Vanguard®
Vanguard® Capital Opportunity Fund
Product Summary Vanguard Style View : Mid Growth
Multi-cap growth equity. Portfolio of mid-, small-, and large-capitalization growth-oriented equities. Seeks long-term capital appreciation. Investment style Invests in out-of-favor growth companies at attractive valuations. Value Blend Growth Fundamental stock selection process. Large The managers develop separate subportfolios.
Portfolio may be concentrated by sector and holdings. Mid Note: This fund is closed to new investors. Small Market capitalizationMarket
Central tendency Expected range of fund holdings
Quarterly Commentary People and Process
The human toll of COVID-19 further mounted during the second Vanguard Capital Opportunity Fund seeks long-term capital quarter of 2021 amid fresh outbreaks of the virus and new appreciation, using a fundamental approach to invest in variants. The global economy nevertheless continued to rebound growth-oriented companies at attractive valuation levels. The fund sharply if unevenly. Countries that have better succeeded in has the flexibility to invest across all market capitalizations and containing the virus—whether through vaccinations, lockdowns, or industry sectors, although holdings are generally mid- and both—tended to fare the best. With the reopening of economies small-cap stocks. The fund tends to focus on companies with the and pent-up demand boosting corporate profits, global stocks potential for rapid earnings growth that are currently overlooked by finished the quarter significantly higher. U.S. stocks outperformed the market. The fund’s managers rely almost exclusively on other developed markets as a whole as well as emerging markets. independent research. Each manager is responsible for a separate subportfolio and has autonomy to implement his best ideas. The For the quarter, Vanguard Capital Opportunity Fund managers anticipate holding companies for at least three to five underperformed its benchmark, the Russell Midcap Growth Index years, resulting in low turnover. The portfolio may be relatively (11.07%), and the average return of its peers (+9.53%). Poor stock concentrated, with the top ten holdings often representing selection in industrials (+11.3%) and information technology 30%–40% of assets. (+11.6%) hurt performance. Given the advisor’s low-turnover approach, positioning did not change materially. IT, health care, and consumer discretionary together constituted more than 70% PRIMECAP Management Company of the portfolio at the end of the quarter. Founded in 1983, PRIMECAP Management Company, Pasadena, The fund’s largest overall detractor for the period, Southwest California, is recognized for its long-term approach to growth Airlines (–13%), suffered as staff shortages and computer equity investing. The firm has advised Vanguard Capital problems prompted delays. Within health care, not holding Opportunity Fund since 1998. Moderna (+68%) and poor results from Amgen (–1%) hurt results. Investment Manager Biographies For the 12 months ended June 30, 2021, the fund outperformed its benchmark (+43.77%) and the average return of its peers Theo A. Kolokotrones, Chairman. Portfolio manager. Advised the (+42.39%). Strong selection in consumer discretionary (+45.1%) fund since 1998. Worked in investment management since 1970. and industrials (+42.8%) more than made up for poor selection in B.A., University of Chicago. M.B.A., Harvard Business School. health care (+41.2%). Holdings in Tesla (+215%) and BioNTech (+236%) contributed most, while BioMarin Pharmaceutical (–32%) Joel P. Fried, President. Portfolio manager. Advised the fund since and Amgen (+4%) detracted most. 1998. Worked in investment management since 1985. B.S., University of California, Los Angeles. M.B.A., Anderson Graduate School of Business, University of California, Los Angeles.
Note: Company returns may differ if a security was held in the Alfred W. Mordecai, Executive Vice President. Portfolio manager. portfolio for less than the full period. Advised the fund since 1998. Worked in investment management since 1997. B.S.E., Duke University. M.E.A., Virginia Polytechnic Institute and State University. M.B.A., Harvard Business School.
M. Mohsin Ansari, Executive Vice President. Portfolio manager. Advised the fund since 2007. Worked in investment management since 2000. B.A., Colgate University. B.S., Washington University. M.B.A., Harvard Business School.
As of June 30, 2021 Vanguard Capital Opportunity Fund
James M. Marchetti, Senior Vice President. Portfolio manager. Advised the fund since 2015. Worked in investment management since 2005. B.A., Massachusetts Institute of Technology. M.B.A., MIT Sloan School of Management.
Total Returns
Expense Year Ratio Quarter to Date 1 Year 3 Years 5 Years 10 Years
Capital Opportunity Fund Investor Shares (8/14/1995) 0.44% 8.70% 18.17% 49.90% 19.41% 21.58% 16.81% Admiral Shares (11/12/2001) 0.37 8.72 18.21 50.02 19.50 21.66 16.89 Russell Midcap Growth Index — 11.07 10.44 43.77 22.39 20.52 15.13 Multi-Cap Growth Funds Average — 9.53 11.14 42.39 22.63 21.57 15.08
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors’ shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance. Figures for periods of less than one year are cumulative returns. All other figures represent average annual returns. Performance figures include the reinvestment of all dividends and any capital gains distributions. All returns are net of expenses.
Note: Average fund returns are derived from data provided by Lipper, a Thomson Reuters Company. Admiral class shareholders are required to maintain specific minimum balances and meet other special criteria.
As of June 30, 2021 Vanguard Capital Opportunity Fund
Quarterly Returns: Investor Shares
Year-End Russell Midcap Capital Growth Assets Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Opportunity Index (Millions) 2021 8.71% 8.70% — — — — $1,892 2020 -20.78 22.19 8.39% 17.03% 22.79% 35.59% 1,676 2019 12.54 0.96 -0.91 12.96 27.19 35.47 1,826 2018 1.71 2.56 9.37 -15.64 -3.75 -4.75 1,610 2017 8.40 6.56 5.36 6.08 29.10 25.27 2,140 2016 -3.23 -1.37 12.09 3.35 10.56 7.33 2,156 2015 4.23 -0.78 -7.87 7.67 2.59 -0.20 2,429 2014 5.28 4.26 1.44 6.76 18.88 11.90 2,909 2013 16.18 4.25 9.45 7.63 42.69 35.74 2,893 2012 11.35 -4.35 5.70 5.15 18.37 15.81 2,384 2011 5.29 -1.57 -18.23 10.70 -6.18 -1.65 2,487
Quarterly Returns: Admiral Shares
Year-End Russell Midcap Capital Growth Assets Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Opportunity Index (Millions) 2021 8.73% 8.72% — — — — $19,827 2020 -20.76 22.20 8.42% 17.06% 22.89% 35.59% 17,502 2019 12.57 0.98 -0.89 12.97 27.28 35.47 16,020 2018 1.74 2.57 9.39 -15.63 -3.69 -4.75 13,554 2017 8.42 6.58 5.37 6.10 29.18 25.27 14,375 2016 -3.21 -1.35 12.10 3.37 10.65 7.33 11,828 2015 4.25 -0.75 -7.87 7.70 2.67 -0.20 11,231 2014 5.30 4.27 1.47 6.77 18.95 11.90 10,803 2013 16.21 4.26 9.48 7.66 42.80 35.74 8,776 2012 11.36 -4.35 5.72 5.17 18.43 15.81 5,173 2011 5.30 -1.55 -18.22 10.74 -6.11 -1.65 4,742
As of June 30, 2021 Vanguard Capital Opportunity Fund
Fund Facts Volatility Measures Investor Admiral R-Squared Beta Shares Shares Russell Midcap Growth Index 0.85 0.85 Fund Number 0111 5111 DJ US Total Stock Mkt Float Adj Idx 0.92 1.00 Ticker VHCOX VHCAX R-squared and beta are calculated from trailing 36-month fund returns Newspaper Listing CapOp CapOpAdml relative to the associated benchmark. CUSIP Number 922038302 922038500 Assets (millions) $1,892 $19,827 (Total $21,719) Top 10 Largest Holdings Inception 8/14/1995 11/12/2001 Expense Ratio (as of 1/2021) 0.44% 0.37% % of Total Net Assets Eli Lilly & Co. 4.6% Biogen Inc. 3.4 Equity Characteristics Alphabet Inc. 3.2 Russell Microsoft Corp. 2.5 Midcap Capital Growth Amgen Inc. 2.5 Opportunity Index BioNTech SE 2.2 Number of stocks 178 390 FedEx Corp. 2.2 Median market cap $54.1 Billion $25.9 Billion Alibaba Group Holding Ltd. 2.2 Average market cap $240.0 Billion $27.0 Billion Southwest Airlines Co. 2.1 Price/earnings ratio 26.8x 38.2x BioMarin Pharmaceutical Inc. 2.0 Price/book ratio 4.6x 10.7x Total 26.9% Return on equity 15.0% 16.0% The holdings listed exclude any temporary cash investments and equity Earnings growth rate 18.5% 18.9% index products. Equity yield (dividend) 0.6% 0.5% Foreign holdings 13.6% 0.0% Short-term reserves 2.2% — Turnover rate (fiscal year end) 7.9% —
Sector Diversification (% of Stocks)
Russell Midcap Capital Growth Overweight/ Opportunity Index Underweight
Communication Services 5.7% 6.2% -0.5
Consumer Discretionary 11.8 15.9 -4.1
Consumer Staples 0.0 2.1 -2.1
Energy 2.0 1.5 0.5
Financials 8.2 4.5 3.7
Health Care 30.5 17.5 13.0
Industrials 12.8 14.3 -1.5
Information Technology 28.9 34.0 -5.1
Materials 0.1 2.0 -1.9
Other 0.0 0.0 0.0
Real Estate 0.0 1.8 -1.8
Utilities 0.0 0.2 -0.2 Total 100.0% 100.0% Sector categories are based on the Global Industry Classification Standard (GICS), except for the Other category (if applicable), which includes securities that have not been provided a GICS classification as of the effective reporting period.
As of June 30, 2021 Vanguard Capital Opportunity Fund
3 month attribution Portfolio Benchmark Attribution
Avg. 3 mo. Contrib. Avg. 3 mo. Contrib. Alloc. Select Total weight return Return weight return Return effect effect effect Health Care 28.7 16.6 4.6 21.8 13.5 3.0 0.1 0.7 0.8 Consumer Staples 0.0 21.0 0.0 3.4 0.2 0.0 0.4 0.0 0.4 Materials 0.1 34.4 0.0 2.0 -1.9 0.0 0.2 0.0 0.3 Financials 8.1 11.7 0.9 3.5 11.7 0.4 0.0 0.0 0.1 Energy 1.9 13.4 0.2 0.6 19.9 0.1 0.1 -0.1 0.0 Utilities 0.0 0.0 0.0 0.1 7.6 0.0 0.0 0.0 0.0 Cash 2.2 0.0 0.0 0.0 0.0 0.0 -0.1 0.0 -0.1 Real Estate 0.1 16.1 0.0 1.8 17.6 0.3 -0.1 0.0 -0.1 Communication Services 5.5 10.3 0.6 6.2 12.9 0.8 0.0 -0.2 -0.2 Consumer Discretionary 11.5 4.2 0.5 11.3 7.7 0.8 0.0 -0.4 -0.4 Information Technology 28.4 7.8 2.3 36.8 11.6 4.4 -0.1 -1.0 -1.1 Industrials 13.5 -2.2 -0.2 12.5 11.3 1.4 0.0 -1.8 -1.7 Total 100.0 8.9 8.9 100.0 11.1 11.1 0.6 -2.7 -2.2
12 month attribution Portfolio Benchmark Attribution Avg. 12 mo. Contrib. Avg. 12 mo. Contrib. Alloc. Select Total weight return Return weight return Return effect effect effect Consumer Discretionary 12.1 75.6 8.9 11.0 45.1 4.9 0.1 3.4 3.5 Industrials 12.7 67.9 8.4 12.3 42.8 5.4 0.1 2.8 2.9 Financials 6.8 85.1 5.0 3.5 31.2 1.1 -0.1 2.9 2.8 Information Technology 29.8 55.2 16.8 36.9 45.4 16.4 0.0 2.4 2.4 Consumer Staples 0.0 23.9 0.0 3.7 11.1 0.6 1.3 0.1 1.5 Materials 0.0 118.0 0.0 2.1 24.9 0.6 0.4 0.1 0.6 Energy 1.6 72.9 1.0 0.5 77.2 0.3 0.5 0.0 0.5 Utilities 0.0 0.0 0.0 0.1 28.0 0.0 0.1 0.0 0.1 Real Estate 0.0 29.2 0.0 1.5 76.9 1.0 -0.1 0.1 0.0 Cash 1.1 0.1 0.0 0.0 0.0 0.0 -0.2 0.0 -0.2 Communication Services 5.3 65.6 3.2 6.2 75.9 3.9 0.0 -0.4 -0.4 Health Care 30.5 25.2 7.6 22.2 41.2 9.6 -0.1 -6.6 -6.7 Total 100.0 50.8 50.8 100.0 43.9 43.9 2.0 5.0 7.0 The portfolio attribution data shown above is provided by FactSet based on information provided by Vanguard about the fund's daily portfolio holdings as of the market close. Because the fund buys and sells stocks throughout the trading day and not necessarily at the market close, the attribution data shown above is an estimate and may not precisely reflect actual attribution information. Information noted above does not reflect fair-value adjustments to prices of foreign securities held in the portfolio.
Top contributors—3 month Top detractors—3 month 3 mo. Total Ending Bench 3 mo. Total Ending Bench return effect weight weight return effect weight weight BioNTech SE 105.0 1.1 2.2 0.0 Amgen Inc. -1.3 -0.3 2.5 0.0 Eli Lilly and Company 23.4 0.4 4.6 0.0 Micron Technology Inc. -3.7 -0.3 2.0 0.0 Alphabet Inc. 19.7 0.3 3.2 0.0 Roku Inc. 41.0 -0.3 0.0 1.3 Biogen Inc. 23.8 0.3 3.4 0.0 Moderna Inc. 68.0 -0.6 0.0 0.0 NVIDIA Corporation 49.9 0.2 0.7 0.0 Southwest Airlines Co. -13.1 -0.6 2.1 0.0
As of June 30, 2021 Vanguard Capital Opportunity Fund
Top contributors—12 month Top detractors—12 month 12 mo. Total Ending Bench 12 mo. Total Ending Bench return effect weight weight return effect weight weight Tesla Inc. 214.7 3.5 1.9 0.0 Alibaba Group Holding Ltd. 5.1 -0.8 2.2 0.0 BioNTech SE 235.5 1.4 2.2 0.0 Moderna Inc. 242.5 -1.1 0.0 0.0 FedEx Corporation 115.0 1.1 2.3 0.0 Roku Inc. 294.1 -1.1 0.0 1.3 Morgan Stanley 91.8 0.7 1.6 0.0 Amgen Inc. 4.2 -1.3 2.5 0.0 Alphabet Inc. 74.6 0.6 3.2 0.0 BioMarin Pharmaceutical Inc. -32.4 -2.5 2.0 0.0
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