Like other U.S. investment companies, Vanguard periodically holds shareholder meetings when shareholder approval is needed for certain matters affecting the funds. At an upcoming shareholder meeting, or by proxy beforehand, shareholders will vote on the election of trustees for all U.S.-based Vanguard funds.

“We encourage Vanguard fund shareholders to vote on these important proposals, which will put in place the people and policies to enable us to continue to lower the cost of investing and enhance the management of our funds with the ultimate goal of improving client outcomes,” said Vanguard CEO Bill McNabb.

Shareholders will also be asked to vote on several fund policy proposals that, if approved, will give the funds more operational flexibility and, in Vanguard’s view, be in the best interests of their shareholders.

Following the SEC’s review, the fund proxy materials will be provided to Vanguard fund shareholders beginning in late August 2017. That’s when shareholders can begin to vote online, by phone, or by mail. The shareholder meeting is scheduled for November 15, 2017, in Scottsdale, Arizona.

Shareholders will vote on the following management proposals presented by Vanguard in the proxy statement:

  • Elect trustees: Trustees oversee the funds to make sure they effectively serve the interests of shareholders. Shareholders of each U.S.-based Vanguard fund will be asked to elect a board of trustees.
  • Enable all funds to retain third-party investment advisors: Many Vanguard funds retain, or reserve the right to retain, one or more third-party investment advisors. Those funds that hire third-party advisors benefit from complementary strategies, diversity of thought, and managerial and operational flexibility. Funds that already have shareholder approval to retain these advisors can avoid incurring costs or delays involved in obtaining shareholder consent. Shareholders will be asked to expand this ability so that all U.S.-based Vanguard funds can enter into or amend investment advisory agreements with third-party advisors without obtaining additional shareholder approval in the future.
  • Enable all funds to retain Vanguard-affiliated investment advisors: To give Vanguard funds managerial and operational flexibility and facilitate greater efficiency, shareholders will be asked to approve a proposal that will enable U.S.-based Vanguard funds to enter into or amend investment advisory agreements with subsidiaries of Vanguard without obtaining additional shareholder approval in the future.
  • Broaden the investment objective for Vanguard’s two REIT offerings: To better align Vanguard REIT Index Fund and Vanguard Variable Insurance Fund—REIT Index Portfolio with the newly constituted Global Industry Classification Standard (GICS) real estate sector, create greater investment capacity for the two funds, and provide broader exposure to the real estate market, the two funds are seeking shareholder approval to broaden their investment objective to allow for the inclusion of real estate-related investments beyond real estate investment trusts (REITs). If the proposal is approved, the funds will seek to track the MSCI US Investable Market Real Estate 25/50 Index instead of the MSCI US REIT Index. Broadening the investment objective and then changing the funds’ benchmark index will provide more complete real estate exposure for investors, including those who use Vanguard’s equity sector investment fund lineup for portfolio construction. Also, if the proposal is approved, the two funds’ names will be changed to Vanguard Real Estate Index Fund and Vanguard Variable Insurance Fund—Real Estate Index Portfolio.
  • Change the diversification status, as defined by the Investment Company Act of 1940, of Vanguard REIT Index Fund: To allow Vanguard REIT Index Fund to track more closely its benchmark index, the fund is seeking shareholder approval to change its status from “diversified” to “nondiversified” as defined by the Investment Company Act of 1940. Many of Vanguard’s other equity sector index funds are already classified as nondiversified because the market segments in which they invest are relatively narrow in scope.
  • Approve new advisory agreements for two funds: Shareholders of Vanguard Institutional Index Fund and Vanguard Institutional Total Stock Market Index Fund will be asked to adopt the Vanguard Funds’ Service Agreement, which will harmonize their investment advisory, administrative, and distribution arrangements with those of other U.S.-based Vanguard funds. Adopting the Funds’ Service Agreement will lead to lower expenses for certain share classes and broader availability of lower-cost share classes.

Additionally, shareholders submitted two proposals. The first calls for the Vanguard funds to separately disclose their votes on climate change proposals. The second seeks to prescribe specific investment limitations on the funds.

Vanguard files for new REIT II Index Fund

In a separate filing, Vanguard submitted a registration statement to the SEC today to launch a new fund—Vanguard REIT II Index Fund. The new fund’s investment objective, strategies, and index will be identical to the existing Vanguard REIT Index Fund, which was launched in 1996 and has grown to be the largest REIT fund in the industry.* The REIT II Index Fund will also invest in the same portfolio of securities as the REIT Index Fund.

The REIT Index Fund will be the principal investor in the REIT II Index Fund. This structure will provide increased investment capacity for the REIT Index Fund, which has attracted considerable shareholder investment in recent years. Shareholders of the REIT Index Fund will be able to continue to interact with the fund as they do today.

The new REIT II Index Fund will be offered to select institutional clients, separately managed accounts, and other Vanguard funds through Institutional Plus Shares with a minimum investment of $100 million. More details about the new fund will be available when it begins operations, which is expected to happen late in the third quarter of this year.

*Source: Morningstar, Inc.


  • A registration statement relating to Vanguard REIT II Index Fund has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
  • The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard and Poor’s, a division of McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by Vanguard. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classification makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of its affiliates or any third party involved in making or compiling the GICS or any GICS classification have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
  • The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The preliminary proxy statement the Vanguard funds filed with the SEC contains a more detailed description of the limited relationship MSCI has with The Vanguard Group, Inc. and any related funds.
  • For more information about Vanguard funds, visit or call 800-962-5279 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing. Please note that a preliminary prospectus is subject to change.
  • All investing is subject to risk, including the possible loss of money you invest.
  • Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility.