https://www.sec.gov/Archives/edgar/data/68138/000093247118008062/morgangrowth.htm497 1 morgangrowth.htm VANGUARD MORGAN GROWTH FUND
Vanguard Morgan™ Growth Fund
Supplement Dated December 17, 2018 to the Prospectus and Summary Prospectus Dated January 26, 2018
Reorganization of Vanguard Morgan Growth Fund into Vanguard U.S. Growth Fund
The Board of Trustees of Vanguard Morgan Growth Fund (the Trust) has approved an agreement and plan of reorganization (the Agreement) whereby Vanguard Morgan Growth Fund, a series of the Trust, would be reorganized with and into Vanguard U.S. Growth Fund, a series of Vanguard World Fund.
The reorganization allows Morgan Growth Fund shareholders to merge to form a larger fund, with an identical objective of seeking to provide long-term capital appreciation. The reorganization will consolidate the assets of the Funds, and streamline the Vanguard fund lineup. We anticipate that the reorganization will eliminate duplicative expenses and spread fixed costs over a larger asset base of the combined fund.
The reorganization does not require shareholder approval and is expected to close on or about April 5, 2019. Prior to the closing, shareholders of the Morgan Growth Fund will be issued a combined Information Statement/Prospectus, which will describe the reorganization, provide a description of the U.S. Growth Fund, and include a comparison of the Funds.
Under the Agreement and after the closing, shareholders of the Morgan Growth Fund will receive Investor Shares and Admiral Shares of the U.S. Growth Fund in exchange for their Investor Shares and Admiral Shares of the Morgan Growth Fund, respectively, and the Morgan Growth Fund and the Trust will cease operations, and be liquidated.
We anticipate that the reorganization will qualify as a tax-free reorganization under the Internal Revenue Code of 1986, as amended.
Closed to New Accounts
Effective immediately, the Morgan Growth Fund is closed to new accounts, and will stop accepting purchase requests from existing accounts shortly before the reorganization is scheduled to occur.
Restructuring of the Investment Advisory Team
The following advisors of the Morgan Growth Fund have been approved to serve as advisors to the combined fund after the completion of the reorganization: Jennison Associates LLC (Jennison), Vanguard Quantitative Equity Group (QEG), and Wellington Management Company LLP (Wellington Management). Jennison and Wellington Management currently serve as advisors of the U.S. Growth Fund. Two of the other advisors in U.S. Growth Fund, Jackson Square Partners, LLC (Jackson Square), and Baillie Gifford Overseas Ltd. (Baillie Gifford), will continue with the U.S. Growth Fund. QEG will be added after the closing of the reorganization. Both Funds operate under the terms of an SEC exemption, whereby each Fund’s Board of Trustees may, without prior approval from shareholders, hire a new advisor. Vanguard may also recommend to the Board of Trustees of the Funds that an advisor be hired, terminated, or replaced, or that the terms of an existing advisory agreement be revised.
The Board of Trustees of the Trust has also approved a restructuring of the Morgan Growth Fund’s investment advisory team, removing Frontier Capital Management Co., LLC (Frontier Capital), as an investment advisor for the Fund effective immediately. All references to Frontier Capital and all other details and descriptions regarding Frontier Capital’s management of certain assets of the Fund in the Prospectus and Summary Prospectus are hereby deleted in their entirety.
In addition, Paul E. Marrkand, CFA of Wellington Management will no longer serve as portfolio manager for the Morgan Growth Fund and will be replaced by Andrew J. Shilling, CFA, also of Wellington Management. All references to Mr. Marrkand in the Prospectus and Summary Prospectus are hereby deleted in their entirety...
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Ted
Vanguard Website:
https://pressroom.vanguard.com/news/Press-release-Vanguard-merges-growth-funds-changes-advisory-teams.html