Fund Description

Vanguard High-Yield Corporate Fund was incepted in December 1978 and is managed by the Wellington Management Company. The objective of the fund is to seek a high level of interest income. The fund invests in high-yield corporate bonds, or 'junk bonds,' which pay high interest rates because they are considered to carry greater risk of default than bonds with higher credit ratings. The management seek to reduce this risk somewhat through solid credit research and broad diversification across companies and industries, and by emphasizing high-yield bonds with relatively stronger credit ratings. The fund invests at least 80% of the fund's holdings have credit ratings of B or above and no more than 20% of assets will be invested in securities rated below B or in unrated bonds of similar quality. The management builds the fund on a company-by-company basis, focusing on the nature of a company's business, its strategy, and the quality of its management. The fund rarely adjust its makeup because of expected interest-rate changes. This is because high-yield bonds are less sensitive to interest-rate changes than higher-quality bonds, and are more expensive to trade. The fund declares dividends on daily basis and distributes them on the first business day of each month. Capital gains are distributed in December.