Equity Income Fund Investor Shares (VEIPX)

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more share classes

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Indexed to FTSE High Dividend Yield Index

  Fact sheet (12/31/2013)

Summary of this fund

Vanguard Equity Income Fund seeks to provide an above-average level of current income and reasonable long-term capital appreciation.

Investment approach

  • Primarily large-cap value equity.
  • Seeks an above average level of current income and reasonable long-term capital appreciation.
  • Multimanager structure combines two distinct strategies.
  • Broadly diversified.

About the benchmark

  • The FTSE High Dividend Yield Index is derived from the U.S. component of the FTSE Global Equity Index Series (GEIS).
  • Includes stocks with the highest dividend yields.
  • Excludes REITs, which generally do not benefit from currently favorable tax rates on qualified dividends.
  • Uses buffer zones during annual rebalancing to reduce portfolio turnover.

PRICE AND DISTRIBUTIONS

Price and distributions

as of 04/16/2014

NAV

The market value of a mutual fund's total assets, minus liabilities, divided by the number of shares outstanding. The value of a single share is called its share value or share price.

Change $/%
$30.22
$0.26 positive change   0.87%
SEC yield

A non-money market fund's SEC yield is based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30 day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.



The SEC yield for a money market fund is calculated by annualizing its daily income distributions for the previous seven days.

2.69% B

BASED ON HOLDINGS' YIELD TO MATURITY/DIVIDEND FOR LAST 30 DAYS OF PRIOR MONTH

Dividend yield

The annual rate of return on a share of stock, determined by dividing the annual dividend by its current share price. In a stock mutual fund, this figure represents the average dividend yield of the stocks held by the fund.

2.99%

KEY FUND FACTS

Key fund facts

Expense ratio
0.30% as of 01/27/2014
Lipper peer average
expense ratio
1.22% as of 12/31/2013
Designation
Domestic Large Value
Inception on
03/21/1988
Total net assets

This represents the total net assets for all share classes of Vanguard's U.S. funds that share the same investment strategy, management and holdings, but does not include any collective trusts sharing the same investment mandate.

$16.2 billion as of 03/31/2014
Net assets for
VEIPX
 
$5.4 billion as of 03/31/2014
Holdings 
155 as of 03/31/2014
Management style
Active
Benchmark
FTSE High Dividend Yield Index
Turnover rate 
 34.00%(Fiscal year-end  09/30/2013)

Fees and minimums

Fees and minimums

Purchase fee:

A fee charged by some mutual funds when an investor buys shares. This fee is not a sales charge or load because it is paid directly to the fund to offset the costs of trading certain securities.

None
Redemption fee:

A fee charged by some mutual funds when an investor sells shares. A redemption fee differs from a back-end load because the money is paid back into the fund. Many funds charge redemption fees only when shares are bought and then sold within a specific period of time, generally in an effort to discourage market-timing and short-term trading. Some brokers also charge their clients redemption fees for the sale of securities.

None
Minimum investment:
$3,000

ETF Knowledge Center™   

STYLEBOX

Stylebox

Stock
Diversified portfolio of large- and mid-capitalization, yield-oriented value stocks.



Expected range
Central tendency

About our styleboxes  

Objective

Vanguard Equity Income Fund seeks to provide an above-average level of current income and reasonable long-term capital appreciation.

Investment approach

  • Primarily large-cap value equity.
  • Seeks an above average level of current income and reasonable long-term capital appreciation.
  • Multimanager structure combines two distinct strategies.
  • Broadly diversified.

About the benchmark

  • The FTSE High Dividend Yield Index is derived from the U.S. component of the FTSE Global Equity Index Series (GEIS).
  • Includes stocks with the highest dividend yields.
  • Excludes REITs, which generally do not benefit from currently favorable tax rates on qualified dividends.
  • Uses buffer zones during annual rebalancing to reduce portfolio turnover.

Total returns

as of 03/31/2014

View as:

as of 03/31/2014

View as:
25%
20
15
10
5
0%
 
 
 
 
 
  YTD 1 year 5 year 10 year Since inception

03/21/1988

NAV 
2.34% 19.65% 21.69% 8.67% 10.33%
Benchmark

Spliced Equity Income Index

*
1.97% 18.74% 21.89% 8.52%

Note: Fee adjusted for mutual funds where applicable.

* Russell 1000 Value Index through July 31, 2007; FTSE High Dividend Yield Index thereafter.

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.


People and process

Firms

Vanguard Equity Investment Group
Wellington Management Company, LLP

Product management

Vanguard Equity Income Fund seeks an above average level of dividend income and reasonable long-term capital appreciation. The fund has two advisors who perform extensive research to identify dividend-paying, undervalued companies with catalysts for share-price appreciation. Each advisor has a distinct strategy: One uses fundamental concepts applied with quantitative investment techniques and one uses traditional, yet distinct, fundamental strategies. Vanguard may invest the fund’s cash flows in equity index futures and/or exchange-traded funds to manage liquidity needs while ensuring that the fund remains fully invested.

Firm and manager details  

Sector weightings as of 03/31/2014

as of 03/31/2014
  Sector  VEIPX Benchmark

FTSE High Dividend Yield Index

+/- Weight
Financials 16.6% 12.8% 3.8%
Information Technology 13.1% 16.6% – 3.5%
Health Care 12.9% 11.4% 1.5%
Consumer Staples 12.7% 13.5% – 0.8%
Industrials 12.5% 11.5% 1.0%
Energy 11.7% 11.8% – 0.1%
Utilities 6.6% 7.3% – 0.7%
Consumer Discretionary 5.9% 5.9% 0.0%
Telecommunication Services 4.1% 5.1% – 1.0%
Materials 3.9% 4.1% – 0.2%
Other 0.0% 0.0% 0.0%
0%
20%
Total 100.0% 100.0%

Sector categories are based on the Global Industry Classification Standard system.

Top 10 holdings as of 03/31/2014

 as of 03/31/2014
Rank Holding
1 Johnson & Johnson
2 Wells Fargo & Co.
3 Microsoft Corp.
4 Exxon Mobil Corp.
5 Verizon Communications Inc.
6 JPMorgan Chase & Co.
7 Chevron Corp.
8 Merck & Co. Inc.
9 General Electric Co.
10 Marsh & McLennan Cos. Inc.
Top 10 equals 30.8% of net assets

Portfolio holdings may exclude any temporary cash investments and equity index products.

Holdings policy for this fund  

Fundamentals

Stockas of 03/31/2014 VEIPX Benchmark

FTSE High Dividend Yield Index

Number of stocks 155 390
Median market cap $98.3 billion $128.3 billion
P/E ratio 15.8x 16.1x
P/B ratio 2.6x 2.5x
Turnover rate 34.0% Fiscal year end 9/2013 N/A

Risk and volatility as of 03/31/2014

as of 03/31/2014
  VEIPX Benchmark

Spliced Equity Income Index

R-squared N/A 0.99
Beta N/A 1.03
Alpha – 0.03 N/A
Standard deviation 10.83% 10.46%
Sharpe ratio 1.49 1.54

Risk and volatility are based on the share class with the earliest inception date.

Risk measures are calculated from trailing 36-month fund returns relative to the associated benchmarks.

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 the overall stock market. The fund’s performance could be hurt by:

  • Stock market risk: The chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising stock prices and periods of falling stock prices.
  • Investment style risk: The chance that returns from mid- and large-capitalization dividend-paying value stocks will trail returns from the overall stock market. Historically, mid-cap stocks have been more volatile in price than the large-cap stocks that dominate the overall market, and they often perform quite differently.
  • Manager risk: 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.



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