Vanguard Broadens Bond Index Fund Offerings

The funds will seek to track benchmarks focusing on discrete segments of
the bond market, as follows:

Fund (ETF Ticker)                                               Barclays Capital Index
Vanguard Short-Term Government Bond Index Fund (VGSH)           U.S. 1-3 Year Government Float Adjusted Index
Vanguard Intermediate-Term Government Bond Index Fund (
      
      VGIT | 
      Quote | 
      Chart | 
      News | 
      PowerRating)    U.S. 3-10 Year Government Float Adjusted Index
Vanguard Long-Term Government Bond Index Fund (
      
      VGLT | 
      Quote | 
      Chart | 
      News | 
      PowerRating)            U.S. Long Government Float Adjusted Index
Vanguard Short-Term Corporate Bond Index Fund (
      
      VCSH | 
      Quote | 
      Chart | 
      News | 
      PowerRating)            U.S. 1-5 Year Corporate Index
Vanguard Intermediate-Term Corporate Bond Index Fund (
      
      VCIT | 
      Quote | 
      Chart | 
      News | 
      PowerRating)     U.S. 5-10 Year Corporate Index
Vanguard Long-Term Corporate Bond Index Fund (
      
      VCLT | 
      Quote | 
      Chart | 
      News | 
      PowerRating)             U.S. Long Corporate Index
Vanguard Mortgage-Backed Securities Index Fund (
      
      VMBS | 
      Quote | 
      Chart | 
      News | 
      PowerRating)           U.S. MBS Float Adjusted Index

"Vanguard's expanded fixed income lineup provides greater choice and
more price competition in the market, and offers financial advisors and
institutions more flexibility to tailor the credit quality and duration
of their bond exposure," said Gus Sauter, Vanguard's chief investment
officer.

The new bond ETFs will be Vanguard's first to trade on the NASDAQ stock
exchange. Vanguard's 39 other ETFs will continue to trade on the NYSE
Arca exchange; some products are cross-listed in Australia and Mexico.

Vanguard is a pioneer in bond index investing, having introduced the
first no-load bond index mutual fund, Vanguard Total Bond Market Index
Fund, in 1986. In April 2007, the company launched four bond ETFs:
Vanguard Total Bond Market ETF (BND), Vanguard Short-Term Bond ETF
(BSV), Vanguard Intermediate-Term Bond ETF (BIV), and Vanguard Long-Term
Bond ETF (BLV). Vanguard Extended Duration Treasury ETF (EDV) began
trading in December 2007.

Vanguard is among the ETF industry leaders in net cash flow this year,
with $21 billion through October 31, 2009, according to Bloomberg data.
Vanguard's ETF assets are up nearly 95% in 2009 to $78 billion. In
total, Vanguard's U.S.-based mutual funds (including ETFs) experienced
net cash flows of $85 billion through October. The firm manages $1.3
trillion in U.S. fund assets, including $600 billion in index funds.

Vanguard attributes much of its continued growth to the considerable
cost advantage of its products. The average expense ratio of Vanguard's
funds is 0.20%, or about one-sixth the 1.19% industry average expense
ratio (Lipper Inc., 12/31/2008). The average expense ratio of Vanguard
ETFs is 0.19%, less than half the ETF industry average of 0.55%
(Morningstar, 10/31/2009).

Vanguard's ETFs are structured as a separate share class of traditional
index funds rather than as stand-alone funds or unit investment trusts.
This novel approach leads not only to low costs but to broad
diversification among securities and issuers, resulting in the potential
for closer replication and tracking of benchmarks. It also enables
Vanguard to optimize its creation baskets based on liquidity, a practice
that lowers transaction costs and can reduce an ETF's premiums or
discounts to net asset value.

A Caveat About Bond ETFs

Unlike a conventional bond index fund, a bond ETF can trade at a
substantial premium or discount to its net asset value based on overall
supply and demand of bonds in the market. An investor buying ETF shares
at a premium to net asset value and selling them at a discount may earn
less than the return of a conventional fund that seeks to track the same
target index. Currently, many bond ETFs, particularly those emphasizing
lower-quality bonds, are trading at a premium.

To help individual investors understand the trade-offs between index
funds and ETFs, Vanguard published an explanatory article in the Autumn
2009 edition of its shareholder newsletter, In The Vanguard. The
article -- "The choice between ETFs and conventional fund shares" --
examines the similarities and differences between the two products.
Investors may request a free copy of the newsletter by calling toll free
(877-662-7447) or read it at Vanguard.com. For a more in-depth
discussion, investors may download a similarly titled Vanguard research
paper at the following URL: https://personal.vanguard.com/us/literature/learnaboutinvesting/investmentguides

The new bond index funds will be managed by the Vanguard Fixed Income
Group, which oversees nearly $485 billion in assets, including $114
billion in bond index fund assets and $10.4 billion in bond ETF assets.

About Vanguard

Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the
world's largest investment management companies and a leading provider
of company-sponsored retirement plan services. Vanguard manages $1.3
trillion in U.S. mutual fund assets, including nearly $490 billion in
retirement assets. Vanguard offers more than 160 funds to U.S. investors
and more than 50 additional funds in non-U.S. markets.

(1) The minimum initial investment for Signal Shares for
Vanguard Financial Advisor Services clients is $5 million per fund, in
aggregate, at the firm level and $1 million per plan for employee
benefit assets. Institutional Shares are available to companies and
organizations for a minimum initial investment of $5 million.
Institutional Shares are not available on accounts receiving
administrative or recordkeeping services.

Asset and cash flow figures as of October 31, 2009.

For more information, visit www.vanguard.com,
or call 800-662-7447 to obtain a fund 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. Vanguard ETF Shares can be bought and sold only through a
broker (who will charge a commission) and cannot be redeemed with the
issuing fund. The market price of Vanguard ETF Shares may be more or
less than net asset value.

Mutual funds are subject to risks. Investments in bond funds are subject
to interest rate, credit, and inflation risk.

U.S. Pat. No. 6,879,964 B2; 7,337,138

Vanguard Marketing Corporation, Distributor.

SOURCE: Vanguard

Vanguard 
John S. Woerth, 610-669-6224 
Rebecca Katz, 610-503-2273 
Linda S. Wolohan, 610-503-2947 
Amy Chain, 610-669-2149Visit Vanguard's pressroom at www.vanguard.com/pressroom

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