The typically quiet Vanguard Group underwent a flurry of activity last week.

First, it announced on June 28 that it would close its

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Precious Metals fund -- a somewhat surprising move. Precious metals funds are in the midst of the biggest rally in nearly a decade, and Vanguard's fund in particular has returned more than 33% year-to-date, and has attracted $124 million in new money, according to Morningstar.

Precious metals funds averaged a 19% gain last year, while the

S&P

fell by nearly that much. But the sector's performance is volatile -- the typical precious metals fund has a standard deviation 37% higher than that of the average stock fund.

That spectacular run is most likely why the fund has closed not only to new investors, but also existing ones, according to Morningstar analyst Christopher Davis. The funds' performance has attracted many speculative investors. Those investors would likely be the first ones to leave the fund in a downturn, Davis says, which would trigger a wave of redemptions that could hurt performance.

The $628 million fund is the second-largest in the category, while consolidation among mining companies has reduced the fund's investment universe. The fund holds fewer than 30 stocks, and has nearly 75% of its assets in its top 10 holdings, according to Morningstar.

Lest Vanguard followers not know what to do with their money, the firm announced four days later the opening of two new funds.

(VGMRX)

Vanguard Mid-Cap Growth fund and

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Vanguard International Explorer fund opened on July 3.

Both new funds will be actively managed -- bringing the number of Vanguard actively managed funds to 23 -- and both are the result of some reorganization. The Provident Investment Counsel Mid-Cap Fund A will now be the Vanguard Mid-Cap Growth Fund, and the Schroder International Smaller Companies Fund became the International Explorer Fund. Both funds will retain their initial investing objectives and advisers.

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Vanguard Mid-Cap Growth Fund, which invests in primarily domestic companies with $1 billion to $14 billion in market capitalization, carries an expense ratio of 0.65% and has a $10,000 initial minimum investment.

The International Explorer Fund, the non-U.S. small-cap fund, will have a 0.75% expense ratio and a $10,000 initial minimum investment.

Viper Attack

All this comes on the heels of Vanguard's recent foray into the world of exchange-traded funds. The firm has registered nine U.S. stock index funds with the

Securities and Exchange Commission

, although just two are currently trading as exchange-traded funds (ETFs). The new ETFs are called Vipers, or "Vanguard Index Participation Equity Receipts." Like all exchange-traded funds, Vipers are based on a particular index, but their shares are traded on an exchange (in this case, the

American Stock Exchange

), rather than bought and sold from the fund company itself.

Although Vanguard registered nine index funds with the SEC, only two have VIPER shares currently trading -- the

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Extended Market fund (which began trading in January 2002), and the

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Total Stock Market Index fund (which began trading May 31, 2001). A spokesman for Vanguard said there are no immediate plans to roll out additional VIPERs, although the company has registered four other funds with the SEC for permission to trade VIPER shares. Those funds are the

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500 Index Fund, the

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Growth Index fund, the

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Small-Cap Index fund, the

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Value Index fund.

As originally published, this story contained an error. Please see

Corrections and Clarifications.

In keeping with TSC's editorial policy, Beverly Goodman doesn't own or short individual stocks, nor does she invest in hedge funds or other private investment partnerships. Goodman welcomes your questions and comments, and invites you to send them to

Beverly Goodman.