Fund Description

Incepted in May 1984, the objective of this Vanguard fund is to seek long-term growth of capital. Dividend income is incidental. The Vanguard Energy fund concentrates on natural resources and energy. The fund invests in stocks of companies engaged in the production, transmission, marketing, or research of energy. These companies may include firms seeking new sources of energy, such as solar, nuclear, or geothermal, or new uses for traditional energy sources, such as oil, natural gas, and coal. Stocks are selected based on its analysis of a company's fundamental value. Because companies in the energy sector often take large write-offs for exploration costs, the fundamental value is determined by analyzing cash flows and the worth of assets such as reserves, in addition to earnings valuations. Wellington Management Company, LLP, has been providing investment advisory services to the fund since its inception. The fund distributes to shareholders virtually all of its net income (interest and dividends, less expenses), as well as any capital gains realized from the sale of its holdings. The fund offers dividends and capital gains in December.