Shares of the Vanguard Market Neutral Fund are now on the market. The new fund is actually not new at all; it is the result of the reorganization of the Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund into the Vanguard Market Neutral Fund. Sub-advisors for the new fund will be AXA Rosenberg Investment Management LLC and Vanguard Quantitative Equity Group.

Shares of Vanguard� Market Neutral Fund are now available for investor purchase. The fund is expected to appeal primarily to endowments, foundations, and other institutional investors.

The new fund is a result of the recent reorganization of the Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund (RMNIX) into the Vanguard Market Neutral Fund. AXA Rosenberg Investment Management LLC and Vanguard Quantitative Equity Group serve as investment advisors of the reorganized fund.

The investment objective of Vanguard Market Neutral Fund is to provide long-term capital appreciation while limiting exposure to general stock market risk. The fund�s long/short market neutral investment strategy is an absolute return investment approach seeking performance that exceeds the returns of 3-month U.S. Treasury bills. Performance is driven by the managers� ability to identify undervalued stocks to buy and overvalued stocks to sell short.

Vanguard Market Neutral Fund offers two share classes, Investor Shares (VMNFX) and Institutional Shares (VMNIX), which feature estimated expense ratios of 0.50% and 0.40%, respectively. (These expense figures exclude an estimated 150 basis points of dividend expenses associated with the shorting strategy of long/short funds, which are expected to be offset by the interest earned on the short-sale proceeds combined with the fund's other investment returns.) A 1% fee will be assessed on shares redeemed within one year of purchase. The fund requires a minimum initial investment of $250,000 for Investor Shares and $5 million for Institutional Shares.

AXA Rosenberg, an independently operated subsidiary of AXA Group, has total assets under management of approximately $142 billion, with nearly $24 billion in North American equities (through September 30, 2007). Vanguard Quantitative Equity Group oversees $25 billion in active quantitative equity fund assets. The group serves as the sole investment advisor to six actively managed Vanguard funds and manages portions of six other actively managed Vanguard funds.

Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world�s largest investment management companies. Vanguard manages nearly $1.3 trillion in U.S. mutual fund assets, including more than $325 billion in employer-sponsored retirement plans. Vanguard offers more than 140 funds to U.S. investors and more than 40 additional funds in foreign markets.

All asset figures are as of November 30, 2007, unless otherwise noted.

For more information, visit www.vanguard.com, or call 800-662-7447 to obtain a fund prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

Investments are subject to risk.

The fund may not be successful in implementing its advisors� strategy of buying undervalued securities and selling those considered overvalued. A short sale is the sale of a security that the seller does not own, usually to take advantage of an expected drop in the price. The short seller typically borrows the security from a broker-dealer and delivers it to the purchaser. The short seller later closes out the short position by returning the security to the lender, usually by purchasing it on the open market. The Fund's use of short sales in combination with its long positions in an attempt to improve performance or to reduce overall portfolio risk may not be successful and may result in greater losses or lower positive returns than if the Fund held only long positions. The Fund's loss on a short sale is potentially unlimited because there is no upward limit on the price a borrowed security could attain. Short selling also involves high transaction costs.

Edited by: Erin Kello

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