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Vanguard - Risk Attributes

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Vanguard Aggressive Growth Portfolio
Risk Attributes

Historic Volatility Measures as of 03/31/2014

BenchmarkR-squared* Beta*
Vanguard 529 Aggressive Growth Composite1.001.01
Dow Jones U.S. Total Stock Market Index

*R-squared and beta are calculated from trailing 36-month fund returns relative to the associated benchmark.

Risks Associated with Aggressive Funds

Vanguard funds classified as aggressive are subject to extremely wide fluctuations in share prices. The unusually high volatility associated with these funds may stem from one or more of the following strategies: a concentration of fund holdings in a relatively low number of individual stocks, or in a particular sector of the stock market, or in a particular geographical region of the world; a heavy emphasis on small-capitalization stocks or growth stocks with relatively high market valuations; holdings of international stocks or bonds, which are subject to price declines caused by changes in the value of the U.S. dollar against foreign currencies; or investments in bonds that have exceptionally long average durations, whose prices are highly sensitive to changes in interest rates.


Plain Talk About Risk

The portfolio’s total return, like stock prices generally, will fluctuate within a wide range, so an investor could lose money over short or even long periods. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. The portfolio is also subject to:

  • Stock market risk.This is the risk that an underlying fund may experience sudden, unpredictable declines in value, as well as periods of poor performance, because of a general decline in the stock market. Because stock prices go up and down, the value of the fund’s shares may go up and down.
  • Foreign securities risk. Underlying funds that invest in foreign securities are subject to country risk, which is the chance that domestic events, such as political upheaval, financial troubles, or a natural disaster, will weaken a country’s securities markets. They are also subject to currency risk, which is the chance that investments in a particular country will decrease in value if the U.S. dollar rises in value against that country’s currency. Finally, there exists investment style risk, which is the chance that returns from foreign stocks will trail returns from U.S. stocks.
  • Derivatives risk. Each of the underlying funds in which the portfolio invests may, to a limited extent, invest in derivatives, which may involve risks different from, and possibly greater than, those of traditional investments. To help stay fully invested, and to reduce transaction costs, the funds may invest in stock futures and options contracts, warrants, convertible securities, and swap agreements, which are types of derivatives. The underlying funds will not use derivatives for speculative purposes or as leveraged investments that magnify gains or losses.
  • Index sampling risk. This is the risk that the securities owned by an underlying fund that uses the sampling method of indexing will not provide investment performance matching that of the fund’s target index.

    Glossary

    For more information about The Vanguard 529 College Savings Plan, download a Program Description or request one by calling 866-734-4530. The Program Description includes investment objectives, risks, charges, expenses, and other information; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor and Underwriter. Please note: Before investing in any 529 plan, you should consider whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with favorable state tax and other benefits that are only available through investment in the home state's 529 plan. You also should consult your financial, tax, or other adviser to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state's 529 plan[s], or any other 529 plan, to learn more about those plans' features, benefits, and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

    The Vanguard 529 College Savings Plan is a Nevada Trust administered by the Board of Trustees of the College Savings Plans of Nevada, chaired by State Treasurer Kate Marshall. 

    The Vanguard Group, Inc., serves as the Investment Manager and through its affiliate, Vanguard Marketing Corporation, markets and distributes the Plan. Upromise Investments, Inc., serves as Program Manager and has overall responsibility for the day-to-day operations, including effecting transactions. The Plan’s portfolios, although they invest in Vanguard mutual funds, are not mutual funds. Investment returns are not guaranteed and you could lose money by investing in the Plan.

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