P.O. Box 2600 | |||
Valley Forge, PA 19482-2600 | |||
610-669-1538 | |||
Barry_a_Mendelson@vanguard.com | |||
November 19, 2013 | |||
Amy Miller, Esq. | |||
U.S. Securities & Exchange Commission | via electronic filing | ||
100 F Street, N.E. | |||
Washington, DC 20549 | |||
RE: | Vanguard Whitehall Funds; File No. 33-64845 | ||
Dear Ms. Miller, | |||
This letter responds to your comments provided by telephone on November 13, 2013 on the | |||
post-effective amendment of the above-referenced registrant. You commented on Post-Effective | |||
Amendment No. 51 that was filed on September 27, 2013 in order to register shares of Global | |||
Minimum Volatility Fund (the “Fund”), a new series of the Trust. | |||
Comment 1: | Prospectus – Fund Summary – Fees and Expenses (page 1) | ||
Comment: | Please replace the phrase “Management Expenses,” which appears in the Annual | ||
Fund Operating Expenses (“AFOE”) table on page 1 of the Prospectus, with | |||
“Management Fees” to be consistent with the AFOE Instructions of Item 3 of | |||
Form N-1A. | |||
Response: | For most if not all funds other than Vanguard funds, the costs associated with | ||
paying a manager are based on contractual fee rates applied to assets under | |||
management, and therefore are appropriately categorized as “fees.” By contrast, | |||
under Vanguard’s unique at-cost expense arrangement, Vanguard passes its actual | |||
out-of-pocket expenses through to the Vanguard funds, and so the amounts | |||
reflected on this line item of the AFOE table are more appropriately characterized | |||
as “management expenses” rather than “management fees.” Nevertheless in | |||
deference to the staff’s desire for uniformity in the presentation of the Fund | |||
Summary portion of the prospectus, we will replace the phrase “Management | |||
Expenses,” which appears in the AFOE table on page 1 of the Prospectus, with | |||
“Management Fees.” |
Comment 2: | Prospectus – Fund Summary – Tax Information (page 4) |
Comment: | As currently drafted, the prospectus states that “The Fund’s distributions may be |
taxable as ordinary income or capital gain.” Please clarify that this | |
characterization does not apply to investors holdings shares in tax-deferred | |
accounts. | |
Response: | We will revise the Tax Information section to read as follows (new material in |
italics): “The Fund’s distributions may be taxed as ordinary income or capital | |
gains.If you are investing through a tax-deferred retirement account, such as an | |
IRA, special tax rules apply.” As we mentioned in our phone conversation, | |
different language appears in the Tax Information section of the Fund Summary | |
for the prospectuses that are designed specifically for the participants in | |
employer-sponsored retirement plans. | |
Comment 3: | Prospectus – More on the Fund – Market Exposure (page 6) |
Comment: | A fund that includes “global” in its name should have a policy requiring |
investment in at least three different countries. Please add disclosure clarifying | |
that the Fund will invest in at least three different countries. | |
Response: | We have added language to the Primary Investment Strategies disclosure on page |
2 stating that the portfolio will include companies “located in many different | |
countries.” We think this complies with the spirit of your comment because the | |
term “many” cannot reasonably be read to mean less than three. We believe such | |
disclosure is preferable to the phrasing you suggest because "at least three | |
different countries” does not sufficiently convey the degree of country | |
diversification that the Fund will provide. | |
Comment 4: | Prospectus – More on the Fund–Other Investment Policies and Risks (page 11) |
Comment: | The Prospectus states that the Fund may invest a small portion of its assets in |
shares of exchange-traded funds (“ETFs”). If the aggregate expenses attributable | |
to the cost of investing in ETFs exceed 0.01% of the average net assets of the | |
Fund, a separate line item, Acquired Fund Fees and Expenses (“AFFE”), is | |
required to be added to the fee table. Please confirm that aggregate expenses | |
attributable to the cost of investing in ETFs will not exceed 0.01% of the average | |
net assets of the Fund. | |
Response: | Aggregate expenses attributable to investing in ETFs are not expected to exceed |
0.01% of the average net assets of the Fund. Accordingly, a separate line item | |
representing AFFE is not required to be included in the Fund’s fee table. In the | |
future, if aggregate expenses attributable to investing in ETFs exceed 0.01% of | |
the Fund’s average nets assets, a separate line item for AFFE will be added to the | |
fee table. |
Comment 5: | Tandy Requirements |
As required by the SEC, the Fund acknowledges that: | |
• | The Fund is responsible for the adequacy and accuracy of the disclosure in the filing. |
• | Staff comments or changes in response to staff comments in the filings reviewed by |
the staff do not foreclose the Commission from taking any action with respect to the | |
filing. | |
• | The Fund may not assert staff comments as a defense in any proceeding initiated by |
the Commission or any person under the federal securities laws of the United States. | |
Please contact me at (610) 503-2398 with any questions or comments regarding the | |
above response. Thank you. | |
Sincerely, | |
Barry A. Mendelson | |
Principal and Senior Counsel |