PRE 14A 1 pre14aproxystatement.htm PRELIMINARY PROXY STATEMENT pre14aproxystatement.htm - Generated by SEC Publisher for SEC Filing

Schedule 14A Information

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

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Vanguard Admiral Funds
Vanguard Bond Index Funds
Vanguard CMT Funds
Vanguard California Tax-Free Funds
Vanguard Charlotte Funds
Vanguard Chester Funds
Vanguard Convertible Securities Fund
Vanguard Explorer Fund
Vanguard Fenway Funds
Vanguard Fixed Income Securities Funds
Vanguard Horizon Funds
Vanguard Index Funds
Vanguard Institutional Index Funds
Vanguard International Equity Index Funds
Vanguard Malvern Funds
Vanguard Massachusetts Tax-Exempt Funds
Vanguard Money Market Reserves
Vanguard Montgomery Funds
Vanguard Morgan Growth Fund
Vanguard Municipal Bond Funds
Vanguard New Jersey Tax-Free Funds
Vanguard New York Tax-Free Funds
Vanguard Ohio Tax-Free Funds
Vanguard Pennsylvania Tax-Free Funds
Vanguard Quantitative Funds
Vanguard Scottsdale Funds
Vanguard Specialized Funds
Vanguard STAR Funds


 

Vanguard Tax-Managed Funds
Vanguard Trustees’ Equity Fund
Vanguard Valley Forge Funds
Vanguard Variable Insurance Funds
Vanguard Wellesley Income Fund
Vanguard Wellington Fund
Vanguard Whitehall Funds
Vanguard Windsor Funds
Vanguard World Funds

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An Important Message from Vanguard Chief Executive Officer F. William McNabb III
<INSERT HEADSHOT OF MCNABB>
Dear fellow shareholder,

Thank you for placing your trust in Vanguard. Every dollar you invest with us is a sign of faith in our funds, our people, and our way of doing business. We work hard every day to earn and maintain that trust and to give all investors the best chance for investment success.

On behalf of the Boards of Trustees, I’m pleased to announce all Vanguard funds will hold a Joint Special Meeting of Shareholders on November 15, 2017, at the Doubletree Paradise Valley in Scottsdale, Arizona. All shareholders have an opportunity to vote on proposals that affect their funds. Your vote is very important. I urge you to review the enclosed information carefully and then vote either by internet, mail, phone, or in person at the meeting.

An important part of the proxy statement is a proposal to elect trustees for all Vanguard funds. These nominees have been selected for their experience, judgment, and integrity. They clearly understand their responsibility to represent your interests in the boardroom. There are only two Vanguard employees who are nominees; myself and Mortimer (Tim) J. Buckley, who it was just announced will succeed me as CEO when I retire from my role in January 2018. All other nominees, eight of whom currently serve as trustee to each fund and two new nominees, are independent of Vanguard, including the nominee who currently serves as lead trustee.

Many of the enclosed proposals involve updating and harmonizing your funds’ investment policies to help Vanguard manage your funds more efficiently and effectively. Specific proposals related to the REIT Index Fund, Vanguard Variable Insurance Fund - REIT Index Portfolio, Institutional Index Fund, and Institutional Total Stock Market Index Fund are also included. The trustees recommend you vote in favor of these proposals.

We also have included two proposals submitted by shareholders of certain funds. The trustees have reviewed these proposals carefully and recommend voting against them because they are not in the best interest of long-term shareholders. A detailed rationale for our recommendations with respect to each of these two proposals is enclosed.

I ask you to vote as soon as possible. Every shareholder matters, and we want to hear from you. Thank you for taking the time to review the enclosed proposals and for your participation in this important process.

Sincerely,

F. William McNabb, III
Chairman and CEO

August 21, 2017
<PAGE BREAK>
Important Information About Voting

Why am I being asked to vote?

Because your vote makes a difference. If many shareholders choose not to vote, the funds might not receive enough votes to reach quorum and conduct the shareholder meeting in November. If that appears likely to happen, the funds will have to send additional mailings to shareholders to try to get more votes-- a process that would be very costly for the funds and thus for you as a fund shareholder.

What’s the deadline for submitting my vote?

We encourage you to vote as soon as possible to make sure that your fund receives enough votes to act on the proposals. The final opportunity to cast your vote is at the shareholder meeting on November 15, 2017.

Who gets to vote?


 

Any person who owned shares of a Vanguard fund on the “record date,” which was August 16, 2017, even if that person later sells those shares.

How do I vote?

You may vote in any of four ways:

(1) Through the Internet at the website listed on the enclosed proxy card or voting instruction card.

(2) By telephone, with a toll-free call to the phone number indicated on the enclosed proxy card or voting instruction card.

(3) By mail, with the enclosed proxy card or voting instruction card.

(4) In person at the shareholder meeting in Scottsdale, Arizona, on November 15, 2017.

<INSERT TEXT BOX WITH 4 COLUMNS OF INFO AND GRAPHICS RELATED TO THE WAYS TO VOTE. USE THE FOLLOWING INFORMATION>

Vote on the Internet

Through the Internet at the website indicated on your proxy card or voting instruction card. Follow the on-screen instructions.

Vote by phone

Call the phone number indicated on your proxy card or voting instruction card. Follow the recorded instructions available 24 hours.

Vote by mail

Vote, sign, and date the proxy card or voting instruction card and return in the postage-paid envelope.

Vote in person

Attend the Shareholder Meeting at DoubleTree Paradise Valley Scottsdale, 5401 N. Scottsdale Rd., Scottsdale, Arizona 85250 on November 15, 2017.

We encourage you to vote through the Internet or by telephone, using the voting control number and security code that appears on your proxy card, or the voting control number that appears on your voting instruction card. These voting methods will save your fund money (since they require no return postage). If you would like to change your previous vote, you may do so using any of the methods described above.

How do I sign the proxy card?

You should sign your name exactly as it appears on the enclosed proxy card or voting instruction card. Unless you have instructed us otherwise, either owner of a joint account may sign the card, but again, the owner must sign the name exactly as it appears on the card. The proxy card or voting instruction card for other types of accounts should be signed in a way that indicates the signer’s authority-- for example, “John Brown, Custodian.”

<PAGE BREAK>

The Vanguard Funds1

Notice of Joint Special Meeting of Shareholders

All Vanguard funds will host a Joint Special Meeting of Shareholders on Wednesday, November 15, 2017, at 8:00 a.m., local Arizona time, at DoubleTree Paradise Valley Scottsdale, 5401 N. Scottsdale Rd., Scottsdale, Arizona 85250. This joint special meeting of the Vanguard funds is being held so that shareholders can vote on Vanguard’s proposals to:

1.      Elect Trustees for each fund.
2.      Approve a manager of managers arrangement with third-party investment advisors.
3.      Approve a manager of managers arrangement with wholly-owned subsidiaries of Vanguard.
4.      Change the investment objective of Vanguard REIT Index Fund and Vanguard Variable Insurance Fund-REIT Index Portfolio.
5.      Reclassify the diversification status of Vanguard REIT Index Fund to nondiversified.
         
1 Please see Part V of this booklet for an alphabetical list of all Vanguard funds.

 

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6. Adopt the Funds’ Service Agreement for Vanguard Institutional Index Fund and Vanguard Institutional Total Stock Market Index Fund.

Also, shareholders of certain funds will be asked to consider proposals submitted by one or more shareholders to:

7. Institute transparent procedures to avoid holding investments in companies that, in management’s judgement, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights. Such procedures may include time-limited engagement with problem companies if management believes that their behavior can be changed.

8. Initiate a review and issue a report on proxy voting policies and practices related to climate change, prepared at reasonable cost and omitting proprietary information.

By Order of the Boards of Trustees,
Anne E. Robinson, Secretary
August 21, 2017

YOUR VOTE IS IMPORTANT
You can vote easily and quickly over the Internet, by toll-free telephone call, or by mail. Just follow the simple
instructions that appear on your enclosed proxy card or voting instruction card. Please help your fund avoid the
expense of a follow-up mailing by voting today.

 

<PAGE BREAK>
The Vanguard Funds

Joint Special Meeting of Shareholders November 15, 2017

PROXY STATEMENT

Introduction

This combined proxy statement is being provided to you on behalf of the boards of trustees of all Vanguard funds.

We have divided the proxy statement into five main parts:

Part I An Overview of the Proposals begins on page 2.
Part II Proposal Details begins on page 3.
Part III Information on the Funds’ Independent Accountants begins on page x.
Part IV More on Proxy Voting and Shareholder Meetings begins on page x.
Part V Fund and Investment Advisor Information begins on page x.

 

Please read the proxy statement before voting on the proposals. If you have questions about the proxy statement, or if you would like additional information, please call Computershare toll-free at <INSERT NUMBER>. This proxy statement was mailed to shareholders beginning the week of August 21, 2017.

Annual and Semiannual Reports. Each fund’s most recent annual and semiannual reports to shareholders are available at no cost. You may read, print, or request mail delivery of a copy through our website at www.vanguard.com. You may also request a report by calling us toll-free at 1-800-662-7447 or by writing to us at P.O. Box 2600, Valley Forge, PA 19482-2600. Participants in an employer-sponsored 401(k) or other retirement plan administered by Vanguard should call us at 800-523-1188.

ATTENTION: Vanguard Variable Insurance Fund Shareholders
You have the right to instruct your annuity provider how to vote the Vanguard Variable Insurance Fund shares held
under your plan. You can issue voting instructions for these shares over the Internet, by toll-free telephone call, or
by mail. Just follow the simple instructions that appear on your enclosed voting instruction card. Note that your
annuity provider will “shadow vote” any fund shares for which contract owners fail to provide voting instructions.
This means that the uninstructed shares will be voted in proportionately the same manner-- either “For,” “Against,”
or “Abstain”-- as the instructed shares.

 

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<PAGE BREAK>
Part I
An Overview of the Proposals

Shareholders of the Vanguard funds are being asked to vote on a number of proposals. Not all proposals apply to each fund. The table below shows each proposal and the specific Vanguard funds to which it applies. Only shareholders of record on August 16, 2017, are entitled to vote on a fund’s proposals.

Vanguard Proposals Vanguard Funds
1. Elect Trustees for each fund. Applies to all Vanguard funds.
2. Approve a manager of managers arrangement with Applies to all Vanguard funds EXCEPT: Alternative Strategies Fund; Capital
third-party investment advisors. Opportunity Fund; Capital Value Fund; Convertible Securities Fund; Core Bond
Fund; Dividend Growth Fund; Emerging Markets Bond Fund; Emerging Markets
Select Stock Fund; Energy Fund; Equity Income Fund; Explorer Fund; Explorer
Value Fund; Global Equity Fund; Global Minimum Volatility Fund; GNMA Fund;
Growth and Income Fund; Health Care Fund; High-Yield Corporate Bond Fund;
Institutional Target Retirement 2065 Fund; International Explorer Fund; International
Growth Fund; International Value Fund; Long-Term Investment-Grade Fund; Market
Liquidity Fund; Market Neutral Fund; Mid-Cap Growth Fund; Morgan Growth Fund;
Municipal Cash Management Fund; Precious Metals and Mining Fund; PRIMECAP
Core Fund; PRIMECAP Fund; Selected Value Fund; Target Retirement 2065 Fund;
U.S. Growth Fund; U.S. Value Fund; Ultra-Short-Term Bond Fund; Balanced
Portfolio of the Variable Insurance Fund; Capital Growth Portfolio of the Variable
Insurance Fund; Diversified Value Portfolio of the Variable Insurance Fund; Equity
Income Portfolio of the Variable Insurance Fund; Growth Portfolio of the Variable
Insurance Fund; High-Yield Bond Portfolio of the Variable Insurance Fund;
International Portfolio of the Variable Insurance Fund; Small Company Growth
Portfolio of the Variable Insurance Fund; Wellesley Income Fund; Wellington Fund;
  Windsor Fund; and Windsor II Fund.
3. Approve a manager of managers arrangement with Applies to all Vanguard funds.
wholly-owned subsidiaries of Vanguard.  
4. Change the investment objective of REIT Index Applies to REIT Index Fund and REIT Index Portfolio of the Variable Insurance
Fund and REIT Index Portfolio of the Variable Fund.
Insurance Fund.  
5. Reclassify the diversification status of REIT Index Applies to REIT Index Fund.
Fund to nondiversified.  
6. Adopt the Funds' Service Agreement for Applies to Institutional Index Fund and Institutional Total Stock Market Fund.
Institutional Index Fund and Institutional Total Stock  
Market Index Fund.  
 
 
Shareholder Proposals Vanguard Funds
7. Institute transparent procedures to avoid holding Applies to 500 Index Fund; Capital Opportunity Fund; Developed Markets Index
investments in companies that, in management’s Fund; Dividend Appreciation Index Fund; Emerging Markets Stock Index Fund;
judgement, substantially contribute to genocide or Energy Fund; Energy Index Fund; Equity Income Fund; European Stock Index Fund;
crimes against humanity, the most egregious Extended Market Index Fund; FTSE All-World ex-US Index Fund; FTSE Social
violations of human rights. Such procedures may Index Fund; Global Equity Fund; GNMA Fund; Growth Index Fund; Health Care
include time-limited engagement with problem Fund; Inflation-Protected Securities Fund; Institutional Index Fund; Intermediate-
companies if management believes that their Term Bond Index Fund; Intermediate-Term Treasury Fund; International Explorer
behavior can be changed. Fund; International Growth Fund; International Value Fund; LifeStrategy Moderate
Growth Fund; Long-Term Treasury Fund; Mid-Cap Index Fund; Mid-Cap Value
Index Fund; Morgan Growth Fund; Municipal Money Market Fund; Pacific Stock
Index Fund; Precious Metals and Mining Fund; Prime Money Market Fund; REIT
Index Fund; Short-Term Bond Index Fund; Short-Term Tax-Exempt Fund; Short-
Term Treasury Fund; Small-Cap Growth Index Fund; Small-Cap Index Fund; Small-
Cap Value Index Fund; STAR Fund; Tax-Managed Small-Cap Fund; Total Bond
Market Index Fund; Total International Stock Index Fund; Total Stock Market Index
Fund; Value Index Fund; Balanced Portfolio of the Vanguard Variable Insurance
  Fund; Wellington Fund; Windsor Fund; and Windsor II Fund.
8. Initiate a review and issue a report on proxy Applies to Total Stock Market Index Fund and 500 Index Fund.
voting policies and practices related to climate
change, prepared at reasonable cost and omitting
proprietary information.  

 

<PAGE BREAK>
Part II
Proposal Details

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Proposal 1     
Elect Trustees for Each Fund
This proposal applies to all Vanguard funds.

 

We are asking shareholders of each Vanguard fund to elect a board of trustees.

Who are the nominees to the board?

The twelve individuals listed below have been nominated for election as Vanguard fund trustees. If approved, the newly elected trustees would be serving together as the board, effective January 1, 2018. Ms. Gutmann, Ms. Heisen, and Messrs. Fullwood, Loughrey, Loughridge, Malpass, McNabb, Perold, and Volanakis currently serve as trustees for all 195 Vanguard funds and are also nominees for trustee for all of the funds. Mr. Buckley, Ms. Mulligan and Ms. Raskin have not previously served as trustees, but are nominees for trustee for all of the funds. Each nominee also serves as a director of The Vanguard Group, Inc. (Vanguard), and each has consented to continue serving (or, in the case of Mr. Buckley, Ms. Mulligan and Ms. Raskin, begin serving) as a trustee for the funds if elected by shareholders. The mailing address of the Vanguard funds’ trustees and officers is P.O. Box 876, Valley Forge, PA 19482.

Nominees2 Principal Occupation(s) and Outside Directorships
Interested Trustees  
 
Mortimer J. Buckley3  
Born 1969 Mr. Buckley has served as President and Director of the The Vanguard Group, Inc. since July 2017. Prior to this
Nominee time, Mr. Buckley served as Chief Investment Officer of Vanguard from 2013 to 2017; head of the
Retail Investor Group from 2006 to 2012 and Chief Information Officer of  Vanguard from 2001 to
2006. He also served as Chairman of the Board of The Children’s Hospital of Philadelphia from 2011 to 2017.
F. William McNabb III4  
Born 1957 Mr. McNabb has served as Chairman of the Board of The Vanguard Group, Inc., and of each of the investment
Chairman of the companies served by Vanguard, since January 2010; Trustee of each of the investment companies served by
Board of Trustees Vanguard, since 2009; Director of Vanguard since 2008; Chief Executive Officer of Vanguard and Chief
Executive Officer and President of each of the investment companies served by Vanguard, since 2008; and
President of Vanguard from 2008 to 2017. Mr. McNabb also serves as a Director of Vanguard Marketing
Corporation. Mr. McNabb served as a Managing Director of Vanguard from 1995 to 2008. Vanguard funds
trustee since July 2009.
 
Independent Trustees  
Emerson U. Fullwood  
Born 1948 Mr. Fullwood is the former Executive Chief Staff and Marketing Officer for North America and Corporate Vice
Trustee President (retired 2008) of Xerox Corporation (document management products and services). Previous positions
held at Xerox by Mr. Fullwood include President of the Worldwide Channels Group, President of Latin America,
Executive Chief Staff Officer of Developing Markets, and President of Worldwide Customer Services. Mr.
Fullwood is the Executive in Residence and 2009–2010 Distinguished Minett Professor at the Rochester Institute
of Technology. Mr. Fullwood serves as Lead Director of SPX FLOW, Inc. (multi-industry manufacturing); as a
Director of the University of Rochester Medical Center, Monroe Community College Foundation, the United
Way of Rochester, North Carolina A&T University, and Roberts Wesleyan College; and as a Trustee of the
University of Rochester. Vanguard funds trustee since January 2008.
 
Amy Gutmann  
Born 1949 Dr. Gutmann has served as the President of the University of Pennsylvania since 2004. She is the Christopher H.
Trustee Browne Distinguished Professor of Political Science, School of Arts and Sciences, and Professor of
Communication, Annenberg School for Communication, with secondary faculty appointments in the Department
of Philosophy, School of Arts and Sciences, and at the Graduate School of Education, University of
Pennsylvania. Dr. Gutmann also serves as a Trustee of the National Constitution Center. Vanguard funds trustee
  since June 2006.
 
 
      
2 If approved, the new board will take effect January 1, 2018.
3 Mr. Buckley is considered an “interested person,” as defined in the Investment Company Act of 1940, because of his position at Vanguard.
4 Mr. McNabb is considered an “interested person,” as defined in the Investment Company Act of 1940, because he is an officer of the Vanguard funds and because of his position at Vanguard.

 

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JoAnn Heffernan Heisen  
Born 1950 Ms. Heisen is the former Corporate Vice President of Johnson & Johnson (pharmaceuticals/medical devices/
Trustee consumer products) and a former member of the Executive Committee (1997–2008). During her tenure at
Johnson & Johnson, Ms. Heisen held multiple roles, including: Chief Global Diversity Officer (retired 2008),
Vice President and Chief Information Officer (1997–2006), Controller (1995–1997), Treasurer (1991–1995), and
Assistant Treasurer (1989–1991). Ms. Heisen serves as a Director of Skytop Lodge Corporation (hotels) and the
Robert Wood Johnson Foundation and as a member of the Advisory Board of the Institute for Women’s
Leadership at Rutgers University. Vanguard funds trustee since July 1998.
 
F. Joseph Loughrey  
Born 1949 Mr. Loughrey is the former President and Chief Operating Officer (retired 2009) and Vice Chairman of the
Trustee Board (2008–2009) of Cummins Inc. (industrial machinery). Mr. Loughrey serves as Chairman of the Board of
Hillenbrand, Inc. (specialized consumer services), Oxfam America, and the Lumina Foundation for Education;
as a Director of the V Foundation for Cancer Research; and as a member of the Advisory Council for the College
of Arts and Letters and Chair of the Advisory Board to the Kellogg Institute for International Studies, both at the
University of Notre Dame. Vanguard funds trustee since October 2009.
 
Mark Loughridge  
Born 1953 Mr. Loughridge is the former Senior Vice President and Chief Financial Officer (retired 2013) at IBM
Trustee (information technology services). Mr. Loughridge also served as a fiduciary member of IBM’s Retirement Plan
Committee (2004–2013). Previous positions held by Mr. Loughridge at IBM include Senior Vice President and
General Manager of Global Financing (2002–2004), Vice President and Controller (1998–2002), and a variety of
management roles. Mr. Loughridge serves as a Director of The Dow Chemical Company and as a member of the
Council on Chicago Booth. Vanguard funds trustee since March 2012.
 
Scott C. Malpass  
Born 1962 Mr. Malpass has served as Chief Investment Officer since 1989 and Vice President since 1996 at the University
Trustee of Notre Dame. Mr. Malpass serves as an Assistant Professor of Finance at the Mendoza College of Business at
the University of Notre Dame and is a member of the Notre Dame 403(b) Investment Committee. Mr. Malpass
also serves as Chairman of the Board of TIFF Advisory Services, Inc., and on the board of Catholic Investment
Services, Inc. (investment advisors); as a member of the board of advisors for Spruceview Capital Partners; and
as a member of the Board of Superintendence of the Institute for the Works of Religion. Vanguard funds trustee
since March 2012.
 
Deanna Mulligan  
Born 1963 Ms. Mulligan has served as Chief Executive Officer (since 2011) and President (since 2010) of The Guardian
Nominee Life Insurance Company of America.5 Previous positions held by Ms. Mulligan since joining The Guardian Life
Insurance Company of America in 2008 include Chief Operating Officer (2010–2011) and Executive Vice
President of Individual Life and Disability (2008–2010). Ms. Mulligan serves as a Board Member of The
Guardian Life Insurance Company of America, the American Council of Life Insurers, the Partnership for New
York City (business leadership), and the Committee Encouraging Corporate Philanthropy; as a Trustee of the
Economic Club of New York and the Bruce Museum (arts and science); and as a member of the Advisory
Council for the Stanford Graduate School of Business.
 
André F. Perold  
Born 1952 Dr. Perold is the George Gund Professor of Finance and Banking, Emeritus at the Harvard Business School
Trustee (retired 2011). Dr. Perold serves as Chief Investment Officer and Co-Managing Partner of HighVista Strategies
LLC (private investment firm). Dr. Perold also serves as an Overseer of the Museum of Fine Arts Boston.
Vanguard funds trustee since December 2004.
 
Sarah Bloom Raskin  
Born 1961 Ms. Raskin served as Deputy Secretary of the United States Department of the Treasury (2014–2017), as
Nominee Governor of the Federal Reserve Board (2010–2014), and as Commissioner of Financial Regulation of the State
 
 
       
5 Guardian Life provides group insurance and administrative services for employee benefits such as group life, dental, vision, and disability coverage to two advisors, each of which manages one or more of the Vanguard funds. Amounts paid by these advisors to Guardian Life for such insurance and services were less than 0.006% of Guardian Life’s premium revenues in each of 2015 and 2016. Park Avenue Securities (PAS) is an indirect, wholly owned subsidiary of Guardian Life and a dually registered broker-dealer and investment adviser. From time to time, PAS receives payments related to the sale of certain non-Vanguard mutual funds advised by firms that also advise certain Vanguard funds. In 2016, these payments amounted to less than 0.15% of PAS’ revenues and PAS’ earnings comprised less than 1% of Guardian Life’s pre-tax earnings. Deanna Mulligan is not an officer or director of PAS.

 

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of Maryland (2007–2010). Ms. Raskin also served as a member of the Neighborhood Reinvestment Corporation
Board from 2012 to 2014.
 
Peter F. Volanakis  
Born 1955 Mr. Volanakis is the retired President and Chief Operating Officer (retired 2010) of Corning Incorporated
Trustee (communications equipment) and a former Director of Corning Incorporated (2000–2010) and of Dow Corning
(2001–2010). Mr. Volanakis served as a Director of SPX Corporation (multi-industry manufacturing) in 2012
and as an Overseer of the Amos Tuck School of Business Administration at Dartmouth College from 2001 to
2013. Mr. Volanakis serves as Chairman of the Board of Trustees of Colby-Sawyer College and is a Member of
the Board of Hypertherm Inc. (industrial cutting systems, software, and consumables).Vanguard funds trustee
since July 2009.

 

Why are fund shareholders being asked to elect trustees?

Federal law requires that shareholders elect a fund’s board of trustees under certain circumstances. As a general matter, a fund’s board of trustees may fill vacancies as long as immediately after the board fills the vacancy, at least two-thirds of the trustees were elected by shareholders. The ability to appoint new trustees is important because without it the funds would have to hold expensive shareholder meetings for each new trustee. Mr. Buckley, Ms. Mulligan and Ms. Raskin, who have each served as a Vanguard director since July 2017, are currently nominees for trustee of each of the Vanguard funds, and none of them could be added to the funds’ boards without exceeding the two-thirds requirement. Accordingly, now is an appropriate time to hold an election.

How many of the nominees will be “independent” trustees if elected?

Ten of the twelve nominees-- all but Mr. McNabb and Mr. Buckley-- will be independent trustees if elected by shareholders. Independent trustees have no affiliation with Vanguard or the funds they oversee, apart from any personal investments they choose to make in the funds as private individuals. Independent trustees play a critical role in overseeing fund operations and representing the interests of each fund’s shareholders.

How are the boards of the Vanguard funds structured?

The Vanguard funds are grouped into 37 separate trusts. Each of these trusts is made up of one or more Vanguard funds (which are sometimes called “series” of the trust). Funds that are part of the same trust elect their trustees on a joint basis.

Part V of this booklet includes an alphabetical list of Vanguard funds that specifies the trust of which each fund is a series and provides a variety of other details about the funds.

The same individuals currently serve as trustees for all of the Vanguard funds. There are important benefits in having the board of each fund include trustees who serve on the boards of the other Vanguard funds. Service on multiple fund boards gives the trustees greater familiarity with operations that are common to all Vanguard funds. Such service also permits the trustees to address common issues on a knowledgeable and consistent basis. It also avoids the substantial additional costs, administrative complexities, and redundancies that would result from having a different board of trustees for every Vanguard fund.

While there are many areas of common interest among the funds, the trustees recognize that they are responsible for exercising their responsibilities at all times on a fund-by-fund basis.

How long will each trustee serve?

If elected, each trustee will serve until he or she resigns, retires, or is removed from the board as provided in the fund’s governing documents. The trustees believe that, as a general matter, each trustee should retire from the board no later than the end of the year in which the trustee attains age 72. However, the trustees believe that a majority of the Independent Trustees should be permitted to allow any Independent Trustee who attains age 72 to continue to serve on the board for a temporary period (not to exceed one year) if exceptional circumstances are present and a temporary extension of service is determined to be in the best interests of the Vanguard Funds. A trustee may be removed from the board by a shareholder vote representing two-thirds of the total combined net asset value of all

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fund shares under the same trust. If a nominee is unable to accept election, or subsequently leaves the board before the next election, the board of trustees may, in its discretion, select another person to fill the vacant position.

What are the board’s responsibilities?

The primary responsibility of the board of trustees of each fund is to oversee the management of the fund for the benefit of shareholders. Each board has a supermajority of independent trustees who are not “interested persons” of the funds. Mr. McNabb and Mr. Buckley would be the only interested trustees on the funds’ boards. The independent trustees bring a broad range of relevant backgrounds, experiences, and skills to the boards, particularly in those domains critical to the funds and their shareholders.

In exercising their oversight responsibilities, the funds’ trustees focus on matters they determine to be vitally important to fund shareholders. This includes not only the management, performance, and risk management of the funds, but also the approval of arrangements with material service providers (e.g., fund custodians).

The business acumen, experience, and objective thinking of the funds’ independent trustees are invaluable assets for the funds’ shareholders and Vanguard management. Having management accountable to a group of independent, highly experienced, and qualified individuals who act solely on behalf of shareholders makes management more effective in the long run.

Each funds’ board of trustees met seven times during its last fiscal year. No trustee attended fewer than 75% of the total meetings of the board and 75% of the total meetings of the committees on which he or she serves.

What are the board’s committees?

The board of trustees of each fund has four standing committees. Three of the committees are composed exclusively of independent trustees; Mr. McNabb serves on one of the two investment committees.

  • Audit Committee. This committee oversees the financial statements and reporting processes, the system of internal control over financial reporting, and the audit process for each fund. The following independent trustees currently serve as members of the committee: Mr. Gupta6, Ms. Heisen, Mr. Loughrey, Mr. Loughridge, and Mr.
    Volanakis. The committee held five meetings during each fund’s most recently ended fiscal year.
  • Compensation Committee. This committee oversees the compensation programs established by each fund for the benefit of its trustees. All independent trustees serve as members of the committee. The committee held one meeting during each fund’s most recently ended fiscal year.
  • Investment Committees. These committees assist the board in its oversight of investment advisors to the funds and in the review and evaluation of materials relating to the board’s consideration of investment advisory agreements with the funds. Each trustee serves on one of two investment committees. Each investment committee held four meetings during each fund’s most recently ended fiscal year.
  • Nominating Committee. This committee nominates candidates for election to the board of trustees of each fund. The committee also has the authority to recommend the removal of any trustee. All independent trustees serve as members of the committee. The committee held three meetings during each fund’s most recently ended fiscal year. The committee considers shareholder recommendations for trustee nominees. Shareholders may send such recommendations to Mr. Loughridge, chairman of the committee.

How are trustees selected?

Oversight of the funds and their management by a group of highly qualified trustees is critical to the long-term investment outcomes of our fund investors. To that end, the board has identified a range of capabilities relevant to the funds’ operations that the trustees – in aggregate – must bring to bear in their role as fiduciaries for fund shareholders. The board expects that all trustees will be individuals of the highest integrity, committed to acting solely in fund investors’ best interests, as well as having a track record of substantial professional accomplishment.

      
6 Mr. Gupta, a fund trustee since 2001, is retiring from Board service at the end of 2017 and therefore is not standing for re-election.

 

- 8 -


 

The following matrix reflects the board’s assessment of each trustee’s background and its relevance to oversight of the funds.

 
Executive
Leadership
Investment
Acumen
Global
Experience
Technology/
Digital
Government, Legal
& Public Policy
 Operations & Risk
Management
 Finance &
Controls

Marketing
Academic/
Research/ Policy
Buckley ü ü ü ü   ü   ü  
Fullwood ü   ü     ü   ü   
Gutmann ü   ü            ü
Heisen ü   ü       ü ü   
Loughrey ü   ü ü ü ü ü      
Loughridge ü   ü ü   ü ü      
Malpass   ü ü     ü ü    ü
McNabb ü ü ü     ü   ü   
Mulligan ü ü       ü   ü   
Perold   ü ü            ü
Raskin   ü   ü ü   ü    
Volonakis ü   ü ü   ü ü     

 

While each trustee/nominee may not be equally skilled in each area the board deems important, the board believes that a variety of skills and experiences, as well as diversity along dimensions such as age, tenure, gender, ethnicity, and others will result in a board uniquely suited to serve investors’ long-term interests.

How are the trustees compensated?

Each fund (other than the Institutional Index Funds and Vanguard’s funds of funds) pays its proportionate share of the independent trustees’ compensation.7 Mr. McNabb, an interested trustee, receives no compensation from the funds.8 The funds compensate their independent trustees in three ways:

  • The independent trustees receive an annual fee for their service to the funds, which is subject to reduction based on absences from scheduled board meetings.
  • The independent trustees are reimbursed for the travel and other expenses that they incur in attending board meetings.
  • Upon retirement (after attaining age 65 and completing five years of service), the independent trustees who began service prior to January 1, 2001, receives a retirement benefit under a separate account arrangement. As of January 1, 2001, the opening balance of the trustees’ separate account was generally equal to the net present value of the benefits the trustee had accrued under the trustees’ former retirement plan. The trustees’ separate account will be credited annually with interest at a rate of 7.5% until the final distribution is received. Those independent trustees who began their service on or after January 1, 2001, are not eligible to participate in the plan.

The following table provides compensation details for each of the trustees. We list the amounts paid as compensation and accrued as retirement benefits for each Vanguard trust and for each trustee from each Vanguard trust during the fund’s most recent fiscal year.

<PAGE BREAK>

 

Trustee Compensation
 
  Independent Trustee
Name of Trust Fullwood  Gupta  Gutmann  Heisen  Loughrey  Loughridge  Malpass  Perold  Volanakis
Vanguard Admiral®  
Funds  
 
                         
7 The trustees of Vanguard Institutional Index Funds receive no compensation directly from those funds, but Vanguard is responsible for paying the trustees for their service. If, however, Proposal 6 of this Proxy Statement is approved by shareholders of the Institutional Index Funds, the trustees of the Institutional Index Funds would be compensated by these funds. The trustees of Vanguard’s funds of funds receive no compensation from those funds.
8 If elected, Mr Buckley will also be an interested trustee and will not be compensated from the funds. Mr. McNabb and Mr. Buckley are salaried employees of Vanguard.

 

- 9 -


 

  Independent Trustee              
Name of Trust Fullwood Gupta Gutmann Heisen Loughrey Loughridge Malpass Perold Volanakis
Aggregate                  
Compensation from this $824 $870 $824 $870 $870 $979 $824 $870 $870
Trust                  
Accrued                  
Pension/Retirement -- -- -- $20 -- -- -- -- --
Benefits from this Trust                  
Vanguard Bond Index                  
Funds                  
Aggregate                  
Compensation from this $28,470 $30,072 $28,470 $30,072 $30,072 $33,793 $28,470 $28,470 $30,072
Trust                  
Accrued                  
Pension/Retirement -- -- -- $508 -- -- -- -- --
Benefits from this Trust                  
Vanguard California                  
Tax-Free Funds                  
Aggregate                  
Compensation from this $1,236 $1,306 $1,236 $1,306 $1,306 $1,470 $1,236 $1,236 $1,306
Trust                  
Accrued                  
Pension/Retirement -- -- -- $24 -- -- -- -- --
Benefits from this Trust                  
Vanguard Charlotte                  
Funds                  
Aggregate                  
Compensation from this $4,071 $4,300 $4,071 $4,300 $4,300 $4,834 $4,071 $4,071 $4,300
Trust                  
Accrued                  
Pension/Retirement -- -- -- $78 -- -- -- -- --
Benefits from this Trust                  
Vanguard Chester                  
Funds                  
Aggregate                  
Compensation from this $5,574 $5,887 $5,574 $5,887 $5,886 $6,618 $5,574 $5,887 $5,887
Trust                  
Accrued                  
Pension/Retirement -- -- -- $138 -- -- -- -- --
Benefits from this Trust                  
Vanguard CMT Funds                  
Aggregate                  
Compensation from this -- -- -- -- -- -- -- -- --
Trust                  
Accrued                  
Pension/Retirement -- -- -- -- -- -- -- -- --
Benefits from this Trust                  
Vanguard Convertible                  
Securities Fund                  
Aggregate                  
Compensation from this $281 $297 $281 $297 $297 $331 $281 $281 $297
Trust                  
Accrued                  
Pension/Retirement -- -- -- $6 -- -- -- -- --
Benefits from this Trust                  
Vanguard Explorer                  
Fund                  
Aggregate                  
Compensation from this $2,034 $2,148 $2,034 $2,148 $2,148 $2,416 $2,034 $2,034 $2,148
Trust                  
Accrued                  
Pension/Retirement -- -- -- $40 -- -- -- -- --
Benefits from this Trust                  
Vanguard Fenway                  
Funds                  
Aggregate                  
Compensation from this $4,248 $4,487 $4,248 $4,487 $4,487 $5,047 $4,248 $4,487 $4,487
Trust                  

 

- 10 -


 

  Independent Trustee              
Name of Trust Fullwood Gupta Gutmann Heisen Loughrey Loughridge Malpass Perold Volanakis
Accrued                  
Pension/Retirement -- -- -- $126 -- -- -- -- --
Benefits from this Trust                  
Vanguard Fixed                  
Income Securities                  
Funds                  
Aggregate                  
Compensation from this $19,603 $20,705 $19,603 $20,705 $20,705 $23,270 $19,603 $19,603 $20,705
Trust                  
Accrued                  
Pension/Retirement -- -- -- $344 -- -- -- -- --
Benefits from this Trust                  
Vanguard Horizon                  
Funds®                  
Aggregate                  
Compensation from this $2,853 $2,853 $2,853 $2,853 $2,853 $3,384 $2,853 $2,853 $2,853
Trust                  
Accrued                  
Pension/Retirement -- -- -- $68 -- -- -- -- --
Benefits from this Trust                  
Vanguard Index Funds                  
Aggregate                  
Compensation from this $77,121 $81,459 $77,121 $81,459 $81,459 $91,548 $77,121 $81,459 $81,459
Trust                  
Accrued                  
Pension/Retirement -- -- -- $1,382 -- -- -- -- --
Benefits from this Trust                  
Vanguard                  
International Equity                  
Index Funds                  
Aggregate                  
Compensation from this $8,100 $8,556 $8,100 $8,556 $8,556 $9,618 $8,100 $8,100 $8,556
Trust                  
Accrued                  
Pension/Retirement -- -- -- $158 -- -- -- -- --
Benefits from this Trust                  
Vanguard Institutional                  
Index Funds                  
Aggregate                  
Compensation from this -- -- -- -- -- -- -- -- --
Trust                  
Accrued                  
Pension/Retirement -- -- -- -- -- -- -- -- --
Benefits from this Trust                  
Vanguard Malvern                  
Funds                  
Aggregate                  
Compensation from this $1,072 $1,132 $1,072 $1,132 $1,132 $1,271 $1,072 $1,132 $1,132
Trust                  
Accrued                  
Pension/Retirement -- -- -- $26 -- -- -- -- --
Benefits from this Trust                  
Vanguard                  
Massachusetts Tax-                  
Exempt Funds                  
Aggregate                  
Compensation from this $99 $104 $99 $104 $104 $117 $99 $104 $104
Trust                  
Accrued                  
Pension/Retirement -- -- -- $2 -- -- -- -- --
Benefits from this Trust                  
Vanguard Money                  
Market Reserves                  
Aggregate                  
Compensation from this $9,763 $10,313 $9,763 $10,313 $10,313 $11,588 $9,763 $10,313 $10,313
Trust                  

 

- 11 -


 

  Independent Trustee              
Name of Trust Fullwood Gupta Gutmann Heisen Loughrey Loughridge Malpass Perold Volanakis
Accrued                  
Pension/Retirement -- -- -- $239 -- -- -- -- --
Benefits from this Trust                  
Vanguard                  
Montgomery Funds                  
Aggregate                  
Compensation from this $132 $140 $132 $140 $140 $155 $132 $132 $140
Trust                  
Accrued                  
Pension/Retirement -- -- -- $2 -- -- -- -- --
Benefits from this Trust                  
Vanguard Morgan                  
Growth Fund                  
Aggregate                  
Compensation from this $1,607 $1,698 $1,607 $1,698 $1,698 $1,909 $1,607 $1,698 $1,698
Trust                  
Accrued                  
Pension/Retirement -- -- -- $40 -- -- -- -- --
Benefits from this Trust                  
Vanguard Municipal                  
Bond Funds                  
Aggregate                  
Compensation from this $8,009 $8,460 $8,009 $8,460 $8,460 $9,509 $8,009 $8,460 $8,460
Trust                  
Accrued                  
Pension/Retirement -- -- -- $157 -- -- -- -- --
Benefits from this Trust                  
Vanguard New Jersey                  
Tax-Free Funds                  
Aggregate                  
Compensation from this $237 $250 $237 $250 $250 $282 $237 $237 $250
Trust                  
Accrued                  
Pension/Retirement -- -- -- $5 -- -- -- -- --
Benefits from this Trust                  
Vanguard New York                  
Tax-Free Funds                  
Aggregate                  
Compensation from this $432 $456 $432 $456 $456 $513 $432 $432 $456
Trust                  
Accrued                  
Pension/Retirement -- -- -- $8 -- -- -- -- --
Benefits from this Trust                  
Vanguard Ohio Tax-                  
Free Funds                  
Aggregate                  
Compensation from this $113 $119 $113 $119 $119 $133 $113 $113 $119
Trust                  
Accrued                  
Pension/Retirement -- -- -- $2 -- -- -- -- --
Benefits from this Trust                  
Vanguard                  
Pennsylvania Tax-Free                  
Funds                  
Aggregate                  
Compensation from this $383 $404 $383 $404 $404 $456 $383 $383 $404
Trust                  
Accrued                  
Pension/Retirement -- -- -- $7 -- -- -- -- --
Benefits from this Trust                  
Vanguard Quantitative                  
Funds                  
Aggregate                  
Compensation from this $1,027 $1,085 $1,027 $1,085 $1,085 $1,220 $1,027 $1,085 $1,085
Trust                  

 

- 12 -


 

  Independent Trustee              
Name of Trust Fullwood Gupta Gutmann Heisen Loughrey Loughridge Malpass Perold Volanakis
Accrued                  
Pension/Retirement -- -- -- $25 -- -- -- -- --
Benefits from this Trust                  
Vanguard Scottsdale                  
Funds                  
Aggregate                  
Compensation from this $1,992 $2,104 $1,992 $2,104 $2,104 $2,366 $1,992 $2,104 $2,104
Trust                  
Accrued                  
Pension/Retirement -- -- -- $50 -- -- -- -- --
Benefits from this Trust                  
Vanguard Specialized                  
Funds                  
Aggregate                  
Compensation from this $22,852 $24,138 $22,852 $24,138 $24,138 $27,129 $22,852 $22,852 $24,138
Trust                  
Accrued                  
Pension/Retirement -- -- -- $402 -- -- -- -- --
Benefits from this Trust                  
Vanguard STAR                  
Funds                  
Aggregate                  
Compensation from this $14,813 $15,647 $14,813 $15,647 $15,647 $17,584 $14,376 $14,813 $15,647
Trust                  
Accrued                  
Pension/Retirement -- -- -- $284 -- -- -- -- --
Benefits from this Trust                  
Vanguard Tax-                  
Managed Funds®                  
Aggregate                  
Compensation from this $5,062 $5,347 $5,062 $5,347 $5,347 $6,008 $5,062 $5,062 $5,347
Trust                  
Accrued                  
Pension/Retirement -- -- -- $90 -- -- -- -- --
Benefits from this Trust                  
Vanguard Trustees'                  
Equity Fund                  
Aggregate                  
Compensation from this $1,589 $1,678 $1,589 $1,678 $1,678 $1,887 $1,589 $1,678 $1,678
Trust                  
Accrued                  
Pension/Retirement -- -- -- $31 -- -- -- -- --
Benefits from this Trust                  
Vanguard Valley Forge                  
Funds                  
Aggregate                  
Compensation from this $2,359 $2,492 $2,359 $2,492 $2,492 $2,803 $2,359 $2,359 $2,492
Trust                  
Accrued                  
Pension/Retirement -- -- -- $42 -- -- -- -- --
Benefits from this Trust                  
Vanguard Variable                  
Insurance Fund                  
Aggregate                  
Compensation from this $2,628 $2,775 $2,628 $2,775 $2,775 $3,119 $2,628 $2,628 $2,775
Trust                  
Accrued                  
Pension/Retirement -- -- -- $47 -- -- -- -- --
Benefits from this Trust                  
Vanguard Wellesley                  
Income Fund                  
Aggregate                  
Compensation from this $5,607 $5,923 $5,607 $5,923 $5,923 $6,654 $5,607 $5,923 $5,923
Trust                  
Accrued                  
Pension/Retirement -- -- -- $138 -- -- -- -- --
Benefits from this Trust                  

 

- 13 -


 

  Independent Trustee              
Name of Trust Fullwood Gupta Gutmann Heisen Loughrey Loughridge Malpass Perold Volanakis
Vanguard Wellington                  
Fund                  
Aggregate                  
Compensation from this $13,966 $14,751 $13,966 $14,751 $14,751 $16,578 $13,966 $13,966 $14,751
Trust                  
Accrued                  
Pension/Retirement -- -- -- $271 -- -- -- -- --
Benefits from this Trust                  
Vanguard Whitehall                  
Funds                  
Aggregate                  
Compensation from this $4,229 $4,466 $4,229 $4,466 $4,466 $5,019 $4,229 $4,229 $4,466
Trust                  
Accrued                  
Pension/Retirement -- -- -- $82 -- -- -- -- --
Benefits from this Trust                  
Vanguard Windsor                  
Funds                  
Aggregate                  
Compensation from this $10,264 $10,842 $10,264 $10,842 $10,842 $12,184 $10,264 $10,264 $10,842
Trust                  
Accrued                  
Pension/Retirement -- -- -- $203 -- -- -- -- --
Benefits from this Trust                  
Vanguard World Fund                  
Aggregate                  
Compensation from this $6,988 $7,382 $6,988 $7,382 $7,382 $8,295 $6,988 $7,382 $7,382
Trust                  
Accrued                  
Pension/Retirement -- -- -- $172 -- -- -- -- --
Benefits from this Trust                  

 

The table below shows the total amount of compensation paid to each trustee by all Vanguard funds during 2016 and the total accrued retirement benefits for each trustee as of January 1, 2017. The table above reflects compensation paid by each trust in its most recently completed fiscal year, whereas the table below reflects the total compensation paid to each trustee for his or her service to 198 funds for the 2016 calendar year, and therefore may not equal the sum of the amounts shown in the above table.

  Independent Trustee              
  Fullwood Gupta Gutmann Heisen Loughrey Loughridge Malpass Perold Volanakis
All Vanguard                  
Funds                  
Aggregate                  
Compensation from $237,000 $250,333 $237,000 $248,833 $250,333 $281,333 $230,300 $237,000 $250,333
all Vanguard funds                  
Total Accrued                  
Annual Retirement -- -- -- $7,509 -- -- -- -- --
Benefit at January 1,                  
20179                  

<PAGE BREAK>

Do trustees own fund shares?

The trustees invest in the Vanguard funds based on their investment needs. Please see Part V of the proxy statement for information on the dollar range of fund shares owned by each trustee.

Who are the funds’ officers?

        
9 Each trustee is eligible to receive retirement benefits only after completing at least 5 years (60 consecutive months) of service as a trustee for the Vanguard funds. The annual retirement benefit will be paid in monthly installments, beginning with the month following the trustee’s retirement from service, and will cease after 10 years of payments (120 monthly installments). Trustees who began their service on or after January 1, 2001, are not eligible to participate in the retirement benefit plan.

 

- 14 -


 

All Vanguard funds employ their officers on a shared basis. Officers are considered “interested persons” of the funds. In addition to Mr. McNabb, chief executive officer and president, they are as follows:

Officers10 Principal Occupation(s)
Glenn Booraem  
Born 1967 Mr. Booraem, a Principal of Vanguard, has served as Investment Stewardship Officer of each of the investment
Investment Stewardship companies served by Vanguard, since February 2017. Mr. Booraem served as Treasurer (2015–2017), Controller
Officer (2010–2015), and Assistant Controller (2001–2010) of each of the investment companies served by Vanguard.
  Vanguard funds officer since July 2010. Oversees 195 Vanguard funds.
 
Thomas J. Higgins  
Born 1957 Mr. Higgins, a Principal of Vanguard, has served as Chief Financial Officer of each of the investment companies
Chief Financial Officer served by Vanguard, since 2008. Mr. Higgins served as Treasurer of each of the investment companies served by
  Vanguard, from 1998 to 2008. Vanguard funds officer since September 2008. Oversees 195 Vanguard funds.
 
Peter Mahoney  
Born 1974 Mr. Mahoney, a Principal of Vanguard, has served as Controller of each of the investment companies served by
Controller Vanguard, since May 2015. Mr. Mahoney served as head of International Fund Services at Vanguard from 2008
to 2014. Vanguard funds officer since May 2015. Oversees 195 Vanguard funds. 
 
Anne E. Robinson  
Born 1970 Ms. Robinson has served as General Counsel of Vanguard since September 2016; Secretary of Vanguard and of
Secretary each of the investment companies served by Vanguard, since September 2016; Director and Senior Vice
  President of Vanguard Marketing Corporation since September 2016; and a Managing Director of Vanguard
  since August 2016. Ms. Robinson served as Managing Director and General Counsel of Global Cards and
  Consumer Services at Citigroup from 2014 to 2016. She served as counsel at American Express from 2003 to
2014. Vanguard funds officer since September 2016. Oversees 195 Vanguard funds. 
 
Michael Rollings  
Born 1963 Mr. Rollings, a Managing Director of Vanguard since June 2016, has served as Treasurer of each of the
Treasurer investment companies served by Vanguard, since February 2017, and a Director of Vanguard Marketing
  Corporation since June 2016. Mr. Rollings served as the Executive Vice President and Chief Financial Officer of
  MassMutual Financial Group from 2006 to 2016. Vanguard funds officer since February 2017. Oversees 195
  Vanguard funds.

 

EACH FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE

NOMINEES.

Proposal 2    
Approve a manager of managers arrangement with third-party investment advisors
This proposal applies to all Vanguard funds EXCEPT: Alternative Strategies Fund; Capital Opportunity Fund;
Capital Value Fund; Convertible Securities Fund; Core Bond Fund; Dividend Growth Fund; Emerging Markets
Bond Fund; Emerging Markets Select Stock Fund; Energy Fund; Equity Income Fund; Explorer Fund; Explorer
Value Fund; Global Equity Fund; Global Minimum Volatility Fund; GNMA Fund; Growth and Income Fund;
Health Care Fund; High-Yield Corporate Bond Fund; Institutional Target Retirement 2065 Fund; International
Explorer Fund; International Growth Fund; International Value Fund; Long-Term Investment-Grade Fund; Market
Liquidity Fund; Market Neutral Fund; Mid-Cap Growth Fund; Morgan Growth Fund; Municipal Cash Management
Fund; Precious Metals and Mining Fund; PRIMECAP Core Fund; PRIMECAP Fund; Selected Value Fund; Target
Retirement 2065 Fund; U.S. Growth Fund; U.S. Value Fund; Ultra-Short-Term Bond Fund; Balanced Portfolio of
the Variable Insurance Fund; Capital Growth Portfolio of the Variable Insurance Fund; Diversified Value Portfolio
of the Variable Insurance Fund; Equity Income Portfolio of the Variable Insurance Fund; Growth Portfolio of the
Variable Insurance Fund; High-Yield Bond Portfolio of the Variable Insurance Fund; International Portfolio of the
Variable Insurance Fund; Small Company Growth Portfolio of the Variable Insurance Fund; Wellesley Income
Fund; Wellington Fund; Windsor Fund; and Windsor II Fund.

 

We seek your approval to adopt a policy that would enable certain funds that are organized or advised by Vanguard (each such fund, a “Vanguard Managed Fund”) to enter into and materially amend investment advisory agreements with third-party investment advisors without first obtaining shareholder approval, subject to the approval of the

          
10 Fund officers are not compensated by the Funds, but are salaried employees of Vanguard.

 

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Vanguard Managed Fund’s trustees and certain conditions imposed by the Securities and Exchange Commission (“SEC”). This policy has already been adopted for many Vanguard funds, but the shareholders of the Vanguard Managed Funds subject to this Proposal have not previously adopted this policy. Adopting this policy would harmonize the flexibility and protections afforded to more than thirty actively managed Vanguard funds.

What is this Proposal about?

Federal law generally requires shareholder approval of mutual fund investment advisory contracts, which can result in lengthy and costly proxy solicitations. These costs, borne by the fund seeking to change its investment advisory contract, could reduce shareholders’ investment returns.

Since 1993, Vanguard and certain Vanguard funds (“Selected Funds”) have operated pursuant to exemptive relief from the SEC (“Existing Relief”). The Existing Relief permits Vanguard, subject to the oversight and approval of the trustees of each Selected Fund, to hire third-party investment advisors that are not affiliated with Vanguard (“Selected Advisors”) to manage the day-to-day investment programs of the Selected Funds, and permits the Selected Funds to enter into or materially amend written advisory contracts with the Selected Advisors, without first obtaining shareholder approval. This advisory structure is commonly referred to as a “manager of managers” arrangement, and is widely used within the mutual fund industry. For example, the SEC has issued more than 200 orders permitting mutual funds to realize the benefits afforded by similar manager of managers arrangements.

The Existing Relief has benefitted shareholders of the Selected Funds and would similarly benefit shareholders of the Vanguard Managed Funds. Vanguard has the expertise necessary to evaluate and select the most suitable investment advisors for the Vanguard Managed Funds and to negotiate competitive and fair fees for their advisory services. If approved, Vanguard would monitor the Selected Advisors’ compliance with the investment objectives and policies of the Vanguard Managed Funds, review the Selected Advisors’ performance, and regularly report on such matters to the trustees of the Vanguard Funds. In addition, Vanguard would recommend to the trustees of each Vanguard Managed Fund the allocation, and reallocation from time to time, of the Vanguard Managed Fund’s assets among Selected Advisors and/or Vanguard, and recommend the termination of a Selected Advisor when deemed in the best interest of the shareholders of a Vanguard Managed Fund. If the trustees of a Vanguard Managed Fund determine that it would be in the best interest of shareholders to designate a new Selected Advisor for the Vanguard Managed Fund, the Existing Relief would permit Vanguard and the trustees to act quickly to name the new Selected Advisor without incurring the significant delay and expense associated with obtaining shareholder approval. There can be no guarantee that a Vanguard Managed Fund’s advisory fees would remain the same or decrease under the terms of any advisory agreement with a Selected Advisor. The trustees of a Vanguard Managed Fund, however, will consider advisory fees, among other factors, when deciding whether to approve an advisory agreement with a Selected Advisor.

Why should I vote for this Proposal?

The trustees believe that this Proposal would provide significant benefits for shareholders of the Vanguard Managed Funds. Circumstances could arise where it would be beneficial for a Vanguard Managed Fund to hire a Selected Advisor for investment or other reasons. Approving this Proposal would give the Vanguard Managed Funds the flexibility to enter into and materially amend advisory agreements with Selected Advisors without incurring the substantial costs and delays involved in a proxy solicitation, costs that are ultimately paid by the fund’s shareholders. It also would ensure that the Vanguard Managed Funds could benefit, in a timely manner, from Vanguard’s expertise in recommending and monitoring the most suitable Selected Advisors for the Vanguard Managed Funds and negotiating competitive fees with those Selected Advisors. Additionally, this Proposal would continue to protect shareholders by requiring the trustees of the Vanguard Managed Funds to evaluate and approve all new or amended advisory agreements with the Selected Advisors. Lastly, this Proposal would enable Vanguard to further enhance its business continuity plans for the Vanguard Managed Funds. Having the flexibility to rely on the Existing Relief would provide an additional option for the Vanguard Managed Funds to continue their operations should an event, such as a natural disaster, significantly disrupt the operations of Vanguard in the future. For these reasons, the trustees believe that approving this Proposal is in the best interests of the Vanguard Managed Funds and their shareholders.

What are the primary conditions of the Existing Relief?

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Under the terms of the Existing Relief, Vanguard and the Vanguard Managed Funds would be subject to several conditions imposed by the SEC. For example, each Vanguard Managed Fund must continue to operate as a member of the Vanguard Group receiving corporate management and distribution services from Vanguard on the basis of Vanguard’s costs of operations. Vanguard must provide general management services to each Vanguard Managed Fund, including overall supervisory responsibility for the general management and investment of the Vanguard Managed Fund. Subject to review and approval by the Vanguard Managed Fund’s trustees, Vanguard would set the Vanguard Managed Fund’s overall investment strategies, evaluate and recommend Selected Advisors to manage all or a portion of a Vanguard Managed Fund’s assets, and monitor the performance of Selected Advisors. The Existing Relief does not extend to any investment advisor that is an affiliate of Vanguard or the Vanguard Funds.

Further, within 90 days of hiring a new Selected Advisor for a Vanguard Managed Fund, Vanguard would be required to furnish to the shareholders a statement containing certain information about the new Selected Advisor and the related advisory agreement. Each Vanguard Managed Fund would be required to disclose: (i) the aggregate fees paid by the Vanguard Managed Fund to Vanguard and any affiliated advisors and (ii) the aggregate fees paid by the Vanguard Managed Fund to Selected Advisors. A Vanguard Managed Fund would not be required to disclose the specific fees paid to a particular Selected Advisor, but the aggregate advisory fees would be reported in the expense ratio of the Vanguard Managed Fund.

Are there currently any plans to change a Vanguard Managed Fund’s advisory arrangements based on this Proposal?

No. Vanguard has not recommended, and the Vanguard Managed Funds’ trustees have not approved, any changes to a Vanguard Managed Fund’s advisory arrangements in anticipation of receiving approval of this Proposal. Rather, approving this Proposal would provide the Vanguard Managed Funds with the flexibility to employ a cost-effective and efficient method to structure their advisory arrangements in a manner that their trustees determine to be in shareholders’ best interests should such a determination be made in the future.

What happens if shareholders do not approve this Proposal?

If shareholders of a Vanguard Managed Fund do not approve this Proposal, such Vanguard Managed Fund will not be permitted to rely on the Existing Relief and would be required to obtain shareholder approval before entering into or materially amending an investment advisory agreement with a Selected Advisor. The process for obtaining shareholder approval can be lengthy and very costly, and the costs would be borne by the fund’s shareholders.

EACH FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 2.

Proposal 3     
Approve a manager of managers arrangement with wholly-owned subsidiaries of Vanguard
This proposal applies to all Vanguard funds.

 

We seek to adopt a policy that would enable Vanguard or each Vanguard fund to enter into and materially amend investment advisory agreements with wholly-owned subsidiaries of Vanguard without first obtaining shareholder approval, subject to the approval of the Vanguard fund’s trustees and any conditions imposed by the Securities and Exchange Commission (“SEC”).

Vanguard is a global organization that provides investment management services to non-U.S. clients primarily through wholly-owned subsidiaries that are located outside of the United States (the “Vanguard Foreign Subsidiaries”). The Vanguard Foreign Subsidiaries generally provide these services by employing their own portfolio managers, analysts, traders, and other professionals. In providing investing services for Vanguard’s non-U.S. clients, the Vanguard Foreign Subsidiaries follow the specifications and methodologies developed by Vanguard for creating and managing index and active investment portfolios. In providing these services, the Vanguard Foreign Subsidiaries rely on many of the same systems, processes, policies, procedures and practices as Vanguard. Recently, the Vanguard Foreign Subsidiaries became SEC-registered investment advisers, and therefore, would now be subject to SEC rules, regulations and oversight for any U.S. mutual funds they might advise. This includes the

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requirement that an investment advisory agreement with an investment advisor to a mutual fund be approved by the fund’s shareholders. For the reasons discussed below, the trustees believe that this Proposal would provide significant benefits for shareholders of the Vanguard funds.

What is this Proposal about?

Federal law generally requires shareholder approval of mutual fund investment advisory contracts, which typically requires a lengthy and costly proxy solicitation. These costs are borne by the fund, which could reduce its shareholders’ investment returns.

Since 1993, Vanguard and certain Vanguard funds (“Selected Funds”) have operated pursuant to exemptive relief from the SEC (“Existing Relief”). The Existing Relief permits Vanguard, subject to the oversight and approval of the trustees of each Selected Fund, to hire third-party investment advisors that are not owned by Vanguard to manage the day-to-day investment programs of the Selected Funds, and permits the Selected Funds to enter into or materially amend written advisory contracts with these advisors, without first obtaining shareholder approval. This advisory structure is commonly referred to as a “manager of managers” arrangement, and is widely used within the mutual fund industry. Although the Existing Relief has benefitted shareholders of the Selected Funds, the Existing Relief does not permit Vanguard or the Vanguard funds to enter into investment advisory agreements with wholly-owned subsidiaries of Vanguard.

In recent years, the SEC has granted exemptive relief to more than 30 fund complexes permitting mutual funds to enter into “manager of managers” arrangements involving subsidiaries of their investment advisors. In February 2017, Vanguard and the Vanguard funds filed an application with the SEC requesting substantially similar exemptive relief (“Requested Relief”). If granted, the Requested Relief would permit Vanguard or the Vanguard funds, without first obtaining shareholder approval, to enter into and materially amend an investment advisory agreement with an investment advisor that is: (1) an indirect or direct “wholly-owned subsidiary” (as such term is defined in the Investment Company Act of 1940 (“1940 Act”)) of Vanguard; (2) a sister company of Vanguard that is an indirect or direct “wholly-owned subsidiary” (as such term is defined in the 1940 Act) of the same company that, indirectly or directly, wholly owns Vanguard (each of (1) and (2) a “Wholly-Owned Subsidiary”); or (3) an investment advisor that is not an “affiliated person” (as such term is defined in the 1940 Act) of the Vanguard fund or Vanguard other than by virtue of serving as an investment advisor to a Vanguard fund (together with a Wholly-Owned Subsidiary, a “Proposed Advisor”). Because each Vanguard Foreign Subsidiary would qualify as a “Wholly-Owned Subsidiary,” the Requested Relief would enable Vanguard or the Vanguard funds to enter into and materially amend investment advisory agreements with Vanguard Foreign Subsidiaries without undertaking a costly proxy solicitation to obtain shareholder approval, subject to the conditions prescribed by the SEC to protect shareholders’ interests.

If this Proposal is approved by shareholders and the SEC grants the Requested Relief, each Vanguard fund would be able to operate under a new “manager of managers” arrangement. Under this arrangement, Vanguard would have the ultimate responsibility, subject to oversight by the board of trustees of each Vanguard fund, to oversee the hiring, termination, and replacement of Proposed Advisers. Vanguard would evaluate Proposed Advisors for a Vanguard fund and make recommendations about their hiring, termination, and replacement to the trustees of the Vanguard fund. Vanguard would negotiate and renegotiate the terms of any advisory agreement with a Proposed Advisor, including the fees paid to a Proposed Advisor, subject to the oversight of the trustees of the Vanguard fund and applicable law. Vanguard would also allocate and, as appropriate, reallocate the Vanguard fund’s assets among Proposed Advisors and/or Vanguard subject to review and approval by the Vanguard fund’s trustees. The Proposed Advisors, subject to the supervision of Vanguard and oversight of the trustees of the Vanguard fund, would determine the securities and other investments to be purchased, sold, or entered into by the Vanguard fund. The Proposed Advisors would monitor their investments for the Vanguard fund and provide periodic reports to Vanguard and the Vanguard fund’s trustees. There can be no guarantee that a Vanguard fund’s advisory fees would remain the same or decrease under the terms of any advisory agreement with a Proposed Advisor. The trustees of a Vanguard fund, however, will consider advisory fees, among other factors, when deciding whether to approve an advisory agreement with a Proposed Advisor.

Although other fund complexes have obtained exemptive relief similar to the Requested Relief, there can be no guarantee that the SEC will issue an exemptive order to Vanguard and the Vanguard funds based on the Requested

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Relief, or that the Requested Relief will be granted by the SEC subject to the currently proposed terms and conditions. If this Proposal is approved by shareholders, Vanguard and the Vanguard funds would continue to seek shareholder approval of new or amended advisory agreements with Wholly-Owned Subsidiaries unless and until an exemptive order is granted by the SEC.

Why should I vote for this Proposal?

The trustees believe that this Proposal would provide significant benefits for shareholders of the Vanguard funds. Circumstances could arise where it would be beneficial for a Vanguard fund to hire a Proposed Advisor for investment or other reasons. Approving this Proposal would give Vanguard or the Vanguard funds the flexibility to enter into and materially amend advisory agreements with Proposed Advisors without incurring the substantial costs and delays involved in a proxy solicitation, costs that are ultimately paid by the fund’s shareholders. It would also ensure that the Vanguard funds could benefit from Vanguard’s expertise in recommending and monitoring the most suitable Proposed Advisors for the Vanguard funds and negotiating competitive fees with those Proposed Advisors. Additionally, this proposal would allow the funds to leverage certain capabilities of Vanguard’s non-U.S. subsidiaries that would be particularly valuable for funds that transact in non-U.S. markets. More specifically, funds would benefit from the ability to participate in the new issue market outside of U.S. hours, leverage relationships with brokers in the local markets, and gain access to local issuers through investor calls and in-person meetings. Furthermore, this Proposal would continue to protect shareholders by requiring the trustees of the Vanguard funds to evaluate and approve all new or amended advisory agreements with the Proposed Advisors. Lastly, this Proposal would enable Vanguard to further enhance its business continuity plans for the Vanguard funds. Having the flexibility to rely on the Requested Relief would provide an additional option for the Vanguard funds to continue their operations should an event, such as a natural disaster, significantly disrupt the operations of Vanguard in the future. For these reasons, the trustees believe that approving this Proposal is in the best interests of the Vanguard funds and their shareholders.

What are the primary conditions of the Requested Relief?

Under the terms of the Requested Relief, Vanguard and the Vanguard funds would be subject to several conditions imposed by the SEC. For example, each Vanguard fund must continue to operate as a member of the Vanguard Group receiving corporate management and distribution services from Vanguard on the basis of Vanguard’s costs of operations. Vanguard must provide general management services to the Vanguard funds, including overall supervisory responsibility for the general management and investment of each Vanguard fund’s assets. Subject to review and approval by the Vanguard fund’s trustees, Vanguard would set a Vanguard fund’s overall investment strategies, and evaluate and recommend Proposed Advisors to manage all or a portion of a Vanguard fund’s assets. Subject to review by the trustees of the Vanguard fund, Vanguard would monitor and evaluate the performance of any Proposed Advisors. Whenever Vanguard recommends an investment advisor change for a Vanguard fund with a Wholly-Owned Subsidiary, the trustees of the Vanguard fund must find that such change is in the best interests of the Vanguard fund and its shareholders and does not involve a conflict of interest from which Vanguard or the Wholly-Owned Subsidiary derives an inappropriate advantage.

Further, within 90 days of hiring a new Proposed Advisor for a Vanguard fund, the Vanguard fund must provide shareholders with an information statement or a notice of the availability of such information statement on a website, containing certain information about the Proposed Advisor and the related advisory agreement. A Vanguard fund may not be required, however, to disclose the specific fees paid to a particular advisor.

Are there currently any plans to change a Vanguard fund’s advisory arrangements based on this Proposal?

No. Vanguard has not recommended, and the Vanguard funds’ trustees have not approved, any changes to a Vanguard fund’s advisory arrangements in anticipation of receiving approval of this Proposal. Rather, approving this Proposal would provide the Vanguard funds with a cost-effective and efficient method to structure their advisory arrangements in a manner that their trustees determine to be in their best interests should such a determination be made in the future.

What happens if shareholders do not approve this Proposal?

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If shareholders of a Vanguard fund do not approve this Proposal, that Vanguard fund would not be permitted to rely on the Requested Relief and would be required to obtain shareholder approval before entering into or materially amending an investment advisory agreement with a wholly-owned subsidiary. The process for obtaining shareholder approval can be lengthy and very costly, and the costs would be borne by the fund’s shareholders.

EACH FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 3.

Proposal 4     
Change the investment objective of REIT Index Fund and REIT Index Portfolio of the Vanguard Variable Insurance Fund
This proposal applies to REIT Index Fund and REIT Index Portfolio of the Vanguard Variable Insurance Fund.

 

We are proposing that shareholders of Vanguard REIT Index Fund (the “REIT Index Fund”) and Vanguard Variable Insurance Fund – REIT Index Portfolio (each a “Fund,” and together the “Funds”) approve a change to enable each Fund to broaden its investment objective, thereby expanding its investable universe. Each Fund currently invests in publicly traded equity real estate investment trusts (“REITs”). We propose that each Fund continue to invest in publicly traded equity REITs and be permitted to invest in other real estate related investments. Each Fund’s investment objective is a fundamental policy and, therefore, can only be changed with shareholder approval.

How would each Fund’s investment objective change?

Each Fund’s current investment objective is as follows:

The Fund seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs.

The proposed investment objective would broaden the Funds’ investment exposure to include real estate-related investments, such as certain specialized REITs and real estate management and development companies. It would read as follows (with the proposed changes in italics and bold):

The Fund seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs and other real estate-related investments.

Why change each Fund’s investment objective?

The changes to the investment objective of the Funds are being proposed because they will:

  • Align the Funds with the updated Global Industry Classification Standard (“GICS”) methodology, which includes the newly constituted real estate sector.
  • Broaden the Vanguard funds’ sector lineup for the equities market by allowing the Funds to invest not just in equity REITs but in all real estate-related securities in the sector which is currently not present in our lineup.
  • Enable additional investment capacity due to inflows and demand in this sector.

Changing the investment objective would align the Funds with the recent changes in the GICS methodology. MSCI and S&P Global developed the GICS in 1999 as a way to standardize market complexity and keep up with the pace of industry movements. Previously, the GICS methodology divided all public equities into ten sectors.

In September 2016, several changes were made to GICS. Notably, as a result of the evolving investment landscape, real estate was added as an eleventh sector to the GICS methodology, creating this new sector by carving out real estate securities from their previous position in the financial sector. This newly created real estate sector is composed of equity REITs, which includes specialized REITs, and real estate management and development companies. Currently, each Fund’s investment objective allows for investment only in publicly traded equity REITs, a subset of the broader real estate market. Since Vanguard generally follows the GICS methodology and desires to

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ensure that the Vanguard sector fund lineup is complete and provides a full replication of the market using a sector methodology, we propose changing the investment objective for the Funds accordingly.

Once transitioned to the new real estate sector, the Funds would utilize a new benchmark index, the MSCI US Investable Market Real Estate 25/50 Index. The current benchmark index of each Fund is the MSCI US REIT Index. For investors who use Vanguard’s entire sector lineup for portfolio construction, this transition would provide broader exposure to the U.S. equities market. A change in each Fund’s benchmark would enable the Funds to allocate cash flow to a wider array of investable securities, giving them broader real estate market exposure.

Changing the investment objective, and subsequently the index, would provide the added benefit of additional investment capacity for the Funds. Generally, there are limits on how much of any one REIT security a fund may own. A narrow investment sector, such as REITs, creates challenges for funds with considerable holdings. If the REIT Index Fund were unable to obtain exposure to a particular REIT due to ownership limits, there may be a negative impact on the Fund’s ability to track its index. Changing the investment objective of each Fund, and then changing the benchmark index accordingly, would increase their investable universe and provide additional capacity with respect to ownership limitations.

What are the differences between the MSCI US REIT Index and MSCI US Investable Market Real Estate 25/50 Index?

MSCI US REIT Index includes only equity REITs. MSCI US Investable Market Real Estate 25/50 Index has approximately 97% of its component securities as equity REITs, which includes an increase in the allocation to specialized REITs, and currently a 3% allocation to real estate management and development companies. If shareholders approve the investment objective change for the Funds, then the corresponding change to each Fund’s benchmark index will provide investors of each Fund with exposure to the securities of approximately 26 additional real estate issuers.

How will each Fund be impacted if the change to the investment objective is approved?

If the change to the investment objective is approved, each Fund would undergo a corresponding change to its benchmark index and name.

Each Fund would change from its current benchmark index, the MSCI US REIT Index, to the MSCI US Investable Market Real Estate 25/50 Index.

How will each Fund’s benchmark change be implemented?

The REIT Index Fund would seek to track a transition index, the MSCI US Investable Market Real Estate 25/50 Transition Index, for an interim period of time. The use of a transition index is expected to reduce the costs associated with trading large amounts of securities within a short period, which would occur if the REIT Index Fund were to suddenly begin tracking the MSCI US Investable Market Real Estate 25/50 Index. The following chart presents the changes to each Fund’s benchmark index.

Fund Current MSCI Index Proposed MSCI Transition Index Proposed MSCI Destination Index
         
Vanguard REIT Index Fund MSCI US REIT Index MSCI US Investable Market Real Estate MSCI US Investable Market Real
    25/50 Transition Index Estate 25/50 Index
         
Vanguard Variable Insurance MSCI US REIT Index Not applicable MSCI US Investable Market Real
Fund – REIT Index Portfolio   Estate 25/50 Index

 

The transition index would be utilized only for the REIT Index Fund for approximately six months in order to gradually align the Fund’s portfolio securities with those of the destination benchmark, MSCI US Investable Market Real Estate 25/50 Index. The transaction costs for the REIT Index Fund are expected to be moderate.

Repositioning the portfolio securities of the Vanguard Variable Insurance Fund – REIT Index Portfolio (the “VVIF REIT Index Portfolio”) would not require the use of a transition index because the modest size of the VVIF REIT

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Index Portfolio enables the transition to the new destination benchmark index within a shorter time frame, with minimal transaction costs.

If this Proposal is approved by shareholders, the REIT Index Fund would expect to begin its transition to its new transition benchmark index in early 2018. We expect the REIT Index Fund would begin to track its new destination benchmark index, the MSCI US Investable Market Real Estate 25/50 Index, by the second quarter of 2018. If approved by shareholders, the VVIF REIT Index Portfolio would begin transitioning to its new benchmark index as soon as practicable after shareholder approval. The transition to its new benchmark is expected to be completed shortly thereafter.

The benchmark index change is not expected to result in a change to the expense ratios of any share classes of the Funds. Capital gains distributions are not expected to occur as a result of the benchmark index changes. However, actual costs depend on multiple variables, such as market conditions and shareholder activity during the transition.

Will anything else change aside from each Fund’s investment objective and benchmark index?

If shareholders approve changing each Fund’s investment objective, each Fund’s name would similarly be changed to reflect the new investment objective and corresponding benchmark index. Specifically, the following name changes would be implemented:

  • Vanguard REIT Index Fund would be renamed Vanguard Real Estate Index Fund.
  • Vanguard Variable Insurance Fund – REIT Index Portfolio would be renamed Vanguard Variable Insurance Fund – Real Estate Index Portfolio.

What happens if shareholders do not approve this Proposal?

If shareholders of a Fund do not approve this Proposal, then the Fund would maintain its current investment objective. The benchmark index and name of the Fund would remain unchanged. The Board would then consider how to proceed in the best interest of the Fund’s shareholders.

EACH FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 4.

Proposal 5    
Reclassify the diversification status of REIT Index Fund to nondiversified
This proposal applies to REIT Index Fund.

 

We propose reclassifying Vanguard REIT Index Fund (the “Fund”) as “nondiversified” under the Investment Company Act of 1940 (“1940 Act”), which would align the Fund’s diversification status with that of Vanguard’s other sector equity index funds. As discussed below, the diversification status of a mutual fund is based on its ownership of the securities of issuers (e.g., real estate investment trusts (“REITs”)) in which it invests. A “diversified” mutual fund must abide by certain SEC restrictions that limit ownership of securities in the fund’s investment portfolio. A “nondiversified” fund is not subject to these requirements and may be able to consistently track its index and own larger positions of an issuer’s voting stock.

Some industry sectors, such as the REIT or real estate market sectors, are composed of the securities of relatively few issuers. When a fund that has elected to abide by the SEC’s diversification requirements continues to grow, it can be limited in its ability to purchase securities of the issuers in its sector because of its diversified status.

Changing the Fund’s diversification status will enable it to own securities in their appropriate weighting in the Fund’s benchmark index as the Fund continues to grow. It will also align the Fund’s diversification status with that of other sector equity index funds in Vanguard’s fund lineup, which are classified as nondiversified. Under the 1940 Act, a change to a Fund’s diversification status from nondiversified to diversified requires shareholder approval.

What is the difference between a diversified and nondiversified fund?

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The SEC requires that a mutual fund designate its status as either diversified or nondiversified depending on its intended ownership of the securities of issuers. The difference is that diversified funds are subject to stricter percentage limits on the amount of assets that can be invested in any one issuer.

The Fund currently operates as diversified under the 1940 Act and, therefore, must operate in compliance with the diversification requirements. Specifically, at least 75% of the Fund’s total assets must be represented by the following:

(i)      Cash and cash items (including receivables).
(ii)      U.S. government securities.
(iii)      Securities of other investment companies.
(iv)      Securities of other issuers, provided that the investment represented by securities of an issuer does not exceed 5% of the total assets of the fund or 10% of the voting stock of the issuer.

Changing the Fund’s status to nondiversified would allow the Fund to continue to grow unconstrained by these limits. The Fund would join twenty-seven other Vanguard funds deemed nondiversified.

Why change the Fund’s diversification status under the 1940 Act?

We are seeking to reclassify the Fund as nondiversified because, based on potential future cash flow into the Fund, the Fund is likely to approach the 1940 Act diversification limits. If these limits are reached, the Fund may not be able to meet its objective of tracking its benchmark index because it will be unable to own securities in their proportionate weighting in the index.

As discussed above, the REIT and real estate market sectors are composed of the securities of fewer issuers than other sectors. Additionally, the Fund is large and has been generally growing due to increased cash flow. In order for the Fund to continue to track its index, it will need to own larger positions of an increasing number of issuers’ voting stock. In addition, it is possible for the largest positions in this type of sector index to appreciate significantly relative to the index's other positions, which could cause the index to become dominated by a handful of companies.

We believe that an index fund should seek to track its target index as closely as possible, regardless of market conditions. As a result of the Fund’s cash flow, combined with the narrow universe of investable securities, the Fund is growing closer to 1940 Act diversification limits imposed by its diversified status, which could impair its ability to track its index. Therefore, we believe it is appropriate to change the Fund’s diversification status. This change should better position the Fund to be able to track closely its benchmark index by holding index securities should cash flow projections materialize.

Has the Fund’s diversification status changed in the past and could it change again?

Under SEC guidance, a fund’s status will automatically change from nondiversified to diversified if the fund operates as a diversified company for more than three years. Such a change in a fund’s status to diversified does not require shareholder approval. On the other hand, the 1940 Act requires shareholder approval to change a fund’s diversification status to nondiversified.

In 2002, shareholders of the Fund approved a change in the Fund’s diversification status from diversified to nondiversified. The Fund, however, operated as a diversified investment company for more than three years and became “de facto” diversified in 2005 and has since operated as diversified. If shareholders approve this Proposal to change the Fund’s diversification status to nondiversified, the potential exists for the Fund’s status to change again to diversified if the Fund operates as diversified for more than three years.

Will the Fund make any changes to its investment strategy if reclassified as nondiversified under the 1940 Act?

No. The Fund will continue to invest in the securities comprising its benchmark index. If reclassification as a nondiversified fund is approved, then the Fund’s risk profile may increase because a nondiversified fund may invest a greater percentage of its assets in a particular issuer or group of issuers or may own larger positions of an issuer’s

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voting stock than a diversified fund, and therefore, may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.

Fund shareholders are separately being asked to approve a change to the Fund’s investment objective, as further described in Proposal 4, and approval of Proposal 4 would lead to a related benchmark index change. However, whether or not shareholders approve Proposal 4 will not affect this Proposal as it relates to the Fund’s diversification status.

Are there other diversification requirements that will still apply to the Fund if it becomes nondiversified under the 1940 Act?

Yes. Subchapter M of the Internal Revenue Code (the “IRC”) also has diversification requirements for mutual funds. These diversification requirements are frequently referred to as the “tax diversification requirements.” Under the IRC, among other tests, at least 50% of a fund’s total assets must be represented by (i) cash and cash items, U.S. government securities, and securities of other regulated investment companies and (ii) securities of other issuers, provided that the investment represented by securities of an issuer does not exceed 5% of the total assets of the fund or 10% of the outstanding voting securities of the issuer. The Fund intends to continue to comply with the tax diversification requirements.

What happens if shareholders do not approve the proposal?

If shareholders do not approve reclassifying the Fund as nondiversified, the Fund would continue to operate as a diversified fund, and for the reasons discussed above, it may be unable to track closely its benchmark index and may incur additional costs if it seeks to gain exposure to index constituents through alternative investments rather than investing directly in an issuer’s voting securities.

THE FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 5.

Proposal 6    
Adopt the Funds’ Service Agreement for Institutional Index Fund and Institutional Total Stock Market Index Fund
This proposal applies to Institutional Index Fund and Institutional Total Stock Market Index Fund.

 

We are asking shareholders of Vanguard Institutional Index Fund and Vanguard Institutional Total Stock Market Index Fund (collectively, the “Institutional Funds”), each a series of Vanguard Institutional Index Funds, to approve a new investment advisory and distribution arrangement for the Institutional Funds by adopting the Vanguard funds’ Fifth Amended and Restated Funds’ Service Agreement (the “Service Agreement”).

We launched the Institutional Funds (Institutional Index Fund in 1990 and Institutional Total Stock Market Fund in 2001) to provide institutional clients access to lower cost alternatives to Vanguard’s core retail mandates. The Institutional Funds currently receive investment advisory, administrative, and distribution services from Vanguard, and its affiliates, pursuant to an Amended and Restated Management and Distribution Agreement, dated March 31, 2004, among Vanguard Institutional Index Funds (the “Institutional Trust”), Vanguard, and Vanguard Marketing Corporation (“VMC”) (the “Institutional Management Agreement”). The Institutional Funds also receive transfer agency and shareholder servicing from Vanguard pursuant to a Shareholder Services Agreement, dated as of May 31, 2001, by and between Vanguard and the Institutional Trust (the “Institutional Shareholder Services Agreement” and together with the Institutional Management Agreement, the “Institutional Agreements”). The Institutional Funds currently are the only publicly-offered Vanguard U.S. mutual funds that are not a party to the proposed Service Agreement. If shareholders approve the adoption of the Service Agreement, the Institutional Funds will become member funds of the Vanguard group of investment companies, and will operate under the Service Agreement’s “internalized” management structure pursuant to exemptive orders issued by the Securities and Exchange Commission (“SEC”).

The proposed Service Agreement sets forth the terms under which the Vanguard funds capitalize, operate, and share the expenses of Vanguard. The Institutional Trust’s Board of Trustees (the “Institutional Board”) believes that

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adopting the Service Agreement will provide a number of benefits to shareholders, including reductions in expense ratios and minimum initial investment requirements for certain shareholders, harmonizing the administrative, investment management, and distribution framework for all of Vanguard’s publicly offered mutual funds, and contributing to Vanguard’s long-term complex-level economies of scale.

Why are we proposing adoption of the Service Agreement?

The Institutional Funds were originally launched to provide large accounts with competitively priced investment funds purchased exclusively by institutional investors. Since then, the overall assets managed by Vanguard have increased significantly and are now sufficient to support the Institutional Funds’ pricing under the Service Agreement. At current asset levels, the Institutional Funds will transition to the proposed Service Agreement’s internalized structure at the same (Institutional Plus shares), or even lower (Institutional shares), expense ratios as under the current Institutional Agreements.

Why should I vote for this Proposal?

The Trustees of the Institutional Trust believe that this Proposal will provide significant benefits for the Institutional Funds’ shareholders. Adopting the Service Agreement will provide Institutional class shareholders of each Institutional Fund an immediate expense ratio reduction. Additionally, to maintain consistency with share class minimums for other Vanguard funds, the minimum initial investments for the Institutional Funds’ Institutional Plus share classes and the Institutional share class of Institutional Total Stock Market will be reduced. This reduction will offer more shareholders access to lower cost share classes. The tables below summarize these changes

Expense Ratio Minimum Initial Investment
 
Institutional Index Fund Institutional Index Fund
  Current Expense Proposed Expense     Proposed
Share Class Ratio Ratio Share Class Current Minimum Minimum
Institutional 0.040% 0.035% Institutional $5M $5M
Institutional Plus 0.020% 0.020% Institutional Plus $200M $100M
 
 
Institutional Total Stock Market Index Fund Institutional Total Stock Market Index Fund
  Current Expense Proposed Expense     Proposed
Share Class Ratio Ratio Share Class Current Minimum Minimum
Institutional 0.040% 0.035% Institutional $100M $5M
Institutional Plus 0.020% 0.020% Institutional Plus $200M $100M

 

Information regarding funds with similar investment objectives for which Vanguard acts as investment adviser, a more detailed comparison of the Institutional Funds’ fees and expenses under the Institutional Agreements, as well as the projected fees and expenses under the Service Agreement is contained in Exhibit 6.1 to this Proxy Statement.

Finally, if the Institutional Funds adopt the Service Agreement, all of the publicly offered Vanguard mutual funds will share a consistent administrative, investment management, and distribution framework that benefits from the Vanguard fund complex’s scale and mutual ownership structure. Harmonizing the terms and conditions under which Vanguard provides administrative, advisory, and distribution services to all of the Vanguard funds also will result in operational efficiencies and a uniform fund governance model.

What are the material terms of the Institutional Agreements and the Service Agreement, and how do the agreements compare?

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The Institutional Funds currently receive advisory, administration, distribution, and shareholder services from Vanguard and VMC in accordance with the Institutional Agreements. Under the current Institutional Management Agreement, the Institutional Funds pay a fixed fee based on an annual percentage rate of 0.015% of each Institutional Fund’s daily net assets for investment advisory and distribution services. Under the current Institutional Shareholder Services Agreement, Vanguard also provides transfer agency and shareholder services to the Institutional Funds based on a fixed annual percentage rate of net assets. For each Institutional Fund the fixed rate is 0.025% for Institutional shares and 0.005% for Institutional Plus shares. Under the current Institutional Agreements, the Institutional Funds do not contribute to the capital of Vanguard and do not receive investment advisory and distribution services based on Vanguard’s costs of operation under the proposed Service Agreement.

Under the proposed Service Agreement, Vanguard will provide to the Institutional Funds corporate management, administrative, transfer agency, and investment advisory services, and Vanguard’s internalized distributor and wholly-owned subsidiary, VMC, will provide distribution services based on Vanguard’s and VMC’s costs of operation as determined under the Service Agreement. Under the proposed Service Agreement, each Vanguard member fund pays its share of Vanguard’s total expenses, which are allocated among the Vanguard funds under methods approved by the Boards of Trustees of each Vanguard fund. In addition, each fund bears its own direct expenses, such as legal, auditing, and custodial fees. A copy of the Service Agreement is included as Exhibit 6.2 of this Proxy Statement.

If shareholders approve adoption of the Service Agreement, the Institutional Funds’ projected allocated expenses for these services will be 0.035% for Institutional shares and 0.02% for Institutional Plus shares of their respective net assets (versus 0.04% for Institutional shares and 0.02% for Institutional Plus shares under the current Institutional Agreements). Additionally, each Vanguard fund that is a party to the Service Agreement may be called to invest up to an additional 0.40% of its net assets in Vanguard. Historically, Vanguard has called upon the Vanguard funds to make additional capital contributions infrequently (most recently in 2009, and prior thereto in 1999).

Consistent with all other publicly available Vanguard funds, the amount of each fund’s initial capital contribution is adjusted from time to time in order to maintain the proportionate relationship between each fund’s relative net assets and its contribution to Vanguard’s capital. Based on net assets as of May 31, 2017, Institutional Index Fund’s investment in Vanguard would be $14,145,000, constituting 5.6574% of Vanguard’s total capital and 0.0063% of the fund’s net assets, and Institutional Total Stock’s investment in Vanguard would be $2,478,000, constituting 0.9908% of Vanguard’s total capital and 0.0063% of the fund’s net assets.

A description of the other material terms of the agreements follows.

Investment Advisory and Distribution Services

Current: The Institutional Funds receive a range of corporate, administrative, and investment advisory services from Vanguard and distribution services from VMC pursuant to the terms of the Institutional Agreements. Under the Institutional Management Agreement, Vanguard manages the investment and reinvestment of the Institutional Funds’ assets and continuously reviews, supervises and administers each of the Institutional Fund’s investment program, and VMC manages and performs various distribution functions. Under the Institutional Shareholder Services Agreement, Vanguard performs shareholder services including maintaining shareholder records; processing shareholder orders; issuing shareholder statements and correspondence; acting as dividend disbursement agent; and preparing, filing, and distributing shareholder reports.

Proposed: Under the Service Agreement, Vanguard and VMC will perform identical services for the Institutional Funds pursuant to the Service Agreement’s internalized management structure and based on Vanguard’s costs of operations. Unlike other mutual fund complexes, each Vanguard fund that is a party to the Service Agreement shares in Vanguard’s costs. Consequently, the Institutional Funds total annual operating expenses under the Service Agreement will be equal to that portion of Vanguard’s costs of operations that are allocated to the Institutional Funds based on board-approved methodologies. In addition, marketing and distribution expenses are allocated based on an SEC-approved formula. To ensure that each fund’s allocation of marketing and distribution expenses falls within a reasonable range of fairness, one-half of VMC’s marketing and distribution expenses are allocated among the Vanguard funds based on their relative net assets, and the remaining half are allocated among the funds based on each fund’s sales for the preceding 24 months relative to the total sales of the Vanguard funds as a group, provided

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that no fund’s aggregate quarterly rate of contribution for marketing and distribution expenses will exceed 125% of the average marketing and distribution expense rate for the Vanguard funds as a group and no fund will incur marketing and distribution expenses in excess of 0.20% of its average month-end net assets. While it is possible for the expenses allocated to the Institutional Funds under the Service Agreement to increase, Vanguard does not currently anticipate that the Institutional Funds’ expense ratios will increase if shareholders adopt the Service Agreement.

Other Expenses

Current: The Institutional Agreements provide that Vanguard will be responsible for paying each Institutional Fund’s trustees compensation, audit fees, outside legal counsel fees, custodian fees, registration and filing fees required by securities laws, and fidelity bond and officer and trustee insurance premiums.

Proposed: The Service Agreement requires that the Institutional Funds each bear the cost of these services.

Capitalization of Vanguard

Current: The Institutional Agreements do not require the Institutional Funds to invest in Vanguard.

Proposed: The Service Agreement sets forth the terms under which the Vanguard funds capitalize, operate, and share the expenses of Vanguard. The amounts that each fund has invested are adjusted from time to time in order to maintain the proportionate relationship between each fund’s relative net assets and its contribution to Vanguard’s capital. The Service Agreement also provides that each member fund may be called upon to invest up to 0.40% of its current net assets in Vanguard. Vanguard has called upon the Vanguard funds to make additional capital contributions infrequently.

Delegation of Duties

Current: The Institutional Agreements do not provide for delegation of Vanguard’s or VMC’s duties.

Proposed: Under the Service Agreement, Vanguard may establish wholly owned subsidiaries, and supervise the management and operations of such subsidiaries, as are necessary or appropriate to carry on or support the business activities of the Institutional Funds. In addition, Vanguard may authorize such subsidiaries to perform such other functions for the Institutional Funds as Vanguard’s board of directors may determine.

Duration and Termination

Current: The Institutional Management and Distribution Agreement may be terminated at any time with respect to an Institutional Fund, either by vote of the board of trustees for the Institutional Fund or by vote of a majority of the outstanding voting securities of the Institutional Fund, on sixty (60) days’ written notice to Vanguard and VMC. Furthermore, the Institutional Management and Distribution Agreement may be terminated by Vanguard or VMC on ninety (90) days’ written notice to an Institutional Fund. The Institutional Shareholder Services Agreement may be terminated at any time with respect to an Institutional Fund either by the Institutional Fund or Vanguard upon 60 days’ written notice to the other party.

Proposed: A fund may elect to withdraw from the Service Agreement at the end of any monthly period by giving at least 90 days’ prior written notice to each other party to the Service Agreement. Furthermore, upon the written demand of all other funds which are a party to the Service Agreement, a fund may be required to withdraw from the Service Agreement.

Liability and Indemnification

Current: The Institutional Agreements do not protect Vanguard against liability for willful misfeasance, bad faith, or gross negligence in the performance of its duties or the reckless disregard of its obligations under the Institutional Agreements.

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Proposed: Under the Service Agreement, each Vanguard fund agrees to indemnify, hold harmless, and reimburse each other fund that is a party to the Service Agreement, Vanguard, and any subsidiary of Vanguard against costs and losses related to civil, criminal, or administrative litigation if the suit or loss is a result of being a party to the Service Agreement or from indirect participation in transactions contemplated by the Service Agreement and the suit or loss is related primarily and substantially to the business of such fund. Such indemnification does not extend to a suit or loss for which the indemnified party has significant fault or responsibility as measured by the comparative conduct of the indemnifying party. A fund’s obligations to another party to the Service Agreement are limited to expenses and losses actually incurred by the indemnified party.

Information about Vanguard and the Institutional Agreements

Vanguard is a Pennsylvania corporation that has been in the business of providing corporate, administrative, investment advisory, and distribution services since May 1975. The principal business address for Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. Vanguard is collectively owned by thirty-five Delaware statutory trusts, each of which is registered as an investment company under the Investment Company Act of 1940, as amended (the “Vanguard Trusts”). The Vanguard Trusts’ series portfolios represent approximately 191 individual mutual funds which comprise the Vanguard family of mutual funds that are currently party to the FSA. As of May 31, 2017, Vanguard had assets under management of approximately $3.4 trillion. A list of each Vanguard fund that owns 10% or more of the outstanding capital stock of Vanguard is included in Exhibit 6.3 to this Proxy Statement.

The names, addresses, and principal occupations of the principal executive officers and trustees of the Vanguard Trusts, along with the positions held by each, if any, with Vanguard are set forth in Part II of this Proxy Statement. The date of each Institutional Agreement, the aggregate amount of compensation paid to Vanguard under the Institutional Agreements for the prior fiscal year, and the date each Institutional Agreement was last submitted to shareholders and the purpose of such submission is set forth in Exhibit 6.4 to this Proxy Statement.

What factors did the Board consider in approving the Service Agreement?

At a Board meeting held on May 18-19, 2017, the Institutional Board considered whether to adopt the Service Agreement as a new investment advisory and distribution arrangement for the Institutional Funds. The Institutional Board determined that it was in the best interest of each of the Institutional Funds and their respective shareholders to adopt the Service Agreement’s internalized management structure.

The Institutional Board based its decision upon an evaluation of Vanguard’s investment staff, portfolio management process, and performance. This evaluation included information provided to the Institutional Board by Vanguard’s Portfolio Review Department, which is responsible for fund and advisor oversight and product management. The Portfolio Review Department made monthly presentations to the Institutional Board during each fiscal year and directed the Institutional Board’s focus to relevant information and topics. The Institutional Board considered the factors below, among others. However, no single factor determined whether the Institutional Board approved the Service Agreement. Rather, it was the totality of the circumstances that drove the Institutional Board’s decision.

  • Nature, extent, and quality of services
    The Institutional Board reviewed the quality of Vanguard’s investment management services over both the short and long term and took into account the organizational depth and stability of the advisor. The Institutional Board considered that Vanguard has been managing investments for more than four decades. Vanguard, through its Equity Index Group, adheres to a sound, disciplined investment management process; the team has considerable experience, stability, and depth.
    The Institutional Board concluded that Vanguard’s experience, stability, depth, and performance, among other factors, warranted adoption of the Service Agreement.
  • Investment performance
    The Institutional Board considered the short- and long-term performance of the Institutional Funds and similar funds managed by Vanguard, including any periods of outperformance or underperformance

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    compared with its target index and peer group. The Institutional Board concluded that the performance was such that the Service Agreement should be adopted.
  • Cost
    The Institutional Board concluded that each Institutional Fund’s expense ratio was below the average expense ratio charged by funds in its peer group and that each Institutional Fund’s advisory expenses were also below its peer group average. The Institutional Board also concluded that adoption of the Service Agreement’s internalized management structure may lead to expense ratio reductions, reduced minimum initial investments for certain shareholders, and a harmonized administrative, investment management, and distribution framework for all of Vanguard’s publically offered mutual funds, which collectively could further enhance long-term complex-level economies of scale.
    The Institutional Board did not conduct a profitability analysis of Vanguard because of Vanguard’s unique “at-cost” structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees and produces “profits” only in the form of reduced expenses for fund shareholders.
  • The benefit of economies of scale
    The Institutional Board concluded that adopting the Service Agreement with Vanguard ensures that each Institutional Fund will realize economies of scale as it grows, with the cost to shareholders declining as fund assets increase.

What actions has the Board taken since the Institutional Funds’ last fiscal year with respect to the Institutional Agreements?

At the March 23-24, 2017, Board meeting, the Institutional Board, on behalf of each of the Institutional Funds, re-approved the continuation of the Institutional Agreements for an additional twelve-month period. The Institutional Board has taken no other actions with respect to the Institutional Agreements since the end of the last fiscal year.

What are the amounts paid to Vanguard for similar funds it advises?

Exhibit 6.1 to this Proxy Statement provides a list of mutual funds with similar investment objectives to the Institutional Funds for which Vanguard acts as investment advisor, as well as the annual expense ratios for those funds and the size of those mutual funds.

Transactions with Affiliated Brokers

For the fiscal year ended December 31, 2016, the Institutional Funds did not pay any commissions to brokers that were affiliated persons of the Institutional Funds, or affiliated persons of such persons.

When will the Service Agreement go into effect?

If the Institutional Funds’ shareholders approve the adoption of the Service Agreement, it is expected to become effective as soon as practicable after the vote is obtained. Following such date, the Service Agreement will remain in full force and effect, unless otherwise terminated, for a period of two years. Thereafter, the Institutional Board will consider continuation of the Service Agreement on an annual basis.

EACH FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 6.

Proposal 7     
A shareholder proposal to institute transparent procedures to avoid holding investments in companies that,
in management’s judgement, substantially contribute to genocide or crimes against humanity, the most
egregious violations of human rights. Such procedures may include time-limited engagement with problem
companies if management believes that their behavior can be changed.

 

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This proposal applies to the following Vanguard funds: 500 Index Fund; Capital Opportunity Fund; Developed
Markets Index Fund; Dividend Appreciation Index Fund; Emerging Markets Stock Index Fund; Energy Fund;
Energy Index Fund; Equity Income Fund; European Stock Index Fund; Extended Market Index Fund; FTSE All-
World ex-US Index Fund; FTSE Social Index Fund; Global Equity Fund; GNMA Fund; Growth Index Fund; Health
Care Fund; Inflation-Protected Securities Fund; Institutional Index Fund; Intermediate-Term Bond Index Fund;
Intermediate-Term Treasury Fund; International Explorer Fund; International Growth Fund; International Value
Fund; LifeStrategy Moderate Growth Fund; Long-Term Treasury Fund; Mid-Cap Index Fund; Mid-Cap Value Index
Fund; Morgan Growth Fund; Municipal Money Market Fund; Pacific Stock Index Fund; Precious Metals and
Mining Fund; Prime Money Market Fund; REIT Index Fund; Short-Term Bond Index Fund; Short-Term Tax-
Exempt Fund; Short-Term Treasury Fund; Small-Cap Growth Index Fund; Small-Cap Index Fund; Small-Cap Value
Index Fund; STAR Fund; Tax-Managed Small-Cap Fund; Total Bond Market Index Fund; Total International Stock
Index Fund; Total Stock Market Index Fund; Value Index Fund; Balanced Portfolio of the Vanguard Variable
Insurance Fund; Wellington Fund; Windsor Fund; and Windsor II Fund.

 

Certain shareholders of the funds identified above have advised the funds that they intend to present the following shareholder proposal at the meeting.

For the reasons set forth after the proposal, the board of trustees recommends a vote “AGAINST” the proposal. No fund is responsible for the contents of the proposal or the supporting statements. A fund will provide the names, addresses, and shareholdings (to the fund’s knowledge) of the proponents of a shareholder proposal, to shareholders of that fund, if they write to the funds’ secretary at the following address: Anne E. Robinson, V26, The Vanguard Group, Inc., P.O. Box 2600, Valley Forge, PA 19482-2600 or call X, or you can send your request by email to <EMAIL ADDRESS>.

The proponents submitted the following proposal:

WHEREAS:

We believe that:

1.      Investors do not want their investments to help fund genocide.
  a)      While reasonable people may disagree about socially responsible investing, few want their investments to help fund genocide.
  b)      KRC Research's 2010 study showed that 88% of respondents want their mutual funds to be genocide-free.
  c)      Millions of Vanguard investors have voted for genocide-free investing proposals, submitted by supporters of Investors Against Genocide, despite active management opposition. As many as 17% of Vanguard shareholders voted in favor in 2009.
  d)      In 2012, a genocide-free investing proposal at an ING mutual fund passed decisively, 59.8% to 10.7% with 29.5% abstaining.
2.      The example of PetroChina shows that current policies do not adequately support genocide-free investing because Vanguard and the funds it manages:
  a)      Are large and long-term investors in PetroChina. For example, SEC filings show Vanguard held $835 million of PetroChina as of April 30, 2013. PetroChina, through its controlling shareholder, China National Petroleum Company, is Sudan's largest business partner, thereby helping fund ongoing government sponsored genocide and crimes against humanity.
  b)      Unnecessarily expose shareholders to the significant financial, operational and reputational risks of the China National Petroleum group's operations in areas affected by genocide and mass atrocities.
  c)      Actively opposed earlier shareholder requests for genocide-free investing.
  d)      Continued to buy shares of problem companies even after becoming aware of the investments' connection to genocide in the Darfur region of Sudan.
  e)      Claimed to have a policy addressing extreme human rights issues that was "substantially identical" to genocide-free investing, but has taken no action to avoid problem investments.
  f)      Made investments in PetroChina that, while legal, are inconsistent with U.S. sanctions explicitly prohibiting transactions relating to Sudan's petroleum industry.

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3.      Individuals, through ownership of shares of Vanguard funds, may inadvertently invest in companies that help support genocide. With no policy to prevent these investments, Vanguard may at any time add orincrease holdings in problem companies.
4.      No sound reasons prevent having a genocide-free investing policy because:
  a)      Ample alternative investments exist.
  b)      Avoiding problem companies need not have a significant effect on investment performance, as shown inGary Brinson's classic asset allocation study.
  c)      Only a handful of Vanguard's U.S. funds would be affected.
  d)      Appropriate disclosure can address any legal concerns regarding the exclusion of problem companies.
  e)      Management can easily obtain independent assessments to identify companies connected to genocide.
  f)      Other large financial firms such as T. Rowe Price and TIAA-CREF have avoided investments connected to genocide by divesting problem companies such as PetroChina.
5.      Investor action can influence foreign governments, as in South Africa. Similar action on Talisman Energy helped end the conflict in South Sudan.

RESOLVED:

Shareholders request that the Board institute transparent procedures to avoid holding investments in companies that, in management's judgment, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights. Such procedures may include time-limited engagement with problem companies if management believes that their behavior can be changed.

This concludes the proponents’ statement regarding the proposal.

The trustees’ response to the shareholder proposal and recommendation

The trustees of the Funds recommend that you vote against this proposal. While the humanitarian issues on which this proposal is ultimately focused are of consequence and deep concern, meaningful long term solutions to these issues require diplomatic and political resources to come together to implement change. Importantly, your Funds are compliant with all applicable U.S. laws on this matter. In addition, the proposal would interfere with the advisors’ fiduciary duty to manage your Funds in line with their investment objectives and strategies. Finally, we believe that the divestment contemplated by the proposal would be an ineffective means to implement the social change it seeks.

Vanguard is fully compliant with all applicable U.S. laws and regulations.

The United States government, through its policymakers, has established a clear legal framework wherein investments in companies that are owned or controlled by the government of Sudan, among other countries, are prohibited. The proposal does not take into account that the Funds are compliant with these laws.

As an investment firm with a very large client base, Vanguard is periodically asked by clients to modify our investments for a variety of reasons—from environmental and social issues to humanitarian and political concerns. We simply cannot manage the Funds in an effective manner that would address all of these issues as well as, or better than, policymakers while fulfilling our fiduciary obligation to shareholders.

The addition of further investment constraints is not in Fund shareholders’ best interests.

Placing additional and specifically prescriptive constraints on a portfolio manager’s investable universe, based on factors unrelated to a Fund’s stated investment objective and/or investment strategies, could interfere with the Fund’s obligation to its investors. Each of the Vanguard funds is required to invest shareholders’ assets pursuant to a given fund’s stated objective. In the case of actively managed funds, which seek to provide varying degrees of current income and/or long-term capital appreciation, they are managed in adherence to tightly prescribed parameters related to the geography, size, sector, and/or style (e.g., growth vs. value) of the companies in which they invest. Constraints imposed by third-parties could impair the ability of portfolio managers to provide Fund shareholders investment returns that are competitive with similar funds. Index funds typically seek to track the

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performance of a benchmark index that represents either the broad market or a subset of the market based on geography, size, sector, and/or style. As such, limiting a Fund’s ability to invest in all of the constituent companies in its benchmark index could introduce deviation (i.e., tracking error) between the Fund’s performance and that of its benchmark index, which would be detrimental to the Fund’s shareholders.

Divestment is an ineffective means to implement social change.

The trustees believe that divestment – especially in cases where a company bears no direct relation to the issue at hand – is a particularly ineffective remedy. Selling a company’s shares into the secondary market (i.e., not back to the subject company itself) has no direct impact on the company’s capitalization, and it simply puts the shares into the hands of another owner (one perhaps with less concern for the underlying issues). Additionally, as investors in publicly traded companies, the Funds are not well poised to influence matters that extend well beyond the operations of their portfolio companies. While we understand the concerns of shareholders who have submitted the proposal, we believe that ending genocide requires diplomatic and political solutions.

EACH FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “AGAINST” PROPOSAL 7.

Proposal 8     
A shareholder proposal to initiate a review and issue a report on proxy voting policies and practices related to
climate change, prepared at reasonable cost and omitting proprietary information.
This proposal applies to 500 Index Fund and Total Stock Market Index Fund.

 

Certain shareholders of the funds identified above have advised the funds that they intend to present the following shareholder proposal at the meeting.

For the reasons set forth after the proposal, the board of trustees recommends a vote “AGAINST” the proposal. No fund is responsible for the contents of the proposal or the supporting statements. A fund will provide the names, addresses, and shareholdings (to the fund’s knowledge) of the proponents of a shareholder proposal, to shareholders of that fund, if they write to the funds’ secretary at the following address: Anne E. Robinson, V26, The Vanguard Group, Inc., P.O. Box 2600, Valley Forge, PA 19482-2600 or call X, or you can send your request by e-mail at <EMAIL ADDRESS>.

The proponents submitted the following proposal:

PROXY VOTING REVIEW

Vanguard is a respected global leader in the financial services industry with $3.8 trillion assets under management.

In a Fortune article (Dec. 8, 2016) CEO Bill McNabb highlighted the importance of companies managing for the long term not for short term results. The proponents believe many environmental, social and governance issues have a distinct impact on long term financial results and should be addressed as part of Vanguard's fiduciary duty.

In 2015 Vanguard expanded its engagement outreach holding meetings and calls with 817 companies crediting engagement with over 100 direct commitments to change from companies. Clearly Vanguard understands the importance of engaging companies in order to change behavior.

In 2015 Vanguard's corporate governance team cast 160,000 votes on behalf of fund holders in 16,740 shareholder meetings in 73 countries, 97% of the time opposing shareholder resolutions, many significantly affecting shareholder value.

Vanguard’s proxy voting focuses appropriately on fund holders economic interests and supports numerous governance reforms proposed by shareholders, believing they affect shareholder value.

Vanguard is a prestigious member of the Principles for Responsible Investment (PRI) a global network of investors and asset owners representing more than $62 trillion in assets. One of the Principles encourages investors to vote conscientiously on ESG issues.

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Yet Vanguard funds' publicly reported proxy voting records reveals consistent votes against all climate related resolutions (except the few supported by management), such as requests for enhanced disclosure or adoption of greenhouse gas reduction goals, even when independent experts advance a strong business and economic case for support.

In contrast funds managed by other investment firms such as, Alliance Bernstein, Morgan Stanley, Neuberger Berman supported the majority of these climate resolutions and Goldman Sachs, State Street Global Advisors and TIAA also voted for a significant percentage.

Vanguard's present voting record poses reputational risk for the company. Moreover, proxy voting on climate change should recognize significant company- specific and economy-wide risks associated with negative impacts of climate change. For example, companies effectively addressing climate changes that impact their business are protecting long-term shareholder value.

Larry Fink, BlackRock's CEO sent a letter in February 2016 to S&P 500 companies expressing concern at the lack of focus on environmental and social risks, stating "For too long, companies have not considered them core to their business."

"Over the long-term, environmental, social and governance (ESG) issues - ranging from climate change to diversity to board effectiveness - have real and quantifiable financial impacts" Fink concluded.

We believe it is Vanguard's fiduciary duty to review how climate change impacts our economy, portfolio companies and fund holdings and evaluate how shareholder resolutions on climate may impact shareholder value and vote proxies accordingly.

Resolved: Shareowners request that the Vanguard Board of Directors ask management of the fund to initiate a review and issue a report on its proxy voting policies and practices related to climate change, prepared at reasonable cost and omitting proprietary information.

This concludes the proponents’ statement regarding the proposal.

The trustees’ response to the shareholder proposal and recommendation

The trustees of the funds recommend that you vote against this proposal. The proposal does not take into consideration that the information requested is already publicly available or that Vanguard advocates for issues, such as climate risk, through direct engagement and participating to develop market-wide solutions.

The Vanguard funds’ current proxy voting policies and voting results, including those related to climate risk disclosure, are already publicly available.

This proposal seeks reporting that would be duplicative of information that is currently provided. Importantly, any additional reporting would be an expense to the funds’ shareholders. Like all registered investment companies, the funds are required to disclose their proxy voting guidelines that describe the funds’ approach to evaluating proposals on which they are entitled to vote. In addition, the funds’ voting records on all proposals are filed annually with the SEC on Form N-PX and concurrently published on Vanguard’s website.

The funds’ vote against a specific proxy proposal is not a dismissal of the general topic.

The trustees have set an appropriately high bar for the funds to support proxy proposals. In the trustees’ view, proxy proposals must demonstrate a clear link between the implementation of actions in the proposal and the creation of long-term value for the subject company. In those cases where the proposal itself fails to clear this hurdle, but the issue has the potential for a material impact on the company’s long-term value or viability (like climate risk), Vanguard will engage on the topic.

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Vanguard believes that direct, ongoing engagement with companies is often more effective than a singular vote.

Voting is but one way for the funds to drive change on issues that affect long-term value creation. Index funds, which generally hold all or a representative sample of the companies in their respective target benchmarks, are essentially permanent owners in the portfolio companies, and the health of those companies is of significant importance. By focusing narrowly on the funds’ proxy voting results, the proposal ignores the meaningful benefits and impact of engagement. Vanguard has addressed a range of significant issues, including climate risk, in thousands of discussions over the past several years with an increasing number of companies and their boards. In our ongoing discussions with companies in many industries affected by climate risks – ranging from energy and utilities to real estate and financial services – we gain an understanding of how companies and their boards respond to and manage climate risks. We seek to ensure that companies adequately disclose any such risks that are likely to have a material impact on their long-term value so that investors can make informed assessments as to the value of the enterprise. In particular, the funds have a strong interest in ensuring that each company’s assets, as well as any liabilities created by significant risks, are appropriately reflected in their market valuations. Where we identify disclosure opportunities that we believe will enhance market efficiency in this manner, we will consider advocating for their adoption. The trustees believe that the combination of deliberate company engagement and voting enables the funds to share concerns with boards and management teams and, where necessary, hold boards accountable for meaningful change over time.

Vanguard’s participation in the development of market solutions is another effective avenue of advocacy.

More broadly, Vanguard believes that market-wide solutions are another mechanism through which we can advocate on issues of importance. To this end, Vanguard follows the UN Principles for Responsible Investment (“UNPRI”), which “incorporate environmental, social, and corporate governance (“ESG”) issues into our ownership policies and practices” and “seek appropriate disclosure on ESG issues by the entities in which we invest.”11

To further demonstrate Vanguard’s commitment to the UNPRI, we are an active participant in the Investor Advisory Group of the Sustainability Accounting Standards Board (“SASB”). SASB seeks to “develop and disseminate sustainability accounting standards that help public corporations disclose material, decision-useful information to investors.” The trustees believe that efforts such as SASB’s promote a level playing field for all companies while enhancing transparency, thereby benefitting all investors.12

These commitments incorporate activities, such as engagement at the sector, market, and public policy level, that go well beyond voting at single companies in both breadth and effectiveness.

EACH FUND’S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE “AGAINST” PROPOSAL 8.

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Part III
Information on the Funds’ Independent Accountants

Selection of PricewaterhouseCoopers as Independent Accountants. The independent trustees of each Vanguard fund have selected PricewaterhouseCoopers LLP (PwC) as independent accountants to audit the funds’ financial statements. Representatives of PwC are not expected to be present at the meeting or available to make a statement or respond to any shareholders’ questions.

In addition to serving as independent accountants, PwC has provided limited nonaudit services (primarily tax services unrelated to fund audits) to both the Vanguard funds and The Vanguard Group, Inc. The independent trustees carefully considered these nonaudit services when evaluating PwC’s independence for purposes of its selection as the funds’ independent accountants. In a letter to the funds’ audit committee dated July XX, 2017, PwC

           
11 Source: UNPRI.org
12 Source: SASB.org

 

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confirmed its status as independent accountants with respect to the Vanguard funds within the meaning of the federal securities laws.

In the event of a contingency situation in which PwC is needed to provide services in between scheduled audit committee meetings, the Chairman of the audit committee would be called on to consider and, if appropriate, pre-approve audit or permitted nonaudit services in an amount sufficient to complete services through the next audit committee meeting, and to determine if such services would be consistent with maintaining PwC’s independence. At the next scheduled audit committee meeting, services and fees would be presented to the audit committee for formal consideration, and, if appropriate, approval by the entire audit committee. The audit committee would again consider whether such services and fees are consistent with maintaining PwC’s independence.

The funds’ audit committee is informed at least annually of all audit and non-audit services provided by PwC to the Vanguard complex, whether such services are provided to Vanguard funds, The Vanguard Group, Inc., or other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the funds.

PwC Audit Reports. PwC’s audit report for each Vanguard fund’s last two most recently ended fiscal years did not contain any adverse opinions or disclaimers of opinion, nor did PwC qualify or modify such reports as to uncertainty, audit scope, or accounting principles. Further, there were no disagreements between any of the Vanguard funds and PwC in three key areas—(1) accounting principles and practices, (2) financial statement disclosures, and (3) audit scope and procedures—that, if not resolved to PwC’s satisfaction, would have caused the accountants to reference the matter in their audit reports.

Fund-Related Audit Fees Paid to PwC. The Vanguard funds are organized under 37 separate trusts, each of which paid PwC the approximate amount shown in the table below as audit fees for the trust’s last two most recently ended fiscal years. Audit fees are fees incurred by PwC for the audit of each trust’s annual financial statements or services that are normally provided by PwC in connection with statutory and regulatory filings or engagements during a fiscal year. The audit fees disclosed also include audit-related fees (the aggregate fees billed for assurance and related services by PwC that are reasonably related to the performance of the audit of each trust’s financial statements), as well as tax compliance services performed in connection with the audits. Please refer to Part V for the name of the trust to which each Vanguard fund belongs.

           Audit Fees
Trust 2016 2015
Vanguard Admiral® Funds $286,000 $229,000
Vanguard Bond Index Funds 281,000 274,000
Vanguard California Tax-Free Funds 102,000 97,000
Vanguard Charlotte Funds 48,000 49,000
Vanguard Chester Funds 35,000 737,000
Vanguard CMT Funds 54,000 53,000
Vanguard Convertible Securities Fund 43,000 42,000
Vanguard Explorer Fund 46,000 44,000
Vanguard Fenway Funds 69,000 67,000
Vanguard Fixed Income Securities Funds 428,000 439,000
Vanguard Horizon Funds® 149,000 142,000
Vanguard Index Funds 505,000 484,000
Vanguard Institutional Index Funds 72,000 69,000
Vanguard International Equity Index Funds 318,000 307,000
Vanguard Malvern Funds 295,000 190,000
Vanguard Massachusetts Tax-Exempt Funds 35,000 34,000
Vanguard Money Market Reserves 69,000 66,000

 

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Vanguard Montgomery Funds 28,000 53,000
Vanguard Morgan Growth Fund 45,000 37,000
Vanguard Municipal Bond Funds 243,000 207,000
Vanguard New Jersey Tax-Free Funds 66,000 63,000
Vanguard New York Tax-Free Funds 66,000 63,000
Vanguard Ohio Tax-Free Funds 65,000 63,000
Vanguard Pennsylvania Tax-Free Funds 66,000 63,000
Vanguard Quantitative Funds 111,000 101,000
Vanguard Scottsdale Funds 610,000 579,000
Vanguard Specialized Funds 216,000 235,000
Vanguard STAR Funds 315,000 200,000
Vanguard Tax-Managed Funds® 159,000 154,000
Vanguard Trustees' Equity Fund 152,000 131,000
Vanguard Valley Forge Funds 25,000 44,000
Vanguard Variable Insurance Fund 535,000 539,000
Vanguard Wellesley Income Fund 34,000 33,000
Vanguard Wellington Fund 40,000 38,000
Vanguard Whitehall Funds 277,000 224,000
Vanguard Windsor Funds 94,000 75,000
Vanguard World Fund 611,000 578,000
Total Audit Fees $6,593,000 $6,803,000

 

All Other Fees Paid to PwC. For the years ended December 31, 2016, and December 31, 2015, PwC was paid approximately $79,500 and $95,760, respectively, for all nonaudit services rendered to the Vanguard funds, including SEC registration statement procedures. For those same two years, PwC was paid approximately $3,468,406, and $3,185,902, respectively, for nonaudit services provided to The Vanguard Group, Inc. and certain of its affiliates. This amount includes attestation reporting services in connection with service organization controls reporting and other attestation services (e.g., custody rule). Attestation reporting services includes reporting over transfer agent operations, defined contribution recordkeeping services, variable annuity and insurance administration services, Personal Advisor Services, and brokerage compliance. Other nonaudit services also includes tax compliance and advisory services. No fees were paid to PwC by any Vanguard entity for design or implementation of financial information systems.

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Part IV

More on Proxy Voting and Shareholder Meetings

Votes Needed to Elect Trustees (Proposal 1). Shareholders of funds that are part of the same trust will elect their trustees on a joint basis. (A list of funds and the trust of which each fund is a series is included in Part V of this proxy statement.) For each trust, the eleven nominees receiving the highest number of affirmative votes cast at the meeting will be elected.

Communications with Trustees. Vanguard fund shareholders may communicate with one or more trustees, or the overall board, by sending written correspondence to the attention of one or more individual trustees, or the overall board, at The Vanguard Group, Inc., P.O. Box 876, Mailstop V-26, Valley Forge, PA 19482. The current process regarding this type of communication requires that all such correspondence be logged upon receipt, and then be provided to the intended recipient(s), as appropriate. The recipient(s) will then review the shareholder correspondence, and determine how to respond.

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Votes Needed to Approve Proposals 2-8. Shareholders of each fund will vote separately on each proposal applicable to that fund. For a proposal to pass for a fund, it must be approved by the lesser of (1) shares representing 67% or more of the fund’s net assets voted, so long as shares representing more than 50% of the fund’s net assets are present or represented by proxy or (2) shares representing more than 50% of the fund’s net assets.

Proxy Solicitation Methods. The funds will solicit shareholder proxies in a variety of ways. All shareholders who are entitled to vote will receive these proxy materials either by mail or electronically (assuming that applicable requirements are met). In addition, the funds have engaged the services of Computershare Fund Services (CFS) to lead in the solicitation of proxies for the shareholder meeting by telephone, by mail, and/or over the internet. Vanguard employees and officers may assist in the solicitation of proxies for the shareholder meeting.

Proxy Solicitation Costs. Each fund will pay all costs of soliciting proxies from its shareholders, including costs relating to the printing, mailing, and tabulation of proxies. CFS’s solicitation costs for the funds are currently estimated to be approximately $17,584,007 and will be allocated across the funds proportionately, according to a fixed formula. By voting immediately, you can help your fund avoid the considerable expense of a second proxy solicitation.

Quorum. Each fund must achieve a quorum in order for the shareholder meeting to go forward. This means that more than thirty-three and one-third percent (33 1/3%) of a fund’s shares must be represented at the meeting, either in person or by proxy. All returned proxies count toward a quorum, regardless of how they are voted (“For,” “Against,” or “Abstain”). The funds will count abstentions and broker non-votes toward establishing a quorum and as votes “Against” proposals 2-8. (A broker non-vote is a proxy received from a broker who holds fund shares on behalf of an investor, but who does not have discretionary power to vote the shares on the investor’s behalf, indicating that the broker has not received instructions from the investor on the matter at issue.) Signed, dated proxy cards and voting instruction cards returned to Vanguard without a choice indicated as to the applicable proposals shall be voted for proposals 1-6 and against proposals 7 and 8.

Adjournment. If a quorum is not present or represented at the shareholder meeting, either the chairman of the meeting (without a shareholder vote) or the holders of a majority of the votes present in person or by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted that might have been transacted at the meeting as originally notified. The shareholders of record entitled to vote at such adjourned meeting shall be deemed to be the shareholders on the original record date, unless the trustees have fixed a new record date.

Revoking Your Proxy. Your latest vote is the one that counts. Therefore, you can revoke a prior proxy simply by voting again – over the internet, with your proxy card or voting instruction card, or by toll-free telephone call. You can also revoke a prior proxy by writing to the funds’ secretary at the following address: Anne E. Robinson, V26, The Vanguard Group, Inc., P.O. Box 2600, Valley Forge, PA 19482-2600, or by voting in person at the meeting. You may revoke your proxy at any time up until voting results are announced at the shareholder meeting.

Shareholder Proposals. Any shareholder proposals to be included in the proxy statement for a fund’s next meeting of shareholders must be received by the fund within a reasonable period of time prior to that meeting. None of the funds currently plan to hold a meeting of shareholders in 2018.

Voting Rights. Shareholders are entitled to cast one vote for each dollar of fund net assets owned on the record date and a fractional vote for each fractional dollar of net assets owned on that date.

Nominee Accounts. Upon request, the Vanguard funds will reimburse nominees for their reasonable expenses in forwarding proxy materials to beneficial owners of the funds’ shares. Please submit invoices for our review to: Anne E. Robinson, V26, The Vanguard Group, Inc., P.O. Box 2600, Valley Forge, PA 19482-2600.

Annual/Semiannual Reports. Each fund’s most recent annual and semiannual reports to shareholders are available at no cost. You may read, print, or request mail delivery of a copy through our website at www.vanguard.com. You may also request a report by calling us toll-free at 800-662-7447 or by writing to us at P.O. Box 2600, Valley Forge,

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PA 19482-2600. Participants in an employer-sponsored 401(k) or other retirement plan administered by Vanguard should call us at 1-800-523-1188.

Other Matters. At this point, we know of no other business to be brought before the shareholder meeting. However, if any other matters do come up, we will use our best judgment to vote on your behalf. If you object to our voting other matters on your behalf, please tell us so in writing before the meeting.

The Vanguard Group, Inc. Except as noted below, each of the Vanguard funds soliciting proxies is a member of Vanguard. Vanguard is owned jointly by the funds it oversees. Vanguard provides the funds—195 distinct investment portfolios—with their corporate management, administrative, and distribution services. Vanguard Marketing Corporation, 100 Vanguard Boulevard, Malvern, PA 19355, a wholly-owned subsidiary of Vanguard, is the funds’ distributor.

The funds organized under Vanguard Institutional Index Funds (Institutional Index Fund and Institutional Total Stock Market Index Fund) currently are not members of Vanguard, although they are administered by and pay fees to Vanguard for management, advisory, marketing, accounting, transfer agency, and other services. However, in Proposal 6, these funds’ board of trustees have recommended that shareholders approve the Service Agreement between Vanguard and the Vanguard funds in order to bring these funds in line with the funds that currently are members of Vanguard.

<PAGE BREAK>
Part V
Fund and Investment Advisor Information

This section includes a list of the names and addresses of all of the Vanguard funds’ investment advisors. The name(s) of each fund’s investment advisor(s) is provided below under “Vanguard Fund Information.”

Advisor Address
Acadian Asset Management LLC 260 Franklin Street, Boston, MA 02110
ARGA Investment Management, LP 1010 Washington Boulevard, 6th Floor, Stamford, CT 06901
ArrowMark Colorado Holdings, LLC 100 Fillmore Street, Suite 325, Denver, CO 80206
Baillie Gifford Overseas Ltd. Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN Scotland
Barrow, Hanley, Mewhinney & Strauss, LLC 2200 Ross Avenue, 31st Floor, Dallas, TX 75201
Cardinal Capital Management L.L.C. Four Greenwich Office Park, Third Floor, Greenwich, CT 06831
ClearBridge Investments, LLC 620 Eighth Avenue, 48th Floor, New York, NY 10018
D. E. Shaw Investment Management, L.L.C. 1166 Avenue of the Americas, Ninth Floor, New York, NY 10036
Donald Smith & Co., Inc. 152 West 57th Street, 22nd Floor, New York, NY 10019
Edinburgh Partners Limited 27-31 Melville Street, Edinburgh, EH3 7JF, Scotland
Frontier Capital Management Co., LLC 99 Summer Street, 20th Floor, Boston, MA 02110
Hotchkis & Wiley Capital Management, LLC 725 South Figueroa Street, 39th Floor, Los Angeles, CA 90017
Jackson Square Partners, LLC 101 California Street, Suite 3750, San Francisco, CA 94111
Jennison Associates LLC 466 Lexington Avenue, New York, NY 10017
Lazard Asset Management LLC 30 Rockefeller Plaza, 57th Floor, New York, NY 10112
Los Angeles Capital Management and Equity Research, Inc. 11150 Santa Monica Boulevard, Suite 200, Los Angeles, CA 90025
M&G Investment Management Limited Laurence Pountney Hill, London, EC4R 0HH, England
Marathon Asset Management LLP Orion House, 5 Upper St. Martin’s Lane, London, WC2H 9EA, England
Oaktree Capital Management, L.P. 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071
PRIMECAP Management Company 177 East Colorado Blvd., 11th Floor, Pasadena, CA 91105
Pzena Investment Management, LLC 320 Park Avenue, 8th Floor, New York, NY 10022
Sanders Capital, LLC 390 Park Avenue, #17, New York, NY 10022
Schroder Investment Management 875 Third Avenue, 22nd Floor, New York, NY 10022-6225
North America Inc.  
Schroder Investment Management 31 Gresham Street, London, EC2V 7QA, England
North America Ltd.  
Stephens Investment Management Group, LLC 111 Center Street, Suite 2110, Little Rock, AR 72201
The Vanguard Group, Inc. P.O. Box 2600, Valley Forge, PA 19482
Victory Capital Management Inc., through its RS investment franchise 4900 Tiedeman Road, 4th Floor, Brooklyn, OH 44144
Wellington Management Company LLP 280 Congress Street, Boston, MA 02210
William Blair Investment Management, LLC 222 West Adam Street, Chicago, IL 60606
<PAGE BREAK>  

 

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Vanguard Fund Information

This section provides certain required information for each of the Vanguard funds. The funds appear in alphabetical order and all information presented is as of May 31, 2017. The year in parentheses is the fund’s year of inception. Among other things, we list the trustee nominees’ beneficial ownership of each fund’s shares based on certain dollar ranges. All trustees allocate personal assets among the Vanguard funds according to their own investment needs. Each trustee nominee owns over $100,000 in shares of Vanguard funds. As a group, each fund’s trustees and officers own less than 1% of the outstanding shares of that fund. As we explained earlier in this statement, Mr. McNabb is the only interested trustee of the Vanguard funds. All other trustees are independent of Vanguard and the Vanguard funds.

Vanguard 500 Index Fund (1976)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $324,562,476,521 and 1,553,611,922 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, over $100,000; GUTMANN, over $100,000; HEISEN,
  over $100,000; VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Alternative Strategies Fund (2015)  
· A series of Vanguard Trustees’ Equity Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $268,506,507 and 13,218,251 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Balanced Index Fund (1992)  
· A series of Vanguard Valley Forge Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $33,723,512,906 and 1,030,062,542 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard California Intermediate-Term Tax-Exempt Fund (1994)  
· A series of Vanguard California Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $12,015,861,062 and 1,015,442,767 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class

 

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  X Shares X X%
 
Vanguard California Long-Term Tax-Exempt Fund (1986)  
· A series of Vanguard California Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,764,906,980 and 309,843,139 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard California Municipal Money Market Fund (1987)  
· A series of Vanguard California Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,822,597,200 and 3,821,873,514 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Capital Opportunity Fund (1995)  
· A series of Vanguard Horizon Funds®.  
· Advised by PRIMECAP Management Company.  
· Net assets of $15,915,704,931 and 133,239,801 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, over $100,000; HEISEN, over $100,000; MCNABB,
  over $100,000.    
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Capital Value Fund (2001)  
· A series of Vanguard Malvern Funds.  
· Advised by Wellington Management Company LLP.  
· Net assets of $910,976,312 and 73,558,615 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; VOLANAKIS, $10,001-$50,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Consumer Discretionary Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,494,160,016 and 18,826,790 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class

 

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  X Shares X X%
 
Vanguard Consumer Staples Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,494,501,738 and 36,331,958 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Convertible Securities Fund (1986)  
· A series of Vanguard Convertible Securities Fund.  
· Advised by Oaktree Capital Management, L.P.  
· Net assets of $1,385,318,096 and 105,124,145 outstanding shares.  
· Nominees who own shares of this fund: PEROLD, $50,001 - $100,000; VOLANAKIS, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Core Bond Fund (2016)  
· A series of Vanguard Malvern Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $765,902,549 and 42,447,287 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; VOLANAKIS, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Developed Markets Index Fund (1999)  
· A series of Vanguard Tax-Managed Funds®.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $86,429,653,176 and 3,523,713,371 outstanding shares.  
· Nominees who own shares of this fund: LOUGHREY, over $100,000; MCNABB, over $100,000;
  VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Diversified Equity Fund (2005)  
· A series of Vanguard Trustees’ Equity Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,367,443,338 and 41,581,413 outstanding shares.  
· Nominees who own shares of this fund: VOLANAKIS, $50,001-$100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class

 

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  X Shares X X%
 
Vanguard Dividend Appreciation Index Fund (2006)  
· A series of Vanguard Specialized Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $30,204,138,095 and 479,011,748 outstanding shares.  
· Nominees who own shares of this fund: LOUGHREY, over $100,000; RASKIN, $50,001-$100,000;
  VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Dividend Growth Fund (1992)  
· A series of Vanguard Specialized Funds.  
· Advised by Wellington Management Company LLP.  
· Net assets of $31,911,637,898 and 1,255,339,133 outstanding shares.  
· Nominees who own shares of this fund: VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Emerging Markets Bond Fund (2016)  
· A series of Vanguard Malvern Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $11,719,391 and 1,113,506 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Emerging Markets Government Bond Index Fund (2013)  
· A series of Vanguard Whitehall Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,272,342,640 and 26,641,054 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
    X X%
 
Vanguard Emerging Markets Select Stock Fund (2011)  
· A series of Vanguard Trustees’ Equity Fund.  
· Advised by M&G Investment Management Limited; Oaktree Capital Management, L.P.; Pzena Investment
  Management, LLC; and Wellington Management Company LLP.  
· Net assets of $502,221,530 and 24,880,072 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; MCNABB, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:

 

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  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Emerging Markets Stock Index Fund (1994)  
· A series of Vanguard International Equity Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $75,755,523,706 and 1,963,373,212 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; FULLWOOD, $1-$10,000; HEISEN, over
  $100,000; MALPASS, over $100,000; MCNABB, over $100,000; PEROLD, over $100,000, VOLANAKIS,
  over $100,000.    
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Energy Fund (1984)  
· A series of Vanguard Specialized Funds.  
· Advised by Wellington Management Company LLP and The Vanguard Group, Inc.  
· Net assets of $9,333,221,393 and 130,032,017 outstanding shares.  
· Nominees who own shares of this fund: HEISEN, $1-$10,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Energy Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,656,418,497 and 61,064,450 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, $10,001-$50,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Equity Income Fund (1988)  
· A series of Vanguard Fenway Funds.  
· Advised by Wellington Management Company LLP and The Vanguard Group, Inc.  
· Net assets of $27,969,607,662 and 481,762,574 outstanding shares.  
· Nominees who own shares of this fund: VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard European Stock Index Fund (1990)  
· A series of Vanguard International Equity Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $20,451,779,798 and 368,483,955 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:

 

- 43 -


 

  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Explorer™ Fund (1967)  
· A series of Vanguard Explorer Fund.  
· Advised by ArrowMark Colorado Holdings, LLC; ClearBridge Investments, LLC; Stephens Investment
  Management Group, LLC; The Vanguard Group, Inc.; and Wellington Management Company LLP.
· Net assets of $12,112,170,120 and 136,267,824 outstanding shares.  
· Nominees who own shares of this fund: LOUGHRIDGE, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Explorer Value™ Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by Cardinal Capital Management, L.L.C. and Frontier Capital Management Co., LLC.
· Net assets of $605,924,750 and 17,767,624 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Extended Duration Treasury Index Fund (2007)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,539,721,702 and 27,664,261 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Extended Market Index Fund (1987)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $56,057,625,479 and 578,515,563 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, over $100,000; GUTMANN, over $100,000;
  LOUGHREY, over $100,000, MALPASS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Federal Money Market Fund (1981)  
· A series of Vanguard Money Market Reserves.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $74,773,336,916 and 74,944,519,887 outstanding shares.  

 

- 44 -


 

· Nominees who own shares of this fund: BUCKLEY, over $100,000; LOUGHREY, over $100,000;
  LOUGHRIDGE, $10,001-$50,000; MALPASS, $10,001-$50,000; MULLIGAN, $10,001-$50,000;
  VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Financials Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $6,064,280,454 and 110,578,570 outstanding shares.  
· Nominees who own shares of this fund: MALPASS, $10,001-$50,000; RASKIN, $10,001-$50,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard FTSE All-World ex-US Index Fund (2007)  
· A series of Vanguard International Equity Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $30,976,224,973 and 615,693,091 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; HEISEN, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard FTSE All-World ex-US Small-Cap Index Fund (2009)  
· A series of Vanguard International Equity Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,476,507,070 and 51,422,597 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; HEISEN, over $100,000; VOLANAKIS,
  over $100,000.    
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard FTSE Social Index Fund (2000)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,089,673,750 and 197,629,830 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Global Equity Fund (1995)  
· A series of Vanguard Horizon Funds®.  

 

- 45 -


 

· Advised by Acadian Asset Management LLC; Baillie Gifford Overseas Ltd.; and Marathon Asset Management
  LLP.    
· Net assets of $5,050,235,458 and 179,065,428 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; HEISEN, over $100,000; VOLANAKIS,
  over $100,000.    
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Global ex-U.S. Real Estate Index Fund (2010)  
· A series of Vanguard International Equity Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,935,774,063 and 92,446,908 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Global Minimum Volatility Fund (2013)  
· A series of Vanguard Whitehall Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,923,874,074 and 92,986,879 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard GNMA Fund (1980)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by Wellington Management Company LLP.  
· Net assets of $25,244,776,790 and 2,384,206,315 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Growth and Income Fund (1986)  
· A series of Vanguard Quantitative Funds.  
· Advised by D.E. Shaw Investment Management, L.L.C.; Los Angeles Capital Management and Equity
  Research, Inc.; and The Vanguard Group, Inc.  
· Net assets of $7,467,999,328 and 129,429,135 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%

 

- 46 -


 

Vanguard Growth Index Fund (1992)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $64,422,534,203 and 777,145,347 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, over $100,000; RASKIN, $50,001-$100,000;
  VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Health Care Fund (1984)  
· A series of Vanguard Specialized Funds.  
· Advised by Wellington Management Company LLP.  
· Net assets of $46,926,986,104 and 473,169,744 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; FULLWOOD, over $100,000; HEISEN,
  over $100,000; MCNABB, over $100,000; VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Health Care Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $7,055,783,517 and 56,017,161 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard High Dividend Yield Index Fund (2006)  
· A series of Vanguard Whitehall Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $25,165,624,656 and 462,036,296 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, over $100,000; HEISEN, $10,001-$50,000;
  LOUGHREY, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard High-Yield Corporate Fund (1978)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by Wellington Management Company LLP.  
· Net assets of $23,505,671,317 and 3,943,676,558 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class

 

- 47 -


 

  X Shares X X%
 
Vanguard High-Yield Tax-Exempt Fund (1978)  
· A series of Vanguard Municipal Bond Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $11,439,864,666 and 1,011,299,002 outstanding shares.  
· Nominees who own shares of this fund: LOUGHREY, over $100,000; RASKIN, $10,001-$50,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Industrials Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,164,983,247 and 26,175,798 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Inflation-Protected Securities Fund (2000)  
· A series of Vanguard Bond Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $27,167,649,253 and 1,720,991,287 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Information Technology Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $14,115,452,946 and 102,620,876 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, $50,001-$100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Institutional Index Fund (1990)  
· A series of Vanguard Institutional Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $228,438,565,197 and 1,036,483,482 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; MCNABB, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%

 

- 48 -


 

Vanguard Institutional Intermediate-Term Bond Fund (2015)  
· A series of Vanguard Malvern Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $13,254,974,909 and 571,964,248 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Institutional Short-Term Bond Fund (2015)  
· A series of Vanguard Malvern Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $7,689,598,030 and 558,753,771 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Institutional Target Retirement 2015 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $7,183,606,526 and 337,841,488 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares::
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Institutional Target Retirement 2020 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $15,697,361,710 and 731,026,998 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Institutional Target Retirement 2025 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $19,063,980,683 and 882,929,813 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Institutional Target Retirement 2030 Fund (2015)  

 

- 49 -


 

· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $16,585,564,514 and 765,759,683 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Target Retirement 2035 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $15,337,084,846 and 705,751,107 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Target Retirement 2040 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $12,807,893,679 and 587,632,536 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Target Retirement 2045 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $10,497,156,474 and 479,841,360 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Target Retirement 2050 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $6,831,515,797 and 312,099,585 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Target Retirement 2055 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,680,684,798 and 122,320,668 outstanding shares.  
· Nominees who own shares of this fund: NONE.  

 

- 50 -


 

· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Target Retirement 2060 Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $637,919,943 and 29,132,319 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Target Retirement 2065 Fund (2017)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Information as of May, 31, 2017 is not available because the fund didn’t commence operation until July 12,
  2017.    
 
Vanguard Institutional Target Retirement Income Fund (2015)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,628,989,671 and 125,128,560 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Institutional Total Stock Market Index Fund (2001)  
· A series of Vanguard Institutional Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $39,911,497,476 and 738,013,495 outstanding shares.  
· Nominees who own shares of this fund: MCNABB, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Intermediate-Term Bond Index Fund (1994)  
· A series of Vanguard Bond Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $32,016,855,547 and 1,772,203,160 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, $10,001-$50,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Intermediate-Term Corporate Bond Index Fund (2009)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  

 

- 51 -


 

· Net assets of $15,764,794,966 and 218,742,698 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Intermediate-Term Government Bond Index Fund (2009)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,300,306,831 and 65,168,663 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Intermediate-Term Investment-Grade Fund (1993)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $27,446,237,996 and 2,795,556,446 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, $10,001-$50,000; LOUGHREY, over $100,000;
  LOUGHRIDGE, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Intermediate-Term Tax-Exempt Fund (1977)  
· A series of Vanguard Municipal Bond Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $53,158,684,015 and 3,738,827,023 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, over $100,000; LOUGHREY, over $100,000;
  LOUGHRIDGE, over $100,000; MCNABB, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Intermediate-Term Treasury Fund (1991)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $6,281,254,191 and 558,562,730 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard International Dividend Appreciation Index Fund (2016)  
· A series of Vanguard Whitehall Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $506,300,702 and 10,372,591 outstanding shares.  

 

- 52 -


 

· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard International Explorer™ Fund (1996)  
· A series of Vanguard Whitehall Funds.  
· Advised by Schroder Investment Management North America Inc. and Wellington Management Company LLP.
· Net assets of $3,370,436,361 and 170,272,995 outstanding shares.  
· Nominees who own shares of this fund: VOLANAKIS, $50,001-$100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard International Growth Fund (1981)  
· A series of Vanguard World Fund.  
· Advised by Baillie Gifford Overseas Ltd. and Schroder Investment Management North America Inc.
· Net assets of $27,419,973,436 and 522,471,062 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; HEISEN, over $100,000; MCNABB, over
  $100,000.    
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard International High Dividend Yield Index Fund (2016)  
· A series of Vanguard Whitehall Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $502,750,694 and 10,295,592 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard International Value Fund (1983)  
· A series of Vanguard Trustees’ Equity Fund.  
· Advised by ARGA Investment Management, LP; Edinburgh Partners Limited; and Lazard Asset Management
  LLC.    
· Net assets of $9,094,680,725 and 249,886,814 outstanding shares.  
· Nominees who own shares of this fund: MCNABB, $50,001-$100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Large-Cap Index Fund (2004)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $15,565,418,380 and 183,010,005 outstanding shares.  

 

- 53 -


 

· Nominees who own shares of this fund: MALPASS, over $100,000; RASKIN, $10,001-$50,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard LifeStrategy® Conservative Growth Fund (1994)  
· A series of Vanguard STAR Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $8,811,734,412 and 455,642,071 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard LifeStrategy® Growth Fund (1994)  
· A series of Vanguard STAR Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $13,388,302,995 and 426,765,222 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard LifeStrategy® Income Fund (1994)  
· A series of Vanguard STAR Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,980,800,337 and 259,064,991 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard LifeStrategy® Moderate Growth Fund (1994)  
· A series of Vanguard STAR Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $14,688,217,203 and 568,568,836 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Limited-Term Tax-Exempt Fund (1987)  
· A series of Vanguard Municipal Bond Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $24,098,328,071 and 2,190,038,932 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; GUTMANN, over $100,000;
  LOUGHRIDGE, over $100,000; MCNABB, over $100,000.  

 

- 54 -


 

· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Long-Term Bond Index Fund (1994)  
· A series of Vanguard Bond Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $10,151,426,195 and 601,490,175 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Long-Term Corporate Bond Index Fund (2009)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,459,853,843 and 40,981,386 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Long-Term Government Bond Index Fund (2009)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,098,476,970 and 28,609,771 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Long-Term Investment-Grade Fund (1973)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by Wellington Management Company LLP and The Vanguard Group, Inc.  
· Net assets of $15,357,710,104 and 1,479,458,431 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Long-Term Tax-Exempt Fund (1977)  
· A series of Vanguard Municipal Bond Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $10,392,523,312 and 891,621,688 outstanding shares.  
· Nominees who own shares of this fund: LOUGHRIDGE, over $100,000; RASKIN, $1-$10,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%

 

- 55 -


 

Vanguard Long-Term Treasury Fund (1986)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,395,130,138 and 278,549,308 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Managed Payout Fund (2008)  
· A series of Vanguard Valley Forge Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,877,104,927 and 102,915,739 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Market Liquidity Fund (2004)  
· A series of Vanguard CMT Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $59,191,132,027 and 612,918,717 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Market Neutral Fund (1998)  
· A series of Vanguard Montgomery Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,064,577,697 and 174,746,536 outstanding shares.  
· Nominees who own shares of this fund: MALPASS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Massachusetts Tax-Exempt Fund (1998)  
· A series of Vanguard Massachusetts Tax-Exempt Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,593,761,214 and 147,482,661 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Materials Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  

 

- 56 -


 

· Net assets of $2,305,134,257 and 21,791,422 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, $50,001-$100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mega Cap Growth Index Fund (2007)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,042,932,583 and 29,984,031 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mega Cap Index Fund (2007)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,311,132,655 and 15,221,053 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mega Cap Value Index Fund (2007)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,765,945,287 and 24,862,742 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mid-Cap Growth Fund (1997)  
· A series of Vanguard Whitehall Funds.  
· Advised by Victory Capital Management Inc., through its RS Investments franchise and William Blair
  Investment Management, LLC.  
· Net assets of $4,185,750,114 and 169,638,351 outstanding shares.  
· Nominees who own shares of this fund: HEISEN, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mid-Cap Growth Index Fund (2006)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $9,656,539,251 and 143,214,993 outstanding shares.  
· Nominees who own shares of this fund: HEISEN, over $100,000.  

 

- 57 -


 

· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mid-Cap Index Fund (1998)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $86,052,599,973 and 922,075,308 outstanding shares.  
· Nominees who own shares of this fund: MULLIGAN, over $100,000; RASKIN, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mid-Cap Value Index Fund (2006)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $15,060,792,860 and 220,833,696 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Morgan™ Growth Fund (1968)  
· A series of Vanguard Morgan Growth Fund.  
· Advised by Frontier Capital Management Co., LLC; Jennison Associates LLC; The Vanguard Group, Inc.; and
  Wellington Management Company LLP.  
· Net assets of $12,153,486,090 and 239,563,668 outstanding shares.  
· Nominees who own shares of this fund: MCNABB, $10,001-$50,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Mortgage-Backed Securities Index Fund (2009)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,567,357,710 and 101,598,268 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Municipal Cash Management Fund (2004)  
· A series of Vanguard CMT Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,485,037,266 and 24,893,144 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class

 

- 58 -


 

X Shares X X%
 
Vanguard Municipal Money Market Fund (1980)  
· A series of Vanguard Municipal Bond Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $16,944,351,712 and 16,941,978,571 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard New Jersey Long-Term Tax-Exempt Fund (1988)  
· A series of Vanguard New Jersey Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,049,785,145 and 171,058,466 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard New Jersey Municipal Money Market Fund (1988)  
· A series of Vanguard New Jersey Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,246,021,999 and 1,245,737,091 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard New York Long-Term Tax-Exempt Fund (1986)  
· A series of Vanguard New York Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,261,024,073 and 360,229,308 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard New York Municipal Money Market Fund (1997)  
· A series of Vanguard New York Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,289,303,126 and 2,289,087,939 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Ohio Long-Term Tax-Exempt Fund (1990)  
· A series of Vanguard Ohio Tax-Free Funds.  

 

- 59 -


 

· Advised by The Vanguard Group, Inc.  
· Net assets of $1,163,855,924 and 92,300,425 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Pacific Stock Index Fund (1990)  
· A series of Vanguard International Equity Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $6,749,940,620 and 137,168,405 outstanding shares.  
· Nominees who own shares of this fund: HEISEN, $1-$10,000; VOLANAKIS, $50,001-$100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Pennsylvania Long-Term Tax-Exempt Fund (1986)  
· A series of Vanguard Pennsylvania Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,465,261,965 and 298,565,932 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, over $100,000; MCNABB, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Pennsylvania Municipal Money Market Fund (1988)  
· A series of Vanguard Pennsylvania Tax-Free Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,961,128,582 and 1,960,944,127 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Precious Metals and Mining Fund (1984)  
· A series of Vanguard Specialized Funds.  
· Advised by M&G Investment Management Limited.  
· Net assets of $2,487,937,962 and 244,919,788 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Prime Money Market Fund (1975)  
· A series of Vanguard Money Market Reserves.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $96,977,137,997 and 96,966,825,983 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, $1-$10,000; HEISEN, over $100,000; LOUGHREY,
  over $100,000; LOUGHRIDGE, $10,001-$50,000; PEROLD, $10,001-$50,000; VOLANAKIS, $1-$10,000.

 

- 60 -


 

· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard PRIMECAP Core Fund (2004)  
· A series of Vanguard Fenway Funds.  
· Advised by PRIMECAP Management Company.  
· Net assets of $9,693,003,958 and 390,017,732 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; FULLWOOD, over $100,000; HEISEN,
  over $100,000; MALPASS, over $100,000; MCNABB, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard PRIMECAP Fund (1984)  
· A series of Vanguard Chester Funds.  
· Advised by PRIMECAP Management Company.  
· Net assets of $53,879,379,873 and 439,947,187 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, $10,001-$50,000; MALPASS, $50,001-$100,000;
  MCNABB, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard REIT Index Fund (1996)  
· A series of Vanguard Specialized Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $62,541,390,043 and 1,102,847,079 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, $1-$10,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Russell 1000 Growth Index Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,648,960,982 and 20,238,922 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Russell 1000 Index Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,708,728,806 and 15,604,633 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:

 

- 61 -


 

Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Russell 1000 Value Index Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,604,340,045 and 18,343,608 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Russell 2000 Growth Index Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $519,741,510 and 3,025,865 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Russell 2000 Index Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,570,542,463 and 11,953,504 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Russell 2000 Value Index Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $312,736,398 and 2,388,863 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares::
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Russell 3000 Index Fund (2010)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,247,414,479 and 7,245,329 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P 500 Growth Index Fund (2010)  

 

- 62 -


 

· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,571,298,861 and 12,700,000 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P 500 Value Index Fund (2010)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $720,063,082 and 7,191,771 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P Mid-Cap 400 Growth Index Fund (2010)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,028,940,112 and 7,245,710 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P Mid-Cap 400 Index Fund (2010)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,840,202,827 and 11,064,244 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P Mid-Cap 400 Value Index Fund (2010)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $777,517,049 and 6,356,026 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P Small-Cap 600 Growth Index Fund (2010)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $247,365,141 and 1,900,000 outstanding shares.  
· Nominees who own shares of this fund: NONE.  

 

- 63 -


 

· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P Small-Cap 600 Index Fund (2010)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,219,878,172 and 7,400,897 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard S&P Small-Cap 600 Value Index Fund (2010)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $222,197,753 and 1,830,302 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Selected Value Fund (1996)  
· A series of Vanguard Whitehall Funds.  
· Advised by Barrow, Hanley, Mewhinney & Strauss, LLC; Donald Smith & Co., Inc.; and Pzena Investment
  Management, LLC.  
· Net assets of $10,032,529,031 and 329,867,427 outstanding shares.  
· Nominees who own shares of this fund: MCNABB, $10,001-$50,000; VOLANAKIS, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Short-Term Bond Index Fund (1994)  
· A series of Vanguard Bond Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $48,977,928,627 and 2,851,516,629 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, $10,001-$50,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Short-Term Corporate Bond Index Fund (2009)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $22,994,953,400 and 411,427,316 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class

 

- 64 -


 

X Shares X X%
 
Vanguard Short-Term Federal Fund (1987)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $5,649,725,645 and 527,715,115 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Short-Term Government Bond Index Fund (2009)  
· A series of Vanguard Scottsdale Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,132,133,941 and 55,094,387 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Short-Term Inflation-Protected Securities Index Fund (2012)  
· A series of Vanguard Malvern Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $20,131,042,663 and 740,839,967 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Short-Term Investment-Grade Fund (1982)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $60,521,494,863 and 5,659,167,365 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, $10,001-$50,000; LOUGHRIDGE, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Short-Term Tax-Exempt Fund (1977)  
· A series of Vanguard Municipal Bond Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $14,796,081,204 and 935,869,618 outstanding shares.  
· Nominees who own shares of this fund: LOUGHREY, $50,001-$100,000; MCNABB, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Short-Term Treasury Fund (1991)  
· A series of Vanguard Fixed Income Securities Funds.  

 

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· Advised by The Vanguard Group, Inc.  
· Net assets of $7,768,249,949 and 729,141,914 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Small-Cap Growth Index Fund (1998)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $18,694,524,664 and 319,080,396 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, $10,001-$50,000; VOLANAKIS, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Small-Cap Index Fund (1960)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $75,092,463,809 and 941,969,944 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; FULLWOOD, over $100,000; HEISEN,
  over $100,000; MCNABB, over $100,000; RASKIN, $50,001-$100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Small-Cap Value Index Fund (1998)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $26,183,490,520 and 465,048,373 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard STAR® Fund (1985)  
· A series of Vanguard STAR® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $20,166,278,686 and 783,518,758 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Strategic Equity Fund (1995)  
· A series of Vanguard Horizon Funds®.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $6,805,256,907 and 205,045,270 outstanding shares.  
· Nominees who own shares of this fund: LOUGHRIDGE, over $100,000.  

 

- 66 -


 

· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Strategic Small-Cap Equity Fund (2006)  
· A series of Vanguard Horizon Funds®.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,620,584,938 and 47,060,010 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2015 Fund (2003)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $17,381,995,358 and 1,135,073,360 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2020 Fund (2006)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $30,387,738,982 and 1,008,641,805 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2025 Fund (2003)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $35,737,326,822 and 2,036,240,994 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2030 Fund (2006)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $29,441,535,496 and 933,437,478 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%

 

- 67 -


 

Vanguard Target Retirement 2035 Fund (2003)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $28,424,538,033 and 1,474,779,719 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2040 Fund (2006)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $21,063,769,373 and 637,895,346 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2045 Fund (2003)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $19,128,233,736 and 924,386,431 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2050 Fund (2006)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $12,350,499,300 and 371,020,968 outstanding shares.  
· Nominees who own shares of this fund: FULLWOOD, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2055 Fund (2010)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,926,234,738 and 136,688,179 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2060 Fund (2012)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  

 

- 68 -


 

· Net assets of $1,760,453,603 and 55,354,319 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Target Retirement 2065 Fund (2017)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Information as of May 31, 2017 is not available because the fund didn’t commence operation until July 12,
  2017.    
 
Vanguard Target Retirement Income Fund (2003)  
· A series of Vanguard Chester Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $11,226,554,720 and 844,131,890 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Tax-Exempt Bond Index Fund (2015)  
· A series of Vanguard Municipal Bond Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,337,963,262 and 29,347,728 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Tax-Managed Balanced Fund (1994)  
· A series of Vanguard Tax-Managed Funds®.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,465,643,862 and 118,081,672 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Tax-Managed Capital Appreciation Fund (1994)  
· A series of Vanguard Tax-Managed Funds®.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $8,129,106,512 and 71,368,088 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; MCNABB, over $100,000; VOLANAKIS,
  over $100,000.    
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%

 

- 69 -


 

Vanguard Tax-Managed Small-Cap Fund (1999)  
· A series of Vanguard Tax-Managed Funds®.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $5,195,857,395 and 94,693,975 outstanding shares.  
· Nominees who own shares of this fund: MCNABB, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Telecommunication Services Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,401,132,364 and 15,437,817 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Total Bond Market Index Fund (1986)  
· A series of Vanguard Bond Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $182,374,406,940 and 14,136,641,330 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, $10,001-$50,000; LOUGHRIDGE, over $100,000;
  MCNABB, over $100,000; VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Total Bond Market II Index Fund (2009)  
· A series of Vanguard Bond Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $129,822,969,530 and 12,071,885,132 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Total International Bond Index Fund (2013)  
· A series of Vanguard Charlotte Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $84,915,692,591 and 4,462,144,719 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, $10,001-$50,000; LOUGHRIDGE, over $100,000;
  VOLANAKIS, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%

 

- 70 -


 

Vanguard Total International Stock Index Fund (1996)  
· A series of Vanguard STAR Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $280,328,363,615 and 9,490,494,128 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, over $100,000; LOUGHREY, over $100,000;
  LOUGHRIDGE, over $100,000; MALPASS, over $100,000; MCNABB, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Total Stock Market Index Fund (1992)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $574,666,131,873 and 7,946,371,291 outstanding shares.  
· Nominees who own shares of this fund: BUCKLEY, over $100,000; FULLWOOD, over $100,000;
  GUTMANN, over $100,000; HEISEN, over $100,000; LOUGHREY, over $100,000; LOUGHRIDGE, over
  $100,000; MALPASS, over $100,000; MCNABB, over $100,000; VOLANAKIS, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Total World Stock Index Fund (2008)  
· A series of Vanguard International Equity Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $11,912,645,324 and 188,822,191 outstanding shares.  
· Nominees who own shares of this fund: MCNABB, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard Treasury Money Market Fund (1992)  
· A series of Vanguard Admiral® Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $15,246,142,935 and 15,208,193,415 outstanding shares.  
· Nominees who own shares of this fund: PEROLD, $1-$10,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%
 
Vanguard U.S. Growth Fund (1959)  
· A series of Vanguard World Fund.  
· Advised by Baillie Gifford Overseas Ltd.; Jackson Square Partners, LLC; Jennison Associates LLC; Wellington
  Management Company LLP; and William Blair Investment Management, LLC.  
· Net assets of $7,454,459,967 and 158,887,067 outstanding shares.  
· Nominees who own shares of this fund: LOUGHRIDGE, over $100,000; MCNABB, over $100,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
  Title of Class Name and Address of Shareholder Percent of Class
  X Shares X X%

 

- 71 -


 

Vanguard U.S Value Fund (2000)  
· A series of Vanguard Malvern Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,586,049,688 and 86,211,796 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Ultra-Short-Term Bond Fund (2015)  
· A series of Vanguard Fixed Income Securities Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $2,818,108,373 and 148,704,604 outstanding shares.  
· Nominees who own shares of this fund: MULLIGAN, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Utilities Index Fund (2004)  
· A series of Vanguard World Fund.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $3,343,076,999 and 34,983,975 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Value Index Fund (1992)  
· A series of Vanguard Index Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $56,145,380,817 and 1,002,497,366 outstanding shares.  
· Nominees who own shares of this fund: GUTMANN, over $100,000; RASKIN, $10,001-$50,000.
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Balanced Portfolio (1991)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by Wellington Management Company LLP.  
· Net assets of $2,684,937,426 and 117,807,718 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Capital Growth Portfolio (2002)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by PRIMECAP Management Company.  

 

- 72 -


 

· Net assets of $1,115,135,498 and 36,229,962 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Conservative Allocation Portfolio (2011)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $261,787,475 and 10,676,188 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Diversified Value Portfolio (1999)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by Barrow, Hanley, Mewhinney & Strauss, LLC.  
· Net assets of $1,127,861,882 and 72,242,624 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Equity Income Portfolio (1993)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by Wellington Management Company LLP and The Vanguard Group, Inc.  
· Net assets of $1,206,630,526 and 54,932,799 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Equity Index Portfolio (1991)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $4,686,688,073 and 127,526,792 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, over $100,000.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Growth Portfolio (1993)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by Jackson Square Partners, LLC; Wellington Management Company LLP; and William Blair
  Investment Management, LLC.  
· Net assets of $479,666,261 and 22,769,909 outstanding shares.  
· Nominees who own shares of this fund: NONE.  

 

- 73 -


 

· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—High Yield Bond Portfolio (1996)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by Wellington Management Company LLP.  
· Net assets of $681,141,248 and 85,635,978 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—International Portfolio (1994)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by Baillie Gifford Overseas Ltd. and Schroder Investment Management North America Inc.
· Net assets of $2,674,189,760 and 113,013,241 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Mid-Cap Index Portfolio (1999)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,631,830,100 and 75,609,448 outstanding shares.  
· Nominees who own shares of this fund: RASKIN, over $100,000  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Moderate Allocation Portfolio (2011)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $333,360,836 and 12,212,309 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Money Market Portfolio (1991)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $958,859,835 and 958,341,670 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%

 

- 74 -


 

Vanguard Variable Insurance Fund—REIT Index Portfolio (1999)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,058,248,329 and 84,036,496 outstanding shares.  
· Nominees who own shares of this fund: NONE.  
· Shareholders with more than 5% record and/or beneficial ownership of the noted class of this fund’s shares:
 
Title of Class Name and Address of Shareholder Percent of Class
X Shares X X%
 
Vanguard Variable Insurance Fund—Short-Term Investment-Grade Portfolio (1999)  
· A series of Vanguard Variable Insurance Funds.  
· Advised by The Vanguard Group, Inc.  
· Net assets of $1,515,508,505 and 143,465,736 outstanding shares.  
·