SHIP LOGO VANGUARD(R)
P.O Box 2600
Valley Forge, PA
19482-2600
610-669-1538
Judy_L_Gaines@vanguard.com
June 13, 2006
Christian Sandoe, Esq.
Division of Investment Management
U.S. Securities and Exchange Commission via electronic filing
450 Fifth Street,
N.W., Fifth Floor
Washington, D.C. 20549
RE: Vanguard Horizon Funds
Dear Mr. Sandoe,
The following responds to your comments of June 9, 2006 on the
post-effective amendment of the registration statement of the above-referenced
registrant. You commented on Post-Effective Amendment No. 30 which was filed on
April 24, 2006. All of the comments pertain to the Vanguard Global Equity Fund.
Comment 1: Prospectus - Primary Investment Strategies
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Comment: Consider adding strategy disclosure reflecting the Fund's
investment in Emerging Markets.
Response: This language is already in the Primary Investment Strategy
section where we say, "The Fund typically invests in....as
well as a mix of developed and emerging markets stocks."
Accordingly, we do not plan to amend the disclosure in
response to this comment.
Comment 2: Prospectus - Primary Investment Strategies
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Comment: Consider adding primary investment strategy disclosure
reflecting the Fund's investment in small- and mid-cap stocks.
Response: In the last paragraph beneath Security Selection, we state "As
a secondary investment strategy, the Fund will own companies
with market values of less than $15 billion, which are
considered small- to mid-cap by the Fund's investment
advisors. However, the advisors will frequently select stocks
with higher market values."
Since investing in small- and mid-cap stocks are a secondary
investment strategy, we do not plan to add related disclosure
to the primary investment strategy section.
We will, however, amend the primary risk disclosure to better
clarify that this risk is only primary to the extent that the
Fund invests in such stocks.
Christian Sandoe, Esq.
June 13, 2006
Page 2
Comment 3: Prospectus - Performance/Risk Information
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Comment: Please add the year-to-date footnote beneath the Annual Total
Return table.
Response: We will make the requested modification.
Comment 4: Prospectus - Market Exposure
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Comment: Consider amending the disclosure to clarify that the term
global connotes diversification across a number of countries
in the world.
Response: In Release No. IC-24828 (the "Names Rule Release"), the SEC
stated that:
"[t]he terms "international" and "global," however, connote
diversification among investments in a number of different
countries throughout the world, and "international" and
"global" funds will not be subject to the [Names] rule. We
would expect, however, that investment companies using these
terms in their names will invest their assets in investments
that are tied economically to a number of countries throughout
the world." (Emphasis added.)
The above-quoted guidance does not impose a particular
disclosure requirement; rather, it sets forth an expectation
regarding a fund's investment approach.
The Fund satisfies this expectation, and the Market Exposure
section discloses 1) the Fund's policy of investing in stocks
from the United States and other countries, and 2) that the
Fund is widely diversified across countries. We think that our
existing disclosure sufficiently conveys the idea that the
Fund invests across a number of countries throughout the
world. We do not think adding "throughout the world" is
necessary, so we do not plan to amend the disclosure in
response to this comment.
Comment 5: Prospectus - Plain Talk About the Portfolio Managers
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Comment: Please clarify the role played by the various portfolio managers.
Response: We have confirmed that the existing disclosure whereby the
PMs are referred to as "co-managers" is an accurate
description of their roles. The PMs work together in managing
Fund assets, sharing in the determination of strategies and
risk exposures, and placing trades on behalf of the respective
advisory firms' portions of the Fund's assets. Furthermore,
we believe that our existing disclosure satisfies the
requirements of Item 5(a)(2) of Form N-1A. Accordingly, we do
not plan to amend the disclosure.
Comment 6: SAI - Other Accounts Managed - PRIMECAP
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Comment: In addition to the existing disclosure regarding other
accounts co-managed by the PMs, please clarify whether any of
the PMs individually manage any other accounts.
Response: The PMs do not individually manage any other accounts, so we
do not plan to amend the existing disclosure.
Christan Sandoe, Esq.
June 13, 2006
Page 3
Comment 7: SAI - Description of Compensation - AllianceBernstein
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Comment: Please describe the time periods for performance, whether
performance is pre- or post-tax, and the various peer groups
and benchmarks that are used in determining the bonus for the
AllianceBernstein PMs.
Response: The compensation of investment professionals at
AllianceBernstein is based on their management of many
accounts/funds, and is not limited to managing this particular
Fund. That being the case, their compensation could relate to
the performance, both pre- and post-tax, over varying
performance period, compared against a multitude of peer
groups and benchmarks. Their compensation is not tied to
specific formulas. While the existing disclosure could be
construed as somewhat vague, it accurately captures the firm's
description of how their investment professionals are
compensated. Accordingly, we do not plan to amend the
disclosure.
Comment 8: SAI - Financial Statements
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Comment: Please update the disclosure to reflect the fact that the
financial statements contained in the Fund's semiannual
report are now available and are incorporated by reference.
Response: We will make the requested change.
Comment 9: Tandy Requirements
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As required by the SEC, the Funds acknowledge that:
o Each Fund is responsible for the adequacy and accuracy of
the disclosure in the filing.
o 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.
o Each 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) 669-1538 with any questions or comments
regarding the above responses. Thank you.
Sincerely,
Judith L. Gaines
Associate Counsel
Securities Regulation, Legal Department