by the Board of Directors of The Vanguard Group (“Vanguard”). In addition, the Plan has been adopted by a majority of the Board of Trustees of each Fund, including a majority of the Trustees who are not interested persons of each Fund. The classes of shares offered by each Fund are designated in Schedule A hereto, as such Schedule may be amended from time to time.

II. SHARE CLASSES

A Fund may offer any one or more of the following share classes:

Investor Shares
Admiral Shares
Institutional Shares
Institutional Plus Shares
Institutional Select Shares
ETF Shares
Transition Shares

III. DISTRIBUTION, AVAILABILITY AND ELIGIBILITY

Distribution arrangements for all classes are described below. Distribution arrangements vary by Vanguard business line depending on the eligibility of the client segments to whom they market. Vanguard retains sole discretion in determining share class availability, and whether Fund shares shall be offered either directly or through certain financial intermediaries, or on certain financial intermediary platforms. Eligibility requirements for purchasing shares of each class will differ, as follows:

A. Investor Shares

Investor Shares generally will be available to investors who are not permitted to purchase other classes of shares, subject to the eligibility requirements specified in Schedule B hereto, as such Schedule may be amended from time to time. It is expected that the minimum investment amount for

85097, v0.63 1

Investor Shares will be substantially lower than the amount required for any other class of shares. Investor Shares are typically distributed by all Vanguard business lines.

B. Admiral Shares

Admiral Shares generally will be available to individual, institutional, and other investors who meet the eligibility requirements specified in Schedule B hereto, as such Schedule may be amended from time to time. These eligibility requirements may include, but are not limited to the following factors: (i) the total amount invested the Fund; or (ii) any other factors deemed appropriate by a Fund’s Board of Trustees. Admiral Shares are typically distributed by all Vanguard business lines.

C. Institutional Shares

Institutional Shares generally will be available to institutional and other investors who meet the eligibility requirements specified in Schedule B hereto, as such Schedule may be amended from time to time. It is expected that the minimum investment amount per account for Institutional Shares will be substantially higher than the amounts required for Investor Shares or Admiral Shares. Institutional Shares are typically distributed by Vanguard’s financial advisory services and institutional business lines.

D. Institutional Plus Shares

Institutional Plus Shares generally will be available to institutional and other investors who meet the eligibility requirements specified in Schedule B hereto, as such Schedule may be amended from time to time. It is expected that the minimum investment amount for Institutional Plus Shares will be substantially higher than the amount required for Institutional Shares. Institutional Plus Shares are typically distributed by Vanguard’s financial advisory services and institutional business lines.

E. Institutional Select Shares

Institutional Select Shares generally will be available to institutional investors who meet the eligibility requirements specified in Schedule B hereto, as such Schedule may be amended from time to time. It is expected that the minimum investment amount for Institutional Select Shares will be the highest among all Vanguard share classes. Institutional Select Shares are typically distributed by Vanguard’s institutional business line.

85097, v0.63 2

F. ETF Shares

A Fund will sell ETF Shares to investors that are (or who purchase through) Authorized Participants, and who pay for their ETF shares by depositing a prescribed basket of securities rather than paying cash. An Authorized Participant is an institution, usually a broker-dealer, that is a participant in the Depository Trust Company (DTC) and that has executed a Participant Agreement with the Fund’s distributor. Additional eligibility requirements may be specified in Schedule B hereto, as such Schedule may be amended from time to time. Investors who are not Authorized Participants may buy and sell ETF shares through various exchanges and market centers. ETF Shares are typically distributed by all Vanguard business lines.

G. Transition Shares

Transition Shares generally will be available solely to Vanguard funds-of-funds that meet the eligibility requirements specified in Schedule B hereto, as such Schedule may be amended from time to time. Transition Shares are only internally distributed.

IV. SERVICE ARRANGEMENTS

All share classes will receive a range of services provided by Vanguard on a per account basis. These “account-based” services may include transaction processing and shareholder recordkeeping, as well as the mailing of updated prospectuses, shareholder reports, tax statements, confirmation statements, quarterly portfolio summaries, and other items. It is expected that the aggregate amount of account-based services provided to Investor Shares will materially exceed the amount of such services provided to any other class, due to the existence of many more accounts holding Investor Shares. In addition to this difference in the volume of services provided, arrangements will differ among the classes as follows:

A. Investor Shares

Investor Shares generally will receive the most basic level of service from Vanguard. Investor Shares generally will be serviced through a pool of Vanguard client service representatives.

B. Admiral Shares

Admiral Shares will receive a different level of service from Vanguard as compared to Investor Shares. Special client service representatives may be assigned to service Admiral Shares, and holders of such shares may from time to time receive special mailings and unique additional services.

85097, v0.63 3

C. Institutional Shares

Institutional Shares will receive from Vanguard a level of service that differs from the service provided to the holders of shares of other classes. Such services may include special client service representatives who will be assigned to service Institutional Shares. Most holders of Institutional Shares periodically will receive special investment updates from Vanguard’s investment staff. Holders of Institutional Shares also may receive unique additional services from Vanguard, and generally will be permitted to transact with Vanguard through the National Securities Clearing Corporation’s FundSERV system and other special servicing platforms for institutional investors.

D. Institutional Plus Shares

Institutional Plus Shares generally will receive a very high level of service from Vanguard as compared to any other share classes. Special client service representatives will be assigned to service Institutional Plus Shares, and most holders of such shares periodically, but more than the holders of all other shares, will receive special updates from Vanguard’s investment staff. Holders of Institutional Plus Shares may receive unique additional services from Vanguard, and generally will be permitted to transact with Vanguard through the National Securities Clearing Corporation’s FundSERV system and other special servicing platforms for institutional investors.

E. Institutional Select Shares

Institutional Select Shares generally will receive a customized level of service. Holders of Institutional Select Shares may receive unique additional services from Vanguard, and generally will be permitted to transact with Vanguard through the National Securities Clearing Corporation’s FundSERV system and other special servicing platforms for institutional investors.

F. ETF Shares

A Fund is expected to maintain only one shareholder of record for ETF

Shares¾DTC or its nominee. Special client service representatives will be assigned to the DTC account, and all transactions on this account will be handled electronically. Due to the nature and purpose of the DTC account, ETF Shares will not receive any special updates from Vanguard’s investment staff.

G. Transition Shares

The only investors eligible to own Transition Shares are Vanguard funds-of-funds, and it is expected that such funds, because of the nature of Transition Shares, will own the shares only for the brief periods necessary to complete the relevant portfolio transitions. The level of service provided will be commensurate

85097, v0.63 4

	with	the needs of a fund-of-funds transitioning from one underlying fund to
	another.
V.	CONVERSION FEATURES
	A.	Self-Directed Conversions
		1.	Conversion into Investor Shares, Admiral Shares,
		Institutional Shares Institutional Plus Shares, and Institutional Select Shares. Shareholders may conduct self-directed conversions from one share class into another share class of the same fund for which they are eligible. Self-directed conversions may be initiated by the shareholder;
		however,	depending upon the particular share class and the complexity of
		the shareholder’s accounts, such conversions may require the assistance of a Vanguard representative. Shareholders may convert from one share class into another share class provided that following the conversion the shareholder: (i) meets the then applicable eligibility requirements for the share class into which they are converting; and (ii) receives services
		consistent	with such new share class. Any such conversion will occur at
		the respective net asset values of the share classes next calculated after Vanguard’s receipt of the shareholder’s request in good order.
		2.	Conversion into ETF Shares. Except as otherwise provided,
		a shareholder may convert Investor Shares, Admiral Shares, or Institutional Shares into ETF Shares of the same fund (if available),
		provided	that: (i) the share class out of which the shareholder is converting
		and the ETF Shares declare and distribute dividends on the same schedule; (ii) the shares to be converted are not held through an employee benefit plan; and (iii) following the conversion, the shareholder will hold ETF
	Shares	through a brokerage account. Any such conversion will occur at the
	respective	net asset values of the share classes next calculated after
	Vanguard’s	receipt of the shareholder’s request in good order. Vanguard
	or	the Fund may charge an administrative fee to process conversion
	transactions.
	B.	Automatic Conversions
	1.	Automatic conversion into Admiral Shares. Vanguard may
	automatically	convert Investor Shares into Admiral Shares of the same
	fund	(if available), provided that following the conversion the shareholder:
	(i)	meets the eligibility requirements for Admiral Shares; and (ii) receives
	services	consistent with Admiral Shares. Any such conversion will occur
	at	the respective net asset values of the share classes next calculated after
	Vanguard’s	conversion without the imposition of any charge. Such
	automatic	conversions may occur on a periodic, or one-time basis.
	Automatic	conversions may occur at different times due to the differing
	mechanisms	through which an account is funded or meets the required

85097, v0.63 5

investment minimum. Automatic conversions do not apply to certain types of accounts (e.g., accounts held through certain intermediaries, or other accounts as may be excluded by Vanguard management).

2. Automatic conversion into Institutional Shares, Institutional Plus Shares, or Institutional Select Shares. Vanguard may conduct automatic conversions of any share class into either Institutional Shares, Institutional Plus Shares, or Institutional Select Shares in accordance with then-current eligibility requirements.

C.	Involuntary Conversions and Cash Outs
	1.	Cash Outs. If a shareholder in any class of shares no longer
	meets the eligibility requirements for such shares, the Fund may cash out the shareholder’s remaining account balance. Any such cash out will be
	preceded	by written notice to the shareholder and will be subject to the
	Fund’s normal redemption fees, if any.
	2.	Conversion of Admiral Shares, Institutional Shares, and
	Institutional Plus Shares. If a shareholder no longer meets the eligibility requirements for the share class currently held, the Fund may convert the shareholder’s holdings into the share class for which such shareholder is eligible. Any such conversion will be preceded by written notice to the shareholder, and will occur at the respective net asset values of the share classes without the imposition of any sales load, fee, or other charge.
	3.	Conversions of Transition Shares. When a Fund that issues
	Transition	Shares has completed the relevant portfolio transition, the Fund
	will convert the Transition Shares to another share class of the same Fund as appropriate, based on the eligibility requirements of such class as specified in
	Schedule	B hereto, as such Schedule may be amended from time to time.

VI.	EXPENSE ALLOCATION AMONG CLASSES
	A.	Background
		Vanguard is a jointly-owned subsidiary of the Funds. Vanguard provides
	the	Funds, on an at-cost basis, virtually all of their corporate management,
	administrative	and distribution services. Vanguard also may provide investment
	advisory	services on an at-cost basis to the Funds. Vanguard was established and
	operates	pursuant to a Funds’ Service Agreement between itself and the Funds
	(the	“Agreement”), and pursuant to certain exemptive orders granted by the U.S.
	Securities	and Exchange Commission (“Exemptive Orders”). Vanguard’s direct
	and	indirect expenses of providing corporate management, administrative and

85097, v0.63 6

distribution services to the Funds are allocated among such funds in accordance with methods specified in the Agreement.¹

B.	Class Specific Expenses
	1.	Expenses for Account-Based Services. Expenses associated
	with Vanguard’s provision of account-based services to the Funds will be
	allocated	among the share classes of each Fund on the basis of the amount
	incurred by each such class as follows:

(a) Account maintenance expenses. Expenses associated with the maintenance of investor accounts will be proportionately allocated among each Fund’s share classes based upon a monthly determination of the costs to service each class of shares. Factors considered in this determination are (i) the percentage of total shareholder accounts represented by each class; (ii) the percentage of total account transactions performed by Vanguard for each class; and (iii) the percentage of new accounts opened for each class.

(b) Expenses of special servicing arrangements.

Expenses relating to any special servicing arrangements for a specific class will be proportionally allocated among each eligible Fund’s share classes primarily based on their percentage of total shareholder accounts receiving the special servicing arrangements.

(c) Literature production and mailing expenses.

Expenses associated with shareholder reports, proxy materials and other literature will be allocated among each Fund’s share classes based upon the number of such items produced and mailed for each class.

2. Other Class Specific Expenses. Expenses for the primary benefit of a particular share class will be allocated to that share class. Such expenses would include any legal fees attributable to a particular class.

C.	Fund-Wide Expenses
	1. Marketing and Distribution Expenses. Each share class will bear marketing and distribution expenses proportionate to the marketing and distribution expenses of the business lines that distribute that share class. Retail and institutional businesses expenses will be allocated based

¹In accordance with the Agreement and Board approved methodologies, the expenses that would otherwise have been allocated to each Vanguard Fund of Funds are reallocated to the approve share class of the underlying funds in the Fund of Funds’ portfolio on a pro rata basis based on that Fund of Funds relative net assets invested in the underlying fund’s share class.

85097, v0.63 7

on the percentage of client accounts in each share class serviced by the respective business. Financial advisory service expenses will be apportioned based on the percentage of assets in each share class.

Expenses associated with each share class will be allocated only among the Funds that have such share class according to the “Vanguard Modified Formula,” with each share class or each Fund treated as if it were a separate Fund. The Vanguard Modified Formula is set forth in the Agreement and in certain of the SEC Exemptive Orders. This allocation has been deemed an appropriate allocation methodology by each Fund’s Board of Trustees under paragraph (c)(1)(v) of Rule 18f-3 under the Investment Company Act of 1940.

2. Asset Management Expenses. Expenses associated with management of a Fund’s assets (including all advisory, tax preparation and custody fees) will be allocated among the Fund’s share classes on the basis of their relative net assets.

3. Other Fund Expenses. Any other Fund expenses not described above will be allocated among the share classes on the basis of their relative net assets.

VII. ALLOCATION OF INCOME, GAINS AND LOSSES

Income, gains and losses will be allocated among each Fund’s share classes on the basis of their relative net assets. As a result of differences in allocated expenses, it is expected that the net income of, and dividends payable to, each class of shares will vary. Dividends and distributions paid to each class of shares will be calculated in the same manner, on the same day and at the same time.

VIII. VOTING AND OTHER RIGHTS

Each share class will have: (i) exclusive voting rights on any matter submitted to shareholders that relates solely to its service or distribution arrangements; and (ii) separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of the other class; and (iii) in all other respects the same rights, obligations and privileges as each other, except as described in the Plan.

IX. AMENDMENTS

All material amendments to the Plan must be approved by a majority of the Board of Trustees of each Fund, including a majority of the Trustees who are not interested persons of the Fund. In addition, any material amendment to the Plan must be approved by the Board of Directors of Vanguard.

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Original Board Approval: July 21, 2000 Last Approved by Board: December 18, 2015

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SCHEDULE A to

VANGUARD FUNDS MULTIPLE CLASS PLAN

Note: Transition Shares, when offered by a Fund, are available for a limited period of time and are then converted into another share class. For this reason, Transition Shares are not shown on Schedule A.


Vanguard Fund		Share Classes Authorized

Vanguard Admiral Funds
·	Treasury Money Market Fund	Investor
·	S&P 500 Value Index Fund	Institutional, ETF
·	S&P 500 Growth Index Fund	Institutional, ETF
·	S&P MidCap 400 Index Fund	Institutional, ETF
·	S&P MidCap 400 Value Index Fund	Institutional, ETF
·	S&P MidCap 400 Growth Index Fund	Institutional, ETF
·	S&P SmallCap 600 Index Fund	Institutional, ETF
·	S&P SmallCap 600 Value Index Fund	Institutional, ETF
·	S&P SmallCap 600 Growth Index Fund	Institutional, ETF

Vanguard Bond Index Funds
·	Short-Term Bond Index Fund	Investor, Admiral, Institutional,
		Institutional Plus, ETF
·	Intermediate-Term Bond Index Fund	Investor, Admiral, Institutional, Institutional
		Plus, ETF
·	Long-Term Bond Index Fund	Investor, Institutional, Institutional Plus,
		ETF
·	Total Bond Market Index Fund	Investor, Admiral, Institutional, Institutional
		Plus, Institutional Select, ETF
·	Total Bond Market II Index Fund	Investor, Institutional
·	Inflation-Protected Securities Fund	Investor, Admiral, Institutional

Vanguard California Tax-Free Funds
·	Municipal Money Market Fund	Investor
·	Intermediate-Term Tax-Exempt Fund	Investor, Admiral
·	Long-Term Tax-Exempt Fund	Investor, Admiral

Vanguard Charlotte Funds
·	Total International Bond Index Fund	Investor, Admiral, Institutional,
		Institutional Select, ETF

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Vanguard Fund		Share Classes Authorized

Vanguard Chester Funds
·	PRIMECAP Fund	Investor, Admiral
·	Target Retirement Income Fund	Investor
·	Target Retirement 2015 Fund	Investor
·	Target Retirement 2020 Fund	Investor
·	Target Retirement 2025 Fund	Investor
·	Target Retirement 2030 Fund	Investor
·	Target Retirement 2035 Fund	Investor
·	Target Retirement 2040 Fund	Investor
·	Target Retirement 2045 Fund	Investor
·	Target Retirement 2050 Fund	Investor
·	Target Retirement 2055 Fund	Investor
·	Target Retirement 2060 Fund	Investor
·	Target Retirement 2065 Fund	Investor
·	Institutional Target Retirement Income Fund	Institutional
·	Institutional Target Retirement 2015 Fund	Institutional
·	Institutional Target Retirement 2020 Fund	Institutional
·	Institutional Target Retirement 2025 Fund	Institutional
·	Institutional Target Retirement 2030 Fund	Institutional
·	Institutional Target Retirement 2035 Fund	Institutional
·	Institutional Target Retirement 2040 Fund	Institutional
·	Institutional Target Retirement 2045 Fund	Institutional
·	Institutional Target Retirement 2050 Fund	Institutional
·	Institutional Target Retirement 2055 Fund	Institutional
·	Institutional Target Retirement 2060 Fund	Institutional
·	Institutional Target Retirement 2065 Fund	Institutional

Vanguard Convertible Securities Fund		Investor

Vanguard Explorer Fund		Investor, Admiral

Vanguard Fenway Funds
·	Equity Income Fund	Investor, Admiral
·	Growth Equity Fund	Investor
·	PRIMECAP Core Fund	Investor

Vanguard Fixed Income Securities Funds


·	Ultra-Short-Term Bond Fund	Investor, Admiral
·	Short-Term Treasury Fund	Investor, Admiral
·	Short-Term Federal Fund	Investor, Admiral
·	Short-Term Investment-Grade Fund	Investor, Admiral, Institutional
·	Intermediate-Term Treasury Fund	Investor, Admiral
·	Intermediate-Term Investment-Grade Fund	Investor, Admiral
·	GNMA Fund	Investor, Admiral
·	Long-Term Treasury Fund	Investor, Admiral
·	Long-Term Investment-Grade Fund	Investor, Admiral
·	High-Yield Corporate Fund	Investor, Admiral


	85097, v0.63 2


Vanguard Fund		Share Classes Authorized

Vanguard Horizon Funds
·	Capital Opportunity Fund	Investor, Admiral
·	Global Equity Fund	Investor
·	Strategic Equity Fund	Investor
·	Strategic Small-Cap Equity Fund	Investor

Vanguard Index Funds
·	500 Index Fund	Investor, Admiral, Institutional Select, ETF
·	Extended Market Index Fund	Investor, Admiral, Institutional,
		Institutional Plus, Institutional Select, ETF
·	Growth Index Fund	Investor, Admiral, Institutional, ETF
·	Large-Cap Index Fund	Investor, Admiral, Institutional, ETF
·	Mid-Cap Growth Index Fund	Investor, Admiral, ETF
·	Mid-Cap Index Fund	Investor, Admiral, Institutional,
		Institutional Plus, ETF
·	Mid-Cap Value Index Fund	Investor, Admiral, ETF
·	Small-Cap Growth Index Fund	Investor, Admiral, Institutional, ETF
·	Small-Cap Index Fund	Investor, Admiral, Institutional,
		Institutional Plus, ETF
·	Small-Cap Value Index Fund	Investor, Admiral, Institutional, ETF
·	Total Stock Market Index Fund	Investor, Admiral, Institutional, Institutional
		Plus, Institutional Select, ETF
·	Value Index Fund	Investor, Admiral, Institutional, ETF

Vanguard International Equity Index Funds
·	Emerging Markets Stock Index Fund	Investor, Admiral, Institutional,
		Institutional Plus
	FTSE Emerging Markets ETF	ETF
·	European Stock Index Fund	Investor, Admiral, Institutional,
		Institutional Plus
	FTSE Europe ETF	ETF
·	FTSE All-World ex US Index Fund	Investor, Admiral, Institutional, Institutional
		Plus, ETF
·	Pacific Stock Index Fund	Investor, Admiral, Institutional,
		Institutional Plus
	FTSE Pacific ETF	ETF
·	Total World Stock Index Fund	Investor, Institutional, ETF
·	FTSE All World ex-US Small-Cap Index Fund	Investor, Institutional, ETF
·	Global ex-U.S. Real Estate Index Fund	Investor, Admiral, Institutional, ETF

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Vanguard Fund		Share Classes Authorized

Vanguard Malvern Funds
·	Capital Value Fund	Investor
·	Short-Term Inflation-Protected Securities
	Index Fund	Investor, Admiral, Institutional, ETF
·	U.S. Value Fund	Investor
·	Institutional Short-Term Bond Fund	Institutional Plus
·	Institutional Intermediate-Term Bond Fund	Institutional Plus
·	Core Bond Fund	Investor, Admiral
·	Emerging Markets Bond Fund	Investor, Admiral

Vanguard Massachusetts Tax-Exempt Funds
·	Massachusetts Tax-Exempt Fund	Investor

Vanguard Money Market Funds
·	Prime Money Market Fund	Investor, Admiral
·	Federal Money Market Fund	Investor

Vanguard Morgan Growth Fund		Investor, Admiral

Vanguard Montgomery Funds
·	Market Neutral Fund	Investor, Institutional

Vanguard Municipal Bond Funds
·	Municipal Money Market Fund	Investor
·	Short-Term Tax-Exempt Fund	Investor, Admiral
·	Limited-Term Tax-Exempt Fund	Investor, Admiral
·	Intermediate-Term Tax-Exempt Fund	Investor, Admiral
·	Long-Term Tax-Exempt Fund	Investor, Admiral
·	High-Yield Tax-Exempt Fund	Investor, Admiral
·	Tax-Exempt Bond Index Fund	Investor, Admiral, ETF

Vanguard New Jersey Tax-Free Funds
·	Municipal Money Market Fund	Investor
·	Long-Term Tax-Exempt Fund	Investor, Admiral

Vanguard New York Tax-Free Funds
·	Municipal Money Market Fund	Investor
·	Long-Term Tax-Exempt Fund	Investor, Admiral

Vanguard Ohio Tax-Free Funds
·	Long-Term Tax-Exempt Fund	Investor

Vanguard Pennsylvania Tax-Free Funds
·	Municipal Money Market Fund	Investor
·	Long-Term Tax-Exempt Fund	Investor, Admiral

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Vanguard Fund		Share Classes Authorized

Vanguard Quantitative Funds
·	Growth and Income Fund	Investor, Admiral

Vanguard Scottsdale Funds
·	Short-Term Government Bond Index Fund	Institutional, Admiral, ETF
·	Intermediate-Term Government Bond Index Fund	Institutional, Admiral, ETF
·	Long-Term Government Bond Index Fund	Institutional, Admiral, ETF
·	Short-Term Corporate Bond Index Fund	Institutional, Admiral, ETF
·	Intermediate-Term Corporate Bond Index Fund	Institutional, Admiral, ETF
·	Long-Term Corporate Bond Index Fund	Institutional, Admiral, ETF
·	Mortgage-Backed Securities Index Fund	Institutional, Admiral, ETF
·	Explorer Value Fund	Investor
·	Russell 1000 Index Fund	Institutional, ETF
·	Russell 1000 Value Index Fund	Institutional, ETF
·	Russell 1000 Growth Index Fund	Institutional, ETF
·	Russell 2000 Index Fund	Institutional, ETF
·	Russell 2000 Value Index Fund	Institutional, ETF
·	Russell 2000 Growth Index Fund	Institutional, ETF
·	Russell 3000 Index Fund	Institutional, ETF

Vanguard Specialized Funds
·	Energy Fund	Investor, Admiral
·	Precious Metals Fund	Investor
·	Health Care Fund	Investor, Admiral
·	Dividend Growth Fund	Investor
·	REIT Index Fund	Investor, Admiral, Institutional, ETF
·	Dividend Appreciation Index Fund	Investor, Admiral, ETF

Vanguard STAR Funds
·	LifeStrategy Conservative Growth Fund	Investor
·	LifeStrategy Growth Fund	Investor
·	LifeStrategy Income Fund	Investor
·	LifeStrategy Moderate Growth Fund	Investor
·	STAR Fund	Investor
·	Total International Stock Index Fund	Investor, Admiral, Institutional,
		Institutional Plus, Institutional Select,
		ETF
Vanguard Tax-Managed Funds
·	Tax-Managed Balanced Fund	Admiral
·	Tax-Managed Capital Appreciation Fund	Admiral, Institutional
·	Developed Markets Index Fund	Investor, Admiral, Institutional,
		Institutional Plus
	FTSE Developed Markets ETF	ETF
·	Tax-Managed Small-Cap Fund	Admiral, Institutional

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Vanguard Fund		Share Classes Authorized

Vanguard Trustees’ Equity Fund
·	International Value Fund	Investor
·	Diversified Equity Fund	Investor
·	Emerging Markets Select Stock Fund	Investor
·	Alternative Strategies Fund	Investor

Vanguard Valley Forge Funds
·	Balanced Index Fund	Investor, Admiral, Institutional
·	Managed Payout Fund	Investor

Vanguard Variable Insurance Funds
·	Balanced Portfolio	Investor
·	Conservative Allocation Portfolio	Investor
·	Diversified Value Portfolio	Investor
·	Equity Income Portfolio	Investor
·	Equity Index Portfolio	Investor
·	Growth Portfolio	Investor
·	Total Bond Market Index Portfolio	Investor
·	High Yield Bond Portfolio	Investor
·	International Portfolio	Investor
·	Mid-Cap Index Portfolio	Investor
·	Moderate Allocation Portfolio	Investor
·	Money Market Portfolio	Investor
·	REIT Index Portfolio	Investor
·	Short-Term Investment Grade Portfolio	Investor
·	Small Company Growth Portfolio	Investor
·	Capital Growth Portfolio	Investor
·	Total Stock Market Index Portfolio	Investor

Vanguard Wellesley Income Fund		Investor, Admiral

Vanguard Wellington Fund		Investor, Admiral

Vanguard Whitehall Funds
·	Selected Value Fund	Investor
·	Mid-Cap Growth Fund	Investor
·	International Explorer Fund	Investor
·	High Dividend Yield Index Fund	Investor, ETF
·	Emerging Markets Government
	Bond Index Fund	Investor, Admiral, Institutional, ETF
·	Vanguard Global Minimum Volatility Fund	Investor, Admiral
·	International Dividend Appreciation Index Fund	Investor, Admiral, ETF
·	International High Dividend Yield Index Fund	Investor, Admiral, ETF

Vanguard Windsor Funds
·	Windsor Fund	Investor, Admiral
·	Windsor II	Investor, Admiral

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Vanguard Fund		Share Classes Authorized

Vanguard World Fund
·	Extended Duration Treasury Index Fund	Institutional, Institutional Plus, ETF
·	FTSE Social Index Fund	Investor, Institutional
·	International Growth Fund	Investor, Admiral
·	Mega Cap Index Fund	Institutional, ETF
·	Mega Cap Growth Index Fund	Institutional, ETF
·	Mega Cap Value Index Fund	Institutional, ETF
·	U.S. Growth Fund	Investor, Admiral
·	Consumer Discretionary Index Fund	Admiral, ETF
·	Consumer Staples Index Fund	Admiral, ETF
·	Energy Index Fund	Admiral, ETF
·	Financials Index Fund	Admiral, ETF
·	Health Care Index Fund	Admiral, ETF
·	Industrials Index Fund	Admiral, ETF
·	Information Technology Index Fund	Admiral, ETF
·	Materials Index Fund	Admiral, ETF
·	Telecommunication Services Index Fund	Admiral, ETF
·	Utilities Index Fund	Admiral, ETF

Original Board Approval: July 21, 2000
Last Updated: July 21, 2017

85097, v0.63 7

SCHEDULE B to

VANGUARD FUNDS MULTIPLE CLASS PLAN

Vanguard has policies and procedures designed to ensure consistency and compliance with the offering of multiple classes of shares within this Multiple Class Plan’s eligibility requirements.²These policies are reviewed and monitored on an ongoing basis in conjunction with Vanguard’s Compliance Department.

Investor Shares - Eligibility Requirements

Investor Shares generally require a minimum initial investment and ongoing account balance of $3,000 ($50,000 for Vanguard Admiral Treasury Money Market Fund). Retail managed clients and financial intermediary and other institutional clients may hold Investor Shares without restriction in Funds that do not offer Admiral Shares. A Vanguard Fund may, from time to time, establish higher or lower minimum amounts for Investor Shares. Vanguard also reserves the right to establish higher or lower minimum amounts for certain investors or a group of investors.

Admiral Shares – Eligibility Requirements

Admiral Shares generally are intended for clients who meet the required minimum initial investment and ongoing account balance of $10,000 for retail clients in index funds and $50,000 for retail clients in actively managed funds. Retail managed clients and external financial intermediary and other institutional clients may hold Admiral Shares of both index and actively managed funds without restriction. Vanguard Funds may, from time to time, establish higher or lower minimum amounts for Admiral Shares and Vanguard reserves the right to establish higher or lower minimum amounts for certain investors or a group of investors. Admiral Share class eligibility also is subject to the following rule:

Certain Retirement Plans – Admiral Shares generally are not available for SIMPLE IRAs, Vanguard Individual 401(k) Plans, and retail serviced Individual 403(b)(7) custodial accounts held directly with Vanguard.

Institutional Shares – Eligibility Requirements

Institutional Shares generally require a minimum initial investment and ongoing account balance of $5,000,000. However, Vanguard also reserves the right to establish higher or lower minimum amounts for certain investors or a group of investors. Institutional Share

²The eligibility of a Vanguard Fund of Funds to invest in a particular share class of an underlying Vanguard fund is determined by Vanguard and the Board in accordance with the allocation methodology referenced in Section VI.

85097, v0.63 1

class eligibility also is subject to the following special rules:

	Individual clients. Individual clients may hold Institutional Shares by
	aggregating	up to 3 accounts held by the same client (same tax I.D. number)
	in	a single Fund.
	Financial intermediary clients. Financial intermediaries generally may hold
	Institutional	Shares for the benefit of their underlying clients provided that:
	(1)	each underlying investor individually meets the investment minimum
	amount	described above; and
	(2)	the financial intermediary agrees to monitor ongoing compliance of the
	underlying	investor accounts with the investment minimum amount; or
	(3)	a sub-accounting arrangement between Vanguard and the financial
	intermediary	allows Vanguard to monitor compliance with the eligibility
	requirements	established by Vanguard.
	Institutional clients. Institutional clients, including but not limited to defined
	benefit	and contribution plan clients, endowments, and foundations may hold
	Institutional	Shares if the total amount aggregated among all accounts held by
	such	client (including accounts held through financial intermediaries) and
	invested	in the Fund is at least $5 million (or such higher minimum required
	by	the individual fund). Such institutional clients must disclose to Vanguard
	on	behalf of their accounts the following: (1) that each account has a common
	decision-maker;	and (2) the total balance in each account held by the client in
	the	Fund.
	Investment by Vanguard Target Retirement Collective Trust. A Vanguard
	Target	Retirement Trust that is a collective trust exempt from regulation under
	the	Investment Company Act and that seeks to achieve its investment
	objective	by investing in underlying Vanguard Funds (a “TRT”) may hold
	Institutional	Shares of an underlying Fund whether or not its investment meets
	the	minimum investment threshold specified above.
	Accumulation Period ¾Accounts funded through regular contributions (e.g.
	employer	sponsored participant contribution plans), whose assets are expected
	to	quickly achieve eligibility levels, may qualify for Institutional Shares upon
	account	creation, rather than undergoing the conversion process shortly after
	account	set-up if Vanguard management determines that the account will
	become	eligible for Institutional Shares within a limited period of time
	(generally	90 days). The accumulation period eligibility is subject to the
	discretion	of Vanguard management.

85097, v0.63 2

Institutional Plus Shares - Eligibility Requirements

Institutional Plus Shares generally require a minimum initial investment and ongoing account balance of $100,000,000. However, Vanguard also reserves the right to establish higher or lower minimum amounts for certain investors or a group of investors. Institutional Plus Share class eligibility also is subject to the following special rules:

	Individual clients. Individual clients may hold Institutional Plus Shares by
	aggregating	up to 3 accounts held by the same client (same tax I.D. number)
	in	a single Fund. For purposes of this rule, Vanguard management is
	authorized	to permit aggregation of a greater number of accounts in the case
	of	clients whose aggregate assets within the Vanguard Funds are expected to
	generate	substantial economies in the servicing of their accounts.
	Institutional clients. Institutional clients, including but not limited to defined
	benefit	and contribution plan clients, endowments, and foundations may hold
	Institutional	Plus Shares if the total amount aggregated among all accounts
	held	by such client (including accounts held through financial intermediaries)
	and	invested in the Fund is at least $100 million (or such higher or lower
	minimum	required by the individual fund). Such institutional clients must
	disclose	to Vanguard on behalf of their accounts the following: (1) that each
	account	has a common decision-maker; and (2) the total balance in each
	account	held by the client in the Fund.
	Financial intermediary clients. Financial intermediaries generally may hold
	Institutional	Plus Shares for the benefit of their underlying clients provided
	that:
	(1)	each underlying investor individually meets the investment minimum
	amount	described above; and
	(2)	the financial intermediary agrees to monitor ongoing compliance of the
	underlying	investor accounts with the investment minimum amount; or
	(3)	a sub-accounting arrangement between Vanguard and the financial
	intermediary	allows Vanguard to monitor compliance with the eligibility
	requirements	established by Vanguard.
	Accumulation Period - Accounts funded through regular contributions e.g.
	employer	sponsored participant contribution plans), whose assets are expected
	to	quickly achieve eligibility levels, may qualify for Institutional Plus Shares
	upon	account creation, rather than undergoing the conversion process shortly
	after	account set-up if Vanguard management determines that the account will
	become	eligible for Institutional Plus Shares within a limited period of time
	(generally	90 days). The accumulation period eligibility is subject to the
	discretion	of Vanguard management.
	Asset Allocation Models - Vanguard clients with defined asset allocation
	models	whose assets meet eligibility requirements may qualify for

85097, v0.63 3

Institutional Plus Shares if such models comply with policies and procedures that have been approved by Vanguard management.

Institutional Select Shares - Eligibility Requirements

Institutional Select Shares generally require a minimum initial investment and ongoing account balance of $3,000,000,000. However, Vanguard also reserves the right to establish higher or lower minimum amounts for certain investors or a group of investors. Institutional Select Share class eligibility also is subject to the following special rules:

	Institutional clients. Institutional clients, including but not limited to defined
	benefit	and contribution plan clients, endowments, foundations, and Section
	529	college savings plans may hold Institutional Select Shares if the total
	amount	aggregated among all accounts held by such client (including accounts
	held	through financial intermediaries) and invested in the Fund is at least $3
	billion	(or such higher or lower minimum required by the individual fund).
	Such	institutional clients must disclose to Vanguard on behalf of their
	accounts	the following: (1) that each account has a common decision-maker;
	and	(2) the total balance in each account held by the client in the Fund.
	Financial intermediary clients. Financial intermediaries generally may hold
	Institutional	Select Shares for the benefit of their underlying clients provided
	that:
	(1)	each underlying investor individually meets the investment minimum
	amount	described above; and
	(2)	the financial intermediary agrees to monitor ongoing compliance of the
	underlying	investor accounts with the investment minimum amount; or
	(3)	a sub-accounting arrangement between Vanguard and the financial
	intermediary	allows Vanguard to monitor compliance with the eligibility
	requirements	established by Vanguard.
	Accumulation Period - Accounts funded through regular contributions (e.g.
	employer	sponsored participant contribution plans), whose assets are expected
	to	quickly achieve eligibility levels, may qualify for Institutional Select Shares
	upon	account creation, rather than undergoing the conversion process shortly
	after	account set-up, if Vanguard management determines that the account
	will	become eligible for Institutional Select Shares within a limited period of
	time	(generally 90 days). The accumulation period eligibility is subject to the
	discretion	of Vanguard management.
	Investment by Vanguard collective investment trusts with a similar mandate.
	A	Vanguard collective investment trust exempt from regulation under the
	Investment	Company Act and that seeks to achieve its investment objective by

85097, v0.63 4

investing in an underlying Fund with an index-based mandate may hold Institutional Select Shares of an underlying Fund with a similar index-based mandate whether or not its investment meets the minimum investment threshold specified above.

ETF Shares – Eligibility Requirements

The eligibility requirements for ETF Shares will be set forth in the Fund’s Registration Statement. To be eligible to purchase ETF Shares directly from a Fund, an investor must be (or must purchase through) an Authorized DTC Participant, as defined in Paragraph III.D of the Multiple Class Plan. Investors purchasing ETF Shares from a Fund must purchase a minimum number of shares, known as a Creation Unit. The number of ETF

Shares in a Creation Unit may vary from Fund to Fund, and will be set forth in the relevant prospectus. The value of a Fund's Creation Unit will vary with the net asset value of the Fund’s ETF Shares, but is expected to be several million dollars. An eligible investor generally must purchase a Creation Unit by depositing a prescribed basket of securities with the Fund, rather than paying cash.

Transition Shares – Eligibility Requirements

Transition Shares will be offered only to Vanguard funds-of-funds and only by an underlying fund of a Vanguard fund-of-funds (i) that is receiving assets in kind from one or more funds-of-funds and (ii) that will “transition” those in-kind assets by selling some or all of them and using the proceeds to purchase different assets. There is no minimum investment amount for Transition Shares.

Original Board Approval: July 21, 2000
Last Approved by Board: January 29, 2016

85097, v0.63 5