Vanguard Energy Fund changes

TheShadow

https://www.sec.gov/Archives/edgar/data/734383/000168386320012536/f6661d1.htm

497 1 f6661d1.htm VANGUARD ENERGY FUND 497

Vanguard Energy Fund

Supplement Dated August 17, 2020, to the Prospectus and Summary Prospectus Dated May 29, 2020
The board of trustees of Vanguard Specialized Funds (the “Board”) approved restructuring of the investment advisory team of Vanguard Energy Fund (the “Fund”), removing The Vanguard Group, Inc.'s Quantitative Equity Group (“QEG”) as an investment advisor to the Fund. Wellington Management Company LLP (“Wellington”) will serve as the Fund’s sole advisor. All references to QEG, and all other details and descriptions regarding QEG's management of certain assets of the Fund in the Prospectus and Summary Prospectus are deleted in their entirety.

The change in the Fund's investment advisory arrangement is expected to change the Fund's expense ratios to 0.33% for Investor Shares and 0.25% for Admiral™ Shares.

Additionally, in the fourth quarter of 2020, the Fund will change its primary benchmark to a custom market-cap weighted blend of the MSCI ACWI Energy Index and the MSCI ACWI Utilities Index to better reflect how Wellington intends to position the Fund within the energy industry (as currently described in the Prospectus and Summary Prospectus).

Prospectus and Summary Prospectus Text Changes
The following replaces a similar table under the heading “Fees and Expenses” in the Fund Summary section:
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)... (see link for table)

msf

FWIW, the management fees are going up by 1 basis point (each share class), because Wellington charges more than Vanguard's Quant Equity Group (QEG).

Also, there's a technical error in the supplement. I have sent the following to Vanguard:

The fund's Prospectus Supplement dated August 17, 2020 reads in part: "Additionally, in the fourth quarter of 2020, the Fund will change its primary benchmark to a custom market-cap weighted blend of the MSCI ACWI Energy Index and the MSCI ACWI Utilities Index to better reflect how Wellington intends to position the Fund within the energy industry (as currently described in the Prospectus and Summary Prospectus)."

I believe this needs to be corrected. The alluded to description of how Wellington manages this fund does not appear in the Summary Prospectus. It does appear in the Statutory Prospectus, p. 11 (pdf p. 16). So the August 17, 2020 Supplement (to both the Summary and Statutory Prospectuses) should be corrected to reference the description only in the Statutory Prospectus.

That prospectus reads in part: "Wellington Management uses a bottom up approach, in which stocks are chosen based on the advisor's fundamental analysis and its assessment of valuation. Although oil and gas price expectations are considered, company-specific factors such as the quality of the companies' assets, internal reinvestment opportunities, investment plans to capitalize on those opportunities, and quality of management are key inputs in the decision-making process."

Vegomatic

https://tinyurl.com/ixc-vgenx-xle

See above link to PortfolioVisualizer... For the last 10 years or so, VGENX (VG's Energy Fund) has been quite similar to IXC, iShares Global Energy ETF. XLE (Energy SPDR), not so much.