Vanguard Asset Allocation Fund
Investment Advisory Agreement Addendum
Effective July 1, 2006
This Addendum amends Section 7 of the Investment Advisory
Agreement dated July
1, 1997, between Vanguard Malvern Funds, on behalf of Vanguard
Asset Allocation
Fund (the "Fund"), and Mellon Capital Management Corporation
("Mellon," or the
"Advisor") for the management of the Fund, as follows:
A. AMENDMENT
The following shall replace the first paragraph of Section 7 of
the Agreement in
its entirety:
7. COMPENSATION. For the services to be rendered by the Advisor
as provided in
this Agreement, the Fund shall pay to the Advisor at the end of
the Fund's
fiscal quarters, a Basic Fee calculated by applying a quarterly
rate, based on
the following annual percentage rates, to the Fund's average
daily net assets
for the quarter:
In the event of termination of this Agreement, the fee provided
in this Section
for the period beginning on the first day of the then-current
fiscal quarter and
ending on the last business day on which this Agreement is in
effect (the "Short
Quarter") shall be calculated by applying the foregoing annual
percentage rates
to the average daily net assets of the Fund during the Short
Quarter, dividing
the result by four, and multiplying that figure by a ratio equal
to the number
of days in the Short Quarter divided by the total number of days
in the full
quarter.
B. MISCELLANEOUS
Except as specifically amended hereby, all of the terms and
conditions of the
Investment Advisory Agreement are unaffected and shall continue
to be in full
force and effect and shall be binding upon the parties in
accordance with its
terms. In particular, and notwithstanding Section A of this
Amendment, the
performance adjustment will continue to be applied to an asset-
base that is
calculated using the average month-end net assets over the
applicable
performance period.
MELLON CAPITAL MANAGEMENT VANGUARD MALVERN FUNDS
CORPORATION
_______________________ __________ _______________________
__________
Signature Date Signature
Date
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