Vanguard Small Company Growth

Objective And Strategy

Objective
Long-term capital appreciation.

Strategy
The Portfolio invests at least 80% of its assets in common stocks of smaller companies. These companies tend to be unseasoned but are considered by the Portfolio's advisors to have superior growth potential. Also, these companies often provide little or no dividend income.
Low Cost Fund

Principal Risks

* This portfolio invests (or may invest) in securities of companies with micro-, small-, or mid-capitalization. Any investment in micro-, small-, or mid-capitalization companies involves greater risk than that customarily associated with investments in larger, more established companies because of the greater business risks of smaller size, limited markets and financial resources, narrower product lines, and frequent lack of management depth. As such, micro- or small-cap companies may be more subject to erratic and abrupt market movements than securities of larger, more established companies.

* This Fund may invest in publicly issued equity securities, including common stocks. Investments in common stocks are subject to market risks that may cause their prices to fluctuate over time.

* The investment adviser to the fund actively managed the fund's investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its investment results to lag relevant benchmarks or other funds with similar objectives.