Vanguard seeks shareholder approval to change two funds to non-diversified

Vanguard announced it will seek shareholder approval to change the diversification status of its Health Care Index Fund and Financials Index Fund from diversified to non-diversified. The proposed changes affect both ETF and mutual fund share classes of the Vanguard Health Care Index Fund (ETF: VHT, Admiral: VHCIX) and Vanguard Financials Index Fund (ETF: VFH, Admiral: VFAIX).

The company stated that current diversification limits prevent the funds from directly investing in securities in proportion to their weights in respective benchmarks, as these benchmarks have become increasingly concentrated in a small number of stocks. The proposed status change would enable the funds to invest directly in securities matching the same weights as their target benchmarks.

The Board of Trustees for each fund believes the changes would allow portfolio managers to better track each fund's benchmark index, potentially improving investment performance.

Shareholders as of the record date of August 26, 2025, will vote on the proposal during a virtual shareholder meeting scheduled for November 4, 2025. Voting options include online, phone, mail, and during the virtual meeting.

The information is based on a company press release statement.

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