Vanguard Supports SEC's Fund Retail Investor Experience and Disclosures

VALLEY FORGE, PA (November 12, 2018) – Vanguard supports the Securities and Exchange Commission’s (SEC) efforts to enhance disclosures by mutual funds and ETFs to improve investor’s experience and help investors make more informed investment decisions. In a recently submitted comment letter, Vanguard made suggestions to improve fund disclosures, focusing on three primary areas:

• Delivery: Vanguard recommends modernizing the requirements for disclosure delivery in light of advancements in technology and the substantial costs to fund shareholders associated with printing and mailing paper prospectuses and reports. While funds would still offer to provide paper copies free of charge upon request, Vanguard believes electronic delivery should be the default option for all disclosure documents. Vanguard has found that the vast majority of fund shareholders prefer a digital experience, and that specific digital delivery mechanisms should be flexible to evolve with changes in technology and the tools used to access digital information.
• Design: Vanguard believes the number of regulatory documents could be meaningfully reduced by consolidating the information contained in the fund prospectus, statement of additional information, and shareholder reports into a single fund disclosure document. This uniform document, readily available on the fund’s website, would serve to fully inform investors and give them a better experience at a reduced cost.
• Content: Vanguard advocates for principles-based disclosure and delivery rules that would enable funds to leverage technology to continuously improve investor experience.

Vanguard recommends balancing the benefits of standardizing disclosure requirements across the industry with the risks of advancing rules that are so prescriptive that they will not benefit investors in the long term.

Vanguard commends the SEC for seeking to adopt rules to modernize the delivery framework for fund shareholder disclosures, and looks forward to adopting meaningful changes to benefit our clients and prospective investors. Vanguard has long been a proponent of investor education and an advocate for candid, concise, and easy-to-understand disclosures.

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About Vanguard

Vanguard is one of the world’s largest investment management companies. As of September 30, 2018, Vanguard managed more than $5.3 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 411 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.

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