Primary Risks
An investment in the Fund could lose money over short or even long periods. You should expect the Fund’s share price and total return to fluctuate within a wide range, like the fluctuations of global stock markets. The Fund is subject to the following risks, which could affect the Fund’s performance:
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Stock market risk
, which is the chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. In addition, investments in foreign stocks can be riskier than U.S. stock investments. The prices of foreign stocks and the prices of U.S. stocks have, at times, moved in opposite directions.
•
Investment style risk
, which is the chance that returns from the types of stocks in which the Fund invests will trail returns from global stock markets. Small-, mid-, and large-capitalization stocks each tend to go through cycles of doing better—or worse—than other segments of the stock market or the global stock market in general. These periods have, in the past, lasted for as long as several years. Historically, small- and mid-cap stocks have been more volatile in price than large-cap stocks. Small and mid-size companies tend to have greater stock volatility because, among other things, these companies are more sensitive to changing economic conditions.
•
Country/regional risk,
which is the chance that world events—such as political upheaval, financial troubles, or natural disasters—will adversely affect the value of securities issued by companies in foreign countries or regions. Because the Fund may invest a large portion of its assets in securities of companies located in any one country or region, including emerging markets, the Fund’s performance may be hurt disproportionately by the poor performance of its investments in that area. Country/ regional risk is especially high in emerging markets.
•
Currency risk
, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates. Currency risk is especially high in emerging markets.
•
Manager risk
, which is the chance that poor security selection or focus on securities in a particular sector, category, or group of companies will cause the Fund to underperform relevant benchmarks or other funds with a similar investment objective. Significant investment in the financial sector subjects the Fund to proportionately higher exposure to the risks of this sector.
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
3
Annual Total Returns
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns compare with those of relevant market indexes, which have investment characteristics similar to those of the Fund. MSCI ACWI Index returns are adjusted for withholding taxes. Keep in mind that the Fund’s past performance (before and after taxes) does not indicate how the Fund will perform in the future. Updated performance information is available on our website at
vanguard.com/performance
or by calling Vanguard toll-free at 800-662-7447.
Annual Total Returns — Vanguard Global Equity Fund Investor Shares
During the periods shown in the bar chart, the highest return for a calendar quarter was 22.81% (quarter ended June 30, 2009), and the lowest return for a quarter was –24.00% (quarter ended December 31, 2008).
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Average Annual Total Returns for Periods Ended December 31, 2012
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1 Year
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5 Years
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10 Years
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Vanguard Global Equity Fund Investor Shares
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Return Before Taxes
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19.52%
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–2.17%
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9.15%
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Return After Taxes on Distributions
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19.14
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–2.56
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8.49
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Return After Taxes on Distributions and Sale of Fund Shares
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13.06
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–1.92
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7.95
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Comparative Indexes
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(reflect no deduction for fees or expenses)
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MSCI ACWI Index
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16.13%
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–1.16%
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8.11%
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Spliced Global Equity Index
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16.13
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–1.16
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8.32
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4
Actual after-tax returns depend on your tax situation and may differ from those shown in the preceding table. When after-tax returns are calculated, it is assumed that the shareholder was in the highest individual federal marginal income tax bracket at the time of each distribution of income or capital gains or upon redemption. State and local income taxes are not reflected in the calculations. Please note that after-tax returns are not relevant for a shareholder who holds fund shares in a tax-deferred account, such as an individual retirement account or a 401(k) plan. Also, figures captioned
Return After Taxes on Distributions and Sale of Fund Shares
will be higher than other figures for the same period if a capital loss occurs upon redemption and results in an assumed tax deduction for the shareholder.
Investment Advisors
Acadian Asset Management LLC
Baillie Gifford Overseas Ltd.
Marathon Asset Management LLP
Portfolio Managers
John R. Chisholm, CFA, Chief Investment Officer of Acadian. He has co-managed a portion of the Fund since 2004.
Ronald D. Frashure, CFA, Chairman, President, and Chief Executive Officer of Acadian. He has co-managed a portion of the Fund since 2004.
Brian K. Wolahan, CFA, Senior Vice President and Director of Portfolio Management at Acadian. He has co-managed a portion of the Fund since 2004.
Spencer Adair, CFA, Investment Manager of Global Alpha Strategy at Baillie Gifford Overseas Ltd. He has co-managed a portion of the Fund since 2008.
Malcolm MacColl, Investment Manager of Global Alpha Strategy at Baillie Gifford Overseas Ltd. and Partner of Baillie Gifford & Co. He has co-managed a portion of the Fund since 2008.
Charles Plowden, Chief of Investment Staff and Lead Portfolio Manager of the Global Alpha Portfolio Construction Group at Baillie Gifford Overseas Ltd. and Joint Senior Partner of Baillie Gifford & Co. He has co-managed a portion of the Fund since 2008.
William J. Arah, Director of Marathon-London. He has co-managed a portion of the Fund since its inception in 1995.
Neil M. Ostrer, Director of Marathon-London. He has co-managed a portion of the Fund since its inception in 1995.
5
Purchase and Sale of Fund Shares
You may purchase or redeem shares online through our website (
vanguard.com)
, by mail (The Vanguard Group, P.O. Box 1110, Valley Forge, PA 19482-1110), or by telephone (800-662-2739). The following table provides the Fund’s minimum initial and subsequent investment requirements.
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Account Minimums
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Investor Shares
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To open and maintain an account
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$3,000
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To add to an existing account
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Generally $100 (other than by Automatic Investment
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Plan, which has no established minimum)
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Tax Information
The Fund’s distributions may be taxable as ordinary income or capital gain.
Payments to Financial Intermediaries
The Fund and its investment advisors do not pay financial intermediaries for sales of Fund shares.
