Keep in mind that the fund’s actual distributions may differ from the figures shown here. These estimates are updated to reflect projected year-end distributions for the underlying funds in which the Managed Payout Fund invests. However, they don’t reflect any changes in the fund’s commodity investments since the mid-December distribution. Commodity investment changes could affect the breakdown of the fund’s year-to-date distributions as well as the need for and amount of any additional distributions. Purchase and redemption activity within the Managed Payout Fund may also have an impact on the final distribution figures.

In late January 2018, you’ll be able to view the finalized ordinary income, capital gains, and return-of-capital distribution amounts for the fund in the secure My Accounts area of vanguard.com. This information will also be reported on Form 1099-DIV, which you’ll receive in early 2018.

Estimated breakdown of 2017 monthly distributions

The percentage estimates in this table are for the monthly distribution payments you’ve received through the December 15, 2017, distribution. They’re separated into categories compatible with tax-reporting requirements, as opposed to the percentage breakdown you see on your regular monthly statements, which is based on financial-reporting requirements.

The estimates include projections of income dividends and capital gains distributions expected to be received through the end of 2017 from the funds and holdings in which the Managed Payout Fund invests. They don’t include commodities gains or losses since the December 15, 2017, distribution.

Vanguard fundTickerOrdinary
income
Long-term
capital gains
Return
of capital
Managed Payout FundVPGDX52%0%48%

Estimated per-share amounts of additional distributions

These estimates are for additional distributions Vanguard Managed Payout Fund is expected to make from net income and/or long-term capital gains. These distributions are usually reinvested automatically in shares of the Managed Payout Fund.

Vanguard fundTickerDeclaration date/
Record date
Payable dateOrdinary incomeLong-term
capital gains
Return
of capital
Managed Payout FundVPGDX12/27/201712/29/2017$0.00$0.01$0.01

Notes:

All investing is subject to risk, including the possible loss of the money you invest.

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 Investment Products.

The fund’s monthly distributions per share are calculated as of January 1 of that year and are generally expected to be fixed during the year.

Vanguard Managed Payout Fund is not guaranteed to achieve its investment objectives and is subject to loss; some of its distributions may be treated in part as a return of capital.

The dollar amount of the fund’s monthly cash distributions could go up or down substantially from one year to the next and over time. It is also possible for the fund to suffer substantial investment losses and simultaneously experience additional asset reductions as a result of its distributions to shareholders under its managed distribution policy. An investment in the fund could lose money over short, intermediate, or even long periods of time because the fund allocates its assets worldwide across different asset classes and investments with specific risk and return characteristics. Diversification does not necessarily ensure a profit or protect against a loss. The fund is proportionately subject to the risks associated with its underlying funds, which may invest in stocks (including stocks issued by REITs), bonds, cash, inflation-linked investments, commodity-linked investments, long/short market-neutral investments, and leveraged absolute return investments.

The Managed Payout Fund may not be appropriate for all investors. For example, depending on the time horizon, retirement income needs, and tax bracket, an investment in the fund might not be appropriate for younger investors not currently in retirement, for investors under age 59½ who may hold the fund in an IRA or another tax-advantaged account, or for participants in employer-sponsored plans. Investors who hold the fund within a tax-advantaged retirement account should consult their tax advisors to discuss tax consequences that could result if payments are distributed from their account prior to age 59½ or if they plan to use the fund, in whole or in part, to meet their required minimum distribution (RMD) obligations. Distributions from the fund are unlikely to precisely match an investor’s IRA RMD obligations. In addition, use of the fund may be restricted in employer-sponsored plans by the terms of the governing plan documents and/or at the discretion of the plan administrator. Review the information carefully with your financial advisor before deciding whether the fund is right for you.

Before investing, consider the Managed Payout Fund’s investment objectives, strategies, risks, fees, and expenses. Contact Vanguard for a prospectus containing this information. Read it carefully.