EDV Vanguard Extended Duration Treasury

The Vanguard� Extended Duration Treasury Index Fund, a low-cost fund designed for pension plans that follow a liability-driven investing strategy, has begun accepting investments. Institutional investors can purchase shares of the fund directly from Vanguard, or can purchase the Vanguard� Extended Duration Treasury ETF, which today began trading on the American Stock Exchange under the ticker EDV. Vanguard offers the lowest cost long-duration ETF in the industry. (source: Lipper). Share Class � Minimum Initial Investment � Estimated Expense Ratio Institutional $5 million 0.11% Institutional Plus $100 million 0.08% Extended Duration Treasury ETF (EDV) N/A 0.14% The Vanguard� Extended Duration Treasury Index Fund seeks to match the performance of the Lehman Brothers Treasury Strips 20-30 Year Equal Par Bond Index, and has a duration generally ranging from 22 to 27 years. The fund was specifically designed for institutions and pension plan providers who are seeking to balance their portfolio assets to pension liabilities. Funds with longer durations are more sensitive to interest rate fluctuations than shorter duration funds. Therefore, rising interest rates may cause a steep decline in the value of the Fund�s investments. Because of this potential volatility, the fund is generally not appropriate for individual investors. The new fund is managed by Vanguard Fixed Income Group, which oversees $374 billion in assets, including more than $80 billion in bond index fund assets. Vanguard, headquartered in Valley Forge, Pennsylvania, is one of the world�s largest investment management companies. Vanguard manages nearly $1.3 trillion in U.S. mutual fund assets, including more than $325 billion in employer-sponsored retirement plans. Vanguard offers more than 140 funds to U.S. investors and more than 40 additional funds in foreign markets. All asset figures are as of November 30, 2007, unless otherwise noted. All mutual funds and ETF products are subject to stock market risk, which may result in the loss of principal. Investments in Treasury bond funds and ETFs are subject to interest rate and inflation risk. Diversification does not ensure a profit or protect against a loss in a declining market. 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. Vanguard Extended Duration Treasury ETF is not sponsored, endorsed, sold or promoted by Lehman Brothers. Lehman Brothers makes no representation or warranty, express or implied, to the owners of Vanguard Extended Duration Treasury ETF or any member of the public regarding the advisability of investing in securities generally or in Vanguard Extended Duration Treasury ETF particularly or the ability of the Lehman Brothers Index to track general bond market performance. Lehman Brothers hereby expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect to the Lehman index and any data included therein. Lehman�s only relationship to Vanguard and Vanguard Extended Duration Treasury ETF is the licensing of the Lehman index, which is determined, composed, and calculated by Lehman without regard to Vanguard or the Vanguard Extended Duration Treasury ETF. Lehman is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of Vanguard Extended Duration Treasury ETF to be issued. The Fund is subject to interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk is expected to be extremely high for the Fund because it invests mainly in zero coupon long-term bonds, which have prices that are very sensitive to interest rate changes. Because the Fund invests mainly in Treasury STRIPS with maturities ranging from 20 to 30 years, rising interest rates may cause the value of the Fund's investments to decline significantly. Vanguard and Vanguard ETFs are trademarks of The Vanguard Group, Inc. All other marks are the exclusive property of their respective owners. Vanguard Marketing Corporation, Distributor.