N-CSR 1 starfinal.htm starfinal.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-3919
Name of Registrant: Vanguard STAR Funds
Address of Registrant: P.O. Box 2600
Valley Forge, PA 19482 
Name and address of agent for service:  Heidi Stam, Esquire 
  P.O. Box 876 
  Valley Forge, PA 19482 
Registrant’s telephone number, including area code: (610) 669-1000
Date of fiscal year end: October 31
Date of reporting period: November 1, 2008 – October 31, 2009
Item 1: Reports to Shareholders   

 

Vanguard STAR® Fund 
Annual Report 
October 31, 2009 


> Vanguard STAR Fund returned 19.74% for the fiscal year ended

October 31, 2009.

> The fund’s return for the period surpassed that of its benchmark, the

STAR Composite Index, and the average return of a composite of peer-

group funds weighted to approximate STAR’s asset allocation.

> Each of the STAR Fund’s 11 underlying funds posted positive returns for

the fiscal year. The fund’s equity funds generally performed better than

its bond funds.

Contents   
 
Your Fund’s Total Returns  1 
President’s Letter  2 
Results of Proxy Voting  8 
Fund Profile  10 
Performance Summary  11 
Financial Statements  13 
Your Fund’s After-Tax Returns  21 
About Your Fund’s Expenses  22 
Glossary  24 

Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the risks of investing in your fund are spelled out in the prospectus.

Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Fiscal Year Ended October 31, 2009     
  Ticker  Total 
  Symbol  Returns 
Vanguard STAR Fund  VGSTX  19.74% 
STAR Composite Index1    15.32 
STAR Composite Average2    16.05 

Your Fund’s Performance at a Glance         
October 31, 2008–October 31, 2009         
      Distributions Per Share 
  Starting  Ending  Income  Capital 
  Share Price  Share Price  Dividends  Gains 
Vanguard STAR Fund  $15.33  $16.96  $0.552  $0.626 

1 The STAR Composite Index is weighted 50% Morgan Stanley Capital International (MSCI) US Broad Market Index, 25% Barclays
Capital U.S. Aggregate Bond Index, 12.5% Barclays Capital 1–5 Year U.S. Credit Index, and 12.5% MSCI Europe, Australasia, Far East
(EAFE) Index.
2 The STAR Composite Average, which is derived from data provided by Lipper Inc., is weighted 50% general equity funds average, 25%
fixed income funds average, 12.5% 1–5 year investment-grade funds average, and 12.5% international funds average.

1


 

 

 

President’s Letter

Dear Shareholder,

For the fiscal year ended October 31, 2009, Vanguard STAR Fund returned 19.74%. The fund significantly outpaced its benchmark index, the STAR Composite Index (+15.32%), and a composite of fund peer groups (+16.05%) that is weighted to approximate STAR’s asset allocation.

The STAR Fund invests in 11 actively managed Vanguard mutual funds, which in turn invest in domestic and international stocks, as well as fixed income holdings. During the fund’s fiscal year, each of its underlying funds produced a double-digit return. The STAR Fund’s stock holdings generally outperformed its bond holdings.

If you own the STAR Fund in a taxable account, you may wish to review the section on the fund’s after-tax returns, which appears later in this report.

A vicious bear market quickly turned bullish

A year ago, the global financial system stood on the brink of collapse as the expanding U.S. credit crisis precipitated the deepest worldwide recession since World War II. Since then, markets have pulled back from the depths and, in fact, have rallied impressively. Although U.S. unemployment has risen to double digits and signs of a robust recovery are hard to find, the global economy has begun to

2


revive. For the first time in more than a year, U.S. gross domestic product registered growth, as reported by the Commerce Department for the third quarter of calendar 2009.

U.S. stocks recorded positive returns for the fiscal year ended October 31 as the market’s losses during the first four months of the period—marking the final plunge of a historic bear market—were erased by a remarkable rally beginning in March. Global stocks did even better, thanks to some renewed strength in developed markets and a powerful upswing in emerging markets that actually had some prognosticators worrying about a new asset bubble. Reminders of the markets’ travails are nevertheless apparent in the index

returns for the past three years, where negative figures are the rule. Even the five-year returns for U.S. stocks as of October 31 were barely positive, further evidence of the long-term damage done by the collapse of the real estate bubble.

The bond market experienced an equally dramatic turnaround

The stock market’s rapid fall and recovery were matched by an equally dramatic turnaround in the bond market. At the end of 2008, as the credit markets virtually shut down, risk-averse investors flocked to U.S. Treasury bonds. The effect was to widen the difference between the lower yields of Treasuries and the higher yields of corporate bonds to a margin not seen since the Great Depression.

Market Barometer       
  Average Annual Total Returns 
  Periods Ended October 31, 2009 
  One Year  Three Years  Five Years 
Stocks       
Russell 1000 Index (Large-caps)  11.20%  –6.84%  0.71% 
Russell 2000 Index (Small-caps)  6.46  –8.51  0.59 
Dow Jones U.S. Total Stock Market Index  11.34  –6.55  1.06 
MSCI All Country World Index ex USA (International)  34.79  –2.49  7.58 
 
Bonds       
Barclays Capital U.S. Aggregate Bond Index       
(Broad taxable market)  13.79%  6.35%  5.05% 
Barclays Capital Municipal Bond Index  13.60  4.17  4.15 
Citigroup 3-Month Treasury Bill Index  0.28  2.50  2.94 
 
CPI       
Consumer Price Index  –0.18%  2.32%  2.52% 

3


Central banks around the world responded to the economic slowdown by lowering interest rates and implementing other aggressive stimulus programs. Meanwhile, governments boosted spending in hopes of reversing the recessionary tide. As fears of a worldwide depression eased, investors’ appetite for risk returned to more normal levels. The receding pessimism raised demand for corporate bonds, raising their prices and bringing down their yields. Over the past 12 months, both taxable and municipal bonds returned more than 13%.

However, the Fed’s easy-money campaign had a predictable effect on short-term savings vehicles such as money market funds, whose yields track prevailing short-

term rates. In December 2008, the Fed reduced its target for the federal funds rate, a benchmark for the interest rates paid by money market instruments and other very short-term securities, to between 0% and 0.25%. The Fed has said it expects to maintain its target at this level “for an extended period.”

Domestic and international stocks recorded the best results

STAR follows a balanced investment approach by placing 60% to 70% of its assets in common stocks through eight stock funds and 30% to 40% of its assets in three bond funds. The fund met its goal of producing an above-benchmark performance for the year.

Expense Ratios     
Your Fund Compared With Its Peer Group     
  Acquired  Composite 
  Fund Fees  Benchmark 
  and Expenses1  Expense Ratio2 
STAR Fund  0.32%  1.22% 

1 This figure—drawn from the prospectus dated September 23, 2009—represents an estimate of the weighted average of the expense
ratios and any transaction fees charged by the underlying mutual funds (the “acquired” funds) in which the STAR Fund invests. The STAR
Fund does not charge any expenses or fees of its own. For the fiscal year ended October 31, 2009, the annualized acquired fund fees and
expenses were 0.37%.
2 Based on the STAR Composite Average, which is weighted 50% general equity funds average, 25% fixed income funds average, 12.5%
1–5 year investment-grade funds average, and 12.5% international funds average. The figure is derived from data provided by Lipper Inc.
and captures information through year-end 2008.

4


As the credit market crisis persisted through the first half of the fiscal year, most of the STAR Fund’s stock holdings plummeted. STAR’s underlying stock funds include both the stocks of domestic companies and, to a lesser extent, a diversified group of stocks in companies located outside the United States. Not surprisingly, the fund’s three bond funds performed well in this uncertain market environment as investors sought the relative safety of bonds over the long-term potential opportunity in the stock market. The bond market’s strength helped counter the weakness in the broader stock market.

It was an entirely different story in the second half of the fiscal year. As credit markets eased and investors gained

confidence in the government’s efforts to stabilize global markets, stocks began to rebound. International equities led the rally. STAR’s two international funds—International Growth and International Value—soared, returning more than 30% each for the second half of the period.

On the domestic front, STAR’s two value-oriented funds, Windsor and Windsor II, not only produced solid results for the fiscal year, they also beat their respective benchmarks by significant margins. These funds maneuvered through the earlier part of the year by investing in defensive stocks and positioned themselves to benefit from the uptick in stock prices during the second half. All of STAR’s growth funds ended the period with double-digit returns, but only

    Total Returns for 
Vanguard Fund  Percentage of  12 Months Ended 
(Investor Shares)  STAR’s Assets1  October 31, 2009 
Stock Funds     
Windsor™ II  16.3%  12.0% 
Windsor  8.6  18.2 
U.S. Growth  6.8  15.9 
PRIMECAP  6.8  12.0 
Morgan™ Growth  6.8  15.1 
International Value  6.2  28.3 
International Growth  6.2  32.9 
Explorer™  4.1  14.5 
Bond Funds     
Long-Term Investment-Grade  12.8%  35.0% 
GNMA  12.7  11.3 
Short-Term Investments     
Short-Term Investment-Grade  12.7%  14.4% 
Combined  100.0%  19.7% 

1 As of October 31, 2009.

5


the PRIMECAP Fund and International Growth Fund managed to beat their benchmark indexes.

The fund’s bond holdings, which focus on short- and long-term investment-grade corporate bonds and GNMA mortgage-backed securities, performed well in the second half of the fiscal year, but for the most part not as well as stocks. For the 12 months, each of the three bond funds fell short of its benchmark’s performance partly because of the funds’ customary bias toward higher-quality securities and, in the case of the GNMA Fund, its relatively short average weighted maturity. Over the full 12 months, lower-quality and longer-maturity securities tended to perform best.

The fund’s balanced approach is key to its long-term performance

For the ten years ended October 31, 2009, the STAR Fund posted an average annual return of 4.89%. The fund outperformed its benchmark (+2.84%), its peer group (+2.58%), and the Dow Jones U.S. Total Stock Market Index (+0.06%), for the period.

The fund’s balanced strategy has helped protect it during volatile periods in the stock market, such as the one we experienced this past fiscal year. By investing in both stocks and bonds, the STAR Fund is positioned to benefit from stocks’ long-term potential, while securing some protection from the stock market’s occasional downturns through an allocation to bonds.

Total Returns   
Ten Years Ended October 31, 2009   
  Average 
  Annual Return 
STAR Fund  4.89% 
STAR Composite Index1  2.84 
STAR Composite Average2  2.58 

The figures shown represent past performance, which is not a guarantee of future results. (Current performance
may be lower or higher than the performance data cited. For performance data current to the most recent month-
end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal
value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost.

1 The STAR Composite Index is weighted 62.5% Dow Jones Wilshire 5000 Index, 25% Lehman U.S. Aggregate Bond Index, and 12.5%
Citigroup 3-Month Treasury Bill Index through December 31, 2002; 50% Dow Jones Wilshire 5000 Index, 25% Lehman U.S. Aggregate
Bond Index, 12.5% Lehman 1–5 Year U.S. Credit Index, and 12.5% MSCI EAFE Index through April 22, 2005; and 50% MSCI US Broad
Market Index, 25% Barclays Capital U.S. Aggregate Bond Index, 12.5% Barclays Capital 1–5 Year U.S. Credit Index, and 12.5% MSCI
EAFE Index thereafter.
2 The STAR Composite Average, which is derived from data provided by Lipper Inc., is weighted 62.5% general equity funds average, 25%
fixed income funds average, and 12.5% money market funds average through December 31, 2002; and 50% general equity funds average,
25% fixed income funds average, 12.5% 1–5 year investment-grade funds average, and 12.5% international funds average thereafter.

6


Focus on the long term in times of uncertainty

Investors have endured a tumultuous period in the U.S. stock market this fiscal year.

Challenging times in the financial markets often force us to take a closer look at our portfolio and investment goals. At Vanguard, we encourage you to focus on the long term and avoid making hasty decisions based on the markets’ short-term volatility. It’s important to adhere to the time-tested principles of balance and diversification, both within and across asset classes.

One of the best ways to temper the markets’ fluctuations is to develop a well-balanced and diversified portfolio that is consistent with your long-term goals, time horizon, and risk tolerance. Such a portfolio should include a cost-efficient mix of stocks, bonds, and short-term reserves.

Vanguard STAR Fund’s mix of domestic and international stocks as well as bonds can play an important role in such an investment plan. It can help your portfolio to endure the ups and downs of the market by adding balance and diversification, or stand on its own as a well-balanced, all-in-one portfolio.

Thank you for investing your assets at Vanguard.

Sincerely,


F. William McNabb III
President and Chief Executive Officer
November 11, 2009

7


Results of Proxy Voting

At a special meeting of shareholders on July 2, 2009, fund shareholders approved the following two proposals:

Proposal 1—Elect trustees for each fund.*

The individuals listed in the table below were elected as trustees for each fund. All trustees with the exception of Messrs. McNabb and Volanakis (both of whom already served as directors of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.

      Percentage 
Trustee  For  Withheld  For 
John J. Brennan  3,238,376,491  48,158,442  98.5% 
Charles D. Ellis  3,220,296,621  66,238,311  98.0% 
Emerson U. Fullwood  3,234,626,268  51,908,665  98.4% 
Rajiv L. Gupta  3,233,667,602  52,867,331  98.4% 
Amy Gutmann  3,235,485,956  51,048,977  98.4% 
JoAnn Heffernan Heisen  3,236,403,610  50,131,323  98.5% 
F. William McNabb III  3,236,819,920  49,715,013  98.5% 
André F. Perold  3,232,519,097  54,015,835  98.4% 
Alfred M. Rankin, Jr.  3,236,021,880  50,513,052  98.5% 
Peter F. Volanakis  3,238,134,065  48,400,867  98.5% 

* Results are for all funds within the same trust.

Proposal 2—Update and standardize the funds’ fundamental policies regarding:
(a) Purchasing and selling real estate.
(b) Issuing senior securities.
(c) Borrowing money.
(d) Making loans.
(e) Purchasing and selling commodities.
(f) Concentrating investments in a particular industry or group of industries.
(g) Eliminating outdated fundamental investment policies not required by law.

The revised fundamental policies are clearly stated and simple, yet comprehensive, making oversight and compliance more efficient than under the former policies. The revised fundamental policies will allow the funds to respond more quickly to regulatory and market changes, while avoiding the costs and delays associated with successive shareholder meetings.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
STAR Fund           
2a  511,715,969  10,770,276  20,605,010  16,152,401  91.5% 
2b  509,878,055  12,684,550  20,528,652  16,152,400  91.2% 
2c  500,267,023  12,148,510  30,675,723  16,152,401  89.5% 
2d  502,987,781  12,509,081  27,594,393  16,152,401  89.9% 
2e  503,217,062  11,480,529  28,393,665  16,152,400  90.0% 
2f  505,177,082  11,949,760  25,964,412  16,152,402  90.3% 
2g  512,913,509  11,151,329  19,026,417  16,152,402  91.7% 

8


Fund shareholders did not approve this proposal:

Proposal 3—Institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.

The trustees recommended a vote against the proposal because it called for procedures that duplicate existing practices and procedures of the Vanguard funds.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
STAR Fund  96,645,940  22,613,443  423,831,863  16,152,410  17.3% 

9


STAR Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics   
  Fund 
Yield1  3.1% 
Acquired Fund Fees and Expenses2  0.32% 

Allocation to Underlying Vanguard Funds   
 
Stock Funds   
Windsor II  16.3% 
Windsor  8.6 
U.S. Growth  6.8 
PRIMECAP  6.8 
Morgan Growth  6.8 
International Value  6.2 
International Growth  6.2 
Explorer  4.1 
Bond Funds   
Long-Term Investment-Grade  12.8% 
GNMA  12.7 
Short-Term Investments   
Short-Term Investment-Grade  12.7% 

Volatility Measures3   
  Fund Versus 
  Composite Index4 
R-Squared  0.99 
Beta  1.04 

Equity Investment Focus

 

Fixed Income Investment Focus

Fund Asset Allocation

1 30-day SEC yield. See the Glossary.
2 This figure—drawn from the prospectus dated September 23, 2009—represents an estimate of the weighted average of the expense
ratios and any transaction fees charged by the underlying mutual funds (the “acquired” funds) in which the STAR Fund invests. The
STAR Fund does not charge any expenses or fees of its own. For the fiscal year ended October 31, 2009, the annualized acquired fund
fees and expenses were 0.37%.
3 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
4 The STAR Composite Index is weighted 50% Morgan Stanley Capital International (MSCI) US Broad Market Index, 25% Barclays
Capital U.S. Aggregate Bond Index, 12.5% Barclays Capital 1–5 Year U.S. Credit Index, and 12.5% MSCI Europe, Australasia,
Far East (EAFE) Index.

10


STAR Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000


  Average Annual Total Returns  Final Value 
  Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
STAR Fund1  19.74%  3.84%  4.89%  $16,119 
Dow Jones U.S. Total Stock Market Index  11.34  1.06  0.06  10,056 
STAR Composite Index2  15.32  3.31  2.84  13,233 
STAR Composite Average3  16.05  2.36  2.58  12,904 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 The STAR Composite Index is weighted 62.5% Dow Jones Wilshire 5000 Index, 25% Lehman U.S. Aggregate Bond Index, and 12.5%
Citigroup 3-Month Treasury Bill Index through December 31, 2002; 50% Dow Jones Wilshire 5000 Index, 25% Lehman U.S. Aggregate
Bond Index, 12.5% Lehman 1–5 Year U.S. Credit Index, and 12.5% MSCI EAFE Index through April 22, 2005; and 50% MSCI US Broad
Market Index, 25% Barclays Capital U.S. Aggregate Bond Index, 12.5% Barclays Capital 1–5 Year U.S. Credit Index, and 12.5% MSCI
EAFE Index thereafter.
3 The STAR Composite Average, which is derived from data provided by Lipper Inc., is weighted 62.5% general equity funds average, 25%
fixed income funds average, and 12.5% money market funds average through December 31, 2002, and 50% general equity funds average,
25% fixed income funds average, 12.5% 1–5 year investment-grade funds average, and 12.5% international funds average thereafter.

11


STAR Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

            Ten Years 
  Inception Date  One Year  Five Years  Capital  Income  Total 
STAR Fund2  3/29/1985  5.53%  4.41%  2.21%  3.08%  5.29% 

1 The STAR Composite Index is weighted 62.5% Dow Jones Wilshire 5000 Index, 25% Lehman U.S. Aggregate Bond Index, and 12.5%
Citigroup 3-Month Treasury Bill Index through December 31, 2002; 50% Dow Jones Wilshire 5000 Index, 25% Lehman U.S. Aggregate
Bond Index, 12.5% Lehman 1–5 Year U.S. Credit Index, and 12.5% MSCI EAFE Index through April 22, 2005; and 50% MSCI US Broad
Market Index, 25% Barclays Capital U.S. Aggregate Bond Index, 12.5% Barclays Capital 1–5 Year U.S. Credit Index, and 12.5% MSCI
EAFE Index thereafter.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
Note: See Financial Highlights for dividend and capital gains information.

12


STAR Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

    Market 
    Value• 
  Shares  ($000) 
Investment Companies (100.0%)     
U.S. Stock Funds (49.4%)     
Vanguard Windsor II Fund Investor Shares  87,580,944  1,946,049 
Vanguard Windsor Fund Investor Shares  95,113,162  1,043,391 
Vanguard U.S. Growth Fund Investor Shares  53,774,301  825,436 
Vanguard PRIMECAP Fund Investor Shares  15,304,246  823,521 
Vanguard Morgan Growth Fund Investor Shares  58,514,360  820,956 
Vanguard Explorer Fund Investor Shares  9,652,038  499,686 
    5,959,039 
International Stock Funds (12.4%)     
Vanguard International Value Fund  24,943,380  747,054 
Vanguard International Growth Fund Investor Shares  45,775,660  746,144 
    1,493,198 
Bond Funds (25.5%)     
Vanguard Long-Term Investment-Grade Fund Investor Shares  168,967,710  1,544,365 
Vanguard GNMA Fund Investor Shares  142,771,533  1,539,077 
    3,083,442 
Short-Term Bond Fund (12.7%)     
Vanguard Short-Term Investment-Grade Fund Investor Shares  145,180,095  1,538,909 
Total Investment Companies (Cost $10,872,269)    12,074,588 
Other Assets and Liabilities (0.0%)     
Other Assets    33,022 
Liabilities    (31,397) 
    1,625 
Net Assets (100%)     
Applicable to 712,067,542 outstanding $.001 par value shares of     
beneficial interest (unlimited authorization)    12,076,213 
Net Asset Value Per Share    $16.96 

13


STAR Fund

At October 31, 2009, net assets consisted of:

  Amount 
  ($000) 
Paid-in Capital  11,111,665 
Undistributed Net Investment Income  68,584 
Accumulated Net Realized Losses  (306,355) 
Unrealized Appreciation (Depreciation)  1,202,319 
Net Assets  12,076,213 

• See Note A in Notes to Financial Statements.
See accompanying Notes, which are an integral part of the Financial Statements.

14


STAR Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Income Distributions Received  354,756 
Net Investment Income—Note B  354,756 
Realized Net Gain (Loss)   
Capital Gain Distributions Received  98,984 
Investment Securities Sold  (308,029) 
Realized Net Gain (Loss)  (209,045) 
Change in Unrealized Appreciation (Depreciation) of Investment Securities  1,805,741 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,951,452 

See accompanying Notes, which are an integral part of the Financial Statements.

15


STAR Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  354,756  408,314 
Realized Net Gain (Loss)  (209,045)  499,748 
Change in Unrealized Appreciation (Depreciation)  1,805,741  (5,074,944) 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,951,452  (4,166,882) 
Distributions     
Net Investment Income  (376,099)  (429,438) 
Realized Capital Gain1  (420,804)  (548,222) 
Total Distributions  (796,903)  (977,660) 
Capital Share Transactions     
Issued  1,031,935  1,122,273 
Issued in Lieu of Cash Distributions  772,281  950,772 
Redeemed  (1,310,111)  (1,710,879) 
Net Increase (Decrease) from Capital Share Transactions  494,105  362,166 
Total Increase (Decrease)  1,648,654  (4,782,376) 
Net Assets     
Beginning of Period  10,427,559  15,209,935 
End of Period2  12,076,213  10,427,559 

1 Includes fiscal 2009 and 2008 short-term gain distributions totaling $0 and $152,838,000, respectively. Short-term gain distributions are
treated as ordinary income dividends for tax purposes.
2 Net Assets—End of Period includes undistributed net investment income of $68,584,000 and $89,927,000.

See accompanying Notes, which are an integral part of the Financial Statements.

16


STAR Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $15.33  $22.80  $21.04  $19.14  $17.92 
Investment Operations           
Net Investment Income  .516  .600  .626  .533  .460 
Capital Gain Distributions Received  .142  .967  .669  .378  .010 
Net Realized and Unrealized Gain (Loss)           
on Investments  2.150  (7.578)  1.392  1.554  1.190 
Total from Investment Operations  2.808  (6.011)  2.687  2.465  1.660 
Distributions           
Dividends from Net Investment Income  (.552)  (.634)  (.600)  (.510)  (.440) 
Distributions from Realized Capital Gains  (.626)  (.825)  (.327)  (.055)  — 
Total Distributions  (1.178)  (1.459)  (.927)  (.565)  (.440) 
Net Asset Value, End of Period  $16.96  $15.33  $22.80  $21.04  $19.14 
 
Total Return1  19.74%  –27.94%  13.14%  13.13%  9.33% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $12,076  $10,428  $15,210  $13,522  $11,547 
Ratio of Total Expenses to           
Average Net Assets  0%2  0%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  3.35%  3.00%  2.85%  2.64%  2.44% 
Portfolio Turnover Rate  21%  24%  8%  9%  6% 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 The acquired fund fees and expenses were 0.37%.

See accompanying Notes, which are an integral part of the Financial Statements.

17


STAR Fund

Notes to Financial Statements

Vanguard STAR Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund follows a balanced investment strategy by investing in selected Vanguard funds. The fund invests 60% to 70% of its net assets in stock funds (predominantly large-capitalization U.S. stock funds), 20% to 30% in intermediate- to long-term bond funds, and 10% to 20% in a short-term bond fund.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.

2. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

3. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

4. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

B. Under a service agreement, The Vanguard Group furnishes investment advisory, corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the year ended October 31, 2009, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

At October 31, 2009, 100% of the fund’s investments were valued based on Level 1 inputs.

18


STAR Fund

D. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

For tax purposes, at October 31, 2009, the fund had $68,455,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $299,655,000 to offset future net capital gains through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $10,878,839,000.

Net unrealized appreciation of investment securities for tax purposes was $1,195,749,000, consisting of unrealized gains of $1,446,693,000 on securities that had risen in value since their purchase and $250,944,000 in unrealized losses on securities that had fallen in value since their purchase.

E. During the year ended October 31, 2009, the fund purchased $2,397,581,000 of investment securities and sold $2,235,425,000 of investment securities, other than temporary cash investments.

F. Capital shares issued and redeemed were:

  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  68,174  56,993 
Issued in Lieu of Cash Distributions  53,393  46,267 
Redeemed  (89,493)  (90,316) 
Net Increase (Decrease) in Shares Outstanding  32,074  12,944 

G. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 8, 2009, for potential recognition or disclosure in these financial statements.

19


Report of Independent Registered
Public Accounting Firm

To the Trustees of Vanguard STAR Funds and the Shareholders of Vanguard STAR Fund:

In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard STAR Fund (the “Fund”) at October 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2009 by agreement to the underlying ownership records of the Vanguard funds, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania

December 8, 2009


Special 2009 tax information (unaudited) for Vanguard STAR Fund

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $420,804,000 as capital gain dividends (from net long-term capital gains) to shareholders during the fiscal year.

The fund distributed $133,640,000 of qualified dividend income to shareholders during the fiscal year.

For corporate shareholders, 23.0% of investment income (dividend income plus short-term gains, if any) qualifies for the dividends-received deduction.

20


Your Fund’s After-Tax Returns

This table presents returns for your fund both before and after taxes. The after-tax returns are shown in two ways: (1) assuming that an investor owned the fund during the entire period and paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s distributions and sold all shares at the end of each period.

Calculations are based on the highest individual federal income tax and capital gains tax rates in effect at the times of the distributions and the hypothetical sales. State and local taxes were not considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures and estimates for 2009. (In the example, returns after the sale of fund shares may be higher than those assuming no sale. This occurs when the sale would have produced a capital loss. The calculation assumes that the investor received a tax deduction for the loss.)

Please note that your actual after-tax returns will depend on your tax situation and may differ from those shown. Also note that if you own the fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not subject to current taxes.

Finally, keep in mind that a fund’s performance—whether before or after taxes—does not guarantee future results.

Average Annual Total Returns: STAR Fund1
Periods Ended October 31, 2009

  One  Five  Ten 
  Year  Years  Years 
Returns Before Taxes  19.74%  3.84%  4.89% 
Returns After Taxes on Distributions  17.81  2.63  3.31 
Returns After Taxes on Distributions and Sale of Fund Shares  13.71  2.81  3.41 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.

21


About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.

A typical fund’s expenses are expressed as a percentage of its average net assets. The STAR Fund has no direct expenses, but bears its proportionate share of the costs for the underlying funds in which it invests. These indirect expenses make up the acquired fund fees and expenses, also expressed as a percentage of average net assets.

The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The costs were calculated using the acquired fund fees and expenses for the STAR Fund.

The accompanying table illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”

• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Six Months Ended October 31, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
STAR Fund  4/30/2009  10/31/2009  Period1 
Based on Actual Fund Return  $1,000.00  $1,182.59  $2.04 
Based on Hypothetical 5% Yearly Return  1,000.00  1,023.34  1.89 

1 The calculations are based on the STAR Fund’s acquired fund fees and expenses for the most recent six-month period. The STAR Fund’s
annualized expense figure for that period is 0.37%. The dollar amounts shown as “Expenses Paid” are equal to the annualized expense
figures for the underlying funds, multiplied by the average account value over the period, multiplied by the number of days in the most
recent six-month period, then divided by the number of days in the most recent 12-month period.

22


Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the account service fee described in the prospectus. If such a fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.

23


Glossary

Acquired Fund Fees and Expenses. Funds that invest in other Vanguard funds incur no direct expenses, but they do bear proportionate shares of the operating, administrative, and advisory expenses of the underlying funds, and they must pay any fees charged by those funds. The figure for acquired fund fees and expenses represents a weighted average of these underlying costs. Acquired is a term that the Securities and Exchange Commission applies to any mutual fund whose shares are owned by another fund.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

Yield. A fund’s 30-day SEC yield is derived using a formula specified by the U.S. Securities and Exchange Commission. Under the formula, data related to the fund’s security holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that period, which is then annualized and divided by the fund’s estimated average net assets over the calculation period. For the purposes of this calculation, a security’s income is based on its current market yield to maturity (in the case of bonds) or its projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized income, it will differ—at times significantly—from the fund’s actual experience. As a result, the fund’s income distributions may be higher or lower than implied by the SEC yield.

24


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The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 156 Vanguard funds.

The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.

Interested Trustees  Emerson U. Fullwood 
  Born 1948. Trustee Since January 2008. Principal 
John J. Brennan1  Occupation(s) During the Past Five Years: Executive 
Born 1954. Trustee Since May 1987. Chairman of  Chief Staff and Marketing Officer for North America 
the Board. Principal Occupation(s) During the Past  and Corporate Vice President (retired 2008) of Xerox 
Five Years: Chairman of the Board and Director/Trustee  Corporation (photocopiers and printers); Director of 
of The Vanguard Group, Inc., and of each of the  SPX Corporation (multi-industry manufacturing), the 
investment companies served by The Vanguard Group;  United Way of Rochester, the Boy Scouts of America, 
Chief Executive Officer (1996–2008) and President  Amerigroup Corporation (direct health and medical 
(1989–2008) of The Vanguard Group and of each of the  insurance carriers), and Monroe Community College 
investment companies served by The Vanguard Group;  Foundation. 
Chairman of the Financial Accounting Foundation;   
Governor of the Financial Industry Regulatory Authority  Rajiv L. Gupta 
(FINRA); Director of United Way of Southeastern  Born 1945. Trustee Since December 2001.2 Principal 
Pennsylvania.  Occupation(s) During the Past Five Years: Chairman 
  and Chief Executive Officer (retired 2009) and President 
F. William McNabb III1  (2006–2008) of Rohm and Haas Co. (chemicals); Board 
Born 1957. Trustee Since July 2009. Principal  Member of American Chemistry Council; Director of 
Occupation(s) During the Past Five Years: Director of  Tyco International, Ltd. (diversified manufacturing and 
The Vanguard Group, Inc., since 2008; Chief Executive  services) and Hewlett-Packard Co. (electronic computer 
Officer and President of The Vanguard Group and of  manufacturing); Trustee of The Conference Board. 
each of the investment companies served by The   
Vanguard Group since 2008; Director of Vanguard  Amy Gutmann 
Marketing Corporation; Managing Director of The  Born 1949. Trustee Since June 2006. Principal 
Vanguard Group (1995–2008).  Occupation(s) During the Past Five Years: President of 
  the University of Pennsylvania; Christopher H. Browne 
  Distinguished Professor of Political Science in the School 
Independent Trustees  of Arts and Sciences with secondary appointments 
  at the Annenberg School for Communication and the 
Charles D. Ellis  Graduate School of Education of the University of 
Born 1937. Trustee Since January 2001. Principal  Pennsylvania; Director of Carnegie Corporation of 
Occupation(s) During the Past Five Years: Applecore  New York, Schuylkill River Development Corporation, 
Partners (pro bono ventures in education); Senior  and Greater Philadelphia Chamber of Commerce; 
Advisor to Greenwich Associates (international business  Trustee of the National Constitution Center. 
strategy consulting); Successor Trustee of Yale University;   
Overseer of the Stern School of Business at New York   
University; Trustee of the Whitehead Institute for   
Biomedical Research.   


JoAnn Heffernan Heisen  Executive Officers   
Born 1950. Trustee Since July 1998. Principal     
Occupation(s) During the Past Five Years: Corporate  Thomas J. Higgins1   
Vice President and Chief Global Diversity Officer since  Born 1957. Chief Financial Officer Since September 
2006 (retired 2008) and Member of the Executive  2008. Principal Occupation(s) During the Past Five 
Committee (retired 2008) of Johnson & Johnson  Years: Principal of The Vanguard Group, Inc.; Chief 
(pharmaceuticals/consumer products); Vice President  Financial Officer of each of the investment companies 
and Chief Information Officer of Johnson & Johnson  served by The Vanguard Group since 2008; Treasurer 
(1997–2005); Director of the University Medical Center  of each of the investment companies served by The 
at Princeton and Women’s Research and Education  Vanguard Group (1998–2008). 
Institute; Member of the Advisory Board of the Maxwell     
School of Citizenship and Public Affairs at Syracuse     
University.  Kathryn J. Hyatt1   
  Born 1955. Treasurer Since November 2008. Principal 
  Occupation(s) During the Past Five Years: Principal of 
F. Joseph Loughrey  The Vanguard Group, Inc.; Treasurer of each of the 
Born 1949. Trustee Since October 2009. Principal  investment companies served by The Vanguard 
Occupation(s) During the Past Five Years: President and  Group since 2008; Assistant Treasurer of each of the 
Chief Operating Officer since 2005 (retired 2009) and  investment companies served by The Vanguard Group 
Vice Chairman of the Board (2008–2009) of Cummins  (1988–2008).   
Inc. (industrial machinery); Director of SKF AB (industrial     
machinery), Hillenbrand, Inc. (specialized consumer     
services), Sauer-Danfoss Inc. (machinery), the Lumina  Heidi Stam1   
Foundation for Education, and the Columbus Community  Born 1956. Secretary Since July 2005. Principal 
Education Coalition; Chairman of the Advisory Council  Occupation(s) During the Past Five Years: Managing 
for the College of Arts and Letters at the University of  Director of The Vanguard Group, Inc., since 2006; 
Notre Dame.  General Counsel of The Vanguard Group since 2005; 
  Secretary of The Vanguard Group and of each of the 
  investment companies served by The Vanguard Group 
André F. Perold  since 2005; Director and Senior Vice President of 
Born 1952. Trustee Since December 2004. Principal  Vanguard Marketing Corporation since 2005; Principal 
Occupation(s) During the Past Five Years: George Gund  of The Vanguard Group (1997–2006). 
Professor of Finance and Banking, Harvard Business     
School; Chair of the Investment Committee of HighVista     
Strategies LLC (private investment firm).  Vanguard Senior Management Team 
 
Alfred M. Rankin, Jr.  R. Gregory Barton  Michael S. Miller 
Born 1941. Trustee Since January 1993. Principal  Mortimer J. Buckley  James M. Norris 
Occupation(s) During the Past Five Years: Chairman,  Kathleen C. Gubanich  Glenn W. Reed 
President, and Chief Executive Officer of NACCO  Paul A. Heller  George U. Sauter 
Industries, Inc. (forklift trucks/housewares/lignite);     
Director of Goodrich Corporation (industrial products/     
aircraft systems and services); Deputy Chairman of   
the Federal Reserve Bank of Cleveland; Trustee of     
University Hospitals of Cleveland, The Cleveland  Founder   
Museum of Art, and Case Western Reserve University.  John C. Bogle   
  Chairman and Chief Executive Officer, 1974–1996 
 
Peter F. Volanakis     
Born 1955. Trustee Since July 2009. Principal     
Occupation(s) During the Past Five Years: President     
since 2007 and Chief Operating Officer since 2005     
of Corning Incorporated (communications equipment);     
President of Corning Technologies (2001–2005); Director     
of Corning Incorporated and Dow Corning; Trustee of     
the Corning Incorporated Foundation and the Corning     
Museum of Glass; Overseer of the Amos Tuck School     
of Business Administration at Dartmouth College.     

1 These individuals are “interested persons” as defined in the Investment Company Act of 1940.
2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


P.O. Box 2600
Valley Forge, PA 19482-2600

Connect with Vanguard® > www.vanguard.com

Fund Information > 800-662-7447  All comparative mutual fund data are from Lipper Inc. 
  or Morningstar, Inc., unless otherwise noted. 
Direct Investor Account Services > 800-662-2739   
 
Institutional Investor Services > 800-523-1036  You can obtain a free copy of Vanguard’s proxy voting 
  guidelines by visiting our website, www.vanguard.com, 
Text Telephone for People  and searching for “proxy voting guidelines,” or by 
With Hearing Impairment > 800-749-7273  calling Vanguard at 800-662-2739. The guidelines are 
  also available from the SEC’s website, www.sec.gov. 
  In addition, you may obtain a free report on how your 
  fund voted the proxies for securities it owned during 
the 12 months ended June 30. To get the report, visit 
This material may be used in conjunction  either www.vanguard.com or www.sec.gov.
with the offering of shares of any Vanguard 
fund only if preceded or accompanied by   
the fund’s current prospectus.  You can review and copy information about your fund 
  at the SEC’s Public Reference Room in Washington, D.C. 
  To find out more about this public service, call the SEC 
  at 202-551-8090. Information about your fund is also 
  available on the SEC’s website, and you can receive 
  copies of this information, for a fee, by sending a 
  request in either of two ways: via e-mail addressed to 
  publicinfo@sec.gov or via regular mail addressed to the 
  Public Reference Section, Securities and Exchange 
  Commission, Washington, DC 20549-1520. 
 
 
 
 
  © 2009 The Vanguard Group, Inc. 
  All rights reserved. 
  Vanguard Marketing Corporation, Distributor. 
  Q560 122009 


Vanguard LifeStrategy® Funds 
Annual Report 
October 31, 2009 

Vanguard LifeStrategy Income Fund 
Vanguard LifeStrategy Conservative Growth Fund 
Vanguard LifeStrategy Moderate Growth Fund 
Vanguard LifeStrategy Growth Fund 


> For the fiscal year ended October 31, 2009, returns for the Vanguard LifeStrategy

Funds ranged from 12.83% for the most conservative of the four funds to 13.82%

for the fund with a moderately aggressive asset allocation.

> Despite these solid results, each of the LifeStrategy Funds trailed the return of

its corresponding benchmark index. Only the LifeStrategy Conservative Growth

Fund was ahead of the return of its peer-group composite average.

> Vanguard Asset Allocation Fund, which makes up about one-quarter of the

assets of each LifeStrategy Fund, restrained the funds’ 12-month returns.

Contents   
 
Your Fund’s Total Returns  1 
President’s Letter  2 
Results of Proxy Voting  8 
LifeStrategy Income Fund  10 
LifeStrategy Conservative Growth Fund  20 
LifeStrategy Moderate Growth Fund  30 
LifeStrategy Growth Fund  39 
Your Fund’s After-Tax Returns  51 
About Your Fund’s Expenses  52 
Glossary  54 

Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice.
Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the
risks of investing in your fund are spelled out in the prospectus.
Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Fiscal Year Ended October 31, 2009     
  Ticker  Total 
  Symbol  Return 
Vanguard LifeStrategy Income Fund  VASIX  12.83% 
Income Composite Index1    13.83 
Income Composite Average2    13.39 
 
Vanguard LifeStrategy Conservative Growth Fund  VSCGX  13.72% 
Conservative Growth Composite Index1    14.34 
Conservative Growth Composite Average2    13.44 
 
Vanguard LifeStrategy Moderate Growth Fund  VSMGX  13.82% 
Moderate Growth Composite Index1    14.54 
Moderate Growth Composite Average2    16.79 
 
Vanguard LifeStrategy Growth Fund  VASGX  13.74% 
Growth Composite Index1    14.57 
Growth Composite Average2    16.42 

Your Fund’s Performance at a Glance           
October 31, 2008–October 31, 2009           
  Starting  Ending  Distributions Per Share   
  Share  Share  Income  Capital  30-Day 
  Price  Price  Dividends  Gains  SEC Yield 
Vanguard LifeStrategy Income Fund  $12.13  $13.20  $0.451  $0.000  2.45% 
Vanguard LifeStrategy Conservative           
Growth Fund  13.46  14.81  0.448  0.000  2.49 
Vanguard LifeStrategy Moderate           
Growth Fund  15.56  17.16  0.482  0.000  2.03 
Vanguard LifeStrategy Growth Fund  16.86  18.66  0.441  0.000  2.06 

1 Total returns for the composite indexes are derived by applying the funds’ target allocations to the results of the following benchmarks: for
U.S. stocks, the Morgan Stanley Capital International (MSCI) US Broad Market Index; for international stocks, the MSCI Europe, Australasia,
Far East (MSCI EAFE) Index; for bonds, the Barclays Capital U.S. Aggregate Bond Index; and for short-term investments, the Barclays Capital
U.S. 1–3 Year Credit Bond Index.
2 Each average is a blended composite that weights the return of the comparable mutual funds average for each asset class in proportion to the
target weighting of the appropriate LifeStrategy Fund. All average returns for funds are derived from data provided by Lipper Inc. The Income
Composite Average is weighted 60% fixed income funds average, 20% general equity funds average, and 20% money market funds average.
The Conservative Growth Composite Average is weighted 40% fixed income funds average, 35% general equity funds average, 20% money
market funds average, and 5% international funds average. The Moderate Growth Composite Average is weighted 50% general equity funds
average, 40% fixed income funds average, and 10% international funds average. The Growth Composite Average is weighted 65% general
equity funds average, 20% fixed income funds average, and 15% international funds average.

1



President’s Letter

Dear Shareholder,

For the fiscal year ended October 31, 2009, the Vanguard LifeStrategy Funds’ returns ranged from 12.83% for the conservative LifeStrategy Income Fund to 13.82% for the LifeStrategy Moderate Growth Fund.

After a tumultuous year in global stock markets, each of the four LifeStrategy Funds lagged its respective benchmark composite index. Only the LifeStrategy Conservative Growth Fund was ahead of the return of its peer-group composite average.

As “funds of funds,” the LifeStrategy Funds pursue their investment objectives by investing in other Vanguard mutual funds. Overall, the LifeStrategy Funds’ returns were weakened by the lackluster performance of the underlying Asset Allocation Fund. Representing about one-fourth of each LifeStrategy Fund, the Asset Allocation Fund fell behind its benchmark index and peer mutual funds average because of its heavy commitment to stocks during the worst period of the credit-market crisis.

If you own a LifeStrategy Fund in a taxable account, you may wish to review the section later in this report on the funds’ after-tax returns.

2


A vicious bear market quickly turned bullish

A year ago, the global financial system stood on the brink of collapse as the expanding U.S. credit crisis precipitated the deepest worldwide recession since World War II. Since then, markets have pulled back from the depths and, in fact, have rallied impressively. Although U.S. unemployment has risen to double digits and signs of a robust recovery are hard to find, the global economy has begun to revive. For the first time in more than a year, U.S. gross domestic product registered growth, as reported by the Commerce Department for the third quarter of calendar 2009.

U.S. stocks recorded positive returns for the fiscal year ended October 31 as the market’s losses during the first four months of the period—marking the final plunge of a historic bear market—were erased by a remarkable rally beginning in March. Global stocks did even better, thanks to some renewed strength in developed markets and a powerful upswing in emerging markets that actually had some prognosticators worrying about a new asset bubble. Reminders of the markets’ travails are nevertheless apparent in the index returns for the past three years, where negative figures are the rule. Even the five-year returns for U.S. stocks as of October 31 were barely positive, further evidence of the long-term damage done by the collapse of the real estate bubble.

Market Barometer       
  Average Annual Total Returns 
  Periods Ended October 31, 2009 
  One Year  Three Years  Five Years 
Stocks       
Russell 1000 Index (Large-caps)  11.20%  –6.84%  0.71% 
Russell 2000 Index (Small-caps)  6.46  –8.51  0.59 
Dow Jones U.S. Total Stock Market Index  11.34  –6.55  1.06 
MSCI All Country World Index ex USA (International)  34.79  –2.49  7.58 
 
Bonds       
Barclays Capital U.S. Aggregate Bond Index       
(Broad taxable market)  13.79%  6.35%  5.05% 
Barclays Capital Municipal Bond Index  13.60  4.17  4.15 
Citigroup 3-Month Treasury Bill Index  0.28  2.50  2.94 
 
CPI       
Consumer Price Index  –0.18%  2.32%  2.52% 

3


The bond market experienced an equally dramatic turnaround

The stock market’s rapid fall and recovery were matched by an equally dramatic turnaround in the bond market. At the end of 2008, as the credit markets virtually shut down, risk-averse investors flocked to U.S. Treasury bonds. The effect was to widen the difference between the lower yields of Treasuries and the higher yields of corporate bonds to a margin not seen since the Great Depression.

Central banks around the world responded to the economic slowdown by lowering interest rates and implementing other aggressive stimulus programs. Meanwhile, governments boosted spending in hopes of reversing the recessionary tide. As fears of a worldwide depression eased, investors’

appetite for risk returned to more normal levels. The receding pessimism raised demand for corporate bonds, pushing up their prices and bringing down their yields. Over the past 12 months, both taxable and municipal bonds returned more than 13%.

However, the Fed’s easy-money campaign had a predictable effect on short-term savings vehicles such as money market funds, whose yields track prevailing short-term rates. In December 2008, the Fed reduced its target for the federal funds rate, a benchmark for the interest rates paid by money market instruments and other very short-term securities, to between 0% and 0.25%. The Fed has said it expects to maintain its target at this level “for an extended period.”

Expense Ratios     
Your Fund Compared With Its Peer Group     
  Acquired  Peer-Group 
  Fund Fees and  Expense 
  Expenses1  Ratio2 
LifeStrategy Income Fund  0.22%  1.05% 
LifeStrategy Conservative Growth Fund  0.22  1.12 
LifeStrategy Moderate Growth Fund  0.22  1.22 
LifeStrategy Growth Fund  0.21  1.29 

1 This figure—drawn from the prospectus dated June 8, 2009—represents an estimate of the weighted average of the expense ratios and
any transaction fees charged by the underlying mutual funds (the “acquired” funds) in which the LifeStrategy Funds invest. The LifeStrategy
Funds do not charge any expenses or fees of their own. For the fiscal year ended October 31, 2009, the annualized acquired fund fees and
expenses were 0.23% for the LifeStrategy Income Fund, 0.24% for the LifeStrategy Conservative Growth Fund, 0.23% for the LifeStrategy
Moderate Growth Fund, and 0.23% for the LifeStrategy Growth Fund.
2 Peer groups are (from top to bottom) the Income Composite Average, the Conservative Growth Composite Average, the Moderate Growth
Composite Average, and the Growth Composite Average. Each average is a blended composite that weights the expense ratio of the
comparable mutual funds average for each asset class in proportion to the target weighting of the appropriate LifeStrategy Fund. Peer-
group expense ratios are derived from data provided by Lipper Inc. and capture information through year-end 2008.

4


Funds produced strong returns, but they could have been better

The Vanguard LifeStrategy Funds offer investors a balanced and diversified portfolio based on their risk tolerance. Up to five underlying Vanguard funds—primarily index portfolios that track U.S. bond and stock markets and international equity markets—make up each of the LifeStrategy Funds.

As the credit-market crisis spread in the first half of the fiscal year, the LifeStrategy Funds’ equity holdings plummeted. Not surprisingly, the LifeStrategy Income Fund and the LifeStrategy Conservative Growth Fund—the funds in the series with the largest bond allocations—were the only ones to post positive returns at the time. Although the funds did not beat their

respective benchmark composite indexes for the six months, the bond market’s strength helped moderate declines in their stock holdings.

In the second half of the fiscal year, as investors gained confidence in various governments’ efforts to stabilize global markets, stocks began to turn around. The LifeStrategy Funds with the highest exposure to domestic and international stocks gained the most. Vanguard Total International Stock Index Fund, Vanguard Total Stock Market Index Fund, and the Asset Allocation Fund each recorded double-digit returns for the six months ended October 31, 2009. For the full year, all four LifeStrategy Funds recorded solid double-digit returns.

Target and Actual Asset Allocations             
Percentages as of October 31, 2009             
          Short-Term 
    Stocks1    Bonds  Investments 
  Target  Actual  Target  Actual  Target  Actual 
LifeStrategy Income Fund  20%  22%  60%  58%  20%  20% 
LifeStrategy Conservative Growth Fund  40  42  40  38  20  20 
LifeStrategy Moderate Growth Fund  60  62  40  38  0  0 
LifeStrategy Growth Fund  80  82  20  18  0  0 

1 Actual international stock positions for the Income, Conservative Growth, Moderate Growth, and Growth Funds equaled 0%, 5%, 10%, and 15% of assets, respectively.

5


For the fiscal year, each LifeStrategy Fund fell short of its composite benchmark index. All of the underlying index funds succeeded in capturing the returns of their respective benchmarks. By contrast, the Asset Allocation Fund and the Short-Term Investment-Grade Fund fell behind their respective benchmarks.

Overall, the LifeStrategy Funds’ performance for the year was affected the most by the poor performance of the Asset Allocation Fund, an actively managed fund that relies on a quantitative model to determine an optimal allocation among bonds, stocks, and short-term reserves. Between November 2008 and February 2009, a period of steep declines in the

stock market, the Asset Allocation Fund devoted 90% to 100% of its assets to equities. The fund’s gains later in the year did not make up for its earlier losses. The performance of the Asset Allocation Fund detracted about 1 percentage point from each of the LifeStrategy Funds. (For information on the target percentages and actual asset allocations of the LifeStrategy Funds, see the table accompanying this report.)

A balanced approach smoothes short-term bumps

Over the ten-year period ended October 31, 2009, the LifeStrategy Funds’ annualized returns ranged from 1.56% for the LifeStrategy Growth Fund to 4.59%

Total Returns   
Ten Years Ended October 31, 2009   
  Average 
  Annual Return 
LifeStrategy Income Fund  4.59% 
Income Composite Index  4.81 
Income Composite Average1  3.66 
LifeStrategy Conservative Growth Fund  3.67 
Conservative Growth Composite Index  3.78 
Conservative Growth Composite Average1  3.02 
LifeStrategy Moderate Growth Fund  2.81 
Moderate Growth Composite Index  3.09 
Moderate Growth Composite Average1  2.68 
LifeStrategy Growth Fund  1.56 
Growth Composite Index  1.83 
Growth Composite Average1  1.83 

The figures shown represent past performance, which is not a guarantee of future results. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost.

1 Each average is a blended composite that weights the return of the comparable mutual funds average for each asset class in proportion to
the target weighting of the appropriate LifeStrategy Fund. All together, the composites use returns for the fixed income funds average, the
general equity funds average, the international funds average, and the money market funds average. These returns are derived from data
provided by Lipper Inc.

6


for the LifeStrategy Income Fund. While none of the LifeStrategy Funds beat their benchmark indexes for that period, three funds—LifeStrategy Income, LifeStrategy Conservative Growth, and LifeStrategy Moderate Growth—outperformed the annual average return of their peers for the decade.

Despite the LifeStrategy Funds’ recent hurdles, the funds’ balanced portfolios have helped protect investors during volatile periods in the stock market such as we experienced this past fiscal year. By investing in stocks and bonds, the funds are positioned to benefit from stocks’ long-term potential, while securing some protection from the stock market’s occasional downturns through an allocation to bonds.

A long-term perspective is key during trying times

Investors endured a tumultuous period in the U.S. stock market over the year ended October 31.

Challenging periods in the financial markets often force us to take a closer look at our portfolio and investment goals. At Vanguard, we encourage you to focus on the long term and avoid making hasty

decisions based on the markets’ short-term volatility. It’s important to focus on time-tested principles of balance and diversification, both within and across asset classes.

One of the best ways to do that is to develop a broadly diversified portfolio of stocks and bonds in proportions consistent with your goals, risk tolerance, and time horizon, and then try to stick with it. The LifeStrategy Funds can play an important role in such a portfolio by enhancing its diversification while helping to manage its risk.

Thank you for entrusting your assets to Vanguard.

Sincerely,


F. William McNabb III
President and Chief Executive Officer
November 12, 2009

7


Results of Proxy Voting

At a special meeting of shareholders on July 2, 2009, fund shareholders approved the following two proposals:

Proposal 1—Elect trustees for each fund.*

The individuals listed in the table below were elected as trustees for each fund. All trustees with the exception of Messrs. McNabb and Volanakis (both of whom already served as directors of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.

LifeStrategy Income Fund, LifeStrategy Conservative Growth Fund, LifeStrategy Moderate Growth Fund, LifeStrategy Growth Fund*

      Percentage 
Trustee  For  Withheld  For 
John J. Brennan  3,238,376,491  48,158,442  98.5% 
Charles D. Ellis  3,220,296,621  66,238,311  98.0% 
Emerson U. Fullwood  3,234,626,268  51,908,665  98.4% 
Rajiv L. Gupta  3,233,667,602  52,867,331  98.4% 
Amy Gutmann  3,235,485,956  51,048,977  98.4% 
JoAnn Heffernan Heisen  3,236,403,610  50,131,323  98.5% 
F. William McNabb III  3,236,819,920  49,715,013  98.5% 
André F. Perold  3,232,519,097  54,015,835  98.4% 
Alfred M. Rankin, Jr.  3,236,021,880  50,513,052  98.5% 
Peter F. Volanakis  3,238,134,065  48,400,867  98.5% 

* Results are for all funds within the same trust.

Proposal 2—Update and standardize the funds’ fundamental policies regarding:
(a) Purchasing and selling real estate.
(b) Issuing senior securities.
(c) Borrowing money.
(d) Making loans.
(e) Purchasing and selling commodities.
(f) Concentrating investments in a particular industry or group of industries.
(g) Eliminating outdated fundamental investment policies not required by law.

The revised fundamental policies are clearly stated and simple, yet comprehensive, making oversight and compliance more efficient than under the former policies. The revised fundamental policies will allow the funds to respond more quickly to regulatory and market changes, while avoiding the costs and delays associated with successive shareholder meetings.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
LifeStrategy Income Fund           
2a  90,150,834  1,307,410  2,322,804  3,877,614  92.3% 
2b  90,253,225  1,377,648  2,150,175  3,877,614  92.4% 
2c  89,069,424  1,456,738  3,254,887  3,877,613  91.2% 
2d  89,172,563  1,615,205  2,993,282  3,877,613  91.3% 
2e  89,212,152  1,588,019  2,980,876  3,877,615  91.4% 

8


        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
LifeStrategy Income Fund           
(continued)           
2f  89,771,191  1,427,013  2,582,844  3,877,614  91.9% 
2g  86,679,253  1,484,555  5,617,241  3,877,613  88.8% 
 
LifeStrategy Conservative Growth Fund         
2a  266,481,648  3,586,651  4,117,608  6,222,727  95.0% 
2b  265,176,288  5,047,590  3,962,031  6,222,726  94.6% 
2c  264,231,684  4,317,363  5,636,862  6,222,725  94.2% 
2d  264,619,027  4,176,952  5,389,928  6,222,726  94.4% 
2e  264,623,693  3,788,572  5,773,644  6,222,725  94.4% 
2f  265,003,061  3,997,164  5,185,686  6,222,723  94.5% 
2g  267,557,558  3,684,633  2,943,717  6,222,726  95.4% 
 
LifeStrategy Moderate Growth Fund         
2a  313,314,163  2,860,791  5,839,910  4,408,232  96.0% 
2b  312,797,864  3,338,496  5,878,502  4,408,233  95.8% 
2c  310,356,051  3,237,415  8,421,395  4,408,234  95.1% 
2d  310,561,176  3,712,536  7,741,150  4,408,234  95.1% 
2e  311,045,903  3,597,288  7,371,670  4,408,234  95.3% 
2f  311,046,843  3,445,942  7,522,077  4,408,233  95.3% 
2g  314,267,548  3,094,727  4,652,588  4,408,233  96.3% 
 
LifeStrategy Growth Fund           
2a  244,332,512  2,820,704  5,769,427  6,181,058  94.3% 
2b  244,269,987  3,291,624  5,361,032  6,181,059  94.3% 
2c  242,292,665  3,080,139  7,549,840  6,181,058  93.5% 
2d  243,266,919  3,045,298  6,610,425  6,181,060  93.9% 
2e  243,349,414  2,985,041  6,588,188  6,181,059  93.9% 
2f  243,651,565  3,187,478  6,083,601  6,181,058  94.0% 
2g  245,920,113  3,152,549  3,849,981  6,181,058  94.9% 

Fund shareholders did not approve this proposal:

Proposal 3—Institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.

The trustees recommended a vote against the proposal because it called for procedures that duplicate existing practices and procedures of the Vanguard funds.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
LifeStrategy Moderate           
Growth Fund  45,151,783  6,115,542  270,747,529  4,408,242  13.8% 

9


LifeStrategy Income Fund

Fund Profile
As of October 31, 2009

Financial Attributes   
 
Yield1  2.5% 
Acquired Fund Fees and Expenses2  0.22% 

Volatility Measures3   
  Fund Versus 
  Composite Index4 
R-Squared  0.97 
Beta  1.19 

Allocation to Underlying Vanguard Funds   
 
Total Bond Market II Index Fund  50.4% 
Asset Allocation Fund  24.7 
Short-Term Investment-Grade Fund  20.1 
Total Stock Market Index Fund  4.8 

Equity Investment Focus


Fixed Income Investment Focus


Fund Asset Allocation

 

1 30-day SEC yield. See the Glossary.
2 This figure—drawn from the prospectus dated June 8, 2009—represents an estimate of the weighted average of the expense ratios and
any transaction fees charged by the underlying mutual funds (the “acquired” funds) in which the LifeStrategy Income Fund invests. The
LifeStrategy Income Fund does not charge any expenses or fees of its own. For the fiscal year ended October 31, 2009, the annualized
acquired fund fees and expenses were 0.23%.
3 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
4 60% Barclays Capital U.S. Aggregate Bond Index, 20% MSCI US Broad Market Index, and 20% Barclays Capital U.S. 1–3 Year Credit
Bond Index.

10


LifeStrategy Income Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000

 

  Average Annual Total Returns  Final Value 
  Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
LifeStrategy Income Fund1  12.83%  3.72%  4.59%  $15,668 
Barclays Capital U.S. Aggregate Bond Index  13.79  5.05  6.31  18,438 
Income Composite Index2  13.83  4.37  4.81  16,003 
Income Composite Average3  13.39  3.00  3.66  14,320 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 60% Lehman U.S. Aggregate Bond Index, 20% Dow Jones Wilshire 5000 Index, and 20% Citigroup 3-Month Treasury Index through
August 31, 2003; 60% Lehman U.S. Aggregate Bond Index, 20% Dow Jones Wilshire 5000 Index, and 20% Lehman 1–3 Year U.S. Credit
Index through April 22, 2005; and 60% Barclays Capital U.S. Aggregate Bond Index, 20% MSCI US Broad Market Index, and 20% Barclays
Capital U.S. 1–3 Year Credit Bond Index thereafter.
3 A composite fund average weighted 60% fixed income funds average, 20% general equity funds average, and 20% money market funds
average. Derived from data provided by Lipper Inc.

11


LifeStrategy Income Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

        Ten Years 
  Inception Date  One Year  Five Years  Capital  Income  Total 
LifeStrategy Income Fund2  9/30/1994  5.28%  3.94%  0.49%  4.25%  4.74% 

1 60% Lehman U.S. Aggregate Bond Index, 20% Dow Jones Wilshire 5000 Index, and 20% Citigroup 3-Month Treasury Index through
August 31, 2003; 60% Lehman U.S. Aggregate Bond Index, 20% Dow Jones Wilshire 5000 Index, and 20% Lehman 1–3 Year U.S. Credit
Index through April 22, 2005; and 60% Barclays Capital U.S. Aggregate Bond Index, 20% MSCI US Broad Market Index, and 20% Barclays
Capital U.S. 1–3 Year Credit Bond Index thereafter.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
Note: See Financial Highlights table for dividend and capital gains information.

12


LifeStrategy Income Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

    Market 
    Value• 
  Shares  ($000) 
Investment Companies (100.0%)     
U.S. Stock Fund (4.8%)     
Vanguard Total Stock Market Index Fund Investor Shares  3,368,812  85,635 
 
Balanced Fund (24.8%)     
Vanguard Asset Allocation Fund Investor Shares  21,207,927  441,549 
 
Bond Fund (50.3%)     
1 Vanguard Total Bond Market II Index Fund Investor Shares  86,767,190  898,040 
 
Short-Term Bond Fund (20.1%)     
Vanguard Short-Term Investment-Grade Fund Investor Shares  33,876,881  359,095 
Total Investment Companies (Cost $1,719,383)    1,784,319 
Temporary Cash Investment (0.1%)     
Money Market Fund (0.1%)     
1 Vanguard Market Liquidity Fund, 0.225% (Cost $2,469)  2,468,676  2,469 
Total Investments (100.1%) (Cost $1,721,852)    1,786,788 
Other Assets and Liabilities (–0.1%)     
Other Assets    7,368 
Liabilities    (9,686) 
    (2,318) 
Net Assets (100%)     
Applicable to 135,153,046 outstanding $.001 par value shares of     
beneficial interest (unlimited authorization)    1,784,470 
Net Asset Value Per Share    $13.20 

13


LifeStrategy Income Fund

At October 31, 2009, net assets consisted of:

  Amount 
  ($000) 
Paid-in Capital  1,746,691 
Undistributed Net Investment Income  4,599 
Accumulated Net Realized Losses  (31,756) 
Unrealized Appreciation (Depreciation)  64,936 
Net Assets  1,784,470 

• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market
Liquidity Fund is the 7-day yield.
See accompanying Notes, which are an integral part of the Financial Statements.

14


LifeStrategy Income Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Income Distributions Received  59,138 
Net Investment Income—Note B  59,138 
Realized Net Gain (Loss) on Investment Securities Sold  (8,606) 
Change in Unrealized Appreciation (Depreciation) of Investment Securities  154,183 
Net Increase (Decrease) in Net Assets Resulting from Operations  204,715 

See accompanying Notes, which are an integral part of the Financial Statements.

15


LifeStrategy Income Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  59,138  75,606 
Realized Net Gain (Loss)  (8,606)  (22,889) 
Change in Unrealized Appreciation (Depreciation)  154,183  (288,775) 
Net Increase (Decrease) in Net Assets Resulting from Operations  204,715  (236,058) 
Distributions     
Net Investment Income  (60,637)  (77,544) 
Realized Capital Gain1  —  (3,797) 
Total Distributions  (60,637)  (81,341) 
Capital Share Transactions     
Issued  476,437  548,650 
Issued in Lieu of Cash Distributions  56,502  76,008 
Redeemed  (534,663)  (550,179) 
Net Increase (Decrease) from Capital Share Transactions  (1,724)  74,479 
Total Increase (Decrease)  142,354  (242,920) 
Net Assets     
Beginning of Period  1,642,116  1,885,036 
End of Period2  1,784,470  1,642,116 

1 Includes fiscal 2008 short-term gain distributions totaling $1,964,000. Short-term gain distributions are treated as ordinary income
dividends for tax purposes.
2 Net Assets—End of Period includes undistributed net investment income of $4,599,000 and $6,098,000.

See accompanying Notes, which are an integral part of the Financial Statements.

16


LifeStrategy Income Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $12.13  $14.44  $13.97  $13.38  $13.39 
Investment Operations           
Net Investment Income  .440  .555  .570  .530  .470 
Capital Gain Distributions Received  —  —  —  —  — 
Net Realized and Unrealized Gain (Loss)           
on Investments  1.081  (2.266)  .538  .580  (.020) 
Total from Investment Operations  1.521  (1.711)  1.108  1.110  .450 
Distributions           
Dividends from Net Investment Income  (.451)  (.570)  (.570)  (.520)  (.460) 
Distributions from Realized Capital Gains  —  (.029)  (.068)  —  — 
Total Distributions  (.451)  (.599)  (.638)  (.520)  (.460) 
Net Asset Value, End of Period  $13.20  $12.13  $14.44  $13.97  $13.38 
 
Total Return1  12.83%  –12.29%  8.14%  8.49%  3.39% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $1,784  $1,642  $1,885  $1,666  $1,752 
Ratio of Total Expenses to           
Average Net Assets  0%2  0%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  3.55%  4.00%  4.07%  3.85%  3.47% 
Portfolio Turnover Rate  27%3  22%  8%  14%  6% 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 The acquired fund fees and expenses were 0.23%.
3 Excludes the value of mutual fund shares delivered and received in connection with a change in the fund’s bond investments from
Vanguard Total Bond Market Index Fund to Vanguard Total Bond Market II Index Fund because those transactions were effected in kind
and did not cause the fund to incur transaction costs.

See accompanying Notes, which are an integral part of the Financial Statements.

17


LifeStrategy Income Fund

Notes to Financial Statements

Vanguard LifeStrategy Income Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. stocks, international stocks, bonds, and short-term reserves.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.

2. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

3. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

4. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

B. Under a service agreement, The Vanguard Group furnishes corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the year ended October 31, 2009, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

At October 31, 2009, 100% of the fund’s investments were valued based on Level 1 inputs.

D. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

18


LifeStrategy Income Fund

For tax purposes, at October 31, 2009, the fund had $4,510,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $31,665,000 to offset future net capital gains of $9,060,000 through October 31, 2016, and $22,605,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $1,721,854,000. Net unrealized appreciation of investment securities for tax purposes was $64,934,000, consisting of unrealized gains of $66,747,000 on securities that had risen in value since their purchase and $1,813,000 in unrealized losses on securities that had fallen in value since their purchase.

E. During the year ended October 31, 2009, the fund purchased $1,257,160,000 of investment securities and sold $1,263,484,000 of investment securities, other than temporary cash investments.

F. Capital shares issued and redeemed were:     
  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  38,458  39,964 
Issued in Lieu of Cash Distributions  4,554  5,521 
Redeemed  (43,288)  (40,641) 
Net Increase (Decrease) in Shares Outstanding  (276)  4,844 

G. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 8, 2009, for potential recognition or disclosure in these financial statements.

19


LifeStrategy Conservative Growth Fund

Fund Profile
As of October 31, 2009

Financial Attributes   
 
Yield1  2.5% 
Acquired Fund Fees and Expenses2  0.22% 

Volatility Measures3   
  Fund Versus 
  Composite Index4 
R-Squared  0.99 
Beta  1.16 

Allocation to Underlying Vanguard Funds   
 
Total Bond Market II Index Fund  30.5% 
Asset Allocation Fund  24.8 
Short-Term Investment-Grade Fund  20.2 
Total Stock Market Index Fund  19.7 
Total International Stock Index Fund  4.8 

Equity Investment Focus


Fixed Income Investment Focus


Fund Asset Allocation

 

 

 

 

 

1 30-day SEC yield. See the Glossary.
2 This figure—drawn from the prospectus dated June 8, 2009—represents an estimate of the weighted average of the expense ratios
and any transaction fees charged by the underlying mutual funds (the “acquired” funds) in which the LifeStrategy Conservative Growth
Fund invests. The LifeStrategy Conservative Growth Fund does not charge any expenses or fees of its own. For the fiscal year ended
October 31, 2009, the annualized acquired fund fees and expenses were 0.24%.
3 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
4 40% Barclays Capital U.S. Aggregate Bond Index, 35% MSCI US Broad Market Index, 20% Barclays Capital U.S. 1–3 Year Credit Bond
Index, and 5% MSCI EAFE Index.

20


LifeStrategy Conservative Growth Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000

 

  Average Annual Total Returns  Final Value 
  Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
LifeStrategy Conservative Growth Fund1  13.72%  3.29%  3.67%  $14,341 
Barclays Capital U.S. Aggregate Bond Index  13.79  5.05  6.31  18,438 
Dow Jones U.S. Total Stock Market Index  11.34  1.06  0.06  10,056 
Conservative Growth Composite Index2  14.34  3.88  3.78  14,487 
Conservative Growth Composite Average3  13.44  2.70  3.02  13,468 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 40% Lehman U.S. Aggregate Bond Index, 35% Dow Jones Wilshire 5000 Index, 20% Citigroup 3-Month Treasury Index, and 5% MSCI
EAFE Index through August 31, 2003; 40% Lehman U.S. Aggregate Bond Index, 35% Dow Jones Wilshire 5000 Index, 20% Lehman 1–3 Year
U.S. Credit Index, and 5% MSCI EAFE Index through April 22, 2005; and 40% Barclays Capital U.S. Aggregate Bond Index, 35% MSCI US
Broad Market Index, 20% Barclays Capital U.S. 1–3 Year Credit Bond Index, and 5% MSCI EAFE Index thereafter.
3 A composite fund average weighted 40% fixed income funds average, 35% general equity funds average, 20% money market funds
average, and 5% international funds average. Derived from data provided by Lipper Inc.

21


LifeStrategy Conservative Growth Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

        Ten Years 
  Inception Date  One Year  Five Years  Capital  Income  Total 
LifeStrategy Conservative             
Growth Fund2  9/30/1994  2.87%  3.66%  0.42%  3.56%  3.98% 

1 40% Lehman U.S. Aggregate Bond Index, 35% Dow Jones Wilshire 5000 Index, 20% Citigroup 3-Month Treasury Index, and 5% MSCI
EAFE Index through August 31, 2003; 40% Lehman U.S. Aggregate Bond Index, 35% Dow Jones Wilshire 5000 Index, 20% Lehman
1–3 Year U.S. Credit Index, and 5% MSCI EAFE Index through April 22, 2005; and 40% Barclays Capital U.S. Aggregate Bond Index,
35% MSCI US Broad Market Index, 20% Barclays Capital U.S. 1–3 Year Credit Bond Index, and 5% MSCI EAFE Index thereafter.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
Note: See Financial Highlights table for dividend and capital gains information.

22


LifeStrategy Conservative Growth Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

    Market 
    Value• 
  Shares  ($000) 
Investment Companies (99.9%)     
U.S. Stock Fund (19.7%)     
Vanguard Total Stock Market Index Fund Investor Shares  42,439,643  1,078,816 
 
International Stock Fund (4.8%)     
Vanguard Total International Stock Index Fund  18,939,055  265,147 
 
Balanced Fund (24.8%)     
Vanguard Asset Allocation Fund Investor Shares  65,338,903  1,360,356 
 
Bond Fund (30.4%)     
1 Vanguard Total Bond Market II Index Fund Investor Shares  161,277,021  1,669,217 
 
Short-Term Bond Fund (20.2%)     
Vanguard Short-Term Investment-Grade Fund Investor Shares  104,489,923  1,107,593 
Total Investment Companies (Cost $5,294,550)    5,481,129 
Temporary Cash Investment (0.0%)     
Money Market Fund (0.0%)     
1 Vanguard Market Liquidity Fund, 0.225% (Cost $771)  771,027  771 
Total Investments (99.9%) (Cost $5,295,321)    5,481,900 
Other Assets and Liabilities (0.1%)     
Other Assets    26,968 
Liabilities    (21,956) 
    5,012 
Net Assets (100%)     
Applicable to 370,441,732 outstanding $.001 par value shares of     
beneficial interest (unlimited authorization)    5,486,912 
Net Asset Value Per Share    $14.81 

23


LifeStrategy Conservative Growth Fund

At October 31, 2009, net assets consisted of:   
  Amount 
  ($000) 
Paid-in Capital  5,420,189 
Undistributed Net Investment Income  10,039 
Accumulated Net Realized Losses  (129,895) 
Unrealized Appreciation (Depreciation)  186,579 
Net Assets  5,486,912 

• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market
Liquidity Fund is the 7-day yield.
See accompanying Notes, which are an integral part of the Financial Statements.

24


LifeStrategy Conservative Growth Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Income Distributions Received  158,914 
Net Investment Income—Note B  158,914 
Realized Net Gain (Loss) on Investment Securities Sold  (26,937) 
Change in Unrealized Appreciation (Depreciation) of Investment Securities  519,397 
Net Increase (Decrease) in Net Assets Resulting from Operations  651,374 

See accompanying Notes, which are an integral part of the Financial Statements.

25


LifeStrategy Conservative Growth Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  158,914  225,599 
Realized Net Gain (Loss)  (26,937)  (102,510) 
Change in Unrealized Appreciation (Depreciation)  519,397  (1,479,399) 
Net Increase (Decrease) in Net Assets Resulting from Operations  651,374  (1,356,310) 
Distributions     
Net Investment Income  (161,858)  (235,505) 
Realized Capital Gain1  —  (3,999) 
Total Distributions  (161,858)  (239,504) 
Capital Share Transactions     
Issued  1,104,538  1,301,965 
Issued in Lieu of Cash Distributions  156,702  233,406 
Redeemed  (1,106,905)  (2,140,116) 
Net Increase (Decrease) from Capital Share Transactions  154,335  (604,745) 
Total Increase (Decrease)  643,851  (2,200,559) 
Net Assets     
Beginning of Period  4,843,061  7,043,620 
End of Period2  5,486,912  4,843,061 

1 Includes fiscal 2008 short-term gain distributions totaling $3,999,000. Short-term gain distributions are treated as ordinary income
dividends for tax purposes.
2 Net Assets—End of Period includes undistributed net investment income of $10,039,000 and $12,983,000.

See accompanying Notes, which are an integral part of the Financial Statements.

26


LifeStrategy Conservative Growth Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $13.46  $17.61  $16.43  $15.24  $14.83 
Investment Operations           
Net Investment Income  .439  .568  .580  .500  .440 
Capital Gain Distributions Received  —  —  —  —  — 
Net Realized and Unrealized Gain (Loss)           
on Investments  1.359  (4.116)  1.170  1.180  .410 
Total from Investment Operations  1.798  (3.548)  1.750  1.680  .850 
Distributions           
Dividends from Net Investment Income  (.448)  (.592)  (.570)  (.490)  (.440) 
Distributions from Realized Capital Gains  —  (.010)  —  —  — 
Total Distributions  (.448)  (.602)  (.570)  (.490)  (.440) 
Net Asset Value, End of Period  $14.81  $13.46  $17.61  $16.43  $15.24 
 
Total Return1  13.72%  –20.71%  10.84%  11.23%  5.77% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $5,487  $4,843  $7,044  $5,326  $4,079 
Ratio of Total Expenses to           
Average Net Assets  0%2  0%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  3.23%  3.52%  3.40%  3.21%  2.95% 
Portfolio Turnover Rate  29%3  22%  10%  4%  7% 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 The acquired fund fees and expenses were 0.24%.
3 Excludes the value of mutual fund shares delivered and received in connection with a change in the fund’s bond investments from
Vanguard Total Bond Market Index Fund to Vanguard Total Bond Market II Index Fund because those transactions were effected in kind
and did not cause the fund to incur transaction costs.

See accompanying Notes, which are an integral part of the Financial Statements.

27


LifeStrategy Conservative Growth Fund

Notes to Financial Statements

Vanguard LifeStrategy Conservative Growth Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. stocks, international stocks, bonds, and short-term reserves.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.

2. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

3. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

4. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

B. Under a service agreement, The Vanguard Group furnishes corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the year ended October 31, 2009, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

At October 31, 2009, 100% of the fund’s investments were valued based on Level 1 inputs.

D. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

28


LifeStrategy Conservative Growth Fund

For tax purposes, at October 31, 2009, the fund had $9,899,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $127,702,000 to offset future net capital gains of $58,575,000 through October 31, 2016, and $69,127,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $5,297,374,000. Net unrealized appreciation of investment securities for tax purposes was $184,526,000, consisting of unrealized gains of $236,063,000 on securities that had risen in value since their purchase and $51,537,000 in unrealized losses on securities that had fallen in value since their purchase.

E. During the year ended October 31, 2009, the fund purchased $2,924,531,000 of investment securities and sold $2,786,461,000 of investment securities, other than temporary cash investments.

F. Capital shares issued and redeemed were:     
  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  81,675  80,105 
Issued in Lieu of Cash Distributions  11,572  14,274 
Redeemed  (82,611)  (134,570) 
Net Increase (Decrease) in Shares Outstanding  10,636  (40,191) 

G. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 8, 2009, for potential recognition or disclosure in these financial statements.

29


LifeStrategy Moderate Growth Fund

Fund Profile
As of October 31, 2009

Financial Attributes   
 
Yield1  2.0% 
Acquired Fund Fees and Expenses2  0.22% 

Volatility Measures3   
  Fund Versus 
  Composite Index4 
R-Squared  1.00 
Beta  1.11 

Allocation to Underlying Vanguard Funds   
 
Total Stock Market Index Fund  34.6% 
Total Bond Market II Index Fund  30.6 
Asset Allocation Fund  25.0 
Total International Stock Index Fund  9.8 

Equity Investment Focus


Fixed Income Investment Focus


Fund Asset Allocation


1 30-day SEC yield. See the Glossary.
2 This figure—drawn from the prospectus dated June 8, 2009—represents an estimate of the weighted average of the expense ratios
and any transaction fees charged by the underlying mutual funds (the “acquired” funds) in which the LifeStrategy Moderate Growth
Fund invests. The LifeStrategy Moderate Growth Fund does not charge any expenses or fees of its own. For the fiscal year ended
October 31, 2009, the annualized acquired fund fees and expenses were 0.23%.
3 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
4 50% MSCI US Broad Market Index, 40% Barclays Capital U.S. Aggregate Bond Index, and 10% MSCI EAFE Index.

30


LifeStrategy Moderate Growth Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000


    Average Annual Total Returns  Final Value 
    Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
LifeStrategy Moderate Growth Fund1  13.82%  2.86%  2.81%  $13,189 
Dow Jones U.S. Total Stock Market Index  11.34  1.06  0.06  10,056 
Barclays Capital U.S. Aggregate Bond Index  13.79  5.05  6.31  18,438 
Moderate Growth Composite Index2  14.54  3.37  3.09  13,557 
Moderate Growth Composite Average3  16.79  2.44  2.68  13,026 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 50% Dow Jones Wilshire 5000 Index, 40% Lehman U.S. Aggregate Bond Index, and 10% MSCI EAFE Index through April 22, 2005;
50% MSCI US Broad Market Index, 40% Barclays Capital U.S. Aggregate Bond Index, and 10% MSCI EAFE Index thereafter.
3 A composite fund average weighted 50% general equity funds average, 40% fixed income funds average, and 10% international
funds average. Derived from data provided by Lipper Inc.

31


LifeStrategy Moderate Growth Fund

Fiscal-Year Total Returns (%): October 31,1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

        Ten Years 
  Inception Date  One Year  Five Years  Capital  Income  Total 
LifeStrategy Moderate Growth Fund2  9/30/1994  0.04%  3.43%  0.38%  2.91%  3.29% 

1 50% Dow Jones Wilshire 5000 Index, 40% Lehman U.S. Aggregate Bond Index, and 10% MSCI EAFE Index through April 22, 2005;
50% MSCI US Broad Market Index, 40% Barclays Capital U.S. Aggregate Bond Index, and 10% MSCI EAFE Index thereafter.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
Note: See Financial Highlights table for dividend and capital gains information.

32


LifeStrategy Moderate Growth Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

    Market 
    Value• 
  Shares  ($000) 
Investment Companies (99.9%)     
U.S. Stock Fund (34.5%)     
Vanguard Total Stock Market Index Fund Investor Shares  103,643,747  2,634,624 
 
International Stock Fund (9.8%)     
Vanguard Total International Stock Index Fund  53,314,050  746,397 
 
Balanced Fund (25.0%)     
Vanguard Asset Allocation Fund Investor Shares  91,644,213  1,908,032 
 
Bond Fund (30.6%)     
1 Vanguard Total Bond Market II Index Fund Investor Shares  225,412,142  2,333,016 
Total Investment Companies (Cost $7,152,885)    7,622,069 
Other Assets and Liabilities (0.1%)     
Other Assets    29,273 
Liabilities    (25,284) 
    3,989 
Net Assets (100%)     
Applicable to 444,338,715 outstanding $.001 par value shares of     
beneficial interest (unlimited authorization)    7,626,058 
Net Asset Value Per Share    $17.16 
 
 
At October 31, 2009, net assets consisted of:     
    Amount 
    ($000) 
Paid-in Capital    7,308,303 
Undistributed Net Investment Income    42,828 
Accumulated Net Realized Losses    (194,257) 
Unrealized Appreciation (Depreciation)    469,184 
Net Assets    7,626,058 

• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard.
See accompanying Notes, which are an integral part of the Financial Statements.

33


LifeStrategy Moderate Growth Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Income Distributions Received  207,758 
Net Investment Income—Note B  207,758 
Realized Net Gain (Loss) on Investment Securities Sold  (58,372) 
Change in Unrealized Appreciation (Depreciation) of Investment Securities  802,770 
Net Increase (Decrease) in Net Assets Resulting from Operations  952,156 

See accompanying Notes, which are an integral part of the Financial Statements.

34


LifeStrategy Moderate Growth Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  207,758  300,354 
Realized Net Gain (Loss)  (58,372)  (135,696) 
Change in Unrealized Appreciation (Depreciation)  802,770  (3,162,602) 
Net Increase (Decrease) in Net Assets Resulting from Operations  952,156  (2,997,944) 
Distributions     
Net Investment Income  (225,842)  (317,770) 
Realized Capital Gain1  —  (12,214) 
Total Distributions  (225,842)  (329,984) 
Capital Share Transactions     
Issued  1,203,383  1,751,499 
Issued in Lieu of Cash Distributions  222,292  325,407 
Redeemed  (1,933,510)  (2,613,668) 
Net Increase (Decrease) from Capital Share Transactions  (507,835)  (536,762) 
Total Increase (Decrease)  218,479  (3,864,690) 
Net Assets     
Beginning of Period  7,407,579  11,272,269 
End of Period2  7,626,058  7,407,579 

1 Includes fiscal 2008 short-term gain distributions totaling $4,580,000. Short-term gain distributions are treated as ordinary income
dividends for tax purposes.
2 Net Assets—End of Period includes undistributed net investment income of $42,828,000 and $60,912,000.

See accompanying Notes, which are an integral part of the Financial Statements.

35


LifeStrategy Moderate Growth Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $15.56  $22.21  $20.09  $18.09  $17.17 
Investment Operations           
Net Investment Income  .450  .607  .580  .510  .470 
Capital Gain Distributions Received  —  —  —  —  — 
Net Realized and Unrealized Gain (Loss)           
on Investments  1.632  (6.606)  2.100  1.990  .890 
Total from Investment Operations  2.082  (5.999)  2.680  2.500  1.360 
Distributions           
Dividends from Net Investment Income  (.482)  (.627)  (.560)  (.500)  (.440) 
Distributions from Realized Capital Gains  —  (.024)  —  —  — 
Total Distributions  (.482)  (.651)  (.560)  (.500)  (.440) 
Net Asset Value, End of Period  $17.16  $15.56  $22.21  $20.09  $18.09 
 
Total Return1  13.82%  –27.69%  13.55%  14.09%  7.97% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $7,626  $7,408  $11,272  $9,463  $7,778 
Ratio of Total Expenses to           
Average Net Assets  0%2  0%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  2.89%  2.98%  2.81%  2.70%  2.61% 
Portfolio Turnover Rate  25%3  18%  7%  8%  8% 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 The acquired fund fees and expenses were 0.23%.
3 Excludes the value of mutual fund shares delivered and received in connection with a change in the fund’s bond investments from
Vanguard Total Bond Market Index Fund to Vanguard Total Bond Market II Index Fund because those transactions were effected in kind
and did not cause the fund to incur transaction costs.

See accompanying Notes, which are an integral part of the Financial Statements.

36


LifeStrategy Moderate Growth Fund

Notes to Financial Statements

Vanguard LifeStrategy Moderate Growth Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. stocks, international stocks, bonds, and short-term reserves.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.

2. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

3. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

4. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

B. Under a service agreement, The Vanguard Group furnishes corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the year ended October 31, 2009, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

At October 31, 2009, 100% of the fund’s investments were valued based on Level 1 inputs.

D. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

37


LifeStrategy Moderate Growth Fund

For tax purposes, at October 31, 2009, the fund had $42,639,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $191,824,000 to offset future net capital gains of $45,186,000 through October 31, 2016, and $146,638,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $7,155,129,000. Net unrealized appreciation of investment securities for tax purposes was $466,940,000, consisting of unrealized gains of $537,630,000 on securities that had risen in value since their purchase and $70,690,000 in unrealized losses on securities that had fallen in value since their purchase.

E. During the year ended October 31, 2009, the fund purchased $3,876,044,000 of investment securities and sold $4,408,573,000 of investment securities, other than temporary cash investments.

F. Capital shares issued and redeemed were:

  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  79,071  87,414 
Issued in Lieu of Cash Distributions  14,687  15,908 
Redeemed  (125,352)  (134,904) 
Net Increase (Decrease) in Shares Outstanding  (31,594)  (31,582) 

G. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 8, 2009, for potential recognition or disclosure in these financial statements.


LifeStrategy Growth Fund

Fund Profile

As of October 31, 2009

Financial Attributes   
 
Yield1  2.1% 
Acquired Fund Fees and Expenses2  0.21% 

Volatility Measures3   
  Fund Versus 
  Composite Index4 
R-Squared  1.00 
Beta  1.10 

Allocation to Underlying Vanguard Funds   
 
Total Stock Market Index Fund  49.7% 
Asset Allocation Fund  25.2 
Total International Stock Index Fund  14.8 
Total Bond Market II Index Fund  10.3 

Equity Investment Focus


Fixed Income Investment Focus


Fund Asset Allocation

 

1 30-day SEC yield. See the Glossary.
2 This figure—drawn from the prospectus dated June 8, 2009—represents an estimate of the weighted average of the expense ratios
and any transaction fees charged by the underlying mutual funds (the “acquired” funds) in which the LifeStrategy Growth Fund invests.
The LifeStrategy Growth Fund does not charge any expenses or fees of its own. For the fiscal year ended October 31, 2009, the annualized
acquired fund fees and expenses were 0.23%.
3 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
4 65% MSCI US Broad Market Index, 20% Barclays Capital U.S. Aggregate Bond Index, and 15% MSCI EAFE Index.

39


LifeStrategy Growth Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000


  Average Annual Total Returns  Final Value 
  Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
LifeStrategy Growth Fund1  13.74%  2.10%  1.56%  $11,675 
Dow Jones U.S. Total Stock Market Index  11.34  1.06  0.06  10,056 
Growth Composite Index2  14.57  2.66  1.83  11,990 
Growth Composite Average3  16.42  1.94  1.83  11,988 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 65% Dow Jones Wilshire 5000 Index, 20% Lehman U.S. Aggregate Bond Index, and 15% MSCI EAFE Index through April 22, 2005;
65% MSCI US Broad Market Index, 20% Barclays Capital U.S. Aggregate Bond Index, and 15% MSCI EAFE Index thereafter.
3 A composite fund average weighted 65% general equity funds average, 20% fixed income funds average, and 15% international funds
average. Derived from data provided by Lipper Inc.

40


LifeStrategy Growth Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

        Ten Years 
  Inception Date  One Year  Five Years  Capital  Income  Total 
LifeStrategy Growth Fund2  9/30/1994  –3.33%  2.85%  0.01%  2.20%  2.21% 

1 65% Dow Jones Wilshire 5000 Index, 20% Lehman U.S. Aggregate Bond Index, and 15% MSCI EAFE Index through April 22, 2005;
65% MSCI US Broad Market Index, 20% Barclays Capital U.S. Aggregate Bond Index, and 15% MSCI EAFE Index thereafter.
2 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
Note: See Financial Highlights table for dividend and capital gains information.

41


LifeStrategy Growth Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

    Market 
    Value• 
  Shares  ($000) 
Investment Companies (99.9%)     
U.S. Stock Fund (49.6%)     
Vanguard Total Stock Market Index Fund Investor Shares  129,266,910  3,285,965 
 
International Stock Fund (14.8%)     
Vanguard Total International Stock Index Fund  70,087,135  981,220 
 
Balanced Fund (25.2%)     
Vanguard Asset Allocation Fund Investor Shares  80,132,738  1,668,363 
 
Bond Fund (10.3%)     
1 Vanguard Total Bond Market II Index Fund Investor Shares  65,748,343  680,495 
Total Investment Companies (Cost $6,331,900)    6,616,043 
Temporary Cash Investment (0.0%)     
Money Market Fund (0.0%)     
1 Vanguard Market Liquidity Fund, 0.225% (Cost $774)  773,718  774 
Total Investments (99.9%) (Cost $6,332,674)    6,616,817 
Other Assets and Liabilities (0.1%)     
Other Assets    14,149 
Liabilities    (10,049) 
    4,100 
Net Assets (100%)     
Applicable to 354,743,515 outstanding $.001 par value shares of     
beneficial interest (unlimited authorization)    6,620,917 
Net Asset Value Per Share    $18.66 

42


LifeStrategy Growth Fund

At October 31, 2009, net assets consisted of:   
  Amount 
  ($000) 
Paid-in Capital  6,490,595 
Undistributed Net Investment Income  24,083 
Accumulated Net Realized Losses  (177,904) 
Unrealized Appreciation (Depreciation)  284,143 
Net Assets  6,620,917 

• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market
Liquidity Fund is the 7-day yield.
See accompanying Notes, which are an integral part of the Financial Statements.

43


LifeStrategy Growth Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Income Distributions Received  155,405 
Net Investment Income—Note B  155,405 
Realized Net Gain (Loss) on Investment Securities Sold  (85,614) 
Change in Unrealized Appreciation (Depreciation) of Investment Securities  754,889 
Net Increase (Decrease) in Net Assets Resulting from Operations  824,680 

See accompanying Notes, which are an integral part of the Financial Statements.

44


LifeStrategy Growth Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  155,405  219,594 
Realized Net Gain (Loss)  (85,614)  (78,943) 
Change in Unrealized Appreciation (Depreciation)  754,889  (3,636,859) 
Net Increase (Decrease) in Net Assets Resulting from Operations  824,680  (3,496,208) 
Distributions     
Net Investment Income  (163,404)  (226,065) 
Realized Capital Gain  —  — 
Total Distributions  (163,404)  (226,065) 
Capital Share Transactions     
Issued  960,129  1,375,071 
Issued in Lieu of Cash Distributions  161,307  223,367 
Redeemed  (1,428,334)  (1,981,689) 
Net Increase (Decrease) from Capital Share Transactions  (306,898)  (383,251) 
Total Increase (Decrease)  354,378  (4,105,524) 
Net Assets     
Beginning of Period  6,266,539  10,372,063 
End of Period1  6,620,917  6,266,539 

1 Net Assets—End of Period includes undistributed net investment income of $24,083,000 and $32,082,000.

See accompanying Notes, which are an integral part of the Financial Statements.

45


LifeStrategy Growth Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $16.86  $26.56  $23.32  $20.37  $18.84 
Investment Operations           
Net Investment Income  .423  .571  .540  .450  .420 
Capital Gain Distributions Received  —  —  —  —  — 
Net Realized and Unrealized Gain           
(Loss) on Investments  1.818  (9.690)  3.220  2.950  1.510 
Total from Investment Operations  2.241  (9.119)  3.760  3.400  1.930 
Distributions           
Dividends from Net Investment Income  (.441)  (.581)  (.520)  (.450)  (.400) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.441)  (.581)  (.520)  (.450)  (.400) 
Net Asset Value, End of Period  $18.66  $16.86  $26.56  $23.32  $20.37 
 
Total Return1  13.74%  –34.98%  16.32%  16.94%  10.30% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $6,621  $6,267  $10,372  $8,422  $6,605 
Ratio of Total Expenses to           
Average Net Assets  0%2  0%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  2.57%  2.47%  2.15%  2.07%  2.09% 
Portfolio Turnover Rate  12%3  10%  4%  3%  4% 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.
2 The acquired fund fees and expenses were 0.23%.
3 Excludes the value of mutual fund shares delivered and received in connection with a change in the fund’s bond investments from
Vanguard Total Bond Market Index Fund to Vanguard Total Bond Market II Index Fund because those transactions were effected in kind
and did not cause the fund to incur transaction costs.

See accompanying Notes, which are an integral part of the Financial Statements.

46


LifeStrategy Growth Fund

Notes to Financial Statements

Vanguard LifeStrategy Growth Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. stocks, international stocks, bonds, and short-term reserves.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.

2. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

3. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

4. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.

B. Under a service agreement, The Vanguard Group furnishes corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the year ended October 31, 2009, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

At October 31, 2009, 100% of the fund’s investments were valued based on Level 1 inputs.

D. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

47


LifeStrategy Growth Fund

For tax purposes, at October 31, 2009, the fund had $22,874,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $175,512,000 to offset future net capital gains of $9,185,000 through October 31, 2010, $2,953,000 through October 31, 2011, $46,739,000 through October 31, 2016, and $116,635,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $6,333,856,000. Net unrealized appreciation of investment securities for tax purposes was $282,961,000, consisting of unrealized gains of $394,044,000 on securities that had risen in value since their purchase and $111,083,000 in unrealized losses on securities that had fallen in value since their purchase.

E. During the year ended October 31, 2009, the fund purchased $1,293,434,000 of investment securities and sold $1,608,307,000 of investment securities, other than temporary cash investments.

F. Capital shares issued and redeemed were:     
  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  59,731  60,151 
Issued in Lieu of Cash Distributions  10,050  9,297 
Redeemed  (86,682)  (88,378) 
Net Increase (Decrease) in Shares Outstanding  (16,901)  (18,930) 

G. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 8, 2009, for potential recognition or disclosure in these financial statements.

48


Report of Independent Registered
Public Accounting Firm

To the Trustees of Vanguard STAR Funds and the Shareholders of Vanguard LifeStrategy Income Fund, Vanguard LifeStrategy Conservative Growth Fund, Vanguard LifeStrategy Moderate Growth Fund and Vanguard LifeStrategy Growth Fund:

In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard LifeStrategy Income Fund, Vanguard LifeStrategy Conservative Growth Fund, Vanguard LifeStrategy Moderate Growth Fund and Vanguard LifeStrategy Growth Fund (separate portfolios of Vanguard STAR Funds, hereafter referred to as the “Funds”) at October 31, 2009, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2009 by agreement to the underlying ownership records of the Vanguard funds, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania

December 8, 2009

49


Special 2009 tax information (unaudited) for Vanguard LifeStrategy Funds

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The funds distributed qualified dividend income to shareholders during the fiscal year as follows:

  Qualified Dividend Income 
LifeStrategy Fund  ($000) 
Income  9,940 
Conservative Growth  49,401 
Moderate Growth  108,947 
Growth  121,508 

For corporate shareholders, the percentage of investment income (dividend income plus short-term gains, if any) that qualifies for the dividends-received deduction is as follows:

LifeStrategy Fund  Percentage 
Income  18.2% 
Conservative Growth  29.8 
Moderate Growth  44.8 
Growth  62.8 

50


Your Fund’s After-Tax Returns

This table presents returns for your fund both before and after taxes. The after-tax returns are shown in two ways: (1) assuming that an investor owned the fund during the entire period and paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s distributions and sold all shares at the end of each period.

Calculations are based on the highest individual federal income tax and capital gains tax rates in effect at the times of the distributions and the hypothetical sales. State and local taxes were not considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures and estimates for 2009. (In the example, returns after the sale of fund shares may be higher than those assuming no sale. This occurs when the sale would have produced a capital loss. The calculation assumes that the investor received a tax deduction for the loss.)

Please note that your actual after-tax returns will depend on your tax situation and may differ from those shown. Also note that if you own the fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not subject to current taxes.

Finally, keep in mind that a fund’s performance—whether before or after taxes—does not guarantee future results.

Average Annual Total Returns: Vanguard LifeStrategy Funds1       
Periods Ended October 31, 2009       
  One  Five  Ten 
  Year  Years  Years 
LifeStrategy Income Fund       
Returns Before Taxes  12.83%  3.72%  4.59% 
Returns After Taxes on Distributions  11.55  2.43  3.03 
Returns After Taxes on Distributions and Sale of Fund Shares  8.40  2.47  3.01 
 
LifeStrategy Conservative Growth Fund       
Returns Before Taxes  13.72%  3.29%  3.67% 
Returns After Taxes on Distributions  12.64  2.30  2.41 
Returns After Taxes on Distributions and Sale of Fund Shares  9.05  2.32  2.42 
 
LifeStrategy Moderate Growth Fund       
Returns Before Taxes  13.82%  2.86%  2.81% 
Returns After Taxes on Distributions  12.92  2.10  1.83 
Returns After Taxes on Distributions and Sale of Fund Shares  9.21  2.12  1.88 
 
LifeStrategy Growth Fund       
Returns Before Taxes  13.74%  2.10%  1.56% 
Returns After Taxes on Distributions  13.12  1.62  0.90 
Returns After Taxes on Distributions and Sale of Fund Shares  9.26  1.67  1.02 

1 Total returns do not include the account service fee that may be applicable to certain accounts with balances below $10,000.

51


About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.

A typical fund’s expenses are expressed as a percentage of its average net assets. The LifeStrategy Funds have no direct expenses, but each fund bears its proportionate share of the expenses of the underlying funds in which it invests. These indirect expenses make up the fund’s acquired fund fees and expenses, also expressed as a percentage of average net assets.

The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The costs are calculated using each fund’s acquired fund fees and expenses.

The accompanying table illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”

• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

52


Six Months Ended October 31, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
  4/30/2009  10/31/2009  Period1 
Based on Actual Fund Return       
LifeStrategy Income Fund  $1,000.00  $1,194.56  $1.27 
LifeStrategy Conservative Growth Fund  1,000.00  1,132.68  1.24 
LifeStrategy Moderate Growth Fund  1,000.00  1,160.32  1.20 
LifeStrategy Growth Fund  1,000.00  1,194.56  1.27 
Based on Hypothetical 5% Yearly Return       
LifeStrategy Income Fund  $1,000.00  $1,024.05  $1.17 
LifeStrategy Conservative Growth Fund  1,000.00  1,024.05  1.17 
LifeStrategy Moderate Growth Fund  1,000.00  1,024.10  1.12 
LifeStrategy Growth Fund  1,000.00  1,024.05  1.17 

Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the account service fee described in the prospectus. If such a fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.

1 The calculations are based on the LifeStrategy Funds’ acquired fund fees and expenses for the most recent six-month period. The
LifeStrategy Funds’ annualized expense figures for that period are (in order as listed from top to bottom above) 0.23%, 0.23%, 0.22%,
and 0.23%. The dollar amounts shown as “Expenses Paid” are equal to the annualized average weighted expense ratio for the underlying
funds, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then
divided by the number of days in the most recent 12-month period.

53


Glossary

Acquired Fund Fees and Expenses. Funds that invest in other Vanguard funds incur no direct expenses, but they do bear proportionate shares of the operating, administrative, and advisory expenses of the underlying funds, and they must pay any fees charged by those funds. The figure for acquired fund fees and expenses represents a weighted average of these underlying costs. Acquired is a term that the Securities and Exchange Commission applies to any mutual fund whose shares are owned by another fund.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

Yield. A fund’s 30-day SEC yield is derived using a formula specified by the U.S. Securities and Exchange Commission. Under the formula, data related to the fund’s security holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that period, which is then annualized and divided by the fund’s estimated average net assets over the calculation period. For the purposes of this calculation, a security’s income is based on its current market yield to maturity (in the case of bonds) or its projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized income, it will differ—at times significantly—from the fund’s actual experience. As a result, the fund’s income distributions may be higher or lower than implied by the SEC yield.

54


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The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 156 Vanguard funds.

The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.

Interested Trustees  Emerson U. Fullwood 
  Born 1948. Trustee Since January 2008. Principal 
John J. Brennan1  Occupation(s) During the Past Five Years: Executive 
Born 1954. Trustee Since May 1987. Chairman of  Chief Staff and Marketing Officer for North America 
the Board. Principal Occupation(s) During the Past  and Corporate Vice President (retired 2008) of Xerox 
Five Years: Chairman of the Board and Director/Trustee  Corporation (photocopiers and printers); Director of 
of The Vanguard Group, Inc., and of each of the  SPX Corporation (multi-industry manufacturing), the 
investment companies served by The Vanguard Group;  United Way of Rochester, the Boy Scouts of America, 
Chief Executive Officer (1996–2008) and President  Amerigroup Corporation (direct health and medical 
(1989–2008) of The Vanguard Group and of each of the  insurance carriers), and Monroe Community College 
investment companies served by The Vanguard Group;  Foundation. 
Chairman of the Financial Accounting Foundation;   
Governor of the Financial Industry Regulatory Authority  Rajiv L. Gupta 
(FINRA); Director of United Way of Southeastern  Born 1945. Trustee Since December 2001.2 Principal 
Pennsylvania.  Occupation(s) During the Past Five Years: Chairman 
  and Chief Executive Officer (retired 2009) and President 
F. William McNabb III1  (2006–2008) of Rohm and Haas Co. (chemicals); Board 
Born 1957. Trustee Since July 2009. Principal  Member of American Chemistry Council; Director of 
Occupation(s) During the Past Five Years: Director of  Tyco International, Ltd. (diversified manufacturing and 
The Vanguard Group, Inc., since 2008; Chief Executive  services) and Hewlett-Packard Co. (electronic computer 
Officer and President of The Vanguard Group and of  manufacturing); Trustee of The Conference Board. 
each of the investment companies served by The   
Vanguard Group since 2008; Director of Vanguard  Amy Gutmann 
Marketing Corporation; Managing Director of The  Born 1949. Trustee Since June 2006. Principal 
Vanguard Group (1995–2008).  Occupation(s) During the Past Five Years: President of 
  the University of Pennsylvania; Christopher H. Browne 
  Distinguished Professor of Political Science in the School 
Independent Trustees  of Arts and Sciences with secondary appointments 
  at the Annenberg School for Communication and the 
Charles D. Ellis  Graduate School of Education of the University of 
Born 1937. Trustee Since January 2001. Principal  Pennsylvania; Director of Carnegie Corporation of 
Occupation(s) During the Past Five Years: Applecore  New York, Schuylkill River Development Corporation, 
Partners (pro bono ventures in education); Senior  and Greater Philadelphia Chamber of Commerce; 
Advisor to Greenwich Associates (international business  Trustee of the National Constitution Center. 
strategy consulting); Successor Trustee of Yale University;   
Overseer of the Stern School of Business at New York   
University; Trustee of the Whitehead Institute for   
Biomedical Research.   


JoAnn Heffernan Heisen  Executive Officers   
Born 1950. Trustee Since July 1998. Principal     
Occupation(s) During the Past Five Years: Corporate  Thomas J. Higgins1   
Vice President and Chief Global Diversity Officer since  Born 1957. Chief Financial Officer Since September 
2006 (retired 2008) and Member of the Executive  2008. Principal Occupation(s) During the Past Five 
Committee (retired 2008) of Johnson & Johnson  Years: Principal of The Vanguard Group, Inc.; Chief 
(pharmaceuticals/consumer products); Vice President  Financial Officer of each of the investment companies 
and Chief Information Officer of Johnson & Johnson  served by The Vanguard Group since 2008; Treasurer 
(1997–2005); Director of the University Medical Center  of each of the investment companies served by The 
at Princeton and Women’s Research and Education  Vanguard Group (1998–2008). 
Institute; Member of the Advisory Board of the Maxwell     
School of Citizenship and Public Affairs at Syracuse     
University.  Kathryn J. Hyatt1   
  Born 1955. Treasurer Since November 2008. Principal 
  Occupation(s) During the Past Five Years: Principal of 
F. Joseph Loughrey  The Vanguard Group, Inc.; Treasurer of each of the 
Born 1949. Trustee Since October 2009. Principal  investment companies served by The Vanguard 
Occupation(s) During the Past Five Years: President and  Group since 2008; Assistant Treasurer of each of the 
Chief Operating Officer since 2005 (retired 2009) and  investment companies served by The Vanguard Group 
Vice Chairman of the Board (2008–2009) of Cummins  (1988–2008).   
Inc. (industrial machinery); Director of SKF AB (industrial     
machinery), Hillenbrand, Inc. (specialized consumer     
services), Sauer-Danfoss Inc. (machinery), the Lumina  Heidi Stam1   
Foundation for Education, and the Columbus Community  Born 1956. Secretary Since July 2005. Principal 
Education Coalition; Chairman of the Advisory Council  Occupation(s) During the Past Five Years: Managing 
for the College of Arts and Letters at the University of  Director of The Vanguard Group, Inc., since 2006; 
Notre Dame.  General Counsel of The Vanguard Group since 2005; 
  Secretary of The Vanguard Group and of each of the 
  investment companies served by The Vanguard Group 
André F. Perold  since 2005; Director and Senior Vice President of 
Born 1952. Trustee Since December 2004. Principal  Vanguard Marketing Corporation since 2005; Principal 
Occupation(s) During the Past Five Years: George Gund  of The Vanguard Group (1997–2006). 
Professor of Finance and Banking, Harvard Business     
School; Chair of the Investment Committee of HighVista     
Strategies LLC (private investment firm).  Vanguard Senior Management Team 
 
Alfred M. Rankin, Jr.  R. Gregory Barton  Michael S. Miller 
Born 1941. Trustee Since January 1993. Principal  Mortimer J. Buckley  James M. Norris 
Occupation(s) During the Past Five Years: Chairman,  Kathleen C. Gubanich  Glenn W. Reed 
President, and Chief Executive Officer of NACCO  Paul A. Heller  George U. Sauter 
Industries, Inc. (forklift trucks/housewares/lignite);     
Director of Goodrich Corporation (industrial products/     
aircraft systems and services); Deputy Chairman of   
the Federal Reserve Bank of Cleveland; Trustee of     
University Hospitals of Cleveland, The Cleveland  Founder   
Museum of Art, and Case Western Reserve University.  John C. Bogle   
  Chairman and Chief Executive Officer, 1974–1996 
 
Peter F. Volanakis     
Born 1955. Trustee Since July 2009. Principal     
Occupation(s) During the Past Five Years: President     
since 2007 and Chief Operating Officer since 2005     
of Corning Incorporated (communications equipment);     
President of Corning Technologies (2001–2005); Director     
of Corning Incorporated and Dow Corning; Trustee of     
the Corning Incorporated Foundation and the Corning     
Museum of Glass; Overseer of the Amos Tuck School     
of Business Administration at Dartmouth College.     

1 These individuals are “interested persons” as defined in the Investment Company Act of 1940.
2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


P.O. Box 2600
Valley Forge, PA 19482-2600

Connect with Vanguard® > www.vanguard.com

Fund Information > 800-662-7447  All comparative mutual fund data are from Lipper Inc. 
  or Morningstar, Inc., unless otherwise noted. 
Direct Investor Account Services > 800-662-2739   
 
Institutional Investor Services > 800-523-1036  You can obtain a free copy of Vanguard’s proxy voting
  guidelines by visiting our website, www.vanguard.com, 
Text Telephone for People  and searching for “proxy voting guidelines,” or by 
With Hearing Impairment > 800-749-7273  calling Vanguard at 800-662-2739. The guidelines are 
  also available from the SEC’s website, www.sec.gov. 
  In addition, you may obtain a free report on how your 
  fund voted the proxies for securities it owned during 
the 12 months ended June 30. To get the report, visit
This material may be used in conjunction  either www.vanguard.com or www.sec.gov.
with the offering of shares of any Vanguard 
fund only if preceded or accompanied by   
the fund’s current prospectus.  You can review and copy information about your fund 
  at the SEC’s Public Reference Room in Washington, D.C. 
  To find out more about this public service, call the SEC 
  at 202-551-8090. Information about your fund is also 
  available on the SEC’s website, and you can receive 
  copies of this information, for a fee, by sending a 
  request in either of two ways: via e-mail addressed to 
  publicinfo@sec.gov or via regular mail addressed to the 
  Public Reference Section, Securities and Exchange 
  Commission, Washington, DC 20549-1520. 
 
 
  © 2009 The Vanguard Group, Inc. 
  All rights reserved. 
  Vanguard Marketing Corporation, Distributor. 
  Q880 122009 


Vanguard Total International Stock 
Index Fund Annual Report 
October 31, 2009 


> Global equity markets began to recover in March and continued to climb

as earnings reports improved and investor confidence revived.

> For the fiscal year ended October 31, 2009, Vanguard Total International

Stock Index Fund gained about 31%, surpassing the average return of its

international fund peers.

> All ten industry sectors posted double-digit gains, with materials, industrials,

and financials leading the way.

Contents   
 
Your Fund’s Total Returns  1 
President’s Letter  2 
Results of Proxy Voting  8 
Fund Profile  10 
Performance Summary  12 
Financial Statements  14 
Your Fund’s After-Tax Returns  47 
About Your Fund’s Expenses  48 
Glossary  50 


Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice.
Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the
risks of investing in your fund are spelled out in the prospectus.
Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Fiscal Year Ended October 31, 2009     
  Ticker  Total 
  Symbol  Returns 
Vanguard Total International Stock Index Fund  VGTSX  31.41% 
Total International Composite Index1    34.46 
International Funds Average2    26.69 

Your Fund’s Performance at a Glance         
October 31, 2008–October 31, 2009         
      Distributions Per Share 
  Starting  Ending  Income  Capital 
  Share Price  Share Price  Dividends  Gains 
Vanguard Total International Stock Index Fund  $10.97  $13.99  $0.325  $0.000 

1 Consists of the MSCI Europe Index (51%), the MSCI Pacific Index (26%), and the MSCI Emerging Markets Index (23%), as of October 31, 2009.
2 Derived from data provided by Lipper Inc.

1


 

 

 

President’s Letter

Dear Shareholder,

As the world emerged from the worst global financial crisis since the 1930s, international stocks outpaced U.S. equities for the 2009 fiscal year. Governments’ fiscal policy and stimulus programs played key roles in the recovery. The recession receded in several major European countries, while the developing world’s economies, which had avoided much of the financial crisis fallout, continued to expand.

All geographic regions participated in the rally. Emerging markets led the charge. Also during the period, the U.S. dollar depreciated 13% against the euro and 9% against the yen, an advantage for the fund’s U.S.-based investors in both the European and Pacific markets.

The fund succeeded in capturing the return of its comparative indexes for the fiscal year ended October 31, 2009. However, because of temporary price differences arising from fair-value pricing policies (please see the text box on page 6), the fund’s returns appear to have diverged a bit from that of its benchmark, which is not adjusted for fair value.

If you own the fund in a taxable account, you may wish to review the details of the fund’s after-tax returns on page 47.

2


A vicious bear market quickly turned bullish

A year ago, the global financial system stood on the brink of collapse as the expanding U.S. credit crisis precipitated the deepest worldwide recession since World War II. Since then, markets have pulled back from the depths and, in fact, have rallied impressively. Although U.S. unemployment has risen to double digits and signs of a robust recovery are hard to find, the global economy has begun to revive. For the first time in more than a year, U.S. gross domestic product registered growth, as reported by the Commerce Department for the third quarter of calendar 2009.

U.S. stocks recorded positive returns for the fiscal year ended October 31 as the market’s losses during the first four months of the period—marking the final plunge of a historic bear market—were erased by a remarkable rally beginning in March. Global stocks did even better, thanks to some renewed strength in developed markets and a powerful upswing in emerging markets that actually had some prognosticators worrying about a new asset bubble. Reminders of the markets’ travails are nevertheless apparent in the index returns for the past three years, where negative figures are the rule. Even the five-year returns for U.S. stocks as of October 31 are barely positive, further evidence of the long-term damage done by the collapse of the real estate bubble.

Market Barometer       
  Average Annual Total Returns 
  Periods Ended October 31, 2009 
  One Year  Three Years  Five Years 
Stocks       
MSCI All Country World Index ex USA (International)  34.79%  –2.49%  7.58% 
Russell 1000 Index (Large-caps)  11.20  –6.84  0.71 
Russell 2000 Index (Small-caps)  6.46  –8.51  0.59 
Dow Jones U.S. Total Stock Market Index  11.34  –6.55  1.06 
 
Bonds       
Barclays Capital U.S. Aggregate Bond Index       
(Broad taxable market)  13.79%  6.35%  5.05% 
Barclays Capital Municipal Bond Index  13.60  4.17  4.15 
Citigroup 3-Month Treasury Bill Index  0.28  2.50  2.94 
 
CPI       
Consumer Price Index  –0.18%  2.32%  2.52% 

3


The bond market experienced an equally dramatic turnaround

The stock market’s rapid fall and recovery were matched by an equally dramatic turnaround in the bond market. At the end of 2008, as the credit markets virtually shut down, risk-averse investors flocked to U.S. Treasury bonds. The effect was to widen the difference between the lower yields of Treasuries and the higher yields of corporate bonds to a margin not seen since the Great Depression.

Central banks around the world responded to the economic slowdown by lowering interest rates and implementing other aggressive stimulus programs. Meanwhile, governments boosted spending in hopes of reversing the recessionary tide. As fears of a worldwide depression eased,

investors’ appetite for risk returned to more normal levels. The receding pessimism raised demand for corporate bonds, pushing up their prices and bringing down their yields. Over the past 12 months, both taxable and municipal bonds returned more than 13%.

However, the Fed’s easy-money campaign had a predictable effect on short-term savings vehicles such as money market funds, whose yields track prevailing short-term rates. In December 2008, the Fed reduced its target for the federal funds rate, a benchmark for the interest rates paid by money market instruments and other very short-term securities, to between 0% and 0.25%. The Fed has said it expects to maintain its target at this level “for an extended period.”

Expense Ratios1     
Your Fund Compared With Its Peer Group     
    International 
    Funds 
  Fund  Average2 
Total International Stock Index Fund  0.34%  1.44% 

1 The fund expense ratio shown is from the prospectus dated September 23, 2009, and represents estimated costs for the current fiscal year
based on the fund’s current net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the fund’s total operating
expenses represented 0.32% of average net assets. The peer-group expense ratio is derived from data provided by Lipper Inc. and captures
information through year-end 2008.
2 Derived from data provided by Lipper Inc.

4


Emerging markets pace strong global recovery

Emerging markets, the most volatile of international stocks, enjoyed the greatest gains during the fiscal period after sliding the most a year earlier. Propelled by its holdings in China and Brazil––which combined, on average, to include more than one-third of the fund’s emerging markets assets––the MSCI Emerging Markets Index returned about 64%. Stocks from China, the index’s largest country weighting, rose about 82%, while stocks from Brazil advanced about 92%. China’s government stimulus and fiscal policy took hold with great speed and effect, compared with more-developed parts of the world. The economic recovery in Brazil was tied to commodities, with oil and iron ore driving returns, as well as to government spending, driven by strong domestic demand. Gains from India (returning about +77% in the MSCI Emerging Markets Index), South Africa (about +62%), Taiwan (about +48%), and South Korea (about +57%) also sparked the fund.

Developed markets shared in gains

Pacific and European developed markets also produced significant returns during the fiscal year, although their increases lacked the breadth, depth, and speed of their emerging market counterparts. The MSCI Pacific Index advanced about 28%, and the MSCI Europe Index returned about 27%.

Total Returns   
Ten Years Ended October 31, 2009   
  Average 
  Annual Return 
Total International Stock Index Fund  3.07% 
Total International Composite Index1  3.25 
International Funds Average2  1.64 

The figures shown represent past performance, which is not a guarantee of future results. (Current performance
may be lower or higher than the performance data cited. For performance data current to the most recent month-
end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal
value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost.

1 Consists of the MSCI Europe Index (51%), the MSCI Pacific Index (26%), and the MSCI Emerging Markets Index (23%), as of October 31, 2009.
2 Derived from data provided by Lipper Inc.

5


A note on fair-value pricing 
An index fund’s return sometimes may appear to diverge from the return of its benchmark index a
bit more than would be expected.  This may be the result of a fair-value  pricing adjustment.
 
These adjustments address pricing discrepancies that may arise because of time-zone differences among global
stock markets. Foreign stocks may trade on exchanges that close many hours before a fund’s closing share
price is calculated in the United States, generally at 4 p.m., Eastern time. In the hours between the
foreign close and the U.S. close,  the value of these foreign securities may change—because of company-
specific announcements or market-wide developments, for example. Such price changes are not immediately
reflected in international index values.
 
Fair-value pricing takes such changes into account in calculating the fund’s daily net asset value, thus ensuring
that the NAV doesn’t include “stale” prices. The result can be a temporary divergence between the return of
the fund and that of its benchmark index—a difference that usually corrects itself when the foreign
markets reopen.

Australia, which is dwarfed by Japan among the Pacific region’s country weightings, still had the most influence on the MSCI Pacific Index’s return. Signaling the Australian economy’s solid footing, the Reserve Bank of Australia has already begun increasing its key interest rates. Australian financial and materials stocks rose more than 70% for the fiscal year. Japan, which accounted for about 70% of the value of developed markets in the Pacific, on average, during the period, also saw stock-market strength. Its recovery was bolstered by the consumer discretionary, industrial, and information technology sectors.

Among European markets, stocks in the United Kingdom, which has been slow to shake the global recession, still rose almost 24%. France and Germany, which followed the United Kingdom as the fund’s second and third heaviest country weightings, respectively, also made strong contributions, as did Spain (returning nearly +56%) and Sweden (almost +70%).

All sectors aboard in economic recovery

All ten of the Total International Stock Index Fund’s industry sectors had double-digit positive returns for the fiscal period. Financials, the fund’s most significant sector weighting, advanced about 41%. Banks, especially, made a difference, rebounding off their lows as the global economy began to stabilize.

Reflecting demand for commodities in the improved economy, the materials, industrial, and energy sectors had solid

6


gains. The information technology and telecommunication services sectors also rose on the anticipation that corporations and households will boost spending after a period of significant cutbacks. Increased consumer spending also lifted the consumer discretionary and consumer staples sectors.

The funds’ long-term results are aligned with its benchmark

During a decade that featured extraordinary turmoil and two savage bear markets, Vanguard Total International Stock Index Fund met its objective of tracking its benchmark index. The fund also exceeded the average annual return of its international fund peer group for the ten years ended October 31, 2009.

While the investment environment has been volatile and the future is unpredictable, we’re confident that Vanguard Quantitative Equity Group’s expert and disciplined index-fund management will help the fund continue to capture the returns of its benchmark index. Our fund’s extremely low costs also ensure that you keep more of the fund’s returns.

International stocks have place in a diversified program

Investors dealt with two market extremes over the past fiscal year. Through the final months of 2008 and the first months of 2009, stock markets around the world slid as the global financial crisis intensified and credit markets remained gridlocked. In March, however, markets found a bottom and began to rise on positive economic news and investors’ newfound optimism.

Investors who maintain a long-term view realize that financial markets inevitably experience volatility from time to time, and that the market’s inherent risk is, paradoxically, a source of its potential rewards. Although such uncertainty can be hard to live with, it can be managed. To that end, Vanguard has long counseled investors to create a broadly diversified investment program that considers their time horizon, risk tolerance, and long-term goals. Such a program may include U.S. stock funds and international funds as well as bond and money market funds.

International stocks––and economies––often behave differently from their U.S. counterparts. Diversification can add value so long as asset classes do not march completely in sync, and Vanguard’s research indicates that international equities can diversify your portfolio in the long-term. As part of a well-balanced portfolio, the Total International Stock Index Fund offers exposure to foreign economic opportunities, potentially helping you meet your long-term investing goals.

Thank you for your confidence in Vanguard.


F. William McNabb III
President and Chief Executive Officer
November 16, 2009

7


Results of Proxy Voting

At a special meeting of shareholders on July 2, 2009, fund shareholders approved the following two proposals:

Proposal 1—Elect trustees for each fund.*

The individuals listed in the table below were elected as trustees for each fund. All trustees with the exception of Messrs. McNabb and Volanakis (both of whom already served as directors of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.

      Percentage 
Trustee  For  Withheld  For 
John J. Brennan  3,238,376,491  48,158,442  98.5% 
Charles D. Ellis  3,220,296,621  66,238,311  98.0% 
Emerson U. Fullwood  3,234,626,268  51,908,665  98.4% 
Rajiv L. Gupta  3,233,667,602  52,867,331  98.4% 
Amy Gutmann  3,235,485,956  51,048,977  98.4% 
JoAnn Heffernan Heisen  3,236,403,610  50,131,323  98.5% 
F. William McNabb III  3,236,819,920  49,715,013  98.5% 
André F. Perold  3,232,519,097  54,015,835  98.4% 
Alfred M. Rankin, Jr.  3,236,021,880  50,513,052  98.5% 
Peter F. Volanakis  3,238,134,065  48,400,867  98.5% 
* Results are for all funds within the same trust.       

Proposal 2—Update and standardize the funds’ fundamental policies regarding:
(a) Purchasing and selling real estate.
(b) Issuing senior securities.
(c) Borrowing money.
(d) Making loans.
(e) Purchasing and selling commodities.
(f) Concentrating investments in a particular industry or group of industries.
(g) Eliminating outdated fundamental investment policies not required by law.

The revised fundamental policies are clearly stated and simple, yet comprehensive, making oversight and compliance more efficient than under the former policies. The revised fundamental policies will allow the funds to respond more quickly to regulatory and market changes, while avoiding the costs and delays associated with successive shareholder meetings.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
Total International Stock Index Fund         
2a  1,138,131,010  17,097,227  17,608,824  41,904,334  93.7% 
2b  1,135,047,690  19,118,004  18,671,370  41,904,332  93.4% 
2c  1,119,835,712  18,241,236  34,760,115  41,904,334  92.2% 
2d  1,131,113,987  18,846,974  22,876,098  41,904,337  93.1% 
2e  1,130,558,058  17,941,370  24,337,635  41,904,333  93.1% 
2f  1,133,772,758  18,342,806  20,721,497  41,904,335  93.3% 
2g  1,140,037,356  18,409,449  14,390,717  41,903,874  93.9% 

8


Fund shareholders did not approve this proposal:

Proposal 3—Institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.

The trustees recommended a vote against the proposal because it called for procedures that duplicate existing practices and procedures of the Vanguard funds.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
Total International           
Stock Index Fund  100,230,473  106,391,592  966,210,004  41,909,327  8.3% 

9


Total International Stock Index Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics     
    Target  Broad 
  Fund  Index1  Index2 
Number of Stocks  1,768  1,709  1,806 
Turnover Rate  12%  —  — 
Expense Ratio3  0.34%  —  — 
Short-Term Reserves  0.1%  —  — 

Sector Diversification (% of equity exposure) 
    Target  Broad 
  Fund  Index1  Index2 
Consumer Discretionary  8.7%  8.7%  8.3% 
Consumer Staples  9.1  9.0  8.6 
Energy  10.0  10.0  11.2 
Financials  25.9  26.0  26.6 
Health Care  6.9  6.8  6.4 
Industrials  10.1  10.1  9.8 
Information Technology  6.7  6.7  6.5 
Materials  10.6  10.7  11.2 
Telecommunication       
Services  6.7  6.7  6.4 
Utilities  5.3  5.3  5.0 

Volatility Measures4   
  Fund Versus  Fund Versus 
  Target Index1  Broad Index2 
R-Squared  0.98  0.98 
Beta  1.02  1.01 

Ten Largest Holdings5 (% of total net assets) 
 
HSBC Holdings PLC  diversified banks  1.5% 
Royal Dutch Shell PLC  integrated oil   
  and gas  1.4 
BP PLC  integrated oil   
  and gas  1.4 
Nestle SA  packaged foods   
  and meats  1.3 
Banco Santander SA  diversified banks  1.0 
Total SA  integrated oil   
  and gas  1.0 
Telefonica SA  integrated   
  telecommunication   
  services  0.9 
Vodafone Group PLC  wireless   
  telecommunication   
  services  0.9 
Roche Holdings AG  pharmaceuticals  0.9 
Novartis AG  pharmaceuticals  0.9 
Top Ten    11.2% 

Allocation by Region (% of equity exposure)


1 Total International Composite Index.
2 MSCI All Country World Index ex USA.
3 The expense ratio shown is from the prospectus dated September 23, 2009 and represents estimated costs for the current fiscal year
based on the fund’s current net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the fund’s total operating
expenses represented 0.32% of average net assets.
4 For and explanation of R-squared, beta, and other items used here, see the Glossary.
5 The holdings listed exclude any temporary cash investments and equity index products.

10


Total International Stock Index Fund

Market Diversification (% of equity exposure) 
    Target 
  Fund  Index1 
Europe     
United Kingdom  16.6%  16.4% 
France  8.3  8.2 
Germany  6.2  6.1 
Switzerland  6.1  6.1 
Spain  3.7  3.7 
Italy  2.8  2.8 
Sweden  2.0  2.1 
Netherlands  2.0  2.0 
Other European Markets  4.2  4.2 
Subtotal  51.9%  51.6% 
Pacific     
Japan  16.3%  16.3% 
Australia  6.3  6.4 
Hong Kong  1.8  1.8 
Singapore  1.0  1.0 
Other Pacific Markets  0.1  0.1 
Subtotal  25.5%  25.6% 
Emerging Markets     
China  4.2%  4.3% 
Brazil  3.8  3.7 
South Korea  2.9  2.9 
Taiwan  2.6  2.6 
India  1.7  1.7 
South Africa  1.6  1.6 
Russia  1.5  1.5 
Mexico  1.0  1.0 
Other Emerging Markets  3.3  3.5 
Subtotal  22.6%  22.8% 

1 Total International Composite Index.

11


Total International Stock Index Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009

Initial Investment of $10,000


    Average Annual Total Returns  Final Value 
    Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
Total International Stock Index Fund1  31.41%  6.54%  3.07%  $13,535 
MSCI All Country World Index ex USA  34.79  7.58  3.95  14,733 
Total International Composite Index2  34.46  6.87  3.25  13,775 
International Funds Average3  26.69  4.57  1.64  11,769 

1 Total returns do not reflect the 0.5% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares
purchased on or after June 27, 2003, and held for less than two months; or for the account service fee that may be applicable to certain
accounts with balances below $10,000.
2 Consists of the MSCI Europe Index (51%), the MSCI Pacific Index (26%), and the MSCI Emerging Markets (23%) as of October 31, 2009.
3 Derived from data provided by Lipper Inc.

12


Total International Stock Index Fund

Fiscal Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

  Inception Date  One Year  Five Years  Ten Years 
Total International Stock Index Fund2  4/29/1996  4.65%  7.69%  3.68% 

1 Consists of the MSCI Europe Index (51%), the MSCI Pacific Index (26%), and the MSCI Emerging Markets Index (23%) as of October 31, 2009.
2 Total returns do not reflect the 0.5% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares
purchased on or after June 27, 2003, and held for less than two months; or the account service fee that may be applicable to certain
accounts with balances below $10,000.
Note: See Financial Highlights table for dividend and capital gains information.

13


Total International Stock Index Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

      Market 
      Value• 
    Shares  ($000) 
Common Stocks (99.4%)1     
Australia (6.3%)     
  BHP Billiton Ltd.  6,460,927  211,897 
  Commonwealth Bank     
  of Australia  2,924,403  135,141 
  Westpac Banking Corp.  5,604,477  130,991 
  National Australia     
  Bank Ltd.  3,689,888  97,493 
  Australia & New Zealand     
  Banking Group Ltd.  4,485,083  91,478 
  Woolworths Ltd.  2,361,428  60,443 
  Wesfarmers Ltd.  1,931,473  48,197 
  Rio Tinto Ltd.  837,330  46,414 
  Westfield Group  3,946,738  42,759 
  Woodside Petroleum Ltd.  953,508  39,995 
  QBE Insurance Group Ltd.  1,930,422  38,876 
  CSL Ltd.  1,160,827  32,593 
  Newcrest Mining Ltd.  928,927  26,702 
  Macquarie Group Ltd.  583,756  25,566 
  Telstra Corp. Ltd.  8,479,218  25,197 
  Origin Energy Ltd.  1,675,163  24,020 
  Santos Ltd.  1,575,525  21,002 
  AMP Ltd.  3,873,374  20,409 
  Suncorp-Metway Ltd.  2,465,475  19,285 
  Foster's Group Ltd.  3,689,400  18,094 
  Brambles Ltd.  2,702,408  17,037 
  Orica Ltd.  688,200  14,599 
  Stockland  4,378,397  14,545 
  Insurance Australia     
  Group Ltd.  3,955,435  13,306 
  Amcor Ltd.  2,338,509  12,042 
  AGL Energy Ltd.  858,914  10,646 
  Coca-Cola Amatil Ltd.  1,067,932  10,153 
  ASX Ltd.  326,704  9,849 
  Toll Holdings Ltd.  1,256,922  9,528 
  BlueScope Steel Ltd.  3,504,368  9,287 
  Transurban Group  2,250,980  9,133 
^  Leighton Holdings Ltd.  285,545  9,068 
  GPT Group  17,449,685  8,905 
  Sonic Healthcare Ltd.  699,632  8,735 

  Computershare Ltd.  871,396  8,460 
*,^  Fortescue Metals     
  Group Ltd.  2,382,876  7,978 
  TABCORP Holdings Ltd.  1,153,968  7,361 
  Wesfarmers Ltd.  291,813  7,311 
  AXA Asia Pacific     
  Holdings Ltd.  1,941,727  7,269 
  Incitec Pivot Ltd.  3,104,149  7,241 
  WorleyParsons Ltd.  312,474  7,209 
  OneSteel Ltd.  2,607,393  7,079 
*  Asciano Group  5,181,096  6,938 
*  Alumina Ltd.  4,715,733  6,920 
  Lend Lease Corp. Ltd.  830,904  6,887 
  Crown Ltd.  934,977  6,806 
  Mirvac Group  4,942,303  6,471 
  Dexus Property Group  8,976,413  6,342 
*  OZ Minerals Ltd.  5,994,453  6,268 
  Goodman Group  11,411,850  6,119 
  Metcash Ltd.  1,454,041  6,113 
  Cochlear Ltd.  105,936  6,071 
^  Fairfax Media Ltd.  4,164,895  5,902 
  Boral Ltd.  1,141,016  5,820 
  Macquarie     
  Infrastructure Group  4,495,833  5,753 
  CFS Retail Property Trust  3,323,830  5,711 
  Bendigo and Adelaide     
  Bank Ltd.  661,298  5,359 
  Qantas Airways Ltd.  2,118,414  5,267 
*  James Hardie     
  Industries NV  816,816  5,177 
  Tatts Group Ltd.  2,319,054  5,135 
  Sims Metal     
  Management Ltd.  287,365  5,066 
*  Paladin Energy Ltd.  1,236,751  4,474 
  CSR Ltd.  2,465,378  4,193 
*  Arrow Energy Ltd.  1,109,579  4,010 
  Macquarie Airports  1,439,463  3,662 
  Harvey Norman     
  Holdings Ltd.  1,025,133  3,632 
  Goodman Fielder Ltd.  2,491,332  3,574 
  Billabong International Ltd.  381,520 3,530 

14


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Nufarm Ltd.  319,641  3,267 
  Aristocrat Leisure Ltd.  747,619  2,985 
  Energy Resources of     
  Australia Ltd.  124,845  2,578 
  Perpetual Ltd.  73,685  2,455 
*  Caltex Australia Ltd.  253,530  2,299 
  SP AusNet  2,628,780  2,066 
*  CSR, Ltd. Rights     
  Exp. 11/9/2009  431,441  93 
      1,530,236 
Austria (0.2%)     
^  Erste Group Bank AG  338,183  13,596 
  OMV AG  288,425  11,886 
  Telekom Austria AG  620,189  10,159 
  Voestalpine AG  226,982  7,761 
  Verbund–Oesterreichische     
  Elektrizitaetswirtschafts     
  AG Class A  147,024  6,600 
^  Raiffeisen International     
  Bank Holding AG  103,814  6,088 
  Vienna Insurance Group  74,256  4,184 
      60,274 
Belgium (0.8%)     
  Anheuser-Busch InBev NV  1,388,984  65,213 
*  Fortis  4,287,488  18,537 
  Groupe Bruxelles     
  Lambert SA  155,156  13,674 
*  KBC Groep NV  310,379  13,286 
  Delhaize Group SA  194,240  13,195 
  Solvay SA Class A  114,073  11,202 
  Belgacom SA  292,625  10,960 
*,^  Dexia SA  1,009,758  8,393 
  UCB SA  192,373  8,212 
  Umicore  231,308  7,026 
  Colruyt SA  28,777  6,848 
  Mobistar SA  57,055  3,919 
  Nationale A Portefeuille  62,949  3,290 
      183,755 
Brazil (3.8%)     
  Petroleo Brasileiro SA Pfd.  4,981,200  98,742 
  Petroleo Brasileiro SA  3,817,100  87,757 
  Vale SA  3,081,800  69,365 
  Itau Unibanco Holding SA  2,921,181  55,568 
  Vale SA  2,081,500  52,876 
  Banco Bradesco SA  2,559,800  50,074 
  Investimentos Itau SA  4,333,600  24,773 
*  Vale SA Class B ADR  982,607  22,698 
  Cia de Bebidas das     
  Americas  247,046  22,431 
  Petroleo Brasileiro SA     
  Series A ADR  542,332  21,758 
  Itau Unibanco Holding     
  SA ADR  1,039,284  19,892 
  OGX Petroleo e Gas     
  Participacoes SA  24,428  19,691 

  Cia Siderurgica Nacional SA  564,900  18,660 
*  Vale SA Class B ADR  694,918  17,713 
  BM&FBOVESPA SA  2,367,408  15,253 
  BRF–Brasil Foods SA  627,700  15,133 
  Gerdau SA  978,900  14,754 
  Petroleo Brasileiro     
  SA ADR  291,781  13,486 
  Usinas Siderurgicas de     
  Minas Gerais SA  487,000  12,717 
  Companhia Brasileira de     
  Meios de Pagamento  1,179,612  10,855 
*  Banco Santander     
  Brasil SA ADR  865,127  10,260 
  Banco do Brasil SA  633,300  10,142 
  Metalurgica Gerdau SA     
  Class A  527,500  9,687 
  Redecard SA  641,794  9,421 
  Bradespar SA  436,400  8,955 
  Cia Energetica de     
  Minas Gerais  569,125  8,933 
  Tele Norte Leste     
  Participacoes SA  418,900  7,966 
  Banco Bradesco SA ADR  398,301  7,847 
  Vivo Participacoes SA  301,525  7,340 
  Cyrela Brazil Realty SA  558,872  7,091 
  Cia de Concessoes     
  Rodoviarias  354,353  6,968 
  Cia Siderurgica     
  Nacional SA ADR  198,696  6,589 
  Ultrapar Participacoes SA  142,869  6,257 
  Centrais Eletricas     
  Brasileiras SA  436,200  6,213 
  Natura Cosmeticos SA  333,200  5,988 
  All America Latina     
  Logistica SA  735,300  5,397 
  Usinas Siderurgicas de     
  Minas Gerais SA  217,900  5,356 
  Souza Cruz SA  145,200  5,153 
*  Global Village     
  Telecom Holding SA  174,634  5,011 
  Centrais Eletricas     
  Brasileiras SA  374,300  4,759 
*  NET Servicos de     
  Comunicacao SA  344,600  4,247 
  Gerdau SA ADR  279,678  4,223 
  Lojas Americanas SA  632,500  4,125 
  Cia Energetica de     
  Sao Paulo  347,025  4,038 
  JBS SA  685,822  3,784 
  Cia de Bebidas das     
  Americas ADR  39,765  3,582 
  Eletropaulo Metropolitana     
  Eletricidade de     
  Sao Paulo SA  180,500  3,405 

15


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Cia de Saneamento     
  Basico do Estado     
  de Sao Paulo  171,000  3,300 
*  Empresa Brasileira de     
  Aeronautica SA  643,100  3,278 
  B2W Cia Global Do Varejo  109,818  3,183 
  CPFL Energia SA  179,500  3,144 
  Tractebel Energia SA  254,700  3,109 
  Cia Brasileira de     
  Distribuicao Grupo Pao     
  de Acucar ADR  51,306  3,104 
  MRV Engenharia e     
  Participacoes SA  163,548  3,073 
*  Marfrig Alimentos SA  250,541  2,866 
  Tele Norte Leste     
  Participacoes SA  126,900  2,860 
*  Duratex SA  394,501  2,732 
*  Votorantim Celulose     
  e Papel SA  185,455  2,540 
  Brasil Telecom     
  Participacoes SA  245,400  2,480 
  Suzano Papel     
  e Celulose SA  275,060  2,391 
*  Cosan SA Industria     
  e Comercio  214,800  2,274 
  Tim Participacoes SA  952,400  2,254 
  Banco do Estado do     
  Rio Grande do Sul  352,889  2,244 
  AES Tiete SA  196,100  2,210 
  Cia Paranaense de Energia  124,100  2,162 
  Gerdau SA  185,700  2,124 
*  Braskem SA  316,200  2,082 
  EDP–Energias do Brasil SA  124,800  2,002 
*  Empresa Brasileira de     
  Aeronautica SA ADR  96,498  1,954 
  Brasil Telecom SA  228,800  1,950 
  Klabin SA  804,000  1,917 
  Porto Seguro SA  180,400  1,904 
*  Fertilizantes Fosfatados SA  184,649  1,782 
  Cia Energetica de     
  Minas Gerais ADR  108,880  1,719 
  Cia de Transmissao de     
  Energia Eletrica Paulista  61,000  1,690 
  Tele Norte Leste     
  Participacoes SA ADR  87,449  1,667 
  Cia Brasileira de     
  Distribuicao Grupo Pao     
  de Acucar  52,991  1,599 
  Telemar Norte Leste SA  48,800  1,536 
*  Banco Santander Brasil SA  127,500  1,505 
  Cia Paranaense de     
  Energia ADR  71,556  1,259 
*  Aracruz Celulose SA  521,300  974 
  Cia de Saneamento     
  Basico do Estado de     
  Sao Paulo ADR  24,715  952 

*  Aracruz Celulose SA ADR  44,367  826 
  Brasil Telecom       
  Participacoes SA ADR  13,443  677 
  Tim Participacoes SA ADR  24,281  573 
  Vivo Participacoes SA ADR  6,441 156 
*  NET Servicos de       
  Comunicacao SA ADR  11,600  143 
*  Braskem SA ADR    412  5 
        917,133 
Chile (0.3%)       
  Empresas COPEC SA  874,939  11,652 
  Empresa Nacional de     
  Electricidad SA    4,534,404  6,969 
  Empresas CMPC SA  191,259  6,844 
  Enersis SA    18,165,449  6,453 
  Centros Comerciales     
  Sudamericanos SA    1,688,568  5,200 
  Sociedad Quimica y       
  Minera de Chile SA     
  Class B    118,415  4,349 
  CAP SA    146,252  3,801 
  Lan Airlines SA    258,388  3,431 
  Colbun SA    13,656,416  3,215 
  Banco Santander       
  Chile ADR    52,540  2,766 
  Empresa Nacional de     
  Electricidad SA ADR  59,905  2,749 
  ENTEL Chile SA    206,494  2,746 
  SACI Falabella    546,148  2,592 
  Enersis SA ADR    143,095  2,530 
  Vina Concha y Toro SA  966,492  2,048 
  AES Gener SA    4,660,788  1,975 
  Sociedad Quimica y       
  Minera de Chile SA ADR  53,346  1,960 
  Banco Santander Chile  37,009,699  1,882 
  Cia Cervecerias Unidas SA  244,671 1,726 
  Banco de Credito       
  e Inversiones    58,375  1,694 
        76,582 
China (4.2%)       
  China Mobile Ltd.    11,561,500  108,382 
  China Construction       
  Bank Corp.    86,541,000  74,610 
  Industrial & Commercial     
  Bank of China    87,997,000  70,012 
  China Life       
  Insurance Co. Ltd.    14,309,000  65,790 
  Bank of China Ltd.  109,812,188  63,701 
  CNOOC Ltd.    34,342,000  51,432 
  PetroChina Co. Ltd.    40,634,000  48,894 
  Tencent Holdings Ltd.  1,730,200  30,127 
  China Shenhua       
  Energy Co. Ltd.    6,187,500  27,758 
  China Petroleum &       
  Chemical Corp.    30,542,000  25,902 

16


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Ping An Insurance     
  Group Co. of China Ltd.  2,457,500  21,537 
  China Overseas Land &     
  Investment Ltd.  7,879,680  16,988 
  China Merchants     
  Bank Co. Ltd.  6,627,899  16,956 
  China Unicom     
  Hong Kong Ltd.  11,355,694  14,439 
  Bank of Communications     
  Co. Ltd.  11,105,000  13,278 
  China Telecom Corp. Ltd.  26,478,000  11,703 
*,^  Byd Co. Ltd.  1,070,000  9,796 
  China Coal Energy Co.  6,742,000  9,380 
  China Resources     
  Land Ltd.  3,876,000  9,356 
  China Communications     
  Construction Co. Ltd.  8,113,000  8,722 
  Aluminum Corp.     
  of China Ltd.  7,540,000  8,214 
  Hengan International     
  Group Co. Ltd.  1,230,000  7,918 
  China Resources     
  Enterprise  2,274,000  7,616 
  Zijin Mining     
  Group Co. Ltd.  7,642,000  7,397 
  Belle International     
  Holdings Ltd.  7,242,000  7,312 
  Tingyi Cayman Islands     
  Holding Corp.  3,196,000  7,131 
  China Citic Bank  9,517,539  7,124 
  China Merchants Holdings     
  International Co. Ltd.  2,078,000  6,627 
  China Resources Power     
  Holdings Co. Ltd.  3,137,600  6,500 
  Dongfeng Motor     
  Group Co. Ltd.  5,218,000  6,204 
*  China Mengniu     
  Dairy Co. Ltd.  2,188,000  6,131 
  Jiangxi Copper Co. Ltd.  2,660,000  6,027 
  China COSCO     
  Holdings Co. Ltd.  4,853,000  5,981 
  Beijing Enterprises     
  Holdings Ltd.  984,000  5,890 
  Yanzhou Coal     
  Mining Co. Ltd.  3,758,000  5,810 
  Sino-Ocean Land     
  Holdings Ltd.  5,868,000  5,707 
*  China Railway Group Ltd.  7,191,000  5,661 
  Shimao Property     
  Holdings Ltd.  3,036,000  5,640 
^  Alibaba.com Ltd.  2,423,000  5,583 
  Citic Pacific Ltd.  2,074,000  5,345 
^  Anhui Conch     
  Cement Co. Ltd.  800,000  5,176 
  China National Building     
  Material Co. Ltd.  2,318,000  4,977 

  Lenovo Group Ltd.  8,792,000  4,895 
*,^  China Taiping Insurance     
  Holdings Co. Ltd.  1,371,000  4,832 
  Shanghai Industrial     
  Holdings Ltd.  1,025,000  4,815 
  China Railway     
  Construction Corp. Ltd.  3,599,300  4,771 
  Kingboard Chemical     
  Holdings Ltd.  1,140,500  4,590 
  Cnpc Hong Kong Ltd.  4,210,000  4,444 
  Denway Motors Ltd.  9,234,000  4,420 
  China Yurun Food     
  Group Ltd.  2,059,000  4,232 
*  GOME Electrical     
  Appliances     
  Holdings Ltd.  14,172,980  4,152 
  Fushan International     
  Energy Group Ltd.  5,202,000  4,006 
  Agile Property     
  Holdings Ltd.  3,118,000  3,991 
  Parkson Retail Group Ltd.  2,452,000  3,970 
  Inner Mongolia Yitai     
  Coal Co. Class B  608,500  3,902 
^  Angang Steel Co. Ltd.  2,082,000  3,838 
^  Li Ning Co. Ltd.  1,414,500  3,838 
  Huaneng Power     
  International Inc.  5,918,000  3,778 
  Chaoda Modern     
  Agriculture Holdings Ltd.  4,611,825  3,563 
  Guangzhou R&F     
  Properties Co. Ltd.  1,898,400  3,557 
  China High Speed     
  Transmission Equipment     
  Group Co.  1,700,000  3,409 
  China Shipping     
  Development Co. Ltd.  2,428,000  3,408 
*,^  PICC Property &     
  Casualty Co. Ltd.  4,610,000  3,396 
  China Everbright Ltd.  1,356,000  3,197 
  China Oilfield     
  Services Ltd.  2,946,000  3,183 
*  Metallurgical Corp.     
  of China Ltd.  4,669,000  3,163 
  Shui On Land Ltd.  5,200,699  3,152 
  COSCO Pacific Ltd.  2,150,000  2,970 
^  Datang International     
  Power Generation     
  Co. Ltd.  6,244,000  2,957 
^  Country Garden     
  Holdings Co.  7,648,000  2,932 
  Want Want China     
  Holdings Ltd.  4,939,500  2,902 
  ZTE Corp.  519,279  2,877 
  China Vanke Co. Ltd.     
  Class B  2,297,900  2,842 

17


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  China Agri-Industries     
  Holdings Ltd.  2,959,000  2,838 
*,^  China Zhongwang     
  Holdings Ltd.  3,026,400  2,833 
^  Renhe Commercial     
  Holdings Co. Ltd.  14,499,635  2,789 
  Shanghai Electric     
  Group Co. Ltd.  5,600,000  2,637 
  China Dongxiang     
  Group Co.  4,246,000  2,594 
  Weichai Power Co. Ltd.  396,400  2,588 
  Tsingtao Brewery Co. Ltd.  636,000  2,584 
*  Air China Ltd.  4,644,000  2,514 
  Yantai Changyu Pioneer     
  Wine Co. Class B  338,550  2,489 
*,^  China Shipping Container     
  Lines Co. Ltd.  6,800,000  2,434 
  Guangdong     
  Investment Ltd.  4,640,000  2,425 
^  Geely Automobile     
  Holdings Ltd.  6,690,000  2,419 
  Shandong Weigao Group     
  Medical Polymer Co. Ltd.  680,000  2,403 
  Hopson Development     
  Holdings Ltd.  1,358,000  2,376 
*  Beijing Capital International     
  Airport Co. Ltd.  3,482,000  2,342 
  Zhejiang     
  Expressway Co. Ltd.  2,702,000  2,298 
  Huabao International     
  Holdings Ltd.  2,310,000  2,203 
^  Fosun International  3,165,000  2,144 
^  Soho China Ltd.  3,887,500  2,089 
  Jiangsu Expressway     
  Co. Ltd.  2,316,000  2,060 
*,^  Maanshan Iron & Steel  3,374,000  2,031 
*  Hidili Industry International     
  Development Ltd.  1,952,000  1,998 
  China South Locomotive     
  and Rolling Stock Corp.  3,592,000  1,992 
^  Sinofert Holdings Ltd.  3,888,000  1,924 
  China Communications     
  Services Corp. Ltd.  3,550,000  1,836 
*,^  Sinopec Shanghai     
  Petrochemical Co. Ltd.  4,524,000  1,813 
  Sinotruk Hong Kong Ltd.  1,413,500  1,681 
  China BlueChemical Ltd.  3,142,000  1,672 
  Dongfang Electric     
  Corp. Ltd.  335,800  1,668 
  Shanghai Lujiazui     
  Finance & Trade Zone     
  Development Co. Ltd.     
  Class B  893,200  1,667 
  Franshion Properties     
  China Ltd.  5,918,000  1,655 

      Market 
      Value• 
    Shares  ($000) 
  China International     
  Marine Containers     
  Co. Ltd. Class B  1,451,553  1,448 
  Shanghai Zhenhua     
  Heavy Industry Co. Ltd.     
  Class B  1,583,079  1,310 
  Harbin Power     
  Equipment Co. Ltd.  1,326,000  1,232 
  China Travel     
  International Inv HK  5,610,000  1,145 
^  Guangshen     
  Railway Co. Ltd.  2,714,000  1,103 
      1,029,950 
Colombia (0.0%)     
  BanColombia SA ADR  134,871  5,338 
 
Czech Republic (0.1%)     
  CEZ AS  311,595  15,344 
  Komercni Banka AS  29,547  5,794 
  Telefonica O2 Czech     
  Republic AS  214,912  5,064 
      26,202 
Denmark (0.7%)     
  Novo Nordisk A/S Class B  862,920  53,610 
*  Vestas Wind Systems A/S  391,458  27,456 
*  Danske Bank A/S  871,348  20,012 
  A P Moller–Maersk     
  A/S Class B  2,112  14,421 
  Carlsberg A/S Class B  204,720  14,353 
  Novozymes A/S  87,794  8,031 
  A P Moller–Maersk A/S  1,053  7,001 
*  DSV A/S  398,368  6,192 
*  Topdanmark A/S  28,728  4,142 
  TrygVesta AS  50,050  3,606 
  Coloplast A/S Class B  43,871  3,582 
*  William Demant Holding  46,314  3,293 
  H Lundbeck A/S  110,400  2,138 
      167,837 
Egypt (0.1%)     
^  Orascom Construction     
  Industries GDR  172,156  8,310 
  Orascom Telecom     
  Holding SAE GDR  173,003  5,883 
      14,193 
Finland (0.9%)     
  Nokia Oyj  7,218,899  91,184 
  Fortum Oyj  853,291  20,196 
  Sampo Oyj  807,572  19,330 
  UPM-Kymmene Oyj  1,008,209  12,100 
  Kone Oyj Class B  295,066  11,017 
  Stora Enso Oyj  1,130,697  8,558 
  Metso Oyj  246,105  6,872 
^  Wartsila Oyj  161,442  5,844 
  Elisa Oyj  259,702  5,030 
^  Neste Oil Oyj  249,354  4,410 

18


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Nokian Renkaat Oyj  203,701  4,347 
  Kesko Oyj Class B  125,699  4,183 
  Outokumpu Oyj  224,313  3,709 
  Orion Oyj Class B  174,032  3,307 
  Rautaruukki Oyj  161,148  3,285 
  Pohjola Bank PLC  270,245  3,003 
  Sanoma Oyj  152,891  2,822 
      209,197 
France (8.3%)     
  Total SA  4,114,604  246,219 
  Sanofi-Aventis SA  2,028,605  148,701 
  BNP Paribas  1,773,551  133,609 
  GDF Suez  2,326,264  97,255 
  France Telecom SA  3,528,106  87,422 
  AXA SA  3,016,480  75,020 
  Societe Generale  1,093,558  72,634 
  Groupe Danone SA  1,058,716  63,602 
  Vivendi  2,256,488  62,600 
  ArcelorMittal  1,653,783  55,968 
  Carrefour SA  1,222,863  52,489 
  Air Liquide SA  481,069  51,811 
  LVMH Moet Hennessy     
  Louis Vuitton SA  472,628  48,941 
  L'Oreal SA  461,070  47,143 
  Schneider Electric SA  450,455  46,842 
  Vinci SA  814,973  42,532 
  Unibail-Rodamco SE  157,235  34,819 
  Cie de Saint-Gobain  707,470  34,475 
  Credit Agricole SA  1,713,815  32,828 
  Lafarge SA  384,707  31,227 
  Pernod-Ricard SA  373,620  31,125 
  Alstom SA  390,103  27,029 
  EDF SA  457,431  25,495 
  Veolia Environnement  729,203  23,823 
  Cie Generale d'Optique     
  Essilor International SA  385,025  21,558 
  Compagnie Generale des     
  Etablissements Michelin     
  Class B  278,895  20,660 
  Bouygues SA  429,460  20,224 
*  Alcatel-Lucent  4,460,624  16,705 
  Vallourec SA  103,872  16,355 
*  Renault SA  356,602  15,958 
  PPR  145,970  15,908 
  European Aeronautic     
  Defence and     
  Space Co. NV  786,016  14,719 
^  Hermes International  102,070  14,194 
  Accor SA  273,802  13,112 
  Cap Gemini SA  279,390  12,943 
  Technip SA  200,403  12,573 
  Christian Dior SA  122,374  12,204 
  SES SA  546,042  11,832 
  Suez Environnement Co.  519,435  11,543 
  STMicroelectronics NV  1,320,941  10,601 
*  Natixis  1,870,225  10,506 

      Market 
      Value• 
    Shares  ($000) 
  Sodexo  180,711  10,320 
  Lagardere SCA  226,327  10,225 
*  Peugeot SA  291,190  9,485 
  Publicis Groupe  227,985  8,663 
  Casino Guichard     
  Perrachon SA  105,666  8,396 
  SCOR SE  326,933  8,321 
  Thales SA  171,523  8,311 
  Dassault Systemes SA  125,555  7,246 
  Klepierre  174,428  7,230 
  CNP Assurances  70,852  6,847 
  Eutelsat Communications  190,318  6,049 
  Safran SA  356,472  5,751 
  Legrand SA  201,953  5,478 
*  Cie Generale de     
  Geophysique-Veritas  273,285  5,412 
  Neopost SA  59,571  5,213 
  Bureau Veritas SA  94,187  5,186 
  Fonciere Des Regions  44,842  4,943 
  Aeroports de Paris  57,518  4,366 
  Eiffage SA  79,276  4,319 
*  Atos Origin SA  87,722  4,107 
  ICADE  37,796  3,979 
*  Air France-KLM  255,391  3,916 
  Gecina SA  36,259  3,857 
  Imerys SA  65,770  3,605 
  Societe BIC SA  51,020  3,541 
^  Societe Television     
  Francaise 1  224,865  3,531 
^  Iliad SA  31,566  3,418 
  Eurazeo  53,993  3,395 
  Societe Des Autoroutes     
  Paris-Rhin-Rhone  43,504  3,267 
^  Eramet  10,148  3,160 
  M6-Metropole Television  125,324  3,019 
  BioMerieux  26,094  2,896 
^  PagesJaunes Groupe  235,857  2,890 
*,^  JC Decaux SA  123,206  2,491 
  Ipsen SA  48,474  2,470 
      2,010,507 
Germany (6.1%)     
  Siemens AG  1,586,042  143,326 
  E.ON AG  3,665,138  140,466 
  Bayer AG  1,473,673  102,244 
  Allianz SE  873,277  100,098 
  BASF SE  1,779,378  95,250 
  Deutsche Bank AG  1,141,393  82,924 
  Daimler AG  1,692,426  82,206 
  SAP AG  1,655,054  74,966 
  Deutsche Telekom AG  5,468,200  74,725 
  RWE AG  806,296  70,722 
  Muenchener     
  Rueckversicherungs AG  398,095  62,984 
  Bayerische Motoren     
  Werke AG  637,218  31,172 
  Linde AG  292,846  30,736 

19


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Deutsche Boerse AG  375,777  30,435 
^  Volkswagen AG  170,530  27,729 
  Deutsche Post AG  1,634,501  27,651 
  ThyssenKrupp AG  643,920  20,742 
  Volkswagen AG Pfd.  203,002  20,225 
  Fresenius Medical     
  Care AG & Co. KGaA  368,058  17,862 
  Adidas AG  373,965  17,315 
  MAN SE  204,338  16,827 
  HeidelbergCement AG  271,084  16,215 
  Henkel AG & Co. KGaA  344,573  15,693 
  K&S AG  285,380  15,578 
*  Commerzbank AG  1,360,181  14,167 
  Porsche Automobil     
  Holding SE  167,686  12,827 
  Metro AG  217,634  12,080 
  Merck KGaA  124,033  11,660 
  Beiersdorf AG  169,657  10,451 
  Henkel AG & Co. KGaA  251,436  9,716 
*  Infineon Technologies AG  2,080,018  9,366 
  Fresenius SE Pfd.  156,252  9,077 
*,^  QIAGEN NV  433,957  8,999 
  Deutsche Lufthansa AG  437,773  6,760 
  Salzgitter AG  74,630  6,709 
  Hochtief AG  81,420  6,145 
  RWE AG  75,937  5,959 
  GEA Group AG  300,726  5,675 
*  Hannover     
  Rueckversicherung AG  117,143  5,281 
*  Deutsche Postbank AG  167,662  5,192 
  Wacker Chemie AG  29,736  4,272 
  Celesio AG  163,147  4,047 
^  Solarworld AG  158,465  3,430 
  Bayerische Motoren     
  Werke AG  102,749  3,377 
  Fraport AG Frankfurt     
  Airport Services     
  Worldwide  71,017  3,344 
*  United Internet AG  246,126  3,205 
  Puma AG Rudolf     
  Dassler Sport  10,080  3,088 
  Fresenius SE  54,871  2,733 
  Suedzucker AG  129,193  2,670 
  Daimler AG  45,880  2,213 
*,^  TUI AG  273,464  1,896 
  Hamburger Hafen und     
  Logistik AG  46,182  1,799 
      1,494,229 
Greece (0.5%)     
*  National Bank of     
  Greece SA  1,139,014  41,643 
*  Alpha Bank AE  689,990  13,303 
  OPAP SA  431,814  10,992 
*  Piraeus Bank SA  602,604  10,389 
*  EFG Eurobank Ergasias SA  626,492  9,924 

      Market 
      Value• 
    Shares  ($000) 
  Coca Cola Hellenic     
  Bottling Co. SA  353,930  9,224 
  Bank of Cyprus     
  Public Co. Ltd.  1,066,097  8,434 
  Hellenic     
  Telecommunications     
  Organization SA  381,890  6,424 
  Marfin Investment     
  Group SA  1,206,668  4,808 
*  Public Power Corp. SA  223,970  4,568 
  Titan Cement Co. SA  111,260  3,845 
  Hellenic Petroleum SA  171,470  2,078 
*  National Bank of     
  Greece SA ADR  144,000  1,047 
  Hellenic     
  Telecommunications     
  Organization SA ADR  86,880  737 
      127,416 
Hong Kong (1.8%)     
  Sun Hung Kai     
  Properties Ltd.  2,706,000  40,997 
  Hong Kong Exchanges     
  and Clearing Ltd.  1,962,500  34,545 
  Cheung Kong     
  Holdings Ltd.  2,664,000  33,810 
  Hutchison Whampoa Ltd.  4,109,000  28,841 
  CLP Holdings Ltd.  3,921,500  26,282 
  Hang Seng Bank Ltd.  1,467,400  20,730 
  Hong Kong & China     
  Gas Co. Ltd.  7,599,000  18,282 
  Li & Fung Ltd.  4,338,000  18,042 
  Swire Pacific Ltd.  1,480,000  18,036 
  BOC Hong Kong     
  Holdings Ltd.  7,120,000  16,389 
  Hang Lung Properties Ltd.  3,972,000  15,011 
  Henderson Land     
  Development Co. Ltd.  2,057,000  14,542 
  Esprit Holdings Ltd.  2,138,600  14,237 
  Wharf Holdings Ltd.  2,631,000  14,216 
  Hongkong Electric     
  Holdings Ltd.  2,657,000  14,209 
  New World     
  Development Ltd.  4,827,000  10,390 
  Bank of East Asia Ltd.  2,838,220  9,956 
  MTR Corp.  2,727,000  9,659 
  Link REIT  4,147,000  9,339 
  Hang Lung Group Ltd.  1,608,000  8,060 
  Kerry Properties Ltd.  1,367,000  7,622 
  Sino Land Co. Ltd.  3,276,000  6,231 
  Wheelock & Co. Ltd.  1,772,000  5,693 
  Shangri-La Asia Ltd.  2,452,000  4,716 
*  Cathay Pacific     
  Airways Ltd.  2,225,000  3,605 
  Hopewell Holdings Ltd.  1,143,000  3,596 
*  Foxconn International     
  Holdings Ltd.  4,091,000  3,593 

20


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Yue Yuen Industrial     
  Holdings Ltd.  1,260,000  3,511 
  Hysan Development     
  Co. Ltd.  1,170,000  3,456 
  Wing Hang Bank Ltd.  335,500  3,255 
  Cheung Kong     
  Infrastructure     
  Holdings Ltd.  843,000  2,997 
  NWS Holdings Ltd.  1,576,000  2,993 
  ASM Pacific     
  Technology Ltd.  367,900  2,860 
  Chinese Estates     
  Holdings Ltd.  1,659,000  2,844 
  Television Broadcasts Ltd.  529,000  2,500 
*  Mongolia Energy Co. Ltd.  5,775,000  2,427 
  Lifestyle International     
  Holdings Ltd.  1,263,500  2,030 
  Orient Overseas     
  International Ltd.  413,000  2,015 
  PCCW Ltd.  6,966,000  1,711 
  Hong Kong Aircraft     
  Engineerg Co. Ltd.  130,000  1,535 
      444,763 
Hungary (0.1%)     
*  OTP Bank PLC  515,953  14,509 
*  MOL Hungarian Oil     
  and Gas NyRt  112,492  9,398 
  Richter Gedeon Nyrt.  26,593  5,538 
  Magyar Telekom     
  Telecommunications PLC  871,424  3,757 
      33,202 
India (1.7%)     
  Reliance Industries Ltd.  1,262,933  51,095 
  Infosys Technologies Ltd.  880,928  40,911 
  Housing Development     
  Finance Corp.  404,821  22,652 
  ICICI Bank Ltd.  1,016,238  16,782 
  HDFC Bank Ltd.  412,063  14,033 
  Larsen & Toubro Ltd.  380,259  12,552 
  Tata Consultancy     
  Services Ltd.  903,748  12,015 
  Oil & Natural Gas     
  Corp. Ltd.  492,655  11,739 
  Sterlite Industries     
  India Ltd.  721,376  11,650 
  ITC Ltd.  2,105,340  11,336 
  Bharat Heavy     
  Electricals Ltd.  225,043  10,525 
  Hindustan Unilever Ltd.  1,671,010  9,991 
  Jindal Steel & Power Ltd.  712,627  9,602 
  Axis Bank Ltd.  413,929  7,880 
  ICICI Bank Ltd. ADR  239,874  7,544 
  NTPC Ltd.  1,568,891  7,041 
  DLF Ltd.  776,995  6,042 
  Wipro Ltd.  468,015  5,965 
  GAIL India Ltd.  733,613  5,400 

        Market 
        Value• 
      Shares  ($000) 
  Mahindra & Mahindra Ltd.    266,212  5,151 
  Hero Honda Motors Ltd.    150,476  4,970 
  Jaiprakash Associates Ltd.  1,020,343  4,493 
  Reliance Infrastructure Ltd.    201,270  4,454 
  State Bank of India Ltd.    96,366  4,446 
  Tata Power Co. Ltd.    157,505  4,428 
  HDFC Bank Ltd. ADR    39,831  4,406 
  Reliance       
  Communications Ltd.  1,184,993  4,368 
  Sesa Goa Ltd.    675,818  4,293 
  Tata Motors Ltd.    349,392  4,136 
  Sun Pharmaceutical       
  Industries Ltd.    135,421  3,941 
  Maruti Suzuki India Ltd.    131,315  3,881 
  Unitech Ltd.  2,264,220  3,880 
  Infrastructure       
  Development       
  Finance Co. Ltd.  1,245,638  3,845 
  Cipla Ltd.    604,955  3,663 
  Kotak Mahindra Bank Ltd.    244,320  3,648 
  Tata Steel Ltd.    362,179  3,580 
  Hindalco Industries Ltd.  1,364,328  3,486 
  Reliance Capital Ltd.    210,735  3,301 
*  Indiabulls Real Estate Ltd.    597,823  3,127 
*  Cairn India Ltd.    529,654  2,933 
  Steel Authority Of India Ltd.  850,814  2,932 
  Dr Reddys Laboratories Ltd.  136,166  2,916 
  United Spirits Ltd.    118,202  2,657 
  JSW Steel Ltd.    164,904  2,613 
  Bajaj Auto Ltd.    81,172  2,378 
  Satyam Computer       
  Services Ltd.  1,002,674  2,167 
*  GMR Infrastructure Ltd.  1,654,486  2,139 
  Ambuja Cements Ltd.  1,131,539  2,124 
  HCL Technologies Ltd.    320,535  2,058 
  Zee Entertainment       
  Enterprises Ltd.    406,874  1,973 
  Power Grid Corp.       
  of India Ltd.    842,398  1,848 
  Bharat Petroleum Corp. Ltd.  168,194  1,828 
*  Reliance Natural       
  Resources Ltd.  1,269,108  1,702 
  Siemens India Ltd.    155,965  1,688 
*  Ranbaxy Laboratories Ltd.    204,789  1,686 
  Wipro Ltd. ADR    96,956  1,663 
  ACC Ltd.    104,447  1,651 
  ABB Ltd.    98,298  1,593 
  Grasim Industries Ltd.    34,289  1,581 
  Dr Reddys       
  Laboratories Ltd. ADR    58,777  1,277 
*  Idea Cellular Ltd.  1,159,498  1,267 
  United Phosphorus Ltd.    402,794  1,216 
  State Bank of India Ltd. GDR  12,622  1,153 
  Aditya Birla Nuvo Ltd.    66,147  1,103 
  Glenmark       
  Pharmaceuticals Ltd.    195,509  923 

21


Total International Stock Index Fund   
 
 
 
    Market 
    Value• 
  Shares  ($000) 
Infosys     
Technologies Ltd. ADR  1,296  60 
    405,381 
Indonesia (0.4%)     
Telekomunikasi     
Indonesia Tbk PT  19,420,500  16,723 
Astra International Tbk PT  3,882,000  12,490 
Bank Central Asia Tbk PT  23,693,000  11,157 
Perusahaan Gas     
Negara PT  23,016,000  8,564 
Bumi Resources Tbk PT  33,562,500  8,080 
Bank Rakyat Indonesia  10,582,000  7,700 
Bank Mandiri Tbk PT  13,766,000  6,606 
United Tractors Tbk PT  2,911,500  4,464 
Indocement Tunggal     
Prakarsa Tbk PT  2,805,000  3,194 
Unilever Indonesia Tbk PT  2,936,500  3,071 
Indofood Sukses     
Makmur Tbk PT  8,359,500  2,642 
Bank Danamon     
Indonesia Tbk PT  5,564,901  2,596 
Tambang Batubara     
Bukit Asam Tbk PT  1,618,000  2,521 
Semen Gresik     
Persero Tbk PT  2,906,500  2,054 
Astra Agro Lestari Tbk PT  766,000  1,700 
*

International Nickel
  Indonesia Tbk PT  3,819,500  1,583 
  Aneka Tambang Tbk PT  6,621,500  1,539 
*  Lippo Karawaci Tbk PT  19,856,500 1,343 
  Indosat Tbk PT  2,444,500  1,298 
      99,325 
Ireland (0.2%)     
  CRH PLC  1,333,647  32,702 
  Kerry Group PLC Class A  271,026  8,033 
*  Elan Corp. PLC  948,326  4,970 
*  Ryanair Holdings PLC  641,474  2,794 
*  Ryanair Holdings PLC ADR  73,866  2,014 
*  Anglo Irish Bank Corp. Ltd.  698,992  223 
      50,736 
Israel (0.6%)     
  Teva Pharmaceutical     
  Industries Ltd.  1,664,453  83,914 
  Israel Chemicals Ltd.  964,336  11,264 
*  Check Point Software     
  Technologies  318,598  9,899 
  Bank Leumi Le-Israel BM  2,204,578  8,610 
*  Bank Hapoalim BM  1,863,345  6,803 
  Bezeq Israeli     
  Telecommunication     
  Corp. Ltd.  2,152,893  4,805 
*  Nice Systems Ltd.  119,424  3,716 
*  Israel Corp. Ltd.  4,380  3,012 
  Partner     
  Communications Co. Ltd.  157,601  2,988 

      Market 
      Value• 
    Shares  ($000) 
  Cellcom Israel Ltd.  92,433  2,781 
  Elbit Systems Ltd.  42,005  2,545 
  Makhteshim-Agan     
  Industries Ltd.  544,112  2,543 
  Teva Pharmaceutical     
  Industries Ltd. ADR  42,703  2,156 
*  Mizrahi Tefahot Bank Ltd.  239,479  1,946 
  Israel Discount     
  Bank Ltd. Class A  856,318  1,635 
  Discount Investment Corp. 55,339  1,300 
  Ormat Industries  136,815  1,193 
  Delek Group Ltd.  7,034  1,162 
      152,272 
Italy (2.7%)     
  ENI SPA  5,018,348  124,288 
*  UniCredit SPA  27,416,042  91,849 
  Enel SPA  12,687,819  75,496 
*  Intesa Sanpaolo SPA  14,846,128  62,480 
  Assicurazioni     
  Generali SPA  2,250,697  56,671 
  Telecom Italia SPA  19,319,929  30,692 
*  Fiat SPA  1,467,658  21,850 
  Unione di Banche     
  Italiane SCPA  1,107,592  15,821 
  Saipem SPA  506,076  14,932 
  Snam Rete Gas SPA  2,874,685  13,943 
  Finmeccanica SPA  775,886  13,020 
  Telecom Italia SPA RNC  11,573,435  12,736 
  Atlantia SPA  492,960  11,657 
  Mediobanca SPA  910,942  11,619 
^  Tenaris SA  630,801  11,226 
*  Banco Popolare SC  1,229,398  10,680 
  Terna Rete Elettrica     
  Nazionale SPA  2,474,723  9,812 
  Parmalat SPA  3,251,549  9,012 
  Mediaset SPA  1,349,453  8,763 
  Banca Monte dei Paschi     
  di Siena SPA  4,180,901  7,944 
  Intesa Sanpaolo SPA  1,793,660  5,849 
  Banca Popolare di     
  Milano Scarl  752,896  5,602 
*  Luxottica Group SPA  222,481  5,416 
  Tenaris SA ADR  139,938  4,985 
  A2A SPA  2,310,239  4,259 
  Prysmian SPA  201,318  3,540 
  Banca Carige SPA  1,208,111  3,406 
^  Exor SPA  155,917  3,072 
*,^  Pirelli & C SPA  5,068,571  2,848 
  Mediolanum SPA  405,440  2,573 
  Fondiaria-Sai SPA  125,972  2,296 
*  Autogrill SPA  193,354  2,174 
  ACEA SPA  176,237  2,062 
  Saras SPA  627,194  2,036 
*,^  Unipol Gruppo     
  Finanziario SPA  1,385,936  2,009 

22


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
^  Italcementi SPA  131,866  1,898 
^  Lottomatica SPA  85,439  1,820 
      670,336 
Japan (16.2%)     
  Toyota Motor Corp.  5,310,300  209,634 
  Honda Motor Co. Ltd.  3,178,000  98,158 
  Mitsubishi UFJ Financial     
  Group Inc.  17,954,330  95,632 
  Canon Inc.  2,054,800  77,472 
  Sumitomo Mitsui     
  Financial Group Inc.  1,749,100  59,452 
  Takeda     
  Pharmaceutical Co. Ltd.  1,445,200  57,799 
  Tokyo Electric     
  Power Co. Inc.  2,345,200  57,647 
  Sony Corp.  1,936,400  57,180 
  Mitsubishi Corp.  2,608,800  55,307 
  Panasonic Corp.  3,783,300  53,401 
  Nomura Holdings Inc.  6,875,390  48,459 
  Nintendo Co. Ltd.  191,200  47,958 
  Mizuho Financial     
  Group Inc.  24,210,992  47,755 
  Mitsui & Co. Ltd.  3,333,100  43,773 
  Toshiba Corp.  7,567,000  43,248 
  NTT DoCoMo Inc.  29,600  42,928 
  East Japan Railway Co.  654,400  41,907 
  Shin-Etsu Chemical Co. Ltd. 789,600  41,874 
  Nippon Telegraph &     
  Telephone Corp.  999,700  41,250 
  Nippon Steel Corp.  9,810,000  37,425 
  Tokio Marine Holdings Inc.  1,395,500 35,683 
  Komatsu Ltd.  1,827,600  35,629 
  Nissan Motor Co. Ltd.  4,787,100  34,640 
  Softbank Corp.  1,458,600  34,370 
  Mitsubishi Estate Co. Ltd.  2,275,000  34,364 
  Seven & I Holdings Co. Ltd. 1,482,600  32,457 
  Astellas Pharma Inc.  873,600  32,169 
  Kansai Electric     
  Power Co. Inc.  1,469,700  31,755 
  JFE Holdings Inc.  946,000  30,816 
  Fanuc Ltd.  368,000  30,567 
  KDDI Corp.  5,622  29,839 
  Chubu Electric     
  Power Co. Inc.  1,271,900  28,397 
  Mitsubishi Electric Corp.  3,722,000  28,313 
  FUJIFILM Holdings Corp.  940,100  26,726 
  Kyocera Corp.  313,600  26,306 
  Kirin Holdings Co. Ltd.  1,608,000  26,248 
  Mitsui Fudosan Co. Ltd.  1,615,000  26,131 
  Denso Corp.  937,000  25,602 
  Daiichi Sankyo Co. Ltd.  1,294,700  25,293 
  Japan Tobacco Inc.  8,646  24,256 
  Kao Corp.  1,037,000  23,098 
  Fujitsu Ltd.  3,578,000  21,070 
  Sumitomo Corp.  2,163,800  21,006 
  Hitachi Ltd.  6,479,000  20,920 
    Market 
    Value• 
  Shares  ($000) 
Mitsubishi Heavy     
Industries Ltd.  5,838,000  20,644 
Sharp Corp.  1,927,000  20,560 
Murata     
Manufacturing Co. Ltd.  412,500  20,127 
Bridgestone Corp.  1,176,500  19,401 
Central Japan Railway Co.  2,887  19,234 
Secom Co. Ltd.  405,100  18,901 
Mitsui Sumitomo     
Insurance Group     
Holdings Inc.  810,700  18,872 
Tokyo Electron Ltd.  331,100  18,626 
ITOCHU Corp.  2,899,000  18,324 
Sumitomo Electric     
Industries Ltd.  1,457,200  17,683 
Nidec Corp.  209,400  17,680 
Tokyo Gas Co. Ltd.  4,447,000  17,617 
Ricoh Co. Ltd.  1,290,000  17,531 
Hoya Corp.  794,100  17,476 
Eisai Co. Ltd.  484,800  17,215 
Terumo Corp.  323,800  17,043 
Tohoku Electric     
Power Co. Inc.  819,800  16,836 
Sumitomo Metal     
Industries Ltd.  6,472,000  16,535 
Daiwa Securities     
Group Inc.  3,131,000  16,479 
Suzuki Motor Corp.  679,400  16,439 
Asahi Glass Co. Ltd.  1,943,000  16,369 
Kubota Corp.  2,096,000  16,288 
Sumitomo Metal     
Mining Co. Ltd.  1,009,000  15,957 
Keyence Corp.  79,910  15,864 
Marubeni Corp.  3,179,000  15,728 
Daikin Industries Ltd.  451,500  15,304 
Fast Retailing Co. Ltd.  91,900  15,126 
Kyushu Electric     
Power Co. Inc.  731,500  14,936 
Toray Industries Inc.  2,553,000  14,544 
Sumitomo Trust &     
Banking Co. Ltd.  2,739,000  14,270 
Sumitomo Realty &     
Development Co. Ltd.  734,000  13,918 
Dai Nippon     
Printing Co. Ltd.  1,082,000  13,557 
Asahi Breweries Ltd.  743,800  13,149 
Olympus Corp.  418,700  13,069 
INPEX Corp.  1,596  13,033 
ORIX Corp.  201,521  13,017 
TDK Corp.  224,700  12,919 
Mitsui OSK Lines Ltd.  2,208,000  12,821 
Rohm Co. Ltd.  188,700  12,514 
Osaka Gas Co. Ltd.  3,722,000  12,458 
Shionogi & Co. Ltd.  573,000  12,361 
Shiseido Co. Ltd.  669,000  12,214 
Ajinomoto Co. Inc.  1,280,000  12,014 

23


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Sumitomo     
  Chemical Co. Ltd.  3,014,000  12,009 
  Asahi Kasei Corp.  2,420,000  11,991 
  Nippon Oil Corp.  2,410,000  11,876 
  SMC Corp.  103,400  11,809 
  T&D Holdings Inc.  450,150  11,629 
  Bank of Yokohama Ltd.  2,366,000  11,618 
  West Japan Railway Co.  3,253  11,528 
  Shizuoka Bank Ltd.  1,160,000  11,526 
  Nikon Corp.  616,000  11,481 
^  Kintetsu Corp.  3,134,000  11,146 
  Resona Holdings Inc.  935,000  11,133 
  Yamato Holdings Co. Ltd.  753,000  11,108 
  Aeon Co. Ltd.  1,240,800  11,067 
  NGK Insulators Ltd.  487,000  10,923 
  Chugoku Electric     
  Power Co. Inc.  539,400  10,916 
*,^  NEC Corp.  3,724,000  10,585 
  Daiwa House     
  Industry Co. Ltd.  977,000  10,438 
*,^  Mitsubishi Motors Corp.  6,970,000  10,311 
  Yamada Denki Co. Ltd.  167,430  10,203 
  Sompo Japan     
  Insurance Inc.  1,708,000  9,988 
  Odakyu Electric     
  Railway Co. Ltd.  1,206,000  9,824 
  Hankyu Hanshin     
  Holdings Inc.  2,205,000  9,823 
  Shikoku Electric Power Co.  344,800  9,702 
  Toppan Printing Co. Ltd.  1,077,000  9,626 
  Nitto Denko Corp.  318,600  9,622 
  Tokyu Corp.  2,189,000  9,566 
  Rakuten Inc.  13,921  9,534 
  Toyota Industries Corp.  345,200  9,350 
  Aisin Seiki Co. Ltd.  367,200  9,336 
  Panasonic Electric     
  Works Co. Ltd.  728,000  9,189 
  Chiba Bank Ltd.  1,475,000  9,096 
  Ibiden Co. Ltd.  248,100  8,883 
  Kobe Steel Ltd.  4,824,000  8,767 
  Konica Minolta     
  Holdings Inc.  921,500  8,656 
  Tobu Railway Co. Ltd.  1,579,000  8,635 
  Mitsubishi Chemical     
  Holdings Corp.  2,321,500  8,621 
  Yahoo! Japan Corp.  27,923  8,559 
  Sekisui House Ltd.  983,000  8,501 
  Chugai     
  Pharmaceutical Co. Ltd.  434,300  8,496 
  Hokuriku Electric Power Co.  363,400  8,285 
  Nippon Building     
  Fund Inc. Class A  989  8,107 
*,^  Sanyo Electric Co. Ltd.  3,221,000  7,984 
  JS Group Corp.  486,000  7,932 
  Electric Power     
  Development Co. Ltd.  255,800  7,887 

      Market 
      Value• 
    Shares  ($000) 
  Nippon Yusen KK  2,115,000  7,807 
  JGC Corp.  403,000  7,704 
  Ono     
  Pharmaceutical Co. Ltd.  161,400  7,663 
  Unicharm Corp.  79,700  7,638 
  Nippon Mining     
  Holdings Inc.  1,709,000  7,624 
  Makita Corp.  217,800  7,218 
  Nippon Electric     
  Glass Co. Ltd.  666,000  7,171 
  Japan Steel Works Ltd.  650,000  7,168 
  OJI Paper Co. Ltd.  1,623,000  7,063 
  NTT Data Corp.  2,430  6,992 
  Trend Micro Inc.  202,000  6,992 
  Keio Corp.  1,108,000  6,977 
  Kawasaki Heavy     
  Industries Ltd.  2,761,000  6,899 
  Chuo Mitsui Trust     
  Holdings Inc.  1,888,000  6,895 
  Hokkaido Electric     
  Power Co. Inc.  357,400  6,881 
  Nipponkoa     
  Insurance Co. Ltd.  1,257,000  6,844 
  Kuraray Co. Ltd.  662,500  6,839 
^  Dentsu Inc.  319,100  6,836 
  Japan Real Estate     
  Investment Corp.     
  Class A  849  6,774 
  Advantest Corp.  305,500  6,747 
  JSR Corp.  345,500  6,738 
  Keihin Electric Express     
  Railway Co. Ltd.  843,000  6,710 
  Nippon Express Co. Ltd.  1,629,000  6,670 
  Omron Corp.  394,900  6,650 
  Kurita Water     
  Industries Ltd.  216,900  6,634 
  Isetan Mitsukoshi     
  Holdings Ltd.  682,400  6,540 
  Oriental Land Co. Ltd.  95,300  6,460 
^  Mazda Motor Corp.  2,824,000  6,373 
  Daito Trust     
  Construction Co. Ltd.  152,000  6,318 
  Benesse Corp.  142,500  6,283 
*,^  GS Yuasa Corp.  708,000  6,098 
  Taiyo Nippon Sanso Corp.  544,000  6,041 
  SBI Holdings Inc.  32,408  5,955 
  Sankyo Co. Ltd.  104,200  5,952 
  Hirose Electric Co. Ltd.  57,200  5,896 
  Toyota Tsusho Corp.  409,100  5,849 
  Kyowa Hakko Kirin Co. Ltd.  501,000  5,791 
  Nitori Co. Ltd.  70,850  5,762 
  Mitsubishi Tanabe     
  Pharma Corp.  433,000  5,528 
  Lawson Inc.  123,300  5,512 
  Joyo Bank Ltd.  1,253,000  5,512 

24


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Fukuoka Financial     
  Group Inc.  1,507,000  5,510 
  Mitsubishi Materials Corp.  2,070,000  5,458 
  Bank of Kyoto Ltd.  594,000  5,390 
*  MEIJI Holdings Co. Ltd.  130,541  5,317 
  Teijin Ltd.  1,805,000  5,305 
  Stanley Electric Co. Ltd.  268,800  5,263 
  NSK Ltd.  903,000  5,246 
  Hokuhoku Financial     
  Group Inc.  2,415,000  5,233 
  Sega Sammy Holdings Inc.  358,700  5,093 
  Showa Denko KK  2,637,000  5,076 
  Sekisui Chemical Co. Ltd.  834,000  5,044 
  Sumitomo Heavy     
  Industries Ltd.  1,111,000  5,041 
  Ube Industries Ltd.  1,953,000  5,033 
  TonenGeneral Sekiyu KK  548,000  5,001 
  Shimano Inc.  129,800  4,963 
  Santen     
  Pharmaceutical Co. Ltd.  144,300  4,951 
  Yamaha Motor Co. Ltd.  414,900  4,941 
*  IHI Corp.  2,578,000  4,916 
  Nisshin Seifun Group Inc.  366,000  4,882 
  Sony Financial Holdings Inc. 1,696  4,867 
  Toyo Seikan Kaisha Ltd.  288,600  4,848 
  Brother Industries Ltd.  422,700  4,813 
  Yakult Honsha Co. Ltd.  184,100  4,794 
  Isuzu Motors Ltd.  2,262,000  4,783 
  Nissin Foods     
  Holdings Co., Ltd.  135,200  4,771 
^  Hitachi Construction     
  Machinery Co. Ltd.  204,700  4,771 
  Suzuken Co. Ltd.  134,300  4,753 
  Fuji Heavy Industries Ltd.  1,210,000  4,728 
  Obayashi Corp.  1,252,000  4,728 
  Nippon Paper Group Inc.  177,800  4,718 
  Hachijuni Bank Ltd.  796,000  4,709 
  Furukawa Electric Co. Ltd.  1,223,000  4,638 
  Chugoku Bank Ltd.  340,000  4,591 
  J Front Retailing Co. Ltd.  947,000  4,489 
  Taisho     
  Pharmaceutical Co. Ltd.  245,000  4,466 
  Toyo Suisan Kaisha Ltd.  170,000  4,448 
  All Nippon     
  Airways Co. Ltd.  1,593,978  4,447 
  Sojitz Corp.  2,406,800  4,443 
  Hisamitsu     
  Pharmaceutical Co. Inc.  128,800  4,428 
  Toho Gas Co. Ltd.  853,000  4,423 
*  Elpida Memory Inc.  336,804  4,400 
  Shimizu Corp.  1,147,000  4,398 
  Kawasaki Kisen     
  Kaisha Ltd.  1,159,000  4,223 
  Jupiter     
  Telecommunications     
  Co. Ltd.  4,614  4,217 
      Market 
      Value• 
    Shares  ($000) 
  Sumco Corp.  220,800  4,214 
  Seiko Epson Corp.  271,400  4,195 
  Aioi Insurance Co. Ltd.  952,000  4,191 
  Nippon Meat Packers Inc.  356,000  4,174 
  Nomura Research     
  Institute Ltd.  192,800  4,169 
  Iyo Bank Ltd.  461,000  4,157 
  Amada Co. Ltd.  656,000  4,013 
  Gunma Bank Ltd.  770,000  4,012 
  JTEKT Corp.  378,100  3,994 
  Shimamura Co. Ltd.  41,600  3,976 
  Tsumura & Co.  115,500  3,975 
  Mediceo Paltac     
  Holdings Co. Ltd.  283,600  3,960 
  THK Co. Ltd.  228,800  3,954 
  Hitachi Chemical Co. Ltd.  198,600  3,943 
  Yamaguchi Financial     
  Group Inc.  411,000  3,927 
  Namco Bandai     
  Holdings Inc.  380,000  3,885 
  Mitsui Chemicals Inc.  1,131,000  3,884 
  Takashimaya Co. Ltd.  572,000  3,857 
  Kajima Corp.  1,638,000  3,835 
  Kikkoman Corp.  330,000  3,819 
  Daihatsu Motor Co. Ltd.  372,000  3,806 
^  Mitsui Engineering &     
  Shipbuilding Co. Ltd.  1,461,000  3,783 
  77 Bank Ltd.  655,000  3,770 
  Suruga Bank Ltd.  416,000  3,758 
  Mizuho Securities Co. Ltd.  1,087,000  3,751 
  Kamigumi Co. Ltd.  494,000  3,711 
  Taisei Corp.  1,886,000  3,701 
  Kaneka Corp.  565,000  3,678 
  Hiroshima Bank Ltd.  950,000  3,645 
  Nippon Sheet     
  Glass Co. Ltd.  1,236,000  3,642 
  Yaskawa Electric Corp.  457,000  3,595 
  Showa Shell Sekiyu KK  363,700  3,582 
  Toyoda Gosei Co. Ltd.  126,800  3,555 
  Nissan Chemical     
  Industries Ltd.  275,000  3,544 
  Yokogawa Electric Corp.  437,000  3,542 
  NGK Spark Plug Co. Ltd.  312,000  3,536 
  Kansai Paint Co. Ltd.  417,000  3,529 
  Ushio Inc.  222,100  3,492 
  Tokuyama Corp.  552,000  3,469 
  Tokyu Land Corp.  859,000  3,464 
  Credit Saison Co. Ltd.  307,200  3,434 
  Mitsubishi UFJ Lease &     
  Finance Co. Ltd.  114,340  3,406 
  NTN Corp.  899,000  3,395 
  Shimadzu Corp.  490,000  3,393 
  Denki Kagaku Kogyo KK  920,000  3,375 
^  Casio Computer Co. Ltd.  459,100  3,369 
  Mitsubishi Gas     
  Chemical Co. Inc.  730,000  3,367 

25


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Mitsubishi Rayon Co. Ltd.  972,000  3,358 
  Nishi-Nippon City Bank Ltd.  1,352,000  3,345 
  Aeon Mall Co. Ltd.  159,100  3,334 
  FamilyMart Co. Ltd.  110,600  3,294 
  Nomura Real Estate     
  Office Fund Inc. Class A  532  3,287 
  Rinnai Corp.  74,200  3,260 
  Toho Co. Ltd.  215,000  3,231 
  Konami Corp.  177,600  3,231 
  Oracle Corp. Japan  72,600  3,199 
  Mitsumi Electric Co. Ltd.  158,000  3,187 
  Dainippon Sumitomo     
  Pharma Co. Ltd.  306,100  3,182 
  Daicel Chemical     
  Industries Ltd.  525,000  3,170 
  Japan Retail Fund     
  Investment Corp. Class A  665  3,126 
  Yamaha Corp.  300,400  3,103 
  Idemitsu Kosan Co. Ltd.  41,800  3,065 
  Cosmo Oil Co. Ltd.  1,165,000  3,060 
  Citizen Holdings Co. Ltd.  543,000  3,055 
  Hitachi Metals Ltd.  320,000  3,053 
  Alfresa Holdings Corp.  70,500  3,048 
  Square Enix     
  Holdings Co., Ltd.  122,000  3,037 
  Sumitomo Rubber     
  Industries Ltd.  327,100  3,015 
  Keisei Electric     
  Railway Co. Ltd.  528,000  2,969 
  TOTO Ltd.  494,000  2,927 
  Nomura Real Estate     
  Holdings Inc.  182,197  2,901 
  Dowa Holdings Co., Ltd.  494,000  2,884 
  Minebea Co. Ltd.  684,000  2,867 
  NOK Corp.  212,500  2,820 
*  Mitsui Mining &     
  Smelting Co. Ltd.  1,092,000  2,814 
  Yamazaki Baking Co. Ltd.  228,000  2,798 
  USS Co. Ltd.  46,200  2,795 
*  Mizuho Trust &     
  Banking Co. Ltd.  2,893,000  2,757 
  Japan Petroleum     
  Exploration Co.  54,600  2,726 
  Asics Corp.  304,000  2,710 
  Toyota Boshoku Corp.  128,400  2,677 
  Mabuchi Motor Co. Ltd.  55,100  2,637 
  Tosoh Corp.  975,000  2,622 
  Tokyo Steel     
  Manufacturing Co. Ltd.  199,700  2,616 
  UNY Co. Ltd.  348,700  2,590 
  Tokyo Tatemono Co. Ltd.  538,000  2,565 
^  Sapporo Holdings Ltd.  488,000  2,548 
*  McDonald's Holdings Co.     
  Japan Ltd.  124,300  2,513 
  Seven Bank Ltd.  1,027  2,509 
  Marui Group Co. Ltd.  424,600  2,439 

      Market 
      Value• 
    Shares  ($000) 
  Yamato Kogyo Co. Ltd.  81,100  2,434 
  NHK Spring Co. Ltd.  307,000  2,397 
  Mitsubishi Logistics Corp.  219,000  2,383 
  Nisshinbo Holdings Inc.  241,000  2,369 
  Nisshin Steel Co. Ltd.  1,417,000  2,365 
  Japan Prime Realty     
  Investment Corp.     
  Class A  1,078  2,348 
  Obic Co. Ltd.  13,690  2,315 
*,^  Shinsei Bank Ltd.  1,734,000  2,262 
  Hakuhodo DY Holdings Inc.  44,670  2,244 
  Hitachi High-     
  Technologies Corp.  135,000  2,236 
*,^  Japan Airlines Corp.  1,718,000  2,225 
  Canon Marketing     
  Japan Inc.  134,200  2,174 
  Kinden Corp.  258,000  2,095 
*,^  Senshu Ikeda Holdings Inc.  604,600  2,069 
  Coca-Cola West Co. Ltd.  110,500  2,053 
  Ito En Ltd.  119,500  2,010 
  Taiheiyo Cement Corp.  1,711,000  1,987 
  Fuji Electric     
  Holdings Co. Ltd.  1,063,000  1,975 
  Sapporo Hokuyo     
  Holdings Inc.  581,700  1,964 
  DIC Corp.  1,181,000  1,933 
  Daido Steel Co. Ltd.  560,000  1,906 
  Shinko Electric     
  Industries Co. Ltd.  127,600  1,900 
^  Dena Co. Ltd.  539  1,863 
  Hino Motors Ltd.  498,000  1,841 
  NTT Urban     
  Development Corp.  2,232  1,793 
*  Aozora Bank Ltd.  1,395,000  1,649 
  Jafco Co. Ltd.  61,200  1,645 
^  Matsui Securities Co. Ltd.  223,700  1,610 
  Otsuka Corp.  30,300  1,598 
  Itochu Techno-     
  Solutions Corp.  55,500  1,526 
  Onward Holdings Co. Ltd.  238,000  1,477 
  Nissay Dowa General     
  Insurance Co. Ltd.  323,000  1,434 
  Aeon Credit Service Co. Ltd. 148,300  1,428 
^  Maruichi Steel Tube Ltd.  75,500  1,409 
  ABC-Mart Inc.  47,100  1,365 
  Leopalace21 Corp.  249,600  1,351 
  Fuji Media Holdings Inc.  876  1,287 
  Tokyo Broadcasting     
  System Holdings Inc.  70,900  1,058 
  Hikari Tsushin Inc.  52,200  979 
^  Acom Co. Ltd.  75,960  971 
^  OSAKA Titanium     
  Technologies Co.  34,700  920 
^  Promise Co. Ltd.  139,100  884 
      3,928,876 

26


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
Malaysia (0.6%)     
  Sime Darby Bhd.  5,749,800  14,867 
  CIMB Group Holdings Bhd.  3,779,400  13,711 
  Malayan Banking Bhd.  6,792,790  13,156 
  IOI Corp. Bhd.  6,587,700  10,214 
  Tenaga Nasional Bhd.  3,772,900  9,247 
  Genting Bhd.  4,269,300  8,975 
  Public Bank Bhd.  2,039,194  6,352 
  MISC Bhd.  2,154,900  5,602 
  Genting Malaysia Bhd.  6,225,000  4,972 
  AMMB Holdings Bhd.  3,389,000  4,660 
  PPB Group Bhd.  1,017,000  4,491 
  Digi.Com Bhd.  679,600  4,340 
*  Axiata Group Bhd.  4,786,200  4,076 
  Kuala Lumpur     
  Kepong Bhd.  918,100  4,009 
  British American Tobacco     
  Malaysia Bhd.  276,000  3,625 
  YTL Corp. Bhd.  1,568,760  3,336 
  IJM Corp. Bhd.  2,137,660  2,982 
  Gamuda Bhd.  3,151,200  2,877 
  PLUS Expressways Bhd.  2,877,300  2,773 
  Petronas Gas Bhd.  951,200  2,719 
  YTL Power     
  International Bhd.  3,893,758  2,447 
  UMW Holdings Bhd.  1,128,900  2,079 
  Hong Leong Bank Bhd.  921,400  2,015 
  Berjaya Sports Toto Bhd.  1,489,928  1,878 
  Tanjong PLC  400,200  1,771 
  SP Setia Bhd.  1,563,700  1,758 
  Telekom Malaysia Bhd.  1,939,200  1,704 
  Bursa Malaysia Bhd.  642,100  1,519 
  Parkson Holdings Bhd.  969,081  1,438 
  RHB Capital Bhd.  857,400  1,345 
  Petronas Dagangan Bhd.  482,100  1,254 
  Alliance Financial     
  Group Bhd.  1,748,800  1,249 
  MMC Corp. Bhd.  1,632,400  1,183 
  Lafarge Malayan     
  Cement Bhd.  616,500  1,088 
*  IGB Corp. Bhd.  1,596,100  907 
  Astro All Asia     
  Networks PLC  904,800  873 
  Hong Leong Financial     
  Group Bhd.  481,200  871 
  KLCC Property     
  Holdings Bhd.  831,900  795 
*  Malaysian Airline     
  System Bhd.  853,300  772 
*  AirAsia Bhd.  1,904,300  749 
  Genting Plantations Bhd.  402,300  719 
      155,398 

Mexico (1.0%)     
  America Movil     
  SAB de CV  35,870,379  79,164 
^  Wal-Mart de Mexico     
  SAB de CV  5,668,700  19,775 
*  Cemex SAB de CV  17,557,951  18,231 
  Grupo Televisa SA  4,689,700  18,150 
  Fomento Economico     
  Mexicano SAB de CV  4,158,500  17,999 
*  Grupo Mexico SAB     
  de CV Class B  7,563,317  15,180 
^  Telefonos de Mexico     
  SAB de CV  10,457,300  8,704 
  Grupo Financiero     
  Banorte SAB de CV  2,700,600  8,631 
  Telmex Internacional     
  SAB de CV  10,245,505  6,890 
^  Grupo Elektra SA de CV  139,270  5,464 
*,^  Carso Global Telecom     
  SAB de CV  1,348,400  5,245 
*  Grupo Modelo SAB de CV  984,300  4,468 
  Kimberly-Clark de     
  Mexico SAB de CV     
  Class A  1,047,500  4,149 
^  Grupo Bimbo SAB     
  de CV Class A  684,800  3,988 
^  Grupo Financiero     
  Inbursa SA  1,263,914  3,561 
  Industrias Penoles     
  SAB de CV  192,095  3,508 
^  Grupo Carso SAB de CV  1,102,700  3,257 
  Alfa SAB de CV Class A  575,600  2,981 
^  Coca-Cola Femsa     
  SAB de CV  532,900  2,874 
  Mexichem SAB de CV  1,666,812  2,651 
*  Desarrolladora Homex     
  SAB de CV  410,800  2,444 
*,^  Urbi Desarrollos Urbanos     
  SAB DE CV  960,000  1,840 
  Grupo Aeroportuario del     
  Pacifico SAB de CV     
  Class B  513,100  1,315 
  Grupo Aeroportuario del     
  Pacifico SAB de CV ADR  41,026  1,046 
*  Cemex SAB de CV ADR  2,829  29 
      241,544 
Netherlands (1.9%)     
  Unilever NV  3,140,840  96,779 
  Koninklijke KPN NV  3,307,792  59,999 
*  ING Groep NV  3,773,490  49,107 
  Koninklijke Philips     
  Electronics NV  1,875,957  47,126 
  Koninklijke Ahold NV  2,298,287  28,950 
  Akzo Nobel NV  447,571  26,426 
  ASML Holding NV  820,374  22,123 
*  Aegon NV  3,018,190  21,452 

27


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Heineken NV  471,521  20,843 
  TNT NV  710,463  18,841 
  Reed Elsevier NV  1,395,268  16,260 
  Koninklijke DSM NV  296,329  12,983 
  Wolters Kluwer NV  537,544  11,984 
  Heineken Holding NV  211,033  8,210 
*  Randstad Holding NV  196,683  7,463 
  Fugro NV  124,918  6,958 
  Corio NV  102,404  6,944 
  SBM Offshore NV  285,443  5,466 
  Koninklijke Boskalis     
  Westminster NV  108,217  3,798 
  ASML Holding NV  8,280  223 
*  Aegon NV  695  5 
      471,940 
New Zealand (0.1%)     
  Fletcher Building Ltd.  1,143,119  6,752 
  Telecom Corp. of     
  New Zealand Ltd.  3,493,061  6,308 
  Sky City Entertainment     
  Group Ltd.  1,101,171  2,720 
  Auckland International     
  Airport Ltd.  1,822,878  2,622 
  Contact Energy Ltd.  573,476  2,554 
      20,956 
Norway (0.6%)     
  StatoilHydro ASA  2,163,000  50,969 
*  Telenor ASA  1,620,000  20,888 
*,^  DnB NOR ASA  1,417,400  16,237 
  Orkla ASA  1,496,080  13,831 
  Yara International ASA  364,900  12,063 
*  Seadrill Ltd.  540,000  11,214 
*  Norsk Hydro ASA  1,316,040  8,625 
*,^  Renewable Energy     
  Corp. AS  639,665  3,810 
      137,637 
Peru (0.1%)     
  Cia de Minas     
  Buenaventura SA  250,262  8,603 
  Credicorp Ltd.  118,098  8,169 
  Southern Copper Corp.     
  (U.S. Shares)  236,085  7,437 
  Southern Copper Corp.  183,214  5,771 
  Cia de Minas     
  Buenaventura SA ADR  113,347  3,805 
  Credicorp Ltd.  9,941  686 
      34,471 
Philippines (0.1%)     
  Philippine Long Distance     
  Telephone Co.  88,120  4,736 
  Manila Electric Co.  785,000  3,052 
  Bank of the     
  Philippine Islands  2,629,900  2,559 
  Ayala Corp.  365,820  2,214 
  Ayala Land Inc.  10,088,700  2,181 

  SM Investments Corp.  322,620  2,107 
  SM Prime Holdings Inc.  7,872,000  1,632 
  Energy     
  Development Corp.  16,340,000  1,411 
  Globe Telecom Inc.  66,490  1,275 
  Banco de Oro Unibank Inc.  1,424,500  1,034 
  Jollibee Foods Corp.  900,300  958 
  Metropolitan Bank & Trust  1,056,600  894 
      24,053 
Poland (0.3%)     
  Powszechna Kasa     
  Oszczednosci Bank     
  Polski SA  1,207,016  14,302 
*  Bank Pekao SA  225,660  12,112 
  KGHM Polska Miedz SA  228,784  7,701 
  Telekomunikacja Polska SA  1,288,522  7,562 
*  Polski Koncern     
  Naftowy Orlen  611,475  6,365 
  Polskie Gornictwo Naftowe     
  I Gazownictwo SA  2,268,458  2,762 
*  Bank Zachodni WBK SA  43,973  2,347 
  Asseco Poland SA  108,579  2,182 
*  Getin Holding SA  698,707  1,988 
*  Globe Trade Centre SA  222,530  1,920 
*  BRE Bank SA  20,468  1,897 
*  ING Bank Slaski SA  6,510  1,461 
*  Bank Handlowy w     
  Warszawie SA  65,071  1,427 
  TVN SA  282,611  1,400 
*  PBG SA  17,583  1,370 
*  Bank Millennium SA  594,417  976 
*  Grupa Lotos SA  90,839  826 
  Cyfrowy Polsat SA  162,982  787 
      69,385 
Portugal (0.3%)     
  EDP–Energias de     
  Portugal SA  3,494,103  15,453 
  Portugal Telecom     
  SGPS SA  1,136,584  12,992 
  Banco Espirito Santo SA  1,002,416  7,398 
  Banco Comercial     
  Portugues SA  4,451,642  6,346 
  Galp Energia SGPS SA     
  Class B  296,977  5,002 
*  EDP Renovaveis SA  416,271  4,149 
  Cimpor Cimentos de     
  Portugal SGPS SA  514,067  4,006 
  Jeronimo Martins SGPS SA 419,250  3,735 
  Brisa Auto-Estradas     
  de Portugal SA  336,619  3,325 
      62,406 
Russia (1.5%)     
  Gazprom OAO ADR  4,553,633  109,206 
  Lukoil OAO ADR  896,297  51,996 

28


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Sberbank of Russian     
  Federation  16,623,160  36,244 
  MMC Norilsk Nickel ADR  1,648,623 21,657 
  Rosneft Oil Co. GDR  2,435,991  18,523 
  Mobile Telesystems     
  OJSC ADR  384,177  17,403 
  Surgutneftegaz ADR  1,374,070  12,127 
^  Tatneft ADR  453,847  11,753 
*  Vimpel-Communications     
  ADR  593,837  10,648 
^  NovaTek OAO GDR  173,524  8,711 
  Polyus Gold Co. ADR  291,149  7,866 
*  RusHydro  194,783,098  6,746 
  VTB Bank OJSC GDR  1,587,352  6,318 
*  Uralkali  1,430,203  6,221 
*  Federal Grid Co. Unified     
  Energy System JSC  557,925,350  5,942 
  Surgutneftegaz  13,376,899  5,572 
  Mechel ADR  280,475  4,813 
^  Novolipetsk Steel     
  OJSC GDR  145,565  3,791 
  Gazpromneft JSC  639,461  3,262 
*  Sistema JSFC GDR  185,380  3,008 
  Severstal GDR  416,527  3,005 
  AK Transneft OAO  2,948  2,466 
*  Pharmstandard GDR  141,218  2,282 
*  Wimm-Bill-Dann     
  Foods OJSC ADR  32,880  2,222 
  TMK OAO GDR  98,029  1,771 
  Comstar United     
  Telesystems OJSC GDR 329,934  1,703 
*  Polymetal  147,270  1,266 
  Rostelecom ADR  22,712  887 
  VTB Bank OJSC  122,279,512  243 
      367,652 
Singapore (1.0%)     
  Singapore     
  Telecommunications     
  Ltd.  15,318,000  31,765 
  DBS Group Holdings Ltd.  3,283,999  30,073 
  United Overseas Bank Ltd. 2,343,000  28,085 
  Oversea-Chinese     
  Banking Corp. Ltd.  4,797,000  25,850 
  CapitaLand Ltd.  4,899,500  14,208 
  Keppel Corp. Ltd.  2,437,000  14,006 
  Wilmar International Ltd.  2,454,000  10,820 
  Singapore Airlines Ltd.  1,024,000  9,820 
  Singapore Exchange Ltd.  1,633,000  9,254 
  Singapore Press     
  Holdings Ltd.  3,039,000  8,322 
*,^  Genting Singapore PLC  9,900,720  7,564 
^  City Developments Ltd.  948,000  6,642 
  Singapore Technologies     
  Engineering Ltd.  2,606,000  5,250 
^  Fraser and Neave Ltd.  1,835,000  4,996 
  CapitaMall Trust  4,248,300  4,772 

        Market 
        Value• 
      Shares  ($000) 
  Noble Group Ltd.    2,584,500  4,723 
  SembCorp Industries Ltd.  1,853,000  4,366 
  Olam International Ltd.  2,268,000  4,354 
  Jardine Cycle &       
  Carriage Ltd.    262,000  4,303 
  ComfortDelgro Corp. Ltd.  3,640,000  3,955 
  SembCorp Marine Ltd.  1,605,000  3,915 
*  Golden Agri-       
  Resources Ltd.  12,950,791  3,898 
  Ascendas Real Estate     
  Investment Trust    2,847,666  3,701 
  UOL Group Ltd.    957,000  2,283 
  Neptune Orient Lines Ltd.  1,708,750  1,902 
  StarHub Ltd.    1,121,000  1,501 
^  Cosco Corp.       
  Singapore Ltd.    1,888,000  1,494 
*  Golden Agri-       
  Resources Ltd.       
  Warrants Exp. 07/23/2012  724,972  60 
        251,882 
South Africa (1.6%)       
  MTN Group Ltd.    2,844,413  42,351 
  Sasol Ltd.    1,103,116  41,329 
  Standard Bank Group Ltd.  2,247,466  28,051 
  Naspers Ltd.    737,998  26,641 
  Impala Platinum       
  Holdings Ltd.    1,033,467  22,740 
  AngloGold Ashanti Ltd.  580,349  21,676 
  Gold Fields Ltd.    1,281,819  16,400 
  FirstRand Ltd.    5,407,528  12,180 
  Sanlam Ltd.    3,949,105  10,842 
  Remgro Ltd.    839,242  9,824 
  Anglo Platinum Ltd.    113,457  9,807 
  ABSA Group Ltd.    607,569  9,618 
  Bidvest Group Ltd.    549,347  8,602 
  Harmony Gold       
  Mining Co. Ltd.    693,605  6,947 
  Shoprite Holdings Ltd.  823,254  6,709 
  Tiger Brands Ltd.    312,390  6,255 
  Nedbank Group Ltd.    390,737  5,874 
  African Bank       
  Investments Ltd.    1,444,597  5,640 
  Steinhoff International     
  Holdings Ltd.    2,174,468  5,255 
  RMB Holdings Ltd.    1,383,208  5,050 
*  Vodacom Group Pty Ltd.  702,517  4,871 
  Truworths International Ltd.  822,319  4,707 
  Growthpoint       
  Properties Ltd.    2,636,739  4,666 
  ArcelorMittal       
  South Africa Ltd.    344,320  4,634 
  Kumba Iron Ore Ltd.    151,861  4,534 
  Massmart Holdings Ltd.  382,860  4,423 
  Murray & Roberts       
  Holdings Ltd.    593,619  4,237 
*  Redefine Income Fund Ltd.  4,518,770  4,153 

29


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  African Rainbow     
  Minerals Ltd.  212,971  4,123 
*  Aspen Pharmacare     
  Holdings Ltd.  485,191  4,089 
  Pretoria Portland     
  Cement Co. Ltd.  942,482  3,945 
  Aveng Ltd.  729,878  3,871 
  Sappi Ltd.  928,845  3,432 
  Woolworths Holdings Ltd.  1,478,459  3,301 
  Imperial Holdings Ltd.  319,740  3,292 
  Netcare Ltd.  2,197,222  3,236 
  Foschini Ltd.  396,205  3,136 
  Telkom SA Ltd.  537,458  3,011 
  Investec Ltd.  401,779  2,965 
  Exxaro Resources Ltd.  229,425  2,577 
  Reunert Ltd.  339,369  2,390 
  Pick n Pay Stores Ltd.  424,507  2,207 
  Discovery Holdings Ltd.  498,155  1,980 
  Liberty Holdings Ltd.  222,296  1,922 
  Northam Platinum Ltd.  263,657  1,232 
      388,725 
South Korea (2.9%)     
  Samsung     
  Electronics Co. Ltd.  180,071  108,355 
  POSCO  83,692  34,684 
  Hyundai Motor Co.  295,788  26,829 
*  KB Financial Group Inc.  534,176  25,694 
*  Shinhan Financial     
  Group Co. Ltd.  641,020  24,321 
2  Samsung     
  Electronics Co. Ltd. GDR  64,914  19,686 
  POSCO ADR  168,771  17,235 
  LG Electronics Inc.  181,093  16,834 
  Hyundai Mobis  122,020  16,271 
  Samsung     
  Electronics Co. Ltd. Pfd.  39,421  15,792 
  LG Chem Ltd.  88,876  15,316 
*  Hynix Semiconductor Inc.  901,630  13,386 
  Samsung Fire & Marine     
  Insurance Co. Ltd.  72,611  13,221 
  KT&G Corp.  212,739  12,389 
  Shinsegae Co. Ltd.  27,260  11,769 
*  NHN Corp.  78,929  11,641 
  Hana Financial Group Inc.  364,080  10,798 
  LG Display Co. Ltd.  447,420  10,707 
  SK Energy Co. Ltd.  114,768  10,541 
  LG Corp.  180,808  10,243 
  Samsung C&T Corp.  247,568  10,076 
  Hyundai Heavy Industries  73,277  10,037 
*  Korea Electric Power Corp.  336,790  9,543 
  Samsung Electro-     
  Mechanics Co. Ltd.  114,630  9,531 
  Samsung SDI Co. Ltd.  64,965  7,417 
  SK Telecom Co. Ltd.  47,767  7,275 
  Hyundai Steel Co.  106,294  6,752 

      Market 
      Value• 
    Shares  ($000) 
*  Woori Finance     
  Holdings Co. Ltd.  460,590  6,200 
  GS Engineering &     
  Construction Corp.  69,055  6,056 
  Samsung Techwin Co. Ltd.  78,440  6,006 
  KT Corp.  179,409  5,848 
  Samsung Heavy     
  Industries Co. Ltd.  308,920  5,844 
*  Kia Motors Corp.  384,250  5,707 
  Korea Exchange Bank  489,630  5,564 
  Lotte Shopping Co. Ltd.  18,633  5,263 
  Hyundai Engineering &     
  Construction Co. Ltd.  94,425  5,213 
  Samsung     
  Engineering Co. Ltd.  58,873  5,205 
  Shinhan Financial     
  Group Co. Ltd. ADR  67,503  5,107 
  Samsung Securities Co. Ltd.  94,685  4,641 
*  KB Financial Group Inc. ADR  92,366  4,382 
*  Korea Electric     
  Power Corp. ADR  308,702  4,285 
  Amorepacific Corp.  6,153  4,246 
  OCI Co. Ltd.  23,957  4,209 
  SK Telecom Co. Ltd. ADR  250,083  4,179 
  S-Oil Corp.  85,993  4,160 
*  Industrial Bank Of Korea  334,250  4,049 
  Daewoo Securities Co. Ltd.  235,950  3,585 
  LG Household &     
  Health Care Ltd.  17,180  3,568 
  SK Holdings Co. Ltd.  43,909  3,483 
  Busan Bank  303,310  3,439 
  Daelim Industrial Co. Ltd.  53,779  3,413 
  Cheil Industries Inc.  90,974  3,394 
  Hyundai Development Co.  113,240  3,351 
  Hankook Tire Co. Ltd.  169,800  3,246 
  Doosan Heavy Industries     
  and Construction Co. Ltd.  60,427  3,243 
  Daegu Bank  239,640  3,180 
  Woongjin Coway Co. Ltd.  89,700  2,999 
  Hanwha Corp.  92,020  2,941 
  Hyundai Securities Co.  252,320  2,865 
  KCC Corp.  9,642  2,780 
  Samsung Card Co.  68,840  2,727 
  NCSoft Corp.  25,470  2,724 
  Yuhan Corp.  16,677  2,686 
  LS Corp.  32,772  2,677 
  Korea Zinc Co. Ltd.  17,076  2,639 
  Hyundai Department     
  Store Co. Ltd.  27,550  2,633 
  Kangwon Land Inc.  194,880  2,604 
*  Korean Air Lines Co. Ltd.  66,530  2,532 
  CJ CheilJedang Corp.  14,843  2,510 
  Daewoo International Corp.  91,260  2,493 
  Daewoo Shipbuilding &     
  Marine Engineering     
  Co. Ltd.  185,500  2,440 

30


Total International Stock Index Fund   
 
 
 
          Market 
          Value• 
        Shares  ($000) 
  Hyosung Corp.      43,226  2,376 
  Hyundai Motor Co.      72,990  2,375 
  GS Holdings Corp.      95,370  2,362 
  LS Industrial         
  Systems Co. Ltd.      31,279  2,343 
  Dongbu Insurance Co. Ltd.    73,300  2,224 
  Mirae Asset         
  Securities Co. Ltd.      42,288  2,210 
  Daewoo Engineering &       
  Construction Co. Ltd.    213,190  2,172 
  KT Corp. ADR      131,252  2,107 
  Doosan Infracore Co. Ltd.    145,330  2,068 
  Woori Investment &         
  Securities Co. Ltd.      160,190  2,014 
  Korea Investment         
  Holdings Co. Ltd.      74,760  1,994 
  LG Telecom Ltd.      253,170  1,897 
  Honam Petrochemical Corp.  27,386  1,878 
  Korea Gas Corp.      43,573  1,839 
  Hyundai Mipo Dockyard    21,997  1,812 
  STX Pan Ocean Co. Ltd.    189,010  1,722 
  Dongkuk Steel Mill Co. Ltd.    70,240  1,492 
  Hanwha Chem Corp.      159,540  1,483 
  Hanjin Shipping Co. Ltd.    107,710  1,464 
  Hite Brewery Co. Ltd.    10,592  1,441 
  SK Networks Co. Ltd.    139,850  1,322 
  S1 Corp.      32,780  1,312 
  Doosan Corp.      18,640  1,293 
  Lotte Confectionery Co. Ltd.  1,270  1,277 
  LG Electronics Inc.      32,070  1,270 
  Tong Yang Securities Inc.    133,350  1,222 
*  Celltrion Inc.      99,723  1,203 
  LG Dacom Corp.      71,650  1,132 
*  SK Broadband Co. Ltd.    271,201  1,115 
  Hanjin Heavy Industries &       
  Construction Co. Ltd.    58,359  1,043 
  Taewoong Co. Ltd.      14,305  975 
  STX Offshore &         
  Shipbuilding Co. Ltd.    89,200  952 
  Taihan Electric Wire Co. Ltd.  48,510 775 
*  Korea Express Co. Ltd.    11,220  616 
          711,439 
Spain (3.7%)         
  Banco Santander SA  15,682,724  252,370 
  Telefonica SA    8,162,210  227,942 
  Banco Bilbao Vizcaya         
  Argentaria SA    6,863,183  122,679 
  Iberdrola SA    7,088,162  64,209 
  Repsol YPF SA    1,411,966  37,588 
  Inditex SA      420,073  24,658 
  Banco Popular Espanol SA  1,666,819  14,847 
^  ACS Actividades de         
  Construccion y         
  Servicios SA      275,221  13,215 
^  Banco de Sabadell SA  1,723,988  11,639 
  Abertis Infraestructuras SA    540,068  11,483 

      Market 
      Value• 
    Shares  ($000) 
  Red Electrica Corp. SA  206,161  10,648 
  Gas Natural SDG SA  427,680  8,592 
  Criteria Caixacorp SA  1,604,946  7,824 
  Iberdrola Renovables SA  1,603,515  7,128 
  Enagas  339,448  6,982 
  Gamesa Corp.     
  Tecnologica SA  347,029  6,341 
  Acciona SA  48,590  5,919 
  Mapfre SA  1,371,533  5,878 
  Bankinter SA  543,097  5,724 
  Acerinox SA  263,270  5,236 
  Zardoya Otis SA  250,513  5,028 
^  Grupo Ferrovial SA  119,092  4,934 
  Indra Sistemas SA  190,104  4,471 
  Cintra Concesiones de     
  Infraestructuras de     
  Transporte SA  415,785  4,278 
  Grifols SA  245,373  3,964 
  Banco de Valencia SA  402,926  3,415 
^  Fomento de Construcciones   
  y Contratas SA  82,588  3,360 
^  Sacyr Vallehermoso SA  171,594  2,596 
*

Iberia Lineas Aereas
  de Espana  910,913  2,512 
  Gestevision Telecinco SA  203,404  2,102 
  Banco Santander SA ADR  38,038  611 
      888,173 
Sweden (2.0%)     
  Nordea Bank AB  6,220,495  66,767 
  Telefonaktiebolaget LM     
  Ericsson Class B  5,734,566  59,914 
  Hennes & Mauritz     
  AB Class B  983,665  55,874 
  TeliaSonera AB  4,315,941  28,606 
  Svenska Handelsbanken     
  AB Class A  941,861  24,340 
  Sandvik AB  1,937,693  21,404 
  Volvo AB Class B  2,095,358  19,844 
*  Skandinaviska Enskilda     
  Banken AB Class A  2,913,814  17,650 
  Atlas Copco AB Class A  1,285,197  17,233 
  Investor AB Class B  877,945  15,533 
  Svenska Cellulosa     
  AB Class B  1,094,977  15,046 
  SKF AB  743,586  11,775 
*  Electrolux AB Class B  469,274  11,248 
  Skanska AB Class B  765,201  11,229 
  Assa Abloy AB Class B  595,504  10,406 
  Swedish Match AB  482,902  9,911 
*  Millicom International     
  Cellular SA  145,493  9,343 
  Atlas Copco AB Class B  745,649  8,884 
*  Swedbank AB Class A  1,021,300  8,798 
  Tele2 AB  586,730  8,552 
  Alfa Laval AB  684,231  8,357 
  Scania AB Class B  618,951  7,940 

31


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Volvo AB Class A  837,684  7,736 
  Getinge AB  383,739  7,151 
  Securitas AB Class B  595,151  5,553 
  SSAB AB Class A  345,258  5,263 
*  Husqvarna AB  767,317  4,832 
*  Lundin Petroleum AB  420,911  3,565 
  Holmen AB  98,251  2,652 
  SSAB AB Class B  160,438  2,243 
      487,649 
Switzerland (6.1%)     
  Nestle SA  7,013,396  326,134 
  Roche Holdings AG  1,354,226  216,897 
  Novartis AG  4,076,575  212,284 
  Credit Suisse Group AG  2,169,274  115,963 
*  UBS AG  6,858,352  114,361 
  ABB Ltd.  4,248,117  79,021 
  Zurich Financial     
  Services AG  283,201  64,851 
  Syngenta AG  186,511  44,162 
  Holcim Ltd.  472,356  30,063 
  Compagnie Financiere     
  Richemont SA  1,003,168  28,083 
  Swiss Reinsurance Co. Ltd.  664,844  27,073 
  Swisscom AG  46,075  16,629 
  Julius Baer Group Ltd.  407,124  15,326 
  Swatch Group AG  59,506  13,894 
  Synthes Inc.  113,569  13,473 
  Geberit AG  78,096  12,919 
  SGS SA  9,068  12,113 
  Givaudan SA  14,773  10,967 
*  Actelion Ltd.  191,078  10,533 
  Adecco SA  235,151  10,508 
  Kuehne & Nagel     
  International AG  103,615  9,388 
  Sonova Holding AG  89,393  9,201 
  Baloise Holding AG  95,459  8,173 
  Lonza Group AG  89,531  6,962 
  Swiss Life Holding AG  57,130  6,843 
  Nobel Biocare Holding AG  237,847  6,748 
  Schindler Holding AG  94,619  6,468 
*  Logitech International SA  349,268  5,962 
  Lindt & Spruengli AG  217  5,509 
  GAM Holding Ltd.  403,385  4,921 
  Pargesa Holding SA  52,459  4,199 
  Swatch Group AG     
  (Registered)  93,290  4,184 
*  Aryzta AG  105,208  4,130 
  Straumann Holding AG  14,997  3,620 
  Lindt & Spruengli AG  1,661  3,497 
  Schindler Holding AG  40,647  2,817 
  BKW FMB Energie AG  29,319  2,412 
*  Aryzta AG (Ireland Shares)  51,983  2,012 
      1,472,300 

      Market 
      Value• 
    Shares  ($000) 
Taiwan (2.6%)     
  Taiwan Semiconductor     
  Manufacturing Co. Ltd.  37,633,063  68,266 
  HON HAI Precision     
  Industry Co. Ltd.  14,760,885  57,816 
  MediaTek Inc.  1,757,430  24,597 
*  Cathay Financial     
  Holding Co. Ltd.  11,275,000  19,335 
  Taiwan Semiconductor     
  Manufacturing Co.     
  Ltd. ADR  1,893,348  18,063 
  China Steel Corp.  18,956,756  16,831 
  Nan Ya Plastics Corp.  9,811,780  15,608 
  Chunghwa     
  Telecom Co. Ltd.  8,358,354  14,671 
  Formosa Plastics Corp.  7,613,780  14,604 
  Asustek Computer Inc.  7,350,601  13,500 
  HTC Corp.  1,285,800  12,769 
  Acer Inc.  4,886,090  11,517 
  AU Optronics Corp.  11,672,640  10,351 
  Formosa Chemicals &     
  Fibre Corp.  5,481,500  10,215 
  Chinatrust Financial     
  Holding Co. Ltd.  16,219,255  9,742 
*  Fubon Financial     
  Holding Co. Ltd.  8,619,000  9,564 
  Yuanta Financial     
  Holding Co. Ltd.  14,035,000  9,262 
*  United     
  Microelectronics Corp.  18,885,175  9,078 
  Delta Electronics Inc.  3,233,240  8,978 
  Compal Electronics Inc.  7,062,521  8,830 
  Mega Financial     
  Holding Co. Ltd.  14,766,000  8,223 
  Quanta Computer Inc.  4,214,950  7,973 
  Uni-President     
  Enterprises Corp.  6,341,357  7,076 
  Taiwan Mobile Co. Ltd.  3,576,000  6,395 
  Far Eastern Textile Co. Ltd. 5,402,478  6,371 
  Formosa     
  Petrochemical Corp.  2,389,950  5,828 
  Siliconware Precision     
  Industries Co.  4,432,000  5,827 
  Taiwan Cement Corp.  5,668,000  5,815 
  Wistron Corp.  3,356,237  5,619 
  InnoLux Display Corp.  4,020,297  5,295 
  First Financial     
  Holding Co. Ltd.  9,124,859  5,271 
  Advanced Semiconductor     
  Engineering Inc.  6,681,060  5,266 
  Lite-On Technology Corp.  3,861,064  5,085 
*  China Development     
  Financial Holding Corp.  18,426,625  4,800 
*  Chi Mei     
  Optoelectronics Corp.  9,164,000  4,572 
  Taiwan Fertilizer Co. Ltd.  1,416,000  4,396 

32


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
*  SinoPac Financial     
  Holdings Co. Ltd.  11,540,000  4,262 
*  Shin Kong Financial     
  Holding Co. Ltd.  10,338,947  4,206 
  Chang Hwa     
  Commercial Bank  9,621,000  4,186 
  Taiwan Cooperative Bank  6,907,000  4,075 
  Synnex Technology     
  International Corp.  2,056,500  3,891 
  Hua Nan Financial     
  Holdings Co. Ltd.  6,688,595  3,886 
  Foxconn     
  Technology Co. Ltd.  1,102,380  3,672 
  Asia Cement Corp.  3,283,413  3,447 
  Far EasTone     
  Telecommunications     
  Co. Ltd.  3,055,000  3,437 
*,^  United Microelectronics     
  Corp. ADR  1,043,348  3,433 
  Epistar Corp.  1,176,408  3,426 
  Cheng Shin Rubber     
  Industry Co. Ltd.  1,564,090  3,214 
  Macronix International  6,339,927  3,214 
  Pou Chen Corp.  4,312,350  2,957 
*  Taishin Financial     
  Holding Co. Ltd.  7,542,000  2,952 
  Chunghwa Telecom Co.     
  Ltd. ADR  167,161  2,905 
  Powertech Technology Inc.  1,051,050  2,877 
  KGI Securities Co. Ltd.  5,501,000  2,520 
  Catcher Technology Co. Ltd. 987,800  2,391 
*  E.Sun Financial     
  Holding Co. Ltd.  6,014,170  2,341 
  President Chain     
  Store Corp.  1,023,536  2,316 
  AU Optronics Corp. ADR  260,366  2,299 
  Largan Precision Co. Ltd.  192,376  2,203 
  Novatek     
  Microelectronics     
  Corp. Ltd.  910,275  2,054 
  Inventec Co. Ltd.  3,593,100  1,988 
  Unimicron     
  Technology Corp.  1,739,750  1,985 
*  Polaris Securities Co. Ltd.  3,828,040  1,964 
  Tripod Technology Corp.  783,759  1,961 
  Richtek Technology Corp.  247,005  1,895 
  Simplo Technology Co. Ltd.  364,100  1,870 
*  Chunghwa Picture Tubes  18,171,000  1,864 
  Transcend Information Inc. 591,363  1,850 
  Yulon Motor Co. Ltd.  1,619,015  1,811 
*  Inotera Memories Inc.  3,022,000  1,785 
  Realtek     
  Semiconductor Corp.  839,673  1,785 
*  Walsin Lihwa Corp.  5,324,000  1,725 
  Far Eastern Department     
  Stores Co. Ltd.  1,655,210  1,700 

      Market 
      Value• 
    Shares  ($000) 
  Young Fast     
  Optoelectronics Co. Ltd.  147,000  1,682 
*  HannStar Display Corp.  8,702,000  1,641 
*  Qisda Corp.  2,882,000  1,599 
  WPG Holdings Co. Ltd.  1,167,000  1,597 
  Everlight     
  Electronics Co. Ltd.  580,000  1,586 
*  Powerchip     
  Semiconductor Corp.  13,999,000  1,561 
  Chicony Electronics     
  Co. Ltd.  710,380  1,553 
*  Tatung Co. Ltd.  7,003,000  1,542 
  U-Ming Marine     
  Transport Corp.  844,000  1,531 
  Tung Ho Steel     
  Enterprise Corp.  1,601,842  1,523 
  Coretronic Corp.  1,286,000  1,408 
  Taiwan Glass     
  Industrial Corp.  1,787,890  1,374 
  Siliconware Precision     
  Industries Co. ADR  201,575  1,357 
  Teco Electric and     
  Machinery Co. Ltd.  3,383,000  1,347 
  Cheng Uei Precision     
  Industry Co. Ltd.  685,644  1,303 
*  Ruentex Industries Ltd.  798,000  1,302 
  Giant Manufacturing Co.     
  Ltd.  498,000  1,291 
  Feng Hsin Iron &     
  Steel Co.  829,000  1,253 
  Pixart Imaging Inc.  175,719  1,239 
  Kinsus Interconnect     
  Technology Corp.  488,000  1,223 
  Motech Industries Inc.  460,731  1,220 
*  Wintek Corp.  1,825,000  1,215 
  Phison Electronics Corp.  179,768  1,203 
  Nan Ya Printed     
  Circuit Board Corp.  373,320  1,162 
  Advanced Semiconductor     
  Engineering Inc. ADR  299,740  1,160 
*  Clevo Co.  920,176  1,148 
*  CMC Magnetics Corp.  5,163,000  1,134 
*  Prime View     
  International Co. Ltd.  692,000  1,128 
*  China Airlines Ltd.  3,544,491  1,102 
  Mitac International  2,318,995  1,085 

*

Evergreen Marine Corp.
  Taiwan Ltd.  2,112,000  1,067 
*  Nanya Technology Corp.  1,482,115  1,047 
  Micro-Star     
  International Co. Ltd.  1,713,517  1,025 
  Eternal Chemical Co. Ltd.  1,078,175  999 
*  Taiwan Business Bank  4,066,000  993 
  TSRC Corp.  850,000  990 
*  Wan Hai Lines Ltd.  2,147,500  988 
  Formosa Taffeta Co. Ltd.  1,433,000  971 

33


Total International Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
*  Winbond     
  Electronics Corp.  5,228,000  966 
*  Eva Airways Corp.  2,570,900  964 
  Sino-American Silicon     
  Products Inc.  445,098  963 
  Advantech Co. Ltd.  534,659  952 
  Farglory Land     
  Development Co. Ltd.  462,000  928 
  Chinese Gamer     
  International Corp.  73,000  927 
  Compal     
  Communications Inc.  627,000  925 
*  Capital Securities Corp.  1,977,000  917 
  Yang Ming Marine     
  Transport Corp.  2,575,776  910 
  Formosa International     
  Hotels Corp.  67,100  837 
  Formosa Sumco     
  Technology Corp.  350,700  810 
  Taiwan Secom Co. Ltd.  454,000  694 
*  Evergreen International     
  Storage & Transport Corp. 798,000  646 
  CSBC Corp. Taiwan  691,850  643 
  Vanguard International     
  Semiconductor Corp.  1,489,000  605 
  Sincere Navigation  531,000  590 
  Global Unichip Corp.  132,045  569 
*  Tatung Co. Ltd. GDR  92,281  413 
*  Via Technologies Inc.  627,200  380 
*  Shin Kong Financial     
  Holding Co., Ltd. Rights     
  Exp. 12/7/2009  495,149  46 
      620,990 
Thailand (0.3%)     
  PTT PCL (Foreign)  1,608,815  11,388 
  PTT Exploration &     
  Production PCL     
  (Foreign)  2,162,555  9,233 
  Bangkok Bank PCL     
  (Foreign)  1,795,600  6,022 
  Siam Commercial Bank     
  PCL (Foreign)  2,353,600  5,368 
  Kasikornbank PCL     
  (Foreign)  2,208,100  5,353 
  Advanced Info Service     
  PCL (Foreign)  1,670,800  4,278 
  Banpu PCL (Foreign)  310,590  3,993 
  Siam Cement PCL     
  (Foreign)  569,000  3,525 
  Bangkok Bank PCL     
  (Local)  776,300  2,567 
  CP ALL PCL (Foreign)  3,830,285  2,161 
  IRPC PCL (Foreign)  16,736,700  1,896 
  Thai Oil PCL (Foreign)  1,546,800  1,879 
  Bank of Ayudhya PLC     
  (Foreign)  3,407,779  1,856 

  Total Access     
  Communication PCL     
  (Foreign)  1,411,800  1,629 
  Krung Thai Bank PCL     
  (Foreign)  5,043,010  1,315 
  PTT Aromatics &     
  Refining PCL (Foreign)  2,068,100  1,297 
*  TMB Bank PCL (Foreign)  35,976,400 1,172 
  PTT Chemical PCL     
  (Foreign)  600,795  1,103 
  BEC World PCL (Foreign)  1,527,505  1,017 
  Glow Energy PCL (Foreign)  907,345  863 
  Land and Houses PCL     
  (Foreign)  4,267,500  763 
  Ratchaburi Electricity     
  Generating Holding PCL  653,665  720 
  PTT Exploration and     
  Production PCL (Local)  36,200  155 
  CP ALL PCL (Local)  267,600  151 
  IRPC Public Co. Ltd.     
  (Local)  1,263,000  143 
  PTT PCL (Local)  19,700  140 
  PTT Chemical PCL  65,300  120 
      70,107 
Turkey (0.3%)     
  Turkiye Garanti Bankasi AS  4,057,693  14,736 
  Turkcell Iletisim Hizmet AS  1,484,822  9,824 
  Akbank TAS  1,452,225  7,845 
  Turkiye Is Bankasi  2,069,824  7,839 
  Anadolu Efes Biracilik     
  Ve Malt Sanayii AS  397,058  4,536 
  Tupras Turkiye     
  Petrol Rafine  241,120  4,141 
  Turkiye Halk Bankasi AS  592,688  3,547 
*  Turkiye Vakiflar     
  Bankasi Tao  1,447,182  3,510 
*  Yapi ve Kredi Bankasi AS  1,679,212  3,452 
  Haci Omer Sabanci     
  Holding AS  905,018  3,309 
  Turk Telekomunikasyon AS  1,010,975  3,069 
  BIM Birlesik Magazalar AS  72,366  2,624 
*  KOC Holding AS  965,479  2,459 
*  Eregli Demir ve Celik     
  Fabrikalari TAS  748,041  2,031 
  Enka Insaat ve Sanayi AS  437,605  1,766 
*  Asya Katilim Bankasi AS  841,521  1,741 
  Dogan Sirketler     
  Grubu Holdings  1,698,196  1,117 
  Coca-Cola Icecek AS  140,110  1,082 
*  Turk Sise ve Cam     
  Fabrikalari AS  806,459  846 
*  Petkim Petrokimya Holding  152,529  735 
*  Tekfen Holding AS  244,481  700 
  Aksigorta AS  220,264  665 
      81,574 

34


Total International Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
United Kingdom (16.4%)     
  HSBC Holdings PLC  33,374,861  368,796 
  BP PLC  36,118,162  338,437 
  Vodafone Group PLC  101,171,871  222,966 
  GlaxoSmithKline PLC  10,000,869  205,145 
  Royal Dutch Shell PLC     
  Class B  5,196,309  149,589 
  Royal Dutch Shell PLC     
  Class A  4,886,797  144,276 
  AstraZeneca PLC  2,791,912  125,333 
  British American     
  Tobacco PLC  3,848,003  122,621 
  Rio Tinto PLC  2,642,236  116,813 
  BHP Billiton PLC  4,254,120  114,627 
  BG Group PLC  6,476,257  111,478 
*  Barclays PLC  21,268,353  111,469 
  Tesco PLC  15,230,447  101,552 
  Standard Chartered PLC  3,875,395  95,071 
*  Anglo American PLC  2,537,604  91,818 
  Diageo PLC  4,818,048  78,477 
  Unilever PLC  2,473,934  73,911 
  Reckitt Benckiser     
  Group PLC  1,169,190  58,079 
  Royal Dutch Shell     
  PLC Class A     
  (Amsterdam Shares)  1,947,652  57,745 
  Imperial Tobacco     
  Group PLC  1,958,043  57,702 
*  Xstrata PLC  3,675,819  52,945 
  SABMiller PLC  1,815,504  47,587 
  National Grid PLC  4,681,608  46,375 
*,^  Lloyds Banking     
  Group PLC  31,460,863  44,359 
  Prudential PLC  4,865,829  44,198 
  Centrica PLC  9,852,666  40,026 
  BAE Systems PLC  6,811,127  35,023 
  Cadbury PLC  2,636,733  33,335 
  Aviva PLC  5,283,599  33,039 
  BT Group PLC  14,903,579  31,938 
  Scottish & Southern     
  Energy PLC  1,776,288  31,351 
  Tullow Oil PLC  1,546,085  29,951 
  Rolls-Royce Group PLC  3,577,274  26,382 
  Compass Group PLC  3,555,884  22,552 
*  Royal Bank of Scotland     
  Group PLC  32,496,292  22,168 
  WPP PLC  2,405,041  21,554 
  Pearson PLC  1,559,272  21,195 
  British Sky Broadcasting     
  Group PLC  2,192,622  19,118 
  Shire PLC  1,079,570  19,093 
  WM Morrison     
  Supermarkets PLC  4,039,076  18,512 
  Experian PLC  1,975,656  18,054 
  Reed Elsevier PLC  2,332,423  17,659 
  Old Mutual PLC  10,173,447  17,657 

      Market 
      Value• 
    Shares  ($000) 
  Marks & Spencer     
  Group PLC  3,044,581  17,052 
  Man Group PLC  3,293,363  16,655 
  Kingfisher PLC  4,552,177  16,639 
  Land Securities     
  Group PLC  1,460,574  15,804 
  Standard Life PLC  4,265,148  15,204 
  Smith & Nephew PLC  1,695,051  14,984 
  Capita Group PLC  1,194,145  14,914 
  Legal & General     
  Group PLC  11,326,112  14,533 
  RSA Insurance     
  Group PLC  6,405,428  12,693 
  British Land Co. PLC  1,634,980  12,628 
  J Sainsbury PLC  2,294,719  12,384 
  International Power PLC  2,942,053  12,214 
  Cable & Wireless PLC  4,910,685  11,652 
*  Cairn Energy PLC  265,679  11,459 
  Randgold Resources Ltd.  171,418  11,300 
  Next PLC  378,639  11,108 
*  Wolseley PLC  546,248  11,050 
  Smiths Group PLC  750,816  10,959 
  G4S PLC  2,447,706  10,120 
  Carnival PLC  311,812  9,667 
  Antofagasta PLC  762,964  9,613 
  Johnson Matthey PLC  415,680  9,573 
  United Utilities     
  Group PLC  1,302,548  9,391 
  Associated British     
  Foods PLC  687,754  9,313 
  Vedanta Resources PLC  271,848  9,302 
*  Autonomy Corp. PLC  412,526  9,070 
  Sage Group PLC  2,530,103  8,835 
  Hammerson PLC  1,331,227  8,830 
  AMEC PLC  638,557  8,410 
  Segro PLC  1,423,906  8,205 
  3i Group PLC  1,855,992  7,989 
  Home Retail Group PLC  1,674,099  7,968 
  Cobham PLC  2,213,510  7,954 
  Serco Group PLC  945,575  7,822 
  Rexam PLC  1,683,933  7,625 
  Kazakhmys PLC  414,118  7,370 
  Burberry Group PLC  835,222  7,366 
  Invensys PLC  1,543,340  7,134 
  Severn Trent PLC  453,401  7,063 
*  Lonmin PLC  294,853  7,054 
  Liberty International PLC  951,777  7,026 
  Whitbread PLC  333,507  6,938 
  Bunzl PLC  629,512  6,844 
  Eurasian Natural     
  Resources Corp.  492,123  6,697 
  ICAP PLC  1,003,133  6,667 
  Friends Provident     
  Group PLC  4,850,364  6,467 
  Intercontinental Hotels     
  Group PLC  495,307  6,332 

35


Total International Stock Index Fund

        Market 
        Value• 
      Shares  ($000) 
  Petrofac Ltd.    401,692  6,182 
  Admiral Group PLC    360,320  6,057 
  Investec PLC    820,502  5,857 
  Firstgroup PLC    934,992  5,750 
  Balfour Beatty PLC    1,300,030  5,652 
  Drax Group PLC    704,268  5,358 
  Tomkins PLC    1,675,668  4,597 
  Schroders PLC    235,176  4,229 
  Fresnillo PLC    347,074  4,206 
  TUI Travel PLC    1,085,881  4,138 
  London Stock Exchange     
  Group PLC    286,262  3,982 
  Ladbrokes PLC    1,701,931  3,390 
*  British Airways PLC    1,114,314  3,309 
*  Berkeley Group       
  Holdings PLC    236,798  3,305 
  Thomas Cook Group PLC  940,003  3,148 
  Carphone Warehouse     
  Group PLC    786,923  2,373 
*  Resolution Ltd.    944,463  1,395 
  WPP PLC ADR    298  13 
        3,988,794 
Total Common Stocks       
(Cost $22,065,061)      24,184,815 
Temporary Cash Investments (1.7%)1   
Money Market Fund (1.6%)     
3,4  Vanguard Market       
  Liquidity Fund,       
  0.225%  385,349,543  385,350 

    Face  Market 
    Amount  Value• 
    ($000)  ($000) 
U.S. Government and Agency Obligations (0.1%) 
5,6  Federal Home Loan     
  Bank Discount Notes,     
  0.195%, 3/24/10  5,000  4,997 
5,6  Federal Home Loan     
  Bank Discount Notes,     
  0.220%, 3/26/10  10,000  9,995 
      14,992 
Total Temporary Cash Investments   
(Cost $400,337)    400,342 
Total Investments (101.1%)     
(Cost $22,465,398)    24,585,157 
Other Assets and Liabilities (–1.1%)   
Other Assets    96,311 
Liabilities4    (351,989) 
      (255,678) 
Net Assets (100%)     
Applicable to 1,738,479,176 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  24,329,479 
Net Asset Value Per Share    $13.99 
 
 
At October 31, 2009, net assets consisted of: 
      Amount 
      ($000) 
Paid-in Capital    24,137,950 
Undistributed Net Investment Income  473,474 
Accumulated Net Realized Losses  (2,398,071) 
Unrealized Appreciation (Depreciation)   
Investment Securities    2,119,759 
Futures Contracts    (5,189) 
Foreign Currencies and     
  Forward Currency Contracts    1,556 
Net Assets    24,329,479 

• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $253,500,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures
investments, the fund's effective common stock and temporary cash investment positions represent 99.9% and 1.2%, respectively, of net
assets.
2 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31, 2009, the value of this security represented 0.1% of net assets.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-
day yield.
4 Includes $270,259,000 of collateral received for securities on loan.
5 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
6 Securities with a value of $9,895,000 have been segregated as initial margin for open futures contracts.
ADR—American Depositary Receipt.
GDR—Global Depositary Receipt.
REIT—Real Estate Investment Trust.
See accompanying Notes, which are an integral part of the Financial Statements.

36


Total International Stock Index Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Dividends1,2  936,701 
Interest  25 
Security Lending  16,639 
Total Income  953,365 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  521 
Management and Administrative  41,634 
Marketing and Distribution  2,951 
Custodian Fees  4,933 
Auditing Fees  36 
Shareholders’ Reports and Proxies  972 
Trustees’ Fees and Expenses  31 
Total Expenses  51,078 
Net Investment Income  902,287 
Realized Net Gain (Loss)   
Investment Securities Sold2  (1,680,903) 
Futures Contracts  26,866 
Foreign Currencies and Forward Currency Contracts  9,015 
Realized Net Gain (Loss)  (1,645,022) 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  6,400,389 
Futures Contracts  (5,189) 
Foreign Currencies and Forward Currency Contracts  219 
Change in Unrealized Appreciation (Depreciation)  6,395,419 
Net Increase (Decrease) in Net Assets Resulting from Operations  5,652,684 

1 Dividends are net of foreign withholding taxes of $36,520,000.
2 Dividend income and realized net gain (loss) from affiliated companies of the fund were $393,579,000, and ($1,429,988,000), respectively.

See accompanying Notes, which are an integral part of the Financial Statements.

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Total International Stock Index Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  902,287  805,620 
Realized Net Gain (Loss)  (1,645,022)  (708,572) 
Change in Unrealized Appreciation (Depreciation)  6,395,419  (15,814,145) 
Net Increase (Decrease) in Net Assets Resulting from Operations  5,652,684  (15,717,097) 
Distributions     
Net Investment Income  (511,942)  (730,097) 
Realized Capital Gain  —  — 
Total Distributions  (511,942)  (730,097) 
Capital Share Transactions     
Issued  5,544,277  8,100,643 
Issued in Lieu of Cash Distributions  468,122  669,637 
Redeemed1  (3,976,141)  (4,895,227)2 
Net Increase (Decrease) from Capital Share Transactions  2,036,258  3,875,053 
Total Increase (Decrease)  7,177,000  (12,572,141) 
Net Assets     
Beginning of Period  17,152,479  29,724,620 
End of Period3  24,329,479  17,152,479 

1 Net of redemption fees for fiscal 2009 and 2008 of $1,020,000 and $204,000, respectively.
2 The fund collected redemption fees of $1,711,000 which were reallocated proportionately to the funds in which the fund invested.
3 Net Assets—End of Period includes undistributed net investment income of $473,474,000 and $81,475,000.

See accompanying Notes, which are an integral part of the Financial Statements.

38


Total International Stock Index Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $10.97  $21.89  $16.90  $13.49  $11.48 
Investment Operations           
Net Investment Income  .5441  .5402  .412  .294  .255 
Net Realized and Unrealized Gain (Loss)           
on Investments  2.801  (10.938)  4.980  3.410  2.010 
Total from Investment Operations  3.345  (10.398)  5.392  3.704  2.265 
Distributions           
Dividends from Net Investment Income  (.325)  (.522)  (.402)  (.294)  (.255) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.325)  (.522)  (.402)  (.294)  (.255) 
Net Asset Value, End of Period  $13.99  $10.97  $21.89  $16.90  $13.49 
 
Total Return3  31.41%  –48.57%  32.47%  27.84%  19.91% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $24,329  $17,152  $29,725  $18,200  $11,331 
Ratio of Total Expenses to           
Average Net Assets4  0.27%  0.03%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  4.73%1  3.07%  1.93%  1.71%  1.76% 
Portfolio Turnover Rate  12%5  15%5  2%  2%  3% 

1 Net investment income per share and the ratio of net investment income to average net assets include $.249 and 2.06%, respectively,
of annual dividends received from Vanguard mutual funds in December 2008. From August 2008 through February 2009, the fund invested
in a combination of Vanguard mutual funds and common stocks. Effective in March 2009, the fund’s equity investments are solely in
common stocks.
2 Calculated based on average shares outstanding.
3 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months; or the account service fee that
may be applicable to certain accounts with balances below $10,000.
4 The acquired fund fees and expenses were 0.05%, 0.25%, 0.27%, 0.32%, and 0.31%. Including the acquired fund fees and expenses,
total operating expenses were 0.32%, 0.28%, 0.27%, 0.32%, and 0.31%.
5 Excludes the value of securities received and mutual fund shares delivered in connection with a change in the fund’s investment policy
to invest directly in individual stocks and reduce the fund’s investments in Vanguard mutual funds.

See accompanying Notes, which are an integral part of the Financial Statements.

39


Total International Stock Index Fund

Notes to Financial Statements

Vanguard Total International Stock Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. Through March 11, 2009, the fund had investments in the Vanguard European, Pacific, and Emerging Markets Stock Index Funds in addition to direct investments in common stocks. Effective March 12, 2009, the fund’s equity investments are solely in common stocks. The fund’s direct and indirect investments in foreign securities involve investment risks not normally associated with investing in securities of United States corporations.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments acquired over 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value.

2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

3. Futures and Forward Currency Contracts: The fund uses index futures contracts to a limited extent, with the objectives of maintaining full exposure to the stock market, enhancing returns, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. The fund may seek to enhance returns by using futures contracts instead of the underlying securities when futures are believed to be priced more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

40


Total International Stock Index Fund

The fund also may enter into forward currency contracts to provide the appropriate currency exposure related to any open futures contracts. The fund’s risks in using these contracts include movement in the values of the foreign currencies relative to the U.S. dollar and the ability of the counterparties to fulfill their obligations under the contracts. Counterparty risk is mitigated by entering into forward currency contracts only with highly rated counterparties, by a master netting arrangement between the fund and the counterparty, and by the posting of collateral by the counterparty. The forward currency contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has posted. Any securities posted as collateral for open contracts are noted in the Statement of Net Assets

Futures and forward currency contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures or forward currency contracts.

4. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

5. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

6. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.

7. Other: Dividend income is recorded on the ex-dividend date. Interest income is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold. Fees assessed on redemptions of capital shares are credited to paid-in capital.

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. With respect to assets invested in other Vanguard funds through March 11, 2009, the fund’s direct expenses were reduced to the extent of savings realized by the Vanguard funds by the operation of the fund. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At October 31, 2009, the fund had contributed capital of $5,124,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 2.05% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

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Total International Stock Index Fund

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of October 31, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Common Stocks  1,419,184  22,765,408  223 
Temporary Cash Investments  385,350  14,992  — 
Futures Contracts—Liabilities1  (2,084)  —  — 
Forward Currency Contracts—Assets  403  —  — 
Forward Currency Contracts—Liabilities  (139)  —  — 
Total  1,802,714  22,780,400  223 
1 Represents variation margin on the last day of the reporting period.    

The following table summarizes changes in investments valued based on Level 3 inputs during the year ended October 31, 2009:

  Investments in 
  Common Stocks 
Amount Valued Based on Level 3 Inputs  ($000) 
Balance as of October 31, 2008  — 
Transfers into Level 3  198 
Change in Unrealized Appreciation (Depreciation)  25 
Balance as of October 31, 2009  223 

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Total International Stock Index Fund

D. At October 31, 2009, the fair values of derivatives were reflected in the Statement of Net Assets as follows:

    Foreign   
  Equity  Exchange   
  Contracts1  Contracts  Total 
Statement of Net Assets  ($000)  ($000)  ($000) 
Other Assets  —  403  403 
Liabilities  (2,084)  (139)  (2,223) 
1 Represents variation margin on the last day of the reporting period.    

Realized net gain (loss) and the change in unrealized appreciation (depreciation) on derivatives for the year ended October 31, 2009 were:

    Foreign   
  Equity  Exchange   
  Contracts  Contracts  Total 
Realized Net Gain (Loss) on Derivatives  ($000)  ($000)  ($000) 
Futures Contracts  26,866  —  26,866 
Forward Currency Contracts  —  8,308  8,308 
Realized Net Gain (Loss) on Derivatives  26,866  8,308  35,174 
 
Change in Unrealized Appreciation (Depreciation) on Derivatives       
Futures Contracts  (5,189)  —  (5,189) 
Forward Currency Contracts  —  264  264 
Change in Unrealized Appreciation (Depreciation) on Derivatives  (5,189)  264  (4,925) 

At October 31, 2009, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

      ($000) 
    Number of    Unrealized 
    Long (Short)  Aggregate  Appreciation 
Futures Contracts  Expiration  Contracts  Settlement Value  (Depreciation) 
Dow Jones EURO STOXX 50 Index  December 2009  1,275  51,281  (2,796) 
FTSE 100 Index  December 2009  460  37,920  (1,031) 
Topix Index  December 2009  275  27,160  (1,362) 

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Total International Stock Index Fund

At October 31, 2009, the fund had open forward currency contracts to receive and deliver currencies as follows. Unrealized appreciation (depreciation) on open forward currency contracts is treated as realized gain (loss) for tax purposes.

          Unrealized 
          Appreciation 
  Contract Amount (000)  (Depreciation) 
Contract Settlement Date  Receive  Deliver  ($000) 
12/23/2009  EUR  36,652  USD  54,068  29 
12/23/2009  GBP  23,630  USD  38,939  (139) 
12/16/2009  JPY  2,581,777  USD  28,529  374 

EUR—Euro.
GBP—British pound.
JPY—Japanese yen.
USD—U.S. dollar.

The fund had net unrealized foreign currency gains of $1,292,000 resulting from the translation of other assets and liabilities at October 31, 2009.

E. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

During the year ended October 31, 2009, the fund realized net foreign currency gains of $707,000, which increased distributable net income for tax purposes; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Certain of the fund’s investments are in securities considered to be “passive foreign investment companies,” for which any unrealized appreciation and/or realized gains are required to be included in distributable net income for tax purposes. Unrealized appreciation of $128,000 on the fund’s passive foreign investment company holdings at October 31, 2008, has been distributed and is reflected in the balance of undistributed net investment income. During the year ended October 31, 2009, the fund realized gains on the sale of passive foreign investment companies of $947,000, which have been included in current and prior periods’ taxable income; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Since October 31, 2008, the fund’s passive foreign investment company holdings have appreciated in value, increasing the amount of taxable income available for distribution as of October 31, 2009, by $48,762,000. Unrealized appreciation on the fund’s passive foreign investment company holdings at October 31, 2009, was $48,890,000.

44


Total International Stock Index Fund

For tax purposes, at October 31, 2009, the fund had $535,279,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $2,397,680,000 to offset future net capital gains of $43,870,000 through October 31, 2010, $638,457,000 through October 31, 2016, and $1,715,353,000 through October 31, 2017. Capital loss carryforward of $4,316,000 expired on October 31, 2009; accordingly, such losses have been reclassified from accumulated net realized losses to paid-in-capital.

At October 31, 2009, the cost of investment securities for tax purposes was $22,514,288,000.

Net unrealized appreciation of investment securities for tax purposes was $2,070,869,000, consisting of unrealized gains of $3,085,593,000 on securities that had risen in value since their purchase and $1,014,724,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the year ended October 31, 2009, the fund purchased $10,169,105,000 of investment securities and sold $7,852,568,000 of investment securities, other than temporary cash investments.

G. Capital shares issued and redeemed were:     
  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  493,049  473,699 
Issued in Lieu of Cash Distributions  43,832  33,718 
Redeemed  (361,836)  (301,597) 
Net Increase (Decrease) in Shares Outstanding  175,045  205,820 

H. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 15, 2009, for potential recognition or disclosure in these financial statements.

45


Report of Independent Registered
Public Accounting Firm

To the Trustees of Vanguard STAR Funds and the Shareholders of Vanguard Total International Stock Index Fund:

In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard Total International Stock Index Fund (the “Fund”) at October 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2009 by correspondence with the custodian and brokers and by agreement to the underlying ownership records of the Vanguard Market Liquidity Fund, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 15, 2009


Special 2009 tax information (unaudited) for Vanguard Total International Stock Index Fund

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $407,967,000 of qualified dividend income to shareholders during the fiscal year.

The fund will pass through foreign source income of $583,386,000 and foreign taxes paid of $35,258,000 to shareholders. The pass-through of foreign taxes paid will affect only shareholders on the fund’s dividend record date in December 2009. Shareholders will receive more detailed information along with their Form 1099-DIV in January 2010.

46


Your Fund’s After-Tax Returns

This table presents returns for your fund both before and after taxes. The after-tax returns are shown in two ways: (1) assuming that an investor owned the fund during the entire period and paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s distributions and sold all shares at the end of each period.

Calculations are based on the highest individual federal income tax and capital gains tax rates in effect at the times of the distributions and the hypothetical sales. State and local taxes were not considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures and estimates for 2009. (In the example, returns after the sale of fund shares may be higher than those assuming no sale. This occurs when the sale would have produced a capital loss. The calculation assumes that the investor received a tax deduction for the loss.)

Please note that your actual after-tax returns will depend on your tax situation and may differ from those shown. Also note that if you own the fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not subject to current taxes.

Finally, keep in mind that a fund’s performance—whether before or after taxes—does not guarantee future results.

Average Annual Total Returns: Total International Stock Index Fund1       
Periods Ended October 31, 2009       
  One  Five  Ten 
  Year  Years  Years 
Returns Before Taxes  31.41%  6.54%  3.07% 
Returns After Taxes on Distributions  30.70  6.03  2.50 
Returns After Taxes on Distributions and Sale of Fund Shares  20.81  5.50  2.36 

1 Total returns do not reflect the 0.5% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two months; or for the account service fee that may be applicable to certain accounts with balances below $10,000.

47


About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.

A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

The accompanying table illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid
over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the
third column shows the dollar amount that would have been paid by an investor who started with
$1,000 in the fund. You may use the information here, together with the amount you invested, to
estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses
Paid During Period.”

•Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s
costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before
expenses, but that the expense ratio is unchanged. In this case—because the return used is not the
fund’s actual return—the results do not apply to your investment. The example is useful in making
comparisons because the Securities and Exchange Commission requires all mutual funds to calculate
expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical
example with the hypothetical examples that appear in shareholder reports of other funds.

Six Months Ended October 31, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
Total International Stock Index Fund  4/30/2009  10/31/2009  Period1 
Based on Actual Fund Return  $1,000.00  $1,321.06  $1.87 
Based on Hypothetical 5% Yearly Return  1,000.00  1,023.59  1.63 

1 These calculations are based on expenses incurred in the most recent six-month period. The fund’s annualized six-month expense ratio for
that period is 0.32%. The dollar amounts shown as “Expenses Paid” are equal to the annualized expense ratio multiplied by the average
account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the number of days
in the most recent 12-month period.

48


Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the transaction fees or the account service fee described in the prospectus. If such fees were applied to your account, your costs would be higher. Your fund does not carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.

49


Glossary

Acquired Fund Fees and Expenses. Funds that invest in other Vanguard funds bear proportionate shares of the operating, administrative, and advisory expenses of the underlying funds, and they must pay any fees charged by those funds. The figure for acquired fund fees and expenses represents a weighted average of these underlying costs. Acquired is a term that the Securities and Exchange Commission applies to any mutual fund whose shares are owned by another fund.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Equity Exposure. A measure that reflects a fund’s investments in stocks and stock futures. Any holdings in short-term reserves are excluded.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.

Turnover Rate. An indication of the fund’s trading activity. Funds with high turnover rates incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The turnover rate excludes in-kind transactions, which have minimal impact on costs.

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The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 156 Vanguard funds.

The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.

Interested Trustees  Emerson U. Fullwood 
  Born 1948. Trustee Since January 2008. Principal 
John J. Brennan1  Occupation(s) During the Past Five Years: Executive 
Born 1954. Trustee Since May 1987. Chairman of  Chief Staff and Marketing Officer for North America 
the Board. Principal Occupation(s) During the Past  and Corporate Vice President (retired 2008) of Xerox 
Five Years: Chairman of the Board and Director/Trustee  Corporation (photocopiers and printers); Director of 
of The Vanguard Group, Inc., and of each of the  SPX Corporation (multi-industry manufacturing), the 
investment companies served by The Vanguard Group;  United Way of Rochester, the Boy Scouts of America, 
Chief Executive Officer (1996–2008) and President  Amerigroup Corporation (direct health and medical 
(1989–2008) of The Vanguard Group and of each of the  insurance carriers), and Monroe Community College 
investment companies served by The Vanguard Group;  Foundation. 
Chairman of the Financial Accounting Foundation;   
Governor of the Financial Industry Regulatory Authority  Rajiv L. Gupta 
(FINRA); Director of United Way of Southeastern  Born 1945. Trustee Since December 2001.2 Principal 
Pennsylvania.  Occupation(s) During the Past Five Years: Chairman 
  and Chief Executive Officer (retired 2009) and President 
F. William McNabb III1  (2006–2008) of Rohm and Haas Co. (chemicals); Board 
Born 1957. Trustee Since July 2009. Principal  Member of American Chemistry Council; Director of 
Occupation(s) During the Past Five Years: Director of  Tyco International, Ltd. (diversified manufacturing and 
The Vanguard Group, Inc., since 2008; Chief Executive  services) and Hewlett-Packard Co. (electronic computer 
Officer and President of The Vanguard Group and of  manufacturing); Trustee of The Conference Board. 
each of the investment companies served by The   
Vanguard Group since 2008; Director of Vanguard  Amy Gutmann 
Marketing Corporation; Managing Director of The  Born 1949. Trustee Since June 2006. Principal 
Vanguard Group (1995–2008).  Occupation(s) During the Past Five Years: President of 
  the University of Pennsylvania; Christopher H. Browne 
  Distinguished Professor of Political Science in the School 
Independent Trustees  of Arts and Sciences with secondary appointments 
  at the Annenberg School for Communication and the 
Charles D. Ellis  Graduate School of Education of the University of 
Born 1937. Trustee Since January 2001. Principal  Pennsylvania; Director of Carnegie Corporation of 
Occupation(s) During the Past Five Years: Applecore  New York, Schuylkill River Development Corporation, 
Partners (pro bono ventures in education); Senior  and Greater Philadelphia Chamber of Commerce; 
Advisor to Greenwich Associates (international business  Trustee of the National Constitution Center. 
strategy consulting); Successor Trustee of Yale University;   
Overseer of the Stern School of Business at New York   
University; Trustee of the Whitehead Institute for   
Biomedical Research.   


JoAnn Heffernan Heisen  Executive Officers   
Born 1950. Trustee Since July 1998. Principal     
Occupation(s) During the Past Five Years: Corporate  Thomas J. Higgins1   
Vice President and Chief Global Diversity Officer since  Born 1957. Chief Financial Officer Since September 
2006 (retired 2008) and Member of the Executive  2008. Principal Occupation(s) During the Past Five 
Committee (retired 2008) of Johnson & Johnson  Years: Principal of The Vanguard Group, Inc.; Chief 
(pharmaceuticals/consumer products); Vice President  Financial Officer of each of the investment companies 
and Chief Information Officer of Johnson & Johnson  served by The Vanguard Group since 2008; Treasurer 
(1997–2005); Director of the University Medical Center  of each of the investment companies served by The 
at Princeton and Women’s Research and Education  Vanguard Group (1998–2008). 
Institute; Member of the Advisory Board of the Maxwell     
School of Citizenship and Public Affairs at Syracuse     
University.  Kathryn J. Hyatt1   
  Born 1955. Treasurer Since November 2008. Principal 
  Occupation(s) During the Past Five Years: Principal of 
F. Joseph Loughrey  The Vanguard Group, Inc.; Treasurer of each of the 
Born 1949. Trustee Since October 2009. Principal  investment companies served by The Vanguard 
Occupation(s) During the Past Five Years: President and  Group since 2008; Assistant Treasurer of each of the 
Chief Operating Officer since 2005 (retired 2009) and  investment companies served by The Vanguard Group 
Vice Chairman of the Board (2008–2009) of Cummins  (1988–2008).   
Inc. (industrial machinery); Director of SKF AB (industrial     
machinery), Hillenbrand, Inc. (specialized consumer     
services), Sauer-Danfoss Inc. (machinery), the Lumina  Heidi Stam1   
Foundation for Education, and the Columbus Community  Born 1956. Secretary Since July 2005. Principal 
Education Coalition; Chairman of the Advisory Council  Occupation(s) During the Past Five Years: Managing 
for the College of Arts and Letters at the University of  Director of The Vanguard Group, Inc., since 2006; 
Notre Dame.  General Counsel of The Vanguard Group since 2005; 
  Secretary of The Vanguard Group and of each of the 
  investment companies served by The Vanguard Group 
André F. Perold  since 2005; Director and Senior Vice President of 
Born 1952. Trustee Since December 2004. Principal  Vanguard Marketing Corporation since 2005; Principal 
Occupation(s) During the Past Five Years: George Gund  of The Vanguard Group (1997–2006). 
Professor of Finance and Banking, Harvard Business     
School; Chair of the Investment Committee of HighVista     
Strategies LLC (private investment firm).  Vanguard Senior Management Team 
 
Alfred M. Rankin, Jr.  R. Gregory Barton  Michael S. Miller 
Born 1941. Trustee Since January 1993. Principal  Mortimer J. Buckley  James M. Norris 
Occupation(s) During the Past Five Years: Chairman,  Kathleen C. Gubanich  Glenn W. Reed 
President, and Chief Executive Officer of NACCO  Paul A. Heller  George U. Sauter 
Industries, Inc. (forklift trucks/housewares/lignite);     
Director of Goodrich Corporation (industrial products/     
aircraft systems and services); Deputy Chairman of   
the Federal Reserve Bank of Cleveland; Trustee of     
University Hospitals of Cleveland, The Cleveland  Founder   
Museum of Art, and Case Western Reserve University.  John C. Bogle   
  Chairman and Chief Executive Officer, 1974–1996 
 
Peter F. Volanakis     
Born 1955. Trustee Since July 2009. Principal     
Occupation(s) During the Past Five Years: President     
since 2007 and Chief Operating Officer since 2005     
of Corning Incorporated (communications equipment);     
President of Corning Technologies (2001–2005); Director     
of Corning Incorporated and Dow Corning; Trustee of     
the Corning Incorporated Foundation and the Corning     
Museum of Glass; Overseer of the Amos Tuck School     
of Business Administration at Dartmouth College.     

1 These individuals are “interested persons” as defined in the Investment Company Act of 1940.
2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


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The funds or securities referred to herein are not  To find out more about this public service, call the SEC 
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  Q1130 122009 


 

Vanguard International Stock 
Index Funds Annual Report 
October 31, 2009 
Vanguard European Stock Index Fund 
Vanguard Pacific Stock Index Fund 
Vanguard Emerging Markets Stock Index Fund 


> Global equity markets began to recover in March and continued to climb as earnings reports improved and investor confidence revived.

> For the fiscal year ended October 31, 2009, returns for Vanguard International Stock Index Funds ranged from about 23% for the Pacific Stock Index Fund to about 60% for the Emerging Markets Stock Index Fund.

> Most industry sectors recorded gains, with materials, industrials, and financials among the better performers.

 

Contents   
Your Fund’s Total Returns  1 
President’s Letter  4 
Results of Proxy Voting  11 
European Stock Index Fund  13 
Pacific Stock Index Fund  37 
Emerging Markets Stock Index Fund  62 
Your Fund’s After-Tax Returns  94 
About Your Fund’s Expenses  95 
Glossary  98 



Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the risks of investing in your fund are spelled out in the prospectus.

Cover photograph: Veronica Coia.


Your Fund’s Total Returns     
 
 
 
 
Fiscal Year Ended October 31, 2009     
  Ticker  Total 
  Symbol  Returns 
Vanguard European Stock Index Fund     
Investor Shares  VEURX  26.25% 
Admiral™ Shares1  VEUSX  26.33 
Signal® Shares2  VESSX  26.34 
Institutional Shares3  VESIX  26.45 
ETF Shares4  VGK   
Market Price    24.83 
Net Asset Value    26.33 
MSCI Europe Index    27.48 
European Region Funds Average5    29.06 
 
Vanguard Pacific Stock Index Fund     
Investor Shares  VPACX  23.23% 
Admiral Shares1  VPADX  23.38 
Signal Shares2  VPASX  23.38 
Institutional Shares3  VPKIX  23.46 
ETF Shares4  VPL   
Market Price    22.09 
Net Asset Value    23.38 
MSCI Pacific Index    28.32 
Japan/Pacific Region Funds Average5    22.47 

1 A lower-cost class of shares available to many longtime shareholders and to those with significant investments in the fund.
2 Signal Shares also carry lower costs and are available to certain institutional shareholders who meet specific administrative, service, and account-size criteria.
3 This class of shares carries low expenses and is available for a minimum initial investment of $5 million.

4 These Vanguard ETF® Shares are traded on the NYSE Arca exchange and are available only through brokers. The table shows the ETF returns based on both the NYSE Arca market price and the net asset value for a share. U.S. Pat. No. 6,879,964 B2; 7,337,138.
5 Derived from data provided by Lipper Inc.

1


Your Fund’s Total Returns     
 
 
 
 
Fiscal Year Ended October 31, 2009     
  Ticker  Total 
  Symbol  Returns 
Vanguard Emerging Markets Stock Index Fund     
Investor Shares  VEIEX  60.07% 
Admiral Shares1  VEMAX  60.29 
Signal Shares2  VERSX  60.33 
Institutional Shares3  VEMIX  60.41 
ETF Shares4  VWO   
Market Price    58.93 
Net Asset Value    60.28 
MSCI Emerging Markets Index    64.13 
Emerging Markets Funds Average5    56.47 

1 A lower-cost class of shares available to many longtime shareholders and to those with significant investments in the fund.
2 Signal Shares also carry lower costs and are available to certain institutional shareholders who meet certain administrative, service, and account-size criteria.
3 This class of shares carries low expenses and is available for a minimum initial investment of $5 million.
4 These Vanguard ETF® Shares are traded on the NYSE Arca exchange and are available only through brokers. The table shows the ETF returns based on both the NYSE Arca market price and the net asset value for a share. U.S. Pat. No. 6,879,964 B2; 7,337,138.
5 Derived from data provided by Lipper Inc.

2


Your Fund’s Performance at a Glance     
 
 
 
 
October 31, 2008–October 31, 2009         
      Distributions Per Share 
  Starting  Ending  Income  Capital 
  Share Price  Share Price  Dividends  Gains 
European Stock Index Fund         
Investor Shares  $21.99  $25.77  $1.497  $0.000 
Admiral Shares  51.71  60.51  3.616  0.000 
Signal Shares  20.01  23.42  1.397  0.000 
Institutional Shares  22.04  25.80  1.553  0.000 
ETF Shares  41.37  48.41  2.901  0.000 
Pacific Stock Index Fund         
Investor Shares  $7.94  $9.61  $0.140  $0.000 
Admiral Shares  52.04  62.95  1.007  0.000 
Signal Shares  18.08  21.87  0.349  0.000 
Institutional Shares  7.96  9.63  0.158  0.000 
ETF Shares  42.10  50.92  0.823  0.000 
Emerging Markets Stock Index Fund         
Investor Shares  $15.66  $23.90  $0.700  $0.000 
Admiral Shares  20.63  31.45  0.969  0.000 
Signal Shares  19.85  30.26  0.938  0.000 
Institutional Shares  15.71  23.94  0.754  0.000 
ETF Shares  24.83  37.84  1.178  0.000 

3

President’s Letter

Dear Shareholder,

As the world emerged from the worst global financial crisis since the 1930s, international stocks outpaced U.S. equities for the 2009 fiscal year. Governments’ fiscal policy and stimulus programs played key roles in the recovery. The recession receded in several major European countries, while the developing world’s economies, which had avoided much of the financial crisis fallout, continued to expand.

For the fiscal year ended October 31, 2009, the Vanguard International Stock Index Funds rallied strongly. The funds include three separate index funds: European, Pacific, and Emerging Markets. Vanguard Developed Markets Index Fund and its institutional counterpart, which previously were included in this report and invest in both European and Pacific markets, now are covered in a separate report.

Most international bourses participated in the rally, with emerging markets leading the charge. Vanguard Emerging Markets Stock Index Fund climbed about 60%. Although not as dramatic, the results of the European and Pacific developed markets were also notable. Vanguard European Stock Index Fund rose about 26%, and Vanguard Pacific Stock Index Fund returned about 23%. Also during the period, the U.S. dollar depreciated 13% against the euro and 9% against the yen, an advantage for our funds’ U.S.-based investors in European and Pacific markets, respectively.

4


All three funds succeeded in capturing the returns of their respective target indexes. However, because of temporary price differences arising from fair-value pricing policies (please see the text box on page 9), the funds’ returns appear to have diverged from those of their benchmarks, which are not adjusted for fair value.

If you own one or more of the funds in a taxable account, you may wish to review the details of the funds’ after-tax returns on page 94.

A vicious bear market quickly turned bullish
A year ago, the global financial system stood on the brink of collapse as the expanding U.S. credit crisis precipitated the deepest worldwide recession since World War II. Since then, markets have pulled back from the depths and, in fact, have rallied impressively. Although U.S. unemployment has risen to double digits and signs of a robust recovery are hard to find, the global economy has begun to revive. For the first time in more than a year, U.S. gross domestic product registered growth, as reported by the Commerce Department for the third quarter of calendar 2009.

U.S. stocks recorded positive returns for the fiscal year ended October 31 as the market’s losses during the first four months of the period—marking the final plunge of a historic bear market—were erased by a remarkable rally beginning in March. Global stocks did even better, thanks to some renewed strength in

Market Barometer       
    Average Annual Total Returns 
    Periods Ended October 31, 2009 
  One Year  Three Years  Five Years 
Stocks       
MSCI All Country World Index ex USA (International)  34.79%  –2.49%  7.58% 
Russell 1000 Index (Large-caps)  11.20  –6.84  0.71 
Russell 2000 Index (Small-caps)  6.46  –8.51  0.59 
Dow Jones U.S. Total Stock Market Index  11.34  –6.55  1.06 
 
Bonds       
Barclays Capital U.S. Aggregate Bond Index       
(Broad taxable market)  13.79%  6.35%  5.05% 
Barclays Capital Municipal Bond Index  13.60  4.17  4.15 
Citigroup 3-Month Treasury Bill Index  0.28  2.50  2.94 
 
CPI       
Consumer Price Index  –0.18%  2.32%  2.52% 

5


developed markets and a powerful upswing in emerging markets that actually had some prognosticators worrying about a new asset bubble. Reminders of the markets’ travails are nevertheless apparent in the index returns for the past three years, where negative figures are the rule. Even the five-year returns for U.S. stocks as of October 31 are barely positive, further evidence of the long-term damage done by the collapse of the real estate bubble.

The bond market experienced an equally dramatic turnaround
The stock market’s rapid fall and recovery were matched by an equally dramatic turnaround in the bond market. At the

Expense Ratios1   
Your Fund Compared With Its Peer Group   
  Expense 
  Ratio 
European Stock Index Fund   
Investor Shares  0.29% 
Admiral Shares  0.18 
Signal Shares  0.18 
Institutional Shares  0.13 
ETF Shares  0.18 
European Region Funds Average  1.34 
 
Pacific Stock Index Fund   
Investor Shares  0.29% 
Admiral Shares  0.18 
Signal Shares  0.18 
Institutional Shares  0.13 
ETF Shares  0.18 
Japan/Pacific Region Funds Average  1.57 
 
Emerging Markets Stock Index Fund   
Investor Shares  0.39% 
Admiral Shares  0.27 
Signal Shares  0.27 
Institutional Shares  0.20 
ETF Shares  0.27 
Emerging Markets Funds Average  1.73 

1 The fund expense ratios shown are from the prospectuses dated February 27, 2009, and represent estimated costs for the current fiscal year based on each fund’s net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the European Stock Index Fund’s expense ratios were 0.27% for Investor Shares, 0.16% for Admiral Shares, 0.16% for Signal Shares, 0.12% for Institutional Shares, and 0.16% for ETF Shares. The Pacific Stock Index Fund’s expense ratios were 0.27% for Investor Shares, 0.16% for Admiral Shares, 0.16% for Signal Shares, 0.12% for Institutional Shares, and 0.16% for ETF Shares. The Emerging Markets Stock Index Fund’s expense ratios were 0.40% for Investor Shares, 0.27% for Admiral Shares, 0.27% for Signal Shares, 0.23% for Institutional Shares, and 0.27% for ETF Shares.

The peer-group expense ratios are derived from data provided by Lipper Inc. and capture information through year-end 2008.

6


end of 2008, as the credit markets virtually shut down, risk-averse investors flocked to U.S. Treasury bonds. The effect was to widen the difference between the lower yields of Treasuries and the higher yields of corporate bonds to a margin not seen since the Great Depression.

Central banks around the world responded to the economic slowdown by lowering interest rates and implementing other aggressive stimulus programs. Meanwhile, governments boosted spending in hopes of reversing the recessionary tide. As fears of a worldwide depression eased, investors’ appetite for risk returned to more normal levels. The receding pessimism raised demand for corporate bonds, pushing up their prices and bringing down their yields. Over the past 12 months, both taxable and municipal bonds returned more than 13%.

However, the Fed’s easy-money campaign had a predictable effect on short-term savings vehicles such as money market funds, whose yields track prevailing short-term rates. In December 2008, the Fed reduced its target for the federal funds rate, a benchmark for the interest rates paid by money market instruments and other very short-term securities, to between 0% and 0.25%. The Fed has said it expects to maintain its target at this level “for an extended period.”

Total Returns   
Ten Years Ended October 31, 2009   
  Average 
  Annual Return 
European Stock Index Fund Investor Shares  2.83% 
MSCI Europe Index  2.80 
European Region Funds Average1  2.96 
Pacific Stock Index Fund Investor Shares  0.08% 
MSCI Pacific Index  0.42 
Japan/Pacific Region Funds Average1  –2.46 
Emerging Markets Stock Index Fund Investor Shares  11.14% 
Spliced Emerging Markets Index2  11.64 
Emerging Markets Funds Average1  10.64 

The figures shown represent past performance, which is not a guarantee of future results. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost.

1 Derived from data provided by Lipper Inc.
2 Select Emerging Markets Index through August 23, 2006; MSCI Emerging Markets Index thereafter.

7


Emerging markets pace strong global recovery
Emerging markets, the most volatile of international stocks, enjoyed the greatest gains during the fiscal period after sliding the most a year earlier.

The Emerging Markets Stock Index Fund returned about 60%, propelled by its holdings in China and Brazil, which represented, on average, approximately one-third of the fund’s assets. Stocks from China, the fund’s largest market, rose about 82%, while stocks from Brazil advanced about 92%. Brazil’s economic recovery was tied to commodities, where oil and iron ore drove returns.

China’s government stimulus and fiscal policy took hold with great speed and effect, compared with more developed parts of the world. Government spending was also an impetus in Brazil, where domestic demand was strong. Gains from India (about +77%), South Africa (about +62%), Taiwan (about +48%), and South Korea (about +56%) also sparked the fund.

The recovery in emerging markets was broad-based and encompassed all ten industry sectors. Financials, the fund’s most significant sector weighting, advanced nearly 82%. Banks, especially, contributed to the return, rebounding off their lows as the global economy showed signs of stabilization. The materials and energy sectors each contributed more than 10% to the fund’s return.

European markets shared in gains
European markets also produced significant returns for the fiscal year, although the increases lacked the breadth, depth, and speed of their emerging market counter- parts: The European Stock Index Fund returned about 26%.

In the United Kingdom, which has been slow to shake the global recession, stocks still advanced almost 24%. U.K. stocks, on average, accounted for more than 30% of the European Stock Index Fund’s country weighting during the period. France and Germany, which also account for hefty fund weightings, made strong contributions, as did Spain (returning nearly +56%) and Sweden (almost +70%).

All ten industry sectors in the fund had positive returns for the fiscal period. Financials, the largest sector, was a key driver, as banks, insurance companies, and investment firms all bounced back from the crisis. Industrials and materials each gained about 45%, reflecting demand in the improved economy.

Australia, Japan fuel improvement in Pacific

While the Pacific Stock Index Fund brought up the rear among the three geographic regions, its return of about 23% for the fiscal period was still a major improvement from the year earlier and an indication that a recovery is well underway.

8


A note on fair-value pricing 
An index fund’s return sometimes may appear to diverge from the
return of its benchmark index a bit more than would be expected. This
may be the result of a fair-value pricing adjustment. 
 
These adjustments address pricing discrepancies that may arise because
of time-zone differences among global stock markets. Foreign stocks
may trade on exchanges that close many hours before a fund’s closing
share price is calculated in the United States, generally at 4 p.m.,
Eastern time. In the hours between the foreign close and the U.S. close,
the value of these foreign securities may change—because of company-
specific announcements or market- wide developments, for example.
Such price changes are not immediately reflected in
international index values. 
 
Fair-value pricing takes such changes into account in calculating the fund’s
daily net asset value, thus ensuring that the NAV doesn’t include “stale”
prices. The result can be a temporary divergence between the return of
the fund and that of its benchmark index—a difference that usually
corrects itself when the foreign markets reopen. 

Australia, which is dwarfed by Japan in terms of the Pacific Stock Index Fund’s country weightings, still made the greatest contribution to return. Signaling the Australian economy’s solid footing, the Reserve Bank of Australia has already begun increasing its key interest rates. Australian financial and materials stocks rose more than 70% for the fiscal year. Japan, which accounted for about 70% of the value of developed markets in the Pacific, on average, during the period, also saw a strong stock market performance. Its recovery was bolstered by the consumer discretionary, industrials, and information technology sectors.

Most of the Pacific region’s ten industry sectors saw positive gains. The performance of financial stocks, the heaviest weighting in the Pacific Stock Index Fund, reflected the role of banks and investment firms in the economic recovery. Materials stocks rose about 52%, proof of the strong demand for commodities.

The funds’ long-term results align with their benchmarks

During a decade that featured extra-ordinary turmoil and two savage bear markets, Vanguard International Stock Index Funds met their objectives of tracking their respective benchmarks. The Pacific Stock Index Fund and the Emerging Markets Stock Index Fund also exceeded the average annual returns of their respective peer groups for the decade ended October 31, 2009. The

9


European Stock Index Fund came within a fraction of matching the average returns of its respective peer group.

While the investment environment has been volatile and the future is unpredictable, we’re confident that Vanguard Quantitative Equity Group’s expert and disciplined index fund management will help the funds continue to capture the returns of their benchmark indexes. Our funds’ extremely low costs also ensure that you keep more of the funds’ returns.

International stocks have place in diversified program
Investors dealt with two market extremes over the past fiscal year. Through the final months of 2008 and the first months of 2009, stock markets around the world slid as the global financial crisis intensified and credit markets remained gridlocked. In March, however, markets found a bottom and began to rise on positive economic news and investors’ newfound optimism.

Investors who maintain a long-term view realize that financial markets inevitably experience volatility from time to time, and that the market’s inherent risk is, paradoxically, a source of its potential rewards. Although such uncertainty can be hard to live with, it can be managed. To that end, Vanguard has long counseled investors to create a broadly-diversified investment program that considers their time horizon, risk tolerance, and long-term goals. Such a program may include U.S. stock funds and international funds as well as bond and money market funds.

International stocks––and economies––often behave differently than their U.S. counterparts. Diversification can add value so long as a portfolio’s asset classes do not march completely in sync; Vanguard’s research furthermore indicates that international equities can diversify your portfolio over the long term. As part of a well-balanced portfolio, Vanguard International Stock Index Funds offer exposure to foreign economic opportunities, potentially helping you meet your long-term investing goals.

Thank you for your confidence in Vanguard.

Sincerely,


F. William McNabb III
President and Chief Executive Officer
November 17, 2009

10


Results of Proxy Voting

At a special meeting of shareholders on July 2, 2009, fund shareholders approved the following two proposals:

Proposal 1—Elect trustees for each fund.*
The individuals listed in the table below were elected as trustees for each fund. All trustees with the exception of Messrs. McNabb and Volanakis (both of whom already served as directors of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.

European Stock Index Fund, Pacific Stock Index Fund, Emerging Markets Stock Index Fund

      Percentage 
Trustee  For  Withheld  For 
John J. Brennan  1,604,062,236  36,846,078  97.8% 
Charles D. Ellis  1,594,488,732  46,419,583  97.2% 
Emerson U. Fullwood  1,603,672,430  37,235,884  97.7% 
Rajiv L. Gupta  1,604,092,353  36,815,961  97.8% 
Amy Gutmann  1,605,214,829  35,693,485  97.8% 
JoAnn Heffernan Heisen  1,605,059,287  35,849,028  97.8% 
F. William McNabb III  1,605,657,176  35,251,138  97.9% 
André F. Perold  1,602,313,073  38,595,241  97.6% 
Alfred M. Rankin, Jr.  1,604,909,324  35,998,991  97.8% 
Peter F. Volanakis  1,607,261,150  33,647,165  97.9% 
* Results are for all funds within the same trust.       

Proposal 2—Update and standardize the funds’ fundamental policies regarding:
(a) Purchasing and selling real estate.
(b) Issuing senior securities.
(c) Borrowing money.
(d) Making loans.
(e) Purchasing and selling commodities.
(f) Concentrating investments in a particular industry or group of industries.
(g) Eliminating outdated fundamental investment policies not required by law.

The revised fundamental policies are clearly stated and simple, yet comprehensive, making oversight and compliance more efficient than under the former policies. The revised fundamental policies will allow the funds to respond more quickly to regulatory and market changes, while avoiding the costs and delays associated with successive shareholder meetings.

11


        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
European Stock Index Fund           
2a  449,587,070  6,694,799  19,907,448  27,765,178  89.2% 
2b  447,911,380  7,823,384  20,454,555  27,765,177  88.9% 
2c  444,968,986  7,208,152  24,012,179  27,765,178  88.3% 
2d  446,185,109  7,285,760  22,718,448  27,765,179  88.5% 
2e  446,201,350  7,143,870  22,844,095  27,765,180  88.5% 
2f  447,937,500  7,202,447  21,049,370  27,765,178  88.9% 
2g  459,786,579  6,983,326  9,419,408  27,765,182  91.2% 
 
Pacific Stock Index Fund           
2a  540,963,604  7,690,230  12,221,364  28,821,242  91.7% 
2b  538,425,086  8,992,002  13,458,112  28,821,241  91.3% 
2c  535,901,138  8,417,072  16,556,989  28,821,241  90.9% 
2d  533,579,704  8,646,478  18,649,016  28,821,242  90.5% 
2e  537,546,205  8,027,864  15,301,130  28,821,241  91.2% 
2f  536,227,575  8,254,408  16,393,220  28,821,237  90.9% 
2g  540,280,493  7,996,449  12,598,259  28,821,239  91.6% 
 
Emerging Markets Stock Index Fund         
2a  388,719,118  7,531,404  6,900,423  48,533,077  86.1% 
2b  387,193,597  8,261,534  7,695,811  48,533,079  85.7% 
2c  385,338,336  8,173,616  9,638,997  48,533,073  85.3% 
2d  385,609,852  8,235,418  9,305,677  48,533,075  85.4% 
2e  386,760,940  7,817,547  8,572,457  48,533,077  85.6% 
2f  387,408,468  7,780,086  7,962,391  48,533,076  85.8% 
2g  389,626,967  7,799,374  5,724,603  48,533,078  86.3% 

Fund shareholders did not approve this proposal:

Proposal 3—Institute procedures to prevent holding investments in companies that, in the judgment of the board, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights.

The trustees recommended a vote against the proposal because it called for procedures that duplicate existing practices and procedures of the Vanguard funds.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
European Stock Index Fund  48,802,729  10,916,197  416,469,651  27,765,918  9.7% 
Pacific Stock Index Fund  51,017,822  13,812,709  496,044,659  28,821,251  8.7% 
Emerging Markets           
Stock Index Fund  32,187,780  16,796,684  354,081,177  48,618,380  7.1% 

12


European Stock Index Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics     
    Target  Broad 
  Fund  Index1  Index2 
Number of Stocks  483  467  1,806 
Turnover Rate  18%  —  — 
Expense Ratio3    —  — 
Investor Shares  0.29%     
Admiral Shares  0.18%     
Signal Shares  0.18%     
Institutional Shares  0.13%     
ETF Shares  0.18%     
Short-Term Reserves  0.1%  —  — 

Sector Diversification (% of equity exposure) 
    Target  Broad 
  Fund  Index1  Index2 
Consumer Discretionary  7.3%  7.3%  8.3% 
Consumer Staples  12.1  12.1  8.6 
Energy  11.4  11.4  11.2 
Financials  25.0  25.0  26.6 
Health Care  10.1  10.1  6.4 
Industrials  9.3  9.3  9.8 
Information Technology  2.8  2.8  6.5 
Materials  8.5  8.5  11.2 
Telecommunication       
Services  7.2  7.2  6.4 
Utilities  6.3  6.3  5.0 

Volatility Measures4   
  Fund Versus  Fund Versus 
  Target Index1  Broad Index2 
R-Squared  0.98  0.96 
Beta  1.02  1.01 

Ten Largest Holdings5 (% of total net assets) 
 
HSBC Holdings PLC  diversified banks  2.9% 
Royal Dutch Shell PLC  integrated oil   
  and gas  2.8 
BP PLC  integrated oil   
  and gas  2.7 
Nestle SA  packaged foods   
  and meats  2.6 
Banco Santander SA  diversified banks  2.0 
Total SA  integrated oil   
  and gas  1.9 
Telefonica SA  integrated   
  telecommunication   
  services  1.8 
Vodafone Group PLC  wireless   
  telecommunication   
  services  1.8 
Roche Holdings AG  pharmaceuticals  1.7 
Novartis AG  pharmaceuticals  1.7 
Top Ten    21.9% 

Market Diversification (% of equity exposure) 
    Target 
  Fund  Index1 
United Kingdom  32.0%  31.9% 
France  16.1  16.1 
Germany  12.0  11.9 
Switzerland  11.7  11.8 
Spain  7.1  7.1 
Italy  5.4  5.4 
Sweden  3.9  4.0 
Netherlands  3.8  3.8 
Finland  1.7  1.7 
Belgium  1.5  1.5 
Denmark  1.3  1.3 
Norway  1.1  1.1 
Greece  1.0  1.0 
Other European Markets  1.4  1.4 

1 MSCI Europe Index.
2 MSCI All Country World Index ex USA.
3 The expense ratios shown are from the prospectuses dated February 27, 2009, and represent estimated costs for the current fiscal year based on the fund’s net assets as of the prospectus date. For the fiscal year ended October 31,2009, the expense ratios were 0.27% for Investor Shares, 0.16% for Admiral Shares, 0.16% for Signal Shares, 0.12% for Institutional Shares, and 0.16% for ETF Shares.
4 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
5 The holdings listed exclude any temporary cash investments and equity index products.

13


European Stock Index Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000


    Average Annual Total Returns  Final Value 
    Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
European Stock Index Fund Investor Shares1  26.25%  5.31%  2.83%  $13,221 
MSCI All Country World Index ex USA  34.79  7.58  3.95  14,733 
MSCI Europe Index  27.48  5.36  2.80  13,181 
European Region Funds Average2  29.06  5.02  2.96  13,391 

        Final Value of 
      Since  a $100,000 
  One Year  Five Years  Inception3  Investment 
European Stock Index Fund Admiral Shares1  26.33%  5.41%  5.56%  $155,938 
MSCI All Country World Index ex USA  34.79  7.58  7.53  181,578 
MSCI Europe Index  27.48  5.36  5.48  155,046 

      Final Value of 
    Since  a $10,000,000 
  One Year  Inception3  Investment 
European Stock Index Fund Signal Shares1  26.34%  –4.09%  $8,797,173 
MSCI All Country World Index ex USA  34.79  –1.44  9,565,146 
MSCI Europe Index  27.48  –4.08  8,799,042 

1 Total returns do not reflect the 0.50% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares purchased or after June 27, 2003, and held for less than two months; or, for the Investor Shares, the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Derived from data provided by Lipper Inc.
3 Performance for the fund and its comparative standards is calculated since the following inception dates: August 13, 2001, for the Admiral
Shares and October 6, 2006, for the Signal Shares.

14


European Stock Index Fund         
 
 
 
 
        Final Value of 
      Since  a $5,000,000 
  One Year  Five Years  Inception1  Investment 
European Stock Index Fund Institutional Shares2  26.45%  5.47%  2.37%  $6,241,998 
MSCI All Country World Index ex USA  34.79  7.58  3.66  7,025,394 
MSCI Europe Index  27.48  5.36  2.26  6,179,231 
 
        Final Value of 
      Since  a $10,000 
  One Year    Inception1  Investment 
European Stock Index Fund ETF Shares         
Net Asset Value3  26.33%    2.37%  $11,153 
MSCI All Country World Index ex USA  34.79    4.65  12,357 
MSCI Europe Index  27.48    2.31  11,125 
 
 
Cumulative Returns: ETF Shares, March 4, 2005–October 31, 2009     
        Since 
      One Year  Inception1 
European Stock Index Fund ETF Shares Market Price      24.83%  11.31% 
European Stock Index Fund ETF Shares Net Asset Value    26.33  11.53 
MSCI Europe Index      27.48  11.25 

1 Performance for the fund and its comparative standards is calculated since the following inception dates: May 15, 2000, for the Institutional Shares and March 4, 2005, for the ETF Shares.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two months.
3 For more information about how the ETF Shares’ market prices have compared with their net asset value, visit www.vanguard.com, select your ETF, and then select the Performance tab. The Premium/Discount table there shows the percentages of days on which the ETF Shares’ market price was above or below the NAV.

15


European Stock Index Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009
This table presents average annual total returns through the latest calendar quarter—rather than through the end
of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

  Inception Date  One Year  Five Years  Ten Years 
European Stock Index Fund         
Investor Shares1  6/18/1990  0.91%  6.51%  3.42% 
Admiral Shares1  8/13/2001  1.03  6.62  5.902 
Signal Shares1  10/6/2006  1.02  –3.512  — 
Institutional Shares1  5/15/2000  1.12  6.67  2.632 
ETF Shares  3/4/2005       
Market Price    –0.08  2.872  — 
Net Asset Value    1.04  2.902  — 

1 Total returns do not reflect the 0.50% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two months; or, for the Investor Shares, the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Returns since inception.
Note: See Financial Highlights tables for dividend and capital gains information.

16


European Stock Index Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

      Market 
      Value• 
    Shares  ($000) 
Common Stocks (98.7%)1     
Austria (0.5%)     
^  Erste Group Bank AG  293,984  11,819 
  OMV AG  250,980  10,342 
  Telekom Austria AG  542,073  8,880 
  Voestalpine AG  198,485  6,787 
  Verbund–Oesterreichische     
  Elektrizitaetswirtschafts     
  AG Class A  131,244  5,892 
^  Raiffeisen International     
  Bank Holding AG  91,348  5,357 
  Vienna Insurance Group  63,811  3,595 
      52,672 
Belgium (1.5%)     
  Anheuser-Busch InBev NV  1,214,927  57,041 
*  Fortis  3,741,094  16,175 
  Groupe Bruxelles     
  Lambert SA  136,404  12,022 
*  KBC Groep NV  270,316  11,571 
  Delhaize Group SA  169,324  11,502 
  Solvay SA Class A  100,805  9,899 
  Belgacom SA  255,659  9,575 
^,*  Dexia SA  898,673  7,470 
^  UCB SA  171,442  7,319 
  Colruyt SA  25,429  6,051 
  Umicore  193,924  5,890 
  Mobistar SA  50,221  3,450 
  Nationale A Portefeuille  55,508  2,901 
      160,866 
Denmark (1.3%)     
  Novo Nordisk A/S Class B  754,588  46,880 
*  Vestas Wind Systems A/S  343,586  24,098 
*  Danske Bank A/S  764,739  17,563 
  Carlsberg A/S Class B  181,438  12,720 
  A P Moller - Maersk A/S     
  Class B  1,861  12,707 
  Novozymes A/S  77,965  7,132 
  A P Moller–Maersk A/S  910  6,051 
*  DSV A/S  349,453  5,432 
*  Topdanmark A/S  24,179  3,486 

      Market 
      Value• 
    Shares  ($000) 
  Coloplast A/S Class B  38,634  3,154 
  TrygVesta A/S  39,243  2,828 
^,*  William Demant Holding  39,131  2,782 
  H Lundbeck A/S  97,327  1,885 
      146,718 
Finland (1.7%)     
  Nokia Oyj  6,304,831  79,638 
  Fortum Oyj  751,563  17,789 
  Sampo Oyj  708,275  16,953 
  UPM-Kymmene Oyj  880,485  10,567 
  Kone Oyj Class B  259,530  9,690 
  Stora Enso Oyj  977,820  7,401 
  Metso Oyj  215,974  6,031 
  Wartsila Oyj  142,056  5,142 
  Elisa Oyj  229,254  4,440 
^  Neste Oil Oyj  215,268  3,807 
  Nokian Renkaat Oyj  175,010  3,734 
  Kesko Oyj Class B  108,888  3,624 
  Outokumpu Oyj  199,831  3,304 
  Rautaruukki Oyj  138,843  2,830 
  Orion Oyj Class B  148,904  2,830 
  Pohjola Bank PLC  227,417  2,527 
^  Sanoma Oyj  134,457  2,482 
      182,789 
France (15.9%)     
  Total SA  3,593,950  215,063 
  Sanofi-Aventis SA  1,772,391  129,920 
^  BNP Paribas  1,549,099  116,700 
  GDF Suez  2,032,496  84,973 
  France Telecom SA  3,080,536  76,332 
  AXA SA  2,637,780  65,602 
^  Societe Generale  955,134  63,440 
  Groupe Danone SA  927,516  55,720 
  Vivendi  1,973,995  54,763 
  ArcelorMittal  1,448,273  49,013 
  Carrefour SA  1,068,815  45,876 
  Air Liquide SA  420,782  45,318 
  LVMH Moet Hennessy     
  Louis Vuitton SA  412,405  42,705 
  L’Oreal SA  403,044  41,210 

17


European Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Schneider Electric SA  393,253  40,894 
  Vinci SA  710,982  37,105 
  Unibail-Rodamco SE  137,118  30,364 
  Cie de Saint-Gobain  619,833  30,204 
  Credit Agricole SA  1,497,122  28,678 
  Lafarge SA  337,684  27,410 
  Pernod-Ricard SA  326,883  27,232 
  Alstom SA  340,470  23,591 
  EDF SA  398,463  22,209 
  Veolia Environnement  634,824  20,739 
  Cie Generale d’Optique     
  Essilor International SA  337,223  18,881 
  Compagnie Generale     
  des Etablissements     
  Michelin Class B  244,255  18,094 
  Bouygues SA  375,847  17,699 
*  Alcatel-Lucent  3,912,683  14,653 
  Vallourec SA  90,995  14,327 
*  Renault SA  311,822  13,954 
  PPR  127,508  13,896 
  European Aeronautic     
  Defence and     
  Space Co. NV  688,468  12,892 
^  Hermes International  88,880  12,360 
  Accor SA  241,645  11,572 
  Cap Gemini SA  246,794  11,433 
  Technip SA  176,782  11,091 
  Christian Dior SA  106,556  10,627 
  SES SA  479,836  10,397 
  Suez Environnement Co.  454,321  10,096 
  STMicroelectronics NV  1,144,740  9,187 
  Sodexo  160,152  9,146 
  Lagardere SCA  197,502  8,923 
*  Peugeot SA  254,160  8,279 
*  Natixis  1,473,762  8,279 
  Publicis Groupe  200,650  7,624 
  Casino Guichard     
  Perrachon SA  92,826  7,376 
  Thales SA  151,404  7,336 
  SCOR SE  282,546  7,191 
  Klepierre  153,049  6,344 
  Dassault Systemes SA  108,667  6,271 
  CNP Assurances  62,997  6,088 
  Eutelsat Communications  166,028  5,277 
  Safran SA  315,873  5,096 
*  Cie Generale de     
  Geophysique-Veritas  245,161  4,855 
  Legrand SA  173,381  4,703 
  Neopost SA  52,764  4,618 
  Bureau Veritas SA  81,373  4,481 
  Fonciere Des Regions  38,780  4,274 
  Aeroports de Paris  48,939  3,715 
^  Eiffage SA  68,098  3,710 
*  Atos Origin SA  77,465  3,627 
  ICADE  33,447  3,521 
*  Air France-KLM  224,251  3,438 

      Market 
      Value• 
    Shares  ($000) 
  Gecina SA  31,492  3,350 
  Imerys SA  56,457  3,095 
  Societe Television Francaise   1195,868  3,075 
  Societe BIC SA  43,936  3,049 
^  Iliad SA  26,802  2,902 
  Eurazeo  45,615  2,869 
  Societe Des Autoroutes     
  Paris-Rhin-Rhone  37,490  2,816 
^  Eramet  8,941  2,784 
  PagesJaunes Groupe  215,947  2,646 
  M6-Metropole Television  106,342  2,561 
  BioMerieux  22,413  2,488 
*  JC Decaux SA  110,496  2,234 
  Ipsen SA  41,635  2,121 
      1,756,382 
Germany (11.8%)     
  Siemens AG  1,385,978  125,246 
  E.ON AG  3,202,344  122,729 
  Bayer AG  1,286,134  89,232 
  Allianz SE  763,088  87,468 
  BASF SE  1,553,779  83,174 
  Deutsche Bank AG  996,344  72,386 
  Daimler AG  1,349,920  65,570 
  SAP AG  1,444,751  65,440 
  Deutsche Telekom AG  4,773,422  65,231 
  RWE AG  705,021  61,839 
  Muenchener     
  Rueckversicherungs AG  348,077  55,070 
  Bayerische Motoren     
  Werke AG  558,558  27,324 
  Linde AG  256,540  26,926 
  Deutsche Boerse AG  328,530  26,608 
^  Volkswagen AG  149,727  24,346 
  Deutsche Post AG  1,427,702  24,153 
  ThyssenKrupp AG  563,668  18,157 
  Volkswagen AG Pfd.  177,597  17,694 
  Fresenius Medical Care     
  AG & Co. KGaA  323,320  15,691 
  Adidas AG  327,062  15,143 
  MAN SE  177,733  14,636 
  HeidelbergCement AG  236,392  14,140 
  Henkel AG & Co.     
  KGaA Pfd.  300,524  13,687 
  K&S AG  248,612  13,571 
*  Commerzbank AG  1,186,582  12,359 
  Porsche Automobil     
  Holding SE  147,323  11,269 
  Metro AG  192,267  10,672 
  Merck KGaA  108,597  10,209 
  Beiersdorf AG  147,466  9,084 
  Henkel AG & Co. KGaA  218,687  8,450 
*  Infineon Technologies AG  1,788,003  8,051 
  Daimler AG  166,896  8,049 
*  QIAGEN NV  384,180  7,967 
  Fresenius SE Pfd.  136,915  7,954 

18


European Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Deutsche Lufthansa AG  385,290  5,949 
  Salzgitter AG  66,145  5,946 
  Hochtief AG  71,577  5,402 
  RWE AG  64,321  5,047 
  GEA Group AG  257,692  4,863 
*  Hannover     
  Rueckversicherung AG  102,776  4,633 
*  Deutsche Postbank AG  147,242  4,560 
  Wacker Chemie AG  25,765  3,702 
  Celesio AG  145,602  3,612 
^  Solarworld AG  138,509  2,998 
  Bayerische Motoren     
  Werke AG Pfd.  88,135  2,897 
  Fraport AG Frankfurt Airport     
  Services Worldwide  61,229  2,883 
*  United Internet AG  209,668  2,730 
  Puma AG Rudolf     
  Dassler Sport  8,786  2,692 
  Fresenius SE  46,652  2,324 
  Suedzucker AG  109,658  2,267 
^,*  TUI AG  236,283  1,638 
  Hamburger Hafen     
  und Logistik AG  40,721  1,587 
      1,305,255 
Greece (1.0%)     
*  National Bank of Greece SA  827,335  30,248 
*  Alpha Bank AE  595,080  11,473 
  OPAP SA  369,611  9,408 
*  Piraeus Bank SA  507,184  8,744 
*  EFG Eurobank Ergasias SA  539,272  8,542 
  Coca Cola Hellenic     
  Bottling Co. SA  306,492  7,988 
*  National Bank of     
  Greece SA ADR  1,024,141  7,446 
  Bank of Cyprus     
  Public Co. Ltd.  917,432  7,258 
  Marfin Investment     
  Group SA  1,045,511  4,166 
  Hellenic     
  Telecommunications     
  Organization SA  234,997  3,953 
*  Public Power Corp. SA  191,003  3,896 
  Hellenic     
  Telecommunications     
  Organization SA ADR  408,133  3,461 
  Titan Cement Co. SA  94,621  3,270 
  Hellenic Petroleum SA  150,968  1,830 
      111,683 
Ireland (0.4%)     
  CRH PLC  1,155,542  28,335 
  Kerry Group PLC     
  Class A  235,937  6,993 
*  Elan Corp. PLC  845,582  4,431 
*  Ryanair Holdings     
  PLC ADR  94,531  2,577 

      Market 
      Value• 
    Shares  ($000) 
^,*  Anglo Irish Bank     
  Corp. Ltd.  2,503,596  800 
*  Ryanair Holdings PLC  133,763  583 
  CRH PLC  7,832  191 
      43,910 
Italy (5.3%)     
  ENI SPA  4,385,511  108,615 
*  UniCredit SPA  23,980,541  80,340 
  Enel SPA  11,075,077  65,900 
*  Intesa Sanpaolo SPA  12,994,638  54,688 
  Assicurazioni     
  Generali SPA  1,966,960  49,526 
  Telecom Italia SPA  16,919,828  26,879 
*  Fiat SPA  1,287,374  19,166 
  Tenaris SA  796,390  14,173 
  Unione di Banche     
  Italiane SCPA  972,482  13,891 
  Saipem SPA  444,266  13,108 
  Snam Rete Gas SPA  2,524,641  12,245 
  Finmeccanica SPA  682,725  11,456 
  Telecom Italia SPA RNC  10,109,033  11,125 
  Atlantia SPA  436,146  10,313 
  Mediobanca SPA  807,470  10,300 
*  Banco Popolare SC  1,074,727  9,336 
  Terna Rete Elettrica     
  Nazionale SPA  2,194,929  8,702 
  Parmalat SPA  2,871,526  7,958 
  Mediaset SPA  1,195,923  7,766 
  Banca Monte dei     
  Paschi di Siena SPA  3,666,212  6,966 
  Intesa Sanpaolo SPA  1,577,165  5,143 
  Banca Popolare di     
  Milano Scarl  672,695  5,005 
*  Luxottica Group SPA  193,239  4,704 
  A2A SPA  1,850,150  3,411 
^  Banca Carige SPA  1,086,484  3,063 
  Prysmian SPA  167,981  2,954 
*  Pirelli & C SPA  4,372,634  2,457 
^  Mediolanum SPA  371,738  2,359 
  Exor SPA  111,141  2,190 
*  Autogrill SPA  170,560  1,918 
  Fondiaria-Sai SPA  102,689  1,872 
*  Unipol Gruppo     
  Finanziario SPA  1,220,186  1,769 
^  Lottomatica SPA  77,703  1,656 
^  Italcementi SPA  114,045  1,642 
  Saras SPA  470,450  1,527 
  ACEA SPA  122,932  1,438 
      585,561 
Netherlands (3.7%)     
  Unilever NV  2,741,998  84,489 
  Koninklijke KPN NV  2,889,608  52,414 
*  ING Groep NV  3,304,942  43,009 
  Koninklijke Philips     
  Electronics NV  1,639,187  41,178 
  Koninklijke Ahold NV  2,011,336  25,335 

19


European Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Akzo Nobel NV  390,951  23,083 
  ASML Holding NV  709,133  19,124 
*  Aegon NV  2,635,681  18,733 
  Heineken NV  411,615  18,195 
  TNT NV  622,414  16,506 
  Reed Elsevier NV  1,214,536  14,154 
  Koninklijke DSM NV  262,039  11,481 
  Wolters Kluwer NV  469,555  10,468 
  Heineken Holding NV  186,504  7,256 
*  Randstad Holding NV  170,283  6,461 
  Fugro NV  109,132  6,079 
  Corio NV  87,806  5,954 
  SBM Offshore NV  254,161  4,867 
  Koninklijke Boskalis     
  Westminster NV  92,056  3,231 
  ASML Holding NV  17,494  471 
*  Aegon NV  1,765  12 
      412,500 
Norway (1.1%)     
  StatoilHydro ASA  1,892,078  44,585 
*  Telenor ASA  1,417,638  18,279 
^,*  DnB NOR ASA  1,237,852  14,180 
  Orkla ASA  1,300,893  12,026 
  Yara International ASA  318,367  10,524 
*  Seadrill Ltd.  476,687  9,899 
*  Norsk Hydro ASA  1,166,536  7,646 
^,*  Renewable     
  Energy Corp. AS  546,754  3,257 
      120,396 
Portugal (0.5%)     
  EDP–Energias     
  de Portugal SA  3,099,313  13,707 
  Portugal Telecom     
  SGPS SA  990,006  11,316 
  Banco Espirito Santo SA  886,931  6,546 
  Banco Comercial     
  Portugues SA  3,996,934  5,698 
  Galp Energia SGPS SA     
  Class B  256,384  4,318 
*  EDP Renovaveis SA  362,822  3,616 
  Jeronimo Martins     
  SGPS SA  369,400  3,291 
^  Cimpor Cimentos     
  de Portugal SGPS SA  397,744  3,100 
  Brisa Auto-Estradas     
  de Portugal SA  296,778  2,932 
      54,524 
Spain (7.0%)     
  Banco Santander SA  13,444,108  216,346 
  Telefonica SA  6,996,106  195,377 
  Banco Bilbao Vizcaya     
  Argentaria SA  5,998,074  107,216 
  Iberdrola SA  6,196,772  56,134 
  Repsol YPF SA  1,233,477  32,837 
  Inditex SA  366,793  21,530 

      Market 
      Value• 
    Shares  ($000) 
^  Banco Popular Espanol SA  1,464,765  13,048 
^  ACS Actividades de     
  Construccion y     
  Servicios SA  243,224  11,679 
^  Banco de Sabadell SA  1,527,845  10,314 
  Abertis Infraestructuras SA  474,330  10,086 
  Red Electrica Corp. SA  183,979  9,502 
  Gas Natural SDG SA  373,900  7,512 
  Criteria Caixacorp SA  1,430,635  6,974 
  Iberdrola Renovables SA  1,423,669  6,328 
  Enagas  301,973  6,211 
  Gamesa Corp.     
  Tecnologica SA  310,257  5,669 
  Acciona SA  43,177  5,260 
  Mapfre SA  1,183,040  5,070 
  Banco Santander SA ADR  314,353  5,048 
^  Bankinter SA  472,595  4,981 
^  Acerinox SA  237,968  4,732 
  Zardoya Otis SA  219,462  4,405 
^  Grupo Ferrovial SA  94,381  3,910 
  Indra Sistemas SA  166,162  3,908 
  Telefonica SA ADR  44,539  3,738 
^  Cintra Concesiones de     
  Infraestructuras de     
  Transporte SA  333,918  3,436 
  Grifols SA  210,632  3,403 
^  Banco de Valencia SA  351,328  2,977 
^  Fomento de Construcciones     
  y Contratas SA  63,014  2,563 
*  Iberia Lineas Aereas     
  de Espana  829,002  2,286 
^  Sacyr Vallehermoso SA  150,890  2,283 
^  Gestevision Telecinco SA  162,721  1,682 
      776,445 
Sweden (3.9%)     
  Nordea Bank AB  5,446,103  58,455 
  Telefonaktiebolaget LM     
  Ericsson Class B  5,019,839  52,446 
  Hennes & Mauritz AB     
  Class B  861,236  48,920 
  TeliaSonera AB  3,769,584  24,984 
  Svenska Handelsbanken     
  AB Class A  823,036  21,269 
  Sandvik AB  1,698,544  18,763 
  Volvo AB Class B  1,836,061  17,388 
*  Skandinaviska Enskilda     
  Banken AB Class A  2,556,584  15,486 
  Atlas Copco AB Class A  1,132,138  15,181 
  Investor AB Class B  771,597  13,652 
  Svenska Cellulosa AB     
  Class B  954,565  13,117 
  SKF AB  659,909  10,450 
  Skanska AB Class B  673,804  9,888 
*  Electrolux AB Class B  395,250  9,474 
  Assa Abloy AB Class B  531,676  9,291 

20


European Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Swedish Match AB  426,849  8,760 
*  Millicom International     
  Cellular SA  126,641  8,132 
  Atlas Copco AB Class B  665,204  7,926 
  Tele2 AB  520,502  7,587 
*  Swedbank AB Class A  852,702  7,346 
  Alfa Laval AB  584,378  7,137 
  Scania AB Class B  542,050  6,954 
  Volvo AB Class A  725,127  6,697 
  Getinge AB  340,623  6,347 
  Securitas AB Class B  525,787  4,906 
  SSAB AB Class A  308,918  4,709 
*  Husqvarna AB  673,863  4,243 
*  Lundin Petroleum AB  362,866  3,073 
  Holmen AB  86,960  2,347 
  SSAB AB Class B  138,792  1,941 
      426,869 
Switzerland (11.6%)     
  Nestle SA  6,126,666  284,900 
  Roche Holdings AG  1,183,026  189,477 
  Novartis AG  3,562,225  185,500 
  Credit Suisse Group AG  1,895,003  101,301 
*  UBS AG  5,938,697  99,026 
  ABB Ltd.  3,714,298  69,091 
  Zurich Financial     
  Services AG  247,683  56,718 
  Syngenta AG  163,196  38,642 
  Holcim Ltd.  413,365  26,308 
  Compagnie Financiere     
  Richemont SA  876,299  24,531 
  Swiss Reinsurance Co. Ltd.  580,449  23,636 
  Swisscom AG  40,536  14,630 
  Julius Baer Group Ltd.  353,174  13,295 
  Swatch Group AG (Bearer)  51,858  12,109 
  Synthes Inc.  99,905  11,852 
  Geberit AG  68,898  11,398 
  SGS SA  7,968  10,644 
  Givaudan SA  12,879  9,561 
*  Actelion Ltd.  170,702  9,410 
  Adecco SA  205,762  9,194 
  Kuehne & Nagel     
  International AG  91,535  8,293 
  Sonova Holding AG  78,314  8,060 
  Baloise Holding AG  84,531  7,238 
  Swiss Life Holding AG  50,740  6,078 
  Nobel Biocare Holding AG  212,431  6,027 
  Lonza Group AG  77,422  6,020 
  Schindler Holding AG  81,555  5,575 
*  Logitech International SA  309,968  5,291 
  Lindt & Spruengli AG  188  4,773 
  GAM Holding Ltd.  357,347  4,360 
  Pargesa Holding SA  44,448  3,558 
  Swatch Group AG     
  (Registered)  71,585  3,210 
  Straumann Holding AG  13,020  3,143 
  Lindt & Spruengli AG  1,447  3,047 

      Market 
      Value• 
    Shares  ($000) 
*  Aryzta AG  76,814  3,015 
  Schindler Holding AG  35,889  2,487 
*  Aryzta AG (Ireland Shares)  59,634  2,308 
  BKW FMB Energie AG  21,760  1,790 
*  UBS AG  51,025  846 
      1,286,342 
United Kingdom (31.5%)     
  HSBC Holdings PLC  29,155,890  322,176 
  BP PLC  29,789,185  279,133 
  Vodafone Group PLC  83,130,575  183,206 
  GlaxoSmithKline PLC  8,734,439  179,167 
  Royal Dutch Shell PLC     
  Class B  4,538,062  130,640 
  Royal Dutch Shell PLC     
  Class A  4,328,822  128,344 
  AstraZeneca PLC  2,436,414  109,375 
  British American     
  Tobacco PLC  3,361,173  107,107 
  Rio Tinto PLC  2,308,217  102,046 
  BHP Billiton PLC  3,716,368  100,137 
  BG Group PLC  5,657,386  97,382 
*  Barclays PLC  18,578,340  97,371 
  Tesco PLC  13,298,932  88,673 
  Standard Chartered PLC  3,382,137  82,971 
*  Anglo American PLC  2,216,576  80,203 
  Diageo PLC  4,202,660  68,453 
  Unilever PLC  2,163,564  64,638 
  Reckitt Benckiser     
  Group PLC  1,021,098  50,723 
  Imperial Tobacco     
  Group PLC  1,711,508  50,437 
  Royal Dutch Shell PLC     
  Class A  1,641,308  48,457 
*  Xstrata PLC  3,215,156  46,310 
  SABMiller PLC  1,586,061  41,573 
  National Grid PLC  4,092,457  40,539 
^,*  Lloyds Banking     
  Group PLC  27,461,983  38,721 
  Prudential PLC  4,249,147  38,597 
  Centrica PLC  8,616,724  35,005 
  BAE Systems PLC  5,957,878  30,636 
  Cadbury PLC  2,295,678  29,023 
  Aviva PLC  4,605,794  28,801 
  BT Group PLC  13,002,069  27,863 
  Scottish & Southern     
  Energy PLC  1,550,528  27,367 
  Tullow Oil PLC  1,352,339  26,198 
  Rolls-Royce Group PLC  3,118,619  22,999 
  Compass Group PLC  3,107,360  19,707 
*  Royal Bank of     
  Scotland Group PLC  28,420,712  19,388 
  Pearson PLC  1,359,791  18,483 
  WPP PLC  1,921,729  17,222 
  British Sky Broadcasting     
  Group PLC  1,919,063  16,733 
  Shire PLC  943,358  16,684 

21


European Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  BP PLC ADR  293,298  16,607 
  WM Morrison     
  Supermarkets PLC  3,555,465  16,295 
  Experian PLC  1,734,236  15,848 
  Old Mutual PLC  8,945,910  15,527 
  Reed Elsevier PLC  2,040,268  15,447 
  Marks & Spencer     
  Group PLC  2,672,142  14,966 
  Man Group PLC  2,885,211  14,591 
  Kingfisher PLC  3,955,375  14,457 
  Land Securities     
  Group PLC  1,278,614  13,835 
  Standard Life PLC  3,738,319  13,326 
  Smith & Nephew PLC  1,494,406  13,210 
  Capita Group PLC  1,049,836  13,112 
  Legal & General     
  Group PLC  9,864,042  12,657 
  Vodafone Group PLC ADR  525,198  11,654 
  British Land Co. PLC  1,451,159  11,208 
  RSA Insurance Group PLC  5,607,535  11,112 
  J Sainsbury PLC  2,017,530  10,888 
  International Power PLC  2,576,965  10,699 
  Cable & Wireless PLC  4,265,991  10,122 
*  Cairn Energy PLC  232,023  10,007 
^  Randgold Resources Ltd.  150,646  9,931 
  Next PLC  336,723  9,879 
*  Wolseley PLC  475,251  9,613 
  Smiths Group PLC  654,921  9,559 
  G4S PLC  2,130,307  8,807 
  Carnival PLC  276,001  8,556 
  Antofagasta PLC  665,293  8,382 
  Johnson Matthey PLC  360,141  8,294 
  United Utilities Group PLC  1,143,803  8,246 
  Associated British     
  Foods PLC  595,624  8,066 
  Vedanta Resources PLC  235,544  8,060 
*  Autonomy Corp. PLC  363,000  7,981 
  Hammerson PLC  1,161,320  7,703 
  Sage Group PLC  2,200,708  7,685 
  AMEC PLC  564,392  7,433 
  Segro PLC  1,222,919  7,047 
  Home Retail Group PLC  1,477,806  7,034 
  3i Group PLC  1,625,609  6,997 
  Cobham PLC  1,922,893  6,910 
  Serco Group PLC  824,230  6,819 
  Rexam PLC  1,490,204  6,748 
  Burberry Group PLC  737,580  6,505 
  Kazakhmys PLC  356,875  6,351 
  Invensys PLC  1,367,500  6,321 
  Liberty International PLC  845,825  6,244 
*  Lonmin PLC  260,819  6,239 
  Severn Trent PLC  398,993  6,215 
  Whitbread PLC  295,285  6,143 
  Bunzl PLC  552,667  6,008 
  ICAP PLC  880,954  5,855 
  Eurasian Natural     
  Resources Corp.  424,974  5,783 

      Market 
      Value• 
    Shares  ($000) 
  Intercontinental Hotels     
  Group PLC  438,301  5,603 
  Admiral Group PLC  315,972  5,311 
  Friends Provident     
  Group PLC  3,894,426  5,192 
  Petrofac Ltd.  331,916  5,109 
  Balfour Beatty PLC  1,144,354  4,975 
  Investec PLC  695,990  4,968 
  Firstgroup PLC  804,301  4,947 
  Drax Group PLC  617,503  4,698 
  Tomkins PLC  1,495,114  4,102 
  Schroders PLC  206,471  3,713 
  Fresnillo PLC  295,701  3,583 
  TUI Travel PLC  918,205  3,499 
^  London Stock     
  Exchange Group PLC  243,506  3,387 
^  Ladbrokes PLC  1,517,841  3,024 
^,*  British Airways PLC  996,029  2,958 
*  Berkeley Group     
  Holdings PLC  205,006  2,861 
  Thomas Cook Group PLC  713,274  2,389 
^  Carphone Warehouse     
  Group PLC  680,135  2,051 
  WPP PLC ADR  40,001  1,791 
*  Resolution Ltd.  1,152,244  1,702 
      3,485,333 
Total Common Stocks     
(Cost $14,517,557)    10,908,245 
Temporary Cash Investments (3.0%)1   
Money Market Fund (2.9%)     
2,3  Vanguard Market     
  Liquidity Fund, 0.225%   318,103,762  318,104 
 
    Face   
    Amount   
    ($000)   
U.S. Government and Agency Obligations (0.1%) 
4,5  Federal Home Loan     
  Bank Discount Notes,     
  0.275%, 2/19/10  10,000  9,997 
4  Freddie Mac Discount     
  Notes, 0.205%, 3/22/10  4,000  3,998 
      13,995 
Total Temporary Cash Investments   
(Cost $332,092)    332,099 
Total Investments (101.7%)     
(Cost $14,849,649)    11,240,344 
Other Assets and Liabilities (–1.7%)   
Other Assets    65,449 
Liabilities3    (254,547) 
      (189,098) 
Net Assets (100%)    11,051,246 

22


European Stock Index Fund

At October 31, 2009, net assets consisted of: 
  Amount 
  ($000) 
Paid-in Capital  16,224,741 
Undistributed Net Investment Income  378,916 
Accumulated Net Realized Losses  (1,940,639) 
Unrealized Appreciation (Depreciation)   
Investment Securities  (3,609,305) 
Futures Contracts  (4,749) 
Foreign Currencies and   
Forward Currency Contracts  2,282 
Net Assets  11,051,246 
 
Investor Shares—Net Assets   
Applicable to 224,681,131 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  5,789,137 
Net Asset Value Per Share—   
Investor Shares  $25.77 
 
Admiral Shares—Net Assets   
Applicable to 28,099,506 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  1,700,354 
Net Asset Value Per Share—   
Admiral Shares  $60.51 

  Amount 
  ($000) 
Signal Shares—Net Assets   
Applicable to 10,456,717 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  244,914 
Net Asset Value Per Share—   
Signal Shares  $23.42 
 
Institutional Shares—Net Assets   
Applicable to 33,058,996 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  852,760 
Net Asset Value Per Share—   
Institutional Shares  $25.80 
 
ETF Shares—Net Assets   
Applicable to 50,900,760 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  2,464,081 
Net Asset Value Per Share—   
ETF Shares  $48.41 

• See Note A in Notes to Financial Statements.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $197,803,000.
* Non-income-producing security.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures investments, the fund’s effective common stock and temporary cash investment positions represent 99.6% and 2.1%, respectively, of net assets.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
3 Includes $214,041,000 of collateral received for securities on loan.
4 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
5 Securities with a value of $9,997,000 have been segregated as initial margin for open futures contracts.
ADR—American Depositary Receipt.
See accompanying Notes, which are an integral part of the Financial Statements.

23


European Stock Index Fund   
 
 
 
Statement of Operations   
 
 
  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Dividends1  482,378 
Interest2  528 
Security Lending  27,470 
Total Income  510,376 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  582 
Management and Administrative—Investor Shares  14,229 
Management and Administrative—Admiral Shares  1,605 
Management and Administrative—Signal Shares  214 
Management and Administrative—Institutional Shares  1,254 
Management and Administrative—ETF Shares  1,681 
Marketing and Distribution—Investor Shares  2,848 
Marketing and Distribution—Admiral Shares  340 
Marketing and Distribution—Signal Shares  65 
Marketing and Distribution—Institutional Shares  954 
Marketing and Distribution—ETF Shares  525 
Custodian Fees  1,988 
Auditing Fees  40 
Shareholders’ Reports and Proxies—Investor Shares  228 
Shareholders’ Reports and Proxies—Admiral Shares  17 
Shareholders’ Reports and Proxies—Signal Shares  1 
Shareholders’ Reports and Proxies—Institutional Shares  2 
Shareholders’ Reports and Proxies—ETF Shares  210 
Trustees’ Fees and Expenses  25 
Total Expenses  26,808 
Expenses Paid Indirectly  (169) 
Net Expenses  26,639 
Net Investment Income  483,737 
Realized Net Gain (Loss)   
Investment Securities Sold  (2,821,516) 
Futures Contracts  (4,807) 
Foreign Currencies and Forward Currency Contracts  1,442 
Realized Net Gain (Loss)  (2,824,881) 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  3,882,960 
Futures Contracts  9,698 
Foreign Currencies and Forward Currency Contracts  14,586 
Change in Unrealized Appreciation (Depreciation)  3,907,244 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,566,100 

1 Dividends are net of foreign withholding taxes of $39,192,000.
2 Interest income from an affiliated company of the fund was $265,000.
See accompanying Notes, which are an integral part of the Financial Statements.

24


European Stock Index Fund     
 
 
Statement of Changes in Net Assets     
 
  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  483,737  1,208,160 
Realized Net Gain (Loss)  (2,824,881)  3,003,134 
Change in Unrealized Appreciation (Depreciation)  3,907,244  (20,976,281) 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,566,100  (16,764,987) 
Distributions     
Net Investment Income     
Investor Shares  (708,975)  (743,072) 
Admiral Shares  (100,154)  (87,518) 
Signal Shares  (14,655)  (14,971) 
Institutional Shares  (234,718)  (139,970) 
ETF Shares  (124,097)  (97,010) 
Realized Capital Gain     
Investor Shares  —  — 
Admiral Shares  —  — 
Signal Shares  —  — 
Institutional Shares  —  — 
ETF Shares  —  — 
Total Distributions  (1,182,599)  (1,082,541) 
Capital Share Transactions     
Investor Shares  (4,501,240)  (3,934,149) 
Admiral Shares  (5,147)  12,041 
Signal Shares  (10,851)  (29,856) 
Institutional Shares  (2,518,693)  815,638 
ETF Shares  405,547  225,574 
Net Increase (Decrease) from Capital Share Transactions  (6,630,384)  (2,910,752) 
Total Increase (Decrease)  (6,246,883)  (20,758,280) 
Net Assets     
Beginning of Period  17,298,129  38,056,409 
End of Period1  11,051,246  17,298,129 
1 Net Assets—End of Period includes undistributed net investment income of $378,916,000 and $1,073,239,000.   

See accompanying Notes, which are an integral part of the Financial Statements.

25


European Stock Index Fund           
 
 
Financial Highlights           
 
 
Investor Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $21.99  $43.43  $34.67  $27.00  $23.77 
Investment Operations           
Net Investment Income  1.008  1.3721  1.2981  .920  .670 
Net Realized and Unrealized Gain (Loss)           
on Investments  4.269  (21.597)  8.386  7.450  3.140 
Total from Investment Operations  5.277  (20.225)  9.684  8.370  3.810 
Distributions           
Dividends from Net Investment Income  (1.497)  (1.215)  (.924)  (.700)  (.580) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (1.497)  (1.215)  (.924)  (.700)  (.580) 
Net Asset Value, End of Period  $25.77  $21.99  $43.43  $34.67  $27.00 
 
Total Return2  26.25%  –47.80%  28.49%  31.63%  16.21% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $5,789  $10,534  $26,188  $16,850  $10,759 
Ratio of Total Expenses to           
Average Net Assets  0.27%  0.22%  0.22%  0.27%  0.27% 
Ratio of Net Investment Income to           
Average Net Assets  3.80%  3.82%  3.35%  3.35%  2.84% 
Portfolio Turnover Rate3  18%  15%  9%  6%  5% 

1 Calculated based on average shares outstanding.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months or the account service fee that may be applicable to certain accounts with balances below $10,000.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

26


European Stock Index Fund           
 
 
Financial Highlights           
 
 
Admiral Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $51.71  $102.09  $81.50  $63.44  $55.84 
Investment Operations           
Net Investment Income  2.448  3.1771  3.1401  2.230  1.611 
Net Realized and Unrealized Gain (Loss)           
on Investments  9.968  (50.618)  19.692  17.510  7.396 
Total from Investment Operations  12.416  (47.441)  22.832  19.740  9.007 
Distributions           
Dividends from Net Investment Income  (3.616)  (2.939)  (2.242)  (1.680)  (1.407) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (3.616)  (2.939)  (2.242)  (1.680)  (1.407) 
Net Asset Value, End of Period  $60.51  $51.71  $102.09  $81.50  $63.44 
 
Total Return2  26.33%  –47.74%  28.59%  31.77%  16.32% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $1,700  $1,472  $2,955  $2,175  $1,360 
Ratio of Total Expenses to           
Average Net Assets  0.16%  0.12%  0.12%  0.17%  0.18% 
Ratio of Net Investment Income to           
Average Net Assets  3.91%  3.92%  3.45%  3.45%  2.93% 
Portfolio Turnover Rate3  18%  15%  9%  6%  5% 

1 Calculated based on average shares outstanding.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

27


European Stock Index Fund         
 
 
Financial Highlights         
 
 
Signal Shares         
        Oct. 6, 
        20061 to 
  Year Ended October 31,  Oct. 31, 
For a Share Outstanding Throughout Each Period  2009  2008  2007  2006 
Net Asset Value, Beginning of Period  $20.01  $39.50  $31.51  $30.41 
Investment Operations         
Net Investment Income  .947  1.2552  1.1512  .0102 
Net Realized and Unrealized Gain (Loss) on Investments  3.860  (19.616)  7.681  1.090 
Total from Investment Operations  4.807  (18.361)  8.832  1.100 
Distributions         
Dividends from Net Investment Income  (1.397)  (1.129)  (.842)  — 
Distributions from Realized Capital Gains  —  —  —  — 
Total Distributions  (1.397)  (1.129)  (.842)  — 
Net Asset Value, End of Period  $23.42  $20.01  $39.50  $31.51 
 
Total Return3  26.34%  –47.74%  28.59%  3.62% 
 
Ratios/Supplemental Data         
Net Assets, End of Period (Millions)  $245  $223  $502  $12 
Ratio of Total Expenses to Average Net Assets  0.16%  0.12%  0.12%  0.17%4 
Ratio of Net Investment Income to Average Net Assets  3.91%  3.92%  3.45%  3.45%4 
Portfolio Turnover Rate5  18%  15%  9%  6% 

1 Inception.
2 Calculated based on average shares outstanding.
3 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months.
4 Annualized.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

28


European Stock Index Fund           
 
 
Financial Highlights           
 
 
Institutional Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $22.04  $43.51  $34.74  $27.05  $23.80 
Investment Operations           
Net Investment Income  1.036  1.3151  1.3501  .978  .721 
Net Realized and Unrealized Gain (Loss)           
on Investments  4.277  (21.524)  8.390  7.450  3.140 
Total from Investment Operations  5.313  (20.209)  9.740  8.428  3.861 
Distributions           
Dividends from Net Investment Income  (1.553)  (1.261)  (.970)  (.738)  (.611) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (1.553)  (1.261)  (.970)  (.738)  (.611) 
Net Asset Value, End of Period  $25.80  $22.04  $43.51  $34.74  $27.05 
 
Total Return2  26.45%  –47.72%  28.63%  31.83%  16.42% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $853  $3,316  $5,263  $3,113  $1,827 
Ratio of Total Expenses to           
Average Net Assets  0.12%  0.09%  0.09%  0.12%  0.12% 
Ratio of Net Investment Income to           
Average Net Assets  3.95%  3.95%  3.48%  3.50%  2.99% 
Portfolio Turnover Rate3  18%  15%  9%  6%  5% 

1 Calculated based on average shares outstanding.
2 Total returns do not reflect the 2% fee on redemptions of shares held for less than two months.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

29


European Stock Index Fund           
 
 
Financial Highlights           
 
 
ETF Shares           
          March 4, 
          20051 to 
    Year Ended October 31,  Oct. 31, 
For a Share Outstanding Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $41.37  $81.66  $65.21  $50.80  $50.96 
Investment Operations           
Net Investment Income  1.964  2.5302  2.5762  1.800  1.040 
Net Realized and Unrealized Gain (Loss)           
on Investments  7.977  (40.464)  15.683  13.990  (1.200) 
Total from Investment Operations  9.941  (37.934)  18.259  15.790  (.160) 
Distributions           
Dividends from Net Investment Income  (2.901)  (2.356)  (1.809)  (1.380)  — 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (2.901)  (2.356)  (1.809)  (1.380)  — 
Net Asset Value, End of Period  $48.41  $41.37  $81.66  $65.21  $50.80 
 
Total Return  26.33%  –47.73%  28.60%  31.75%  –0.31% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $2,464  $1,754  $3,148  $1,205  $178 
Ratio of Total Expenses to Average Net Assets  0.16%  0.11%  0.12%  0.18%  0.18%3 
Ratio of Net Investment Income to           
Average Net Assets  3.91%  3.93%  3.45%  3.44%  2.93%3 
Portfolio Turnover Rate4  18%  15%  9%  6%  5% 

1 Inception.
2 Calculated based on average shares outstanding.
3 Annualized.
4 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares,
including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

30


European Stock Index Fund

Notes to Financial Statements

Vanguard European Stock Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund invests in securities of foreign issuers, which may subject it to investment risks not normally associated with investing in securities of U.S. corporations. The fund offers five classes of shares: Investor Shares, Admiral Shares, Signal Shares, Institutional Shares, and ETF Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size criteria. Signal Shares are designed for institutional investors who meet certain administrative, service, and account-size criteria. Institutional Shares are designed for investors who meet certain administrative and service criteria and invest a minimum of $5 million. ETF Shares are listed for trading on the NYSE Arca, Inc.; they can be purchased and sold through a broker.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments acquired over 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value.

2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

3. Futures and Forward Currency Contracts: The fund uses index futures contracts to a limited extent, with the objectives of maintaining full exposure to the stock market, enhancing returns, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. The fund may seek to enhance returns by using futures contracts instead of the underlying securities when

31


European Stock Index Fund

futures are believed to be priced more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

The fund also may enter into forward currency contracts to provide the appropriate currency exposure related to any open futures contracts. The fund’s risks in using these contracts include movement in the values of the foreign currencies relative to the U.S. dollar and the ability of the counterparties to fulfill their obligations under the contracts. Counterparty risk is mitigated by entering into forward currency contracts only with highly rated counterparties, by a master netting arrangement between the fund and the counterparty, and by the posting of collateral by the counterparty. The forward currency contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has posted. Any securities posted as collateral for open contracts are noted in the Statement of Net Assets.

Futures and forward currency contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures or forward currency contracts.

4. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

5. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

6. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.

7. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold. Fees assessed on redemptions of capital shares are credited to paid-in capital.

Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses), shareholder reporting, and proxies. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.

32


European Stock Index Fund

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At October 31, 2009, the fund had contributed capital of $2,310,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.92% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. The fund’s custodian bank has agreed to reduce its fees when the fund maintains cash on deposit in the non-interest-bearing custody account. For the year ended October 31, 2009, custodian fee offset arrangements reduced the fund’s expenses by $169,000 (an annual rate of 0.00% of average net assets).

D. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of October 31, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Common Stocks  61,703  10,845,742  800 
Temporary Cash Investments  318,104  13,995  — 
Futures Contracts—Liabilities1  (2,927)  —  — 
Forward Currency Contracts—Assets  624  —  — 
Total  377,504  10,859,737  800 
1 Represents variation margin on the last day of the reporting period.       

The following table summarizes changes in investments valued based on Level 3 inputs during the year ended October 31, 2009:

  Investments in 
  Securities 
Amount Valued Based on Level 3 Inputs  ($000) 
Balance as of October 31, 2008  — 
Transfers into Level 3  708 
Change in Unrealized Appreciation (Depreciation)  92 
Balance as of October 31, 2009  800 

33


European Stock Index Fund

E. At October 31, 2009, the fair values of derivatives were reflected in the Statement of Net Assets as follows:

    Foreign   
  Equity  Exchange   
  Contracts1  Contracts  Total 
Statement of Net Assets Caption  ($000)  ($000)  ($000) 
Other Assets  —  624  624 
Liabilities  (2,927)  —  (2,927) 
1 Represents variation margin on the last day of the reporting period.       

Realized net gain (loss) and the change in unrealized appreciation (depreciation) on derivatives for the year ended October 31, 2009, were:

    Foreign   
  Equity  Exchange   
  Contracts  Contracts  Total 
Realized Net Gain (Loss) on Derivatives  ($000)  ($000)  ($000) 
Futures Contracts  (4,807)  —  (4,807) 
Forward Currency Contracts  —  (1,072)  (1,072) 
Realized Net Gain (Loss) on Derivatives  (4,807)  (1,072)  (5,879) 
 
Change in Unrealized Appreciation (Depreciation) on Derivatives       
Futures Contracts  9,698  —  9,698 
Forward Currency Contracts  —  10,702  10,702 
Change in Unrealized Appreciation (Depreciation) on Derivatives  9,698  10,702  20,400 

At October 31, 2009, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

        ($000) 
    Number of  Aggregate  Unrealized 
    Long (Short)  Settlement  Appreciation 
Futures Contracts  Expiration  Contracts  Value  (Depreciation) 
Dow Jones EURO STOXX 50 Index  December 2009  1,515  60,934  (3,586) 
FTSE 100 Index  December 2009  510  42,041  (1,163) 

At October 31, 2009, the fund had open forward currency contracts to receive and deliver currencies as follows. Unrealized appreciation (depreciation) on open forward currency contracts is treated as realized gain (loss) for tax purposes.

          Unrealized 
          Appreciation 
      Contract Amount (000)  (Depreciation) 
Contract Settlement Date    Receive    Deliver  ($000) 
12/23/09  EUR  43,729  USD  64,509  131 
12/23/09  GBP  26,210  USD  43,191  493 
EUR—Euro.           
GBP—British pound.           
USD—U.S. dollar.           

34


European Stock Index Fund

The fund had net unrealized foreign currency gains of $1,658,000 resulting from the translation of other assets and liabilities at October 31, 2009.

F. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

During the year ended October 31, 2009, the fund realized net foreign currency gains of $2,514,000, which increased distributable net income for tax purposes; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Certain of the fund’s investments are in securities considered to be “passive foreign investment companies,” for which any unrealized appreciation and/or realized gains are required to be included in distributable net income for tax purposes. Unrealized appreciation of $4,496,000 on the fund’s passive foreign investment company holdings at October 31, 2008, has been distributed and is reflected in the balance of undistributed net investment income. During the year ended October 31, 2009, the fund realized gains on the sale of passive foreign investment companies of $2,025,000, which have been included in current and prior periods’ taxable income; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Unrealized appreciation on the fund’s passive foreign investment company holdings at October 31, 2009, was $3,089,000.

During the year ended October 31, 2009, the fund realized $1,505,062,000 of net capital losses resulting from in-kind redemptions—in which shareholders exchanged fund shares for securities held by the fund rather than for cash. Because such losses are not taxable losses to the fund, they have been reclassified from accumulated net realized losses to paid-in capital.

For tax purposes, at October 31, 2009, the fund had $407,810,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $1,880,835,000 to offset future net capital gains of $13,739,000 through October 31, 2011, $357,042,000 through October 31, 2016, and $1,510,054,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $14,910,831,000. Net unrealized depreciation of investment securities for tax purposes was $3,670,487,000, consisting of unrealized gains of $322,066,000 on securities that had risen in value since their purchase and $3,992,553,000 in unrealized losses on securities that had fallen in value since their purchase.

G. During the year ended October 31, 2009, the fund purchased $2,771,676,000 of investment securities and sold $10,117,810,000 of investment securities, other than temporary cash investments.

35


European Stock Index Fund

H. Capital share transactions for each class of shares were:       
      Year Ended October 31, 
    2009    2008 
  Amount  Shares  Amount  Shares 
  ($000)  (000)  ($000)  (000) 
Investor Shares         
Issued  1,139,617  59,184  4,845,905  141,072 
Issued in Lieu of Cash Distributions  700,467  36,181  735,566  18,702 
Redeemed1  (6,341,324)  (349,683)  (9,515,620)  (283,778) 
Net Increase (Decrease)—Investor Shares  (4,501,240)  (254,318)  (3,934,149)  (124,004) 
Admiral Shares         
Issued  197,387  3,957  414,328  4,886 
Issued in Lieu of Cash Distributions  81,700  1,798  73,521  796 
Redeemed1  (284,234)  (6,122)  (475,808)  (6,157) 
Net Increase (Decrease)—Admiral Shares  (5,147)  (367)  12,041  (475) 
Signal Shares         
Issued  71,159  3,811  155,336  4,630 
Issued in Lieu of Cash Distributions  11,893  677  11,877  332 
Redeemed1  (93,903)  (5,161)  (197,069)  (6,553) 
Net Increase (Decrease)—Signal Shares  (10,851)  (673)  (29,856)  (1,591) 
Institutional Shares         
Issued  891,860  44,118  2,001,811  62,248 
Issued in Lieu of Cash Distributions  221,985  11,472  129,816  3,297 
Redeemed1  (3,632,538)  (172,962)  (1,315,989)  (36,071) 
Net Increase (Decrease)—Institutional Shares  (2,518,693)  (117,372)  815,638  29,474 
ETF Shares         
Issued  503,833  10,810  454,883  7,234 
Issued in Lieu of Cash Distributions  —  —  —  — 
Redeemed1  (98,286)  (2,300)  (229,309)  (3,400) 
Net Increase (Decrease)—ETF Shares  405,547  8,510  225,574  3,834 
1 Net of redemption fees for fiscal 2009 and 2008 of $633,000 and $1,724,000, respectively (fund totals).     

I. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 15, 2009, for potential recognition or disclosure in these financial statements.

36


Pacific Stock Index Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics     
    Target  Broad 
  Fund  Index1  Index2 
Number of Stocks  499  494  1,806 
Turnover Rate  8%  —  — 
Expense Ratio3    —  — 
Investor Shares  0.29%     
Admiral Shares  0.18%     
Signal Shares  0.18%     
Institutional Shares  0.13%     
ETF Shares  0.18%     
Short-Term Reserves4  –0.2%  —  — 

Sector Diversification (% of equity exposure) 
    Target  Broad 
  Fund  Index1  Index2 
Consumer Discretionary    14.5% 14.5%  8.3% 
Consumer Staples  6.3  6.2  8.6 
Energy  2.6  2.6  11.2 
Financials  28.5  28.6  26.6 
Health Care  4.6  4.5  6.4 
Industrials  14.7  14.7  9.8 
Information Technology  8.9  8.9  6.5 
Materials  11.5  11.6  11.2 
Telecommunication       
Services  3.5  3.5  6.4 
Utilities  4.9  4.9  5.0 

Volatility Measures5   
  Fund Versus  Fund Versus 
  Target Index1  Broad Index2 
R-Squared  0.95  0.89 
Beta  1.00  0.82 

Ten Largest Holdings6 (% of total net assets) 
BHP Billiton Ltd.  diversified metals   
  and mining  3.4% 
Toyota Motor Corp.  automobile   
  manufacturers  3.4 
Commonwealth     
Bank of Australia  diversified banks  2.2 
Westpac Banking Corp.  diversified banks  2.1 
Honda Motor Co. Ltd.  automobile   
  manufacturers  1.6 
National Australia     
Bank Ltd.  diversified banks  1.6 
Mitsubishi UFJ     
Financial Group Inc.  diversified banks  1.5 
Australia & New Zealand     
Banking Group Ltd.  diversified banks  1.5 
Canon Inc.  office electronics  1.2 
Woolworths Ltd.  food retail  1.0 
Top Ten    19.5% 

Market Diversification (% of equity exposure) 
    Target 
  Fund  Index1 
Japan  63.6%  63.6% 
Australia  24.8  24.8 
Hong Kong  7.2  7.2 
Singapore  4.1  4.1 
Other Pacific Markets  0.3  0.3 

1 MSCI Pacific Index.
2 MSCI All Country World Index ex USA.
3 The expense ratios shown are from the prospectuses dated February 27, 2009, and represent estimated costs for the current fiscal year
based on the fund’s net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the expense ratios were 0.27% for
Investor Shares, 0.16% for Admiral Shares, 0.16% for Signal Shares, 0.12% for Institutional Shares, and 0.16% for ETF Shares.
4 The fund invested a portion of its cash reserves in equity markets through the use of index futures contracts. After the effect of the futures
investments, the fund’s temporary cash position was negative.
5 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
6 The holdings listed exclude any temporary cash investments and equity index products.

37


Pacific Stock Index Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000

 

    Average Annual Total Returns  Final Value 
    Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
Pacific Stock Index Fund Investor Shares1  23.23%  4.12%  0.08%  $10,080 
MSCI All Country World Index ex USA  34.79  7.58  3.95  14,733 
MSCI Pacific Index  28.32  4.52  0.42  10,424 
Japan/Pacific Region Funds Average2  22.47  1.12  –2.46  7,794 

        Final Value of 
      Since  a $100,000 
  One Year  Five Years  Inception3  Investment 
Pacific Stock Index Fund Admiral Shares1  23.38%  4.24%  4.50%  $143,575 
MSCI All Country World Index ex USA  34.79  7.58  7.46  180,584 
MSCI Pacific Index  28.32  4.52  4.79  146,905 
 
        Final Value of 
      Since  a $10,000,000 
  One Year    Inception3  Investment 
Pacific Stock Index Fund Signal Shares1  23.38%    –11.33%  $7,486,007 
MSCI All Country World Index ex USA  34.79    –10.56  7,643,407 
MSCI Pacific Index  28.32    –10.78  7,598,170 

1 Total returns do not reflect the 0.50% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two months; or, for the Investor Shares, the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Derived from data provided by Lipper Inc.
3 Performance for the fund and its comparative standards is calculated since the following inception dates: August 13, 2001, for the Admiral Shares and June 4, 2007, for the Signal Shares.

38


Pacific Stock Index Fund         
 
 
 
 
        Final Value of 
      Since  a $5,000,000 
  One Year  Five Years  Inception1  Investment 
Pacific Stock Index Fund Institutional Shares2  23.46%  4.29%  0.09%  $5,041,212 
MSCI All Country World Index ex USA  34.79  7.58  3.17  6,716,547 
MSCI Pacific Index  28.32  4.52  0.30  5,143,491 
 
        Final Value of 
      Since  a $10,000 
  One Year    Inception1  Investment 
Pacific Stock Index Fund ETF Shares         
Net Asset Value3  23.38%    1.87%  $10,902 
MSCI All Country World Index ex USA  34.79    4.65  12,357 
MSCI Pacific Index  28.32    2.24  11,089 
 
 
Cumulative Returns: ETF Shares, March 4, 2005–October 31, 2009     
        Since 
      One Year  Inception1 
Pacific Stock Index Fund ETF Shares Market Price      22.09%  8.21% 
Pacific Stock Index Fund ETF Shares Net Asset Value      23.38  9.02 
MSCI Pacific Index      28.32  10.89 

1 Performance for the fund and its comparative standards is calculated since the following inception dates: May 15, 2000, for the Institutional Shares and March 4, 2005, for the ETF Shares.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two months.
3 For more information about how the ETF Shares’ market prices have compared with their net asset value, visit www.vanguard.com, select your ETF, and then select the Performance tab. The Premium/Discount table there shows the percentages of days on which the ETF Shares’ market price was above or below the NAV.

39


Pacific Stock Index Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009
This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

  Inception Date  One Year  Five Years  Ten Years 
Pacific Stock Index Fund         
Investor Shares1  6/18/1990  3.49%  5.33%  0.76% 
Admiral Shares1  8/13/2001  3.65  5.44  4.912 
Signal Shares1  6/4/2007  3.65  –10.632  — 
Institutional Shares1  5/15/2000  3.73  5.48  0.392 
ETF Shares  3/4/2005       
Market Price    3.15  2.482  — 
Net Asset Value    3.65  2.542  — 

1 Total returns do not reflect the 0.50% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two months; or, for the Investor Shares, the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Returns since inception.
Note: See Financial Highlights tables for dividend and capital gains information.

40


Pacific Stock Index Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

      Market 
      Value• 
    Shares  ($000) 
Common Stocks (99.5%)1     
Australia (24.6%)     
  BHP Billiton Ltd.  5,859,406  192,169 
  Commonwealth Bank     
  of Australia  2,651,756  122,541 
  Westpac Banking Corp.  5,082,799  118,798 
  National Australia     
  Bank Ltd.  3,349,122  88,489 
  Australia & New Zealand     
  Banking Group Ltd.  4,070,843  83,029 
  Woolworths Ltd.  2,145,633  54,919 
  Wesfarmers Ltd.  1,754,824  43,789 
  Rio Tinto Ltd.  760,502  42,155 
  Westfield Group  3,577,175  38,755 
  Woodside Petroleum Ltd.  866,794  36,358 
  QBE Insurance Group Ltd.  1,750,355  35,250 
  CSL Ltd.  1,053,603  29,583 
  Newcrest Mining Ltd.  844,244  24,268 
^  Macquarie Group Ltd.  530,511  23,234 
  Telstra Corp. Ltd.  7,693,426  22,862 
  Origin Energy Ltd.  1,524,585  21,861 
  Santos Ltd.  1,433,246  19,105 
  AMP Ltd.  3,517,199  18,532 
  Suncorp-Metway Ltd.  2,196,845  17,183 
  Foster’s Group Ltd.  3,365,767  16,507 
  Brambles Ltd.  2,448,129  15,434 
  Orica Ltd.  628,535  13,333 
  Stockland  3,994,506  13,269 
  Insurance Australia     
  Group Ltd.  3,621,843  12,184 
  Amcor Ltd.  2,125,211  10,944 
  AGL Energy Ltd.  778,663  9,652 
  Coca-Cola Amatil Ltd.  970,444  9,226 
  ASX Ltd.  298,134  8,988 
  Toll Holdings Ltd.  1,153,672  8,745 
  BlueScope Steel Ltd.  3,186,454  8,445 
^  Leighton Holdings Ltd.  259,555  8,242 
  Transurban Group  2,009,381  8,153 
  Sonic Healthcare Ltd.  635,020  7,928 
  GPT Group  14,937,807  7,623 

      Market 
      Value• 
    Shares  ($000) 
  Computershare Ltd.  778,265  7,556 
*  Fortescue Metals     
  Group Ltd.  2,160,708  7,235 
  TABCORP Holdings Ltd.  1,052,179  6,712 
  AXA Asia Pacific     
  Holdings Ltd.  1,772,990  6,637 
  Wesfarmers Ltd.     
  Price Protected Shares  264,579  6,629 
  WorleyParsons Ltd.  285,549  6,588 
  Incitec Pivot Ltd.  2,783,678  6,493 
*  Asciano Group  4,699,989  6,293 
  Lend Lease Corp. Ltd.  758,851  6,290 
  OneSteel Ltd.  2,309,004  6,269 
*  Alumina Ltd.  4,245,631  6,230 
  Crown Ltd.  853,033  6,209 
  Dexus Property Group  8,188,593  5,785 
  Mirvac Group  4,409,000  5,773 
*  OZ Minerals Ltd.  5,488,814  5,739 
  Cochlear Ltd.  97,928  5,612 
  Goodman Group  10,453,716  5,605 
  Metcash Ltd.  1,326,873  5,579 
  Boral Ltd.  1,035,318  5,281 
^  Fairfax Media Ltd.  3,685,258  5,223 
  CFS Retail Property Trust  3,014,636  5,180 
  Macquarie     
  Infrastructure Group  3,946,238  5,050 
  Bendigo and     
  Adelaide Bank Ltd.  610,406  4,947 
  Qantas Airways Ltd.  1,937,403  4,817 
*  James Hardie     
  Industries NV  756,226  4,793 
  Tatts Group Ltd.  2,094,044  4,637 
  Sims Metal     
  Management Ltd. ADR  235,750  4,168 
^,*  Paladin Energy Ltd.  1,126,395  4,075 
*  Arrow Energy Ltd.  1,011,387  3,655 
  CSR Ltd.  2,129,573  3,622 
  Harvey Norman     
  Holdings Ltd.  939,554  3,329 
  Goodman Fielder Ltd.  2,246,416  3,222 
  Billabong International Ltd.  344,769  3,190 

41


Pacific Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Macquarie Airports  1,200,090  3,053 
  Nufarm Ltd.  298,228  3,048 
  Aristocrat Leisure Ltd.  680,835  2,718 
  Energy Resources of     
  Australia Ltd.  115,992  2,396 
  Perpetual Ltd.  66,723  2,223 
*  Caltex Australia Ltd.  232,911  2,112 
  SP AusNet  2,371,254  1,863 
  Sims Metal     
  Management Ltd.  19,064  336 
*  CSR, Ltd. Rights     
  Exp. 11/9/09  373,868  81 
      1,387,806 
Hong Kong (7.2%)     
  Sun Hung Kai     
  Properties Ltd.  2,461,781  37,297 
  Hong Kong Exchanges     
  and Clearing Ltd.  1,783,146  31,388 
  Cheung Kong     
  Holdings Ltd.  2,428,208  30,817 
  Hutchison Whampoa Ltd.  3,719,599  26,108 
  CLP Holdings Ltd.  3,567,547  23,910 
  Hang Seng Bank Ltd.  1,334,769  18,856 
  Hong Kong & China     
  Gas Co. Ltd.  6,905,430  16,614 
  Swire Pacific Ltd.  1,342,727  16,363 
  Li & Fung Ltd.  3,928,681  16,339 
  BOC Hong Kong     
  Holdings Ltd.  6,453,992  14,856 
  Hang Lung Properties Ltd.   3,630,242  13,719 
  Henderson Land     
  Development Co. Ltd.  1,870,034  13,221 
  Esprit Holdings Ltd.  1,958,129  13,035 
  Wharf Holdings Ltd.  2,411,792  13,031 
  Hongkong Electric     
  Holdings Ltd.  2,418,165  12,932 
  New World     
  Development Ltd.  4,361,545  9,388 
  Bank of East Asia Ltd.  2,557,422  8,971 
  MTR Corp.  2,479,603  8,782 
  Link REIT  3,775,476  8,502 
  Hang Lung Group Ltd.  1,403,181  7,034 
  Kerry Properties Ltd.  1,238,040  6,903 
  Sino Land Co. Ltd.  2,962,114  5,634 
  Wheelock & Co. Ltd.  1,594,647  5,123 
  Shangri-La Asia Ltd.  2,272,085  4,370 
*  Cathay Pacific     
  Airways Ltd.  2,043,220  3,311 
  Hysan Development     
  Co. Ltd.  1,106,187  3,267 
*  Foxconn International     
  Holdings Ltd.  3,684,816  3,236 
  Yue Yuen Industrial     
  Holdings Ltd.  1,146,717  3,195 
  Hopewell Holdings Ltd.  997,323  3,138 
  Wing Hang Bank Ltd.  307,893  2,987 

      Market 
      Value• 
    Shares  ($000) 
  Cheung Kong Infrastructure   
  Holdings Ltd.  786,854  2,798 
  NWS Holdings Ltd.  1,472,015  2,795 
  ASM Pacific     
  Technology Ltd.  347,241  2,700 
  Television Broadcasts Ltd.  485,897  2,296 
^,*  Mongolia Energy Co. Ltd.  5,273,219  2,216 
  Chinese Estates     
  Holdings Ltd.  1,217,357  2,087 
^  Orient Overseas     
  International Ltd.  389,065  1,898 
  Lifestyle International     
  Holdings Ltd.  1,052,544  1,692 
  PCCW Ltd.  6,472,653  1,590 
  Hong Kong Aircraft     
  Engineerg Co. Ltd.  118,885  1,404 
      403,803 
Japan (63.3%)     
  Toyota Motor Corp.  4,815,883  190,116 
  Honda Motor Co. Ltd.  2,882,854  89,042 
  Mitsubishi UFJ Financial     
  Group Inc.  16,269,341  86,657 
  Canon Inc.  1,862,859  70,235 
  Sumitomo Mitsui     
  Financial Group Inc.  1,585,242  53,883 
  Takeda     
  Pharmaceutical Co. Ltd.  1,308,817  52,344 
  Tokyo Electric     
  Power Co. Inc.  2,125,564  52,249 
  Sony Corp.  1,753,829  51,788 
  Mitsubishi Corp.  2,368,772  50,219 
  Panasonic Corp.  3,426,611  48,367 
  Nomura Holdings Inc.  6,226,254  43,884 
  Nintendo Co. Ltd.  172,961  43,383 
  Mizuho Financial     
  Group Inc.  21,973,328  43,341 
  Mitsui & Co. Ltd.  3,026,880  39,752 
  Toshiba Corp.  6,848,214  39,140 
  NTT DoCoMo Inc.  26,855  38,947 
  Shin-Etsu     
  Chemical Co. Ltd.  716,481  37,996 
  East Japan Railway Co.  592,937  37,971 
  Nippon Telegraph &     
  Telephone Corp.  906,723  37,414 
  Nippon Steel Corp.  8,912,270  34,001 
  Tokio Marine     
  Holdings Inc.  1,264,488  32,333 
  Komatsu Ltd.  1,656,578  32,295 
  Nissan Motor Co. Ltd.  4,341,532  31,416 
  Mitsubishi     
  Estate Co. Ltd.  2,063,005  31,162 
  Softbank Corp.  1,320,431  31,114 
  Seven & I     
  Holdings Co. Ltd.  1,344,979  29,445 
  Astellas Pharma Inc.  791,068  29,130 

42


Pacific Stock Index Fund     
 
 
 
    Market 
    Value• 
  Shares  ($000) 
Kansai Electric     
Power Co. Inc.  1,332,965  28,801 
JFE Holdings Inc.  856,526  27,901 
Fanuc Ltd.  334,539  27,787 
KDDI Corp.  5,089  27,010 
Chubu Electric     
Power Co. Inc.  1,156,333  25,816 
Mitsubishi Electric Corp.  3,373,896  25,665 
FUJIFILM Holdings Corp.  854,094  24,281 
Kirin Holdings Co. Ltd.  1,460,261  23,836 
Kyocera Corp.  283,344  23,768 
Mitsui Fudosan Co. Ltd.  1,461,322  23,644 
Denso Corp.  849,340  23,207 
Daiichi Sankyo Co. Ltd.  1,176,704  22,988 
Japan Tobacco Inc.  7,848  22,018 
Kao Corp.  942,097  20,984 
Fujitsu Ltd.  3,256,530  19,177 
Sumitomo Corp.  1,962,507  19,051 
Hitachi Ltd.  5,872,449  18,961 
Mitsubishi Heavy     
Industries Ltd.  5,303,617  18,754 
Sharp Corp.  1,744,523  18,613 
Murata     
Manufacturing Co. Ltd.  372,767  18,188 
Bridgestone Corp.  1,065,232  17,566 
Central Japan Railway Co.  2,625  17,488 
Mitsui Sumitomo     
Insurance Group     
Holdings Inc.  735,819  17,128 
Secom Co. Ltd.  365,492  17,053 
Tokyo Electron Ltd.  299,385  16,842 
ITOCHU Corp.  2,628,527  16,614 
Nidec Corp.  189,631  16,011 
Sumitomo Electric     
Industries Ltd.  1,315,991  15,969 
Tokyo Gas Co. Ltd.  4,030,233  15,966 
Ricoh Co. Ltd.  1,173,880  15,953 
Hoya Corp.  721,365  15,875 
Eisai Co. Ltd.  440,695  15,649 
Terumo Corp.  294,206  15,485 
Tohoku Electric     
Power Co. Inc.  746,705  15,334 
Sumitomo Metal     
Industries Ltd.  5,865,423  14,985 
Suzuki Motor Corp.  616,274  14,911 
Daiwa Securities     
Group Inc.  2,827,398  14,882 
Kubota Corp.  1,905,452  14,807 
Asahi Glass Co. Ltd.  1,754,824  14,784 
Sumitomo Metal     
Mining Co. Ltd.  912,122  14,425 
Keyence Corp.  72,379  14,369 
Marubeni Corp.  2,877,703  14,238 
Daikin Industries Ltd.  409,040  13,865 
Fast Retailing Co. Ltd.  83,021  13,665 

      Market 
      Value• 
    Shares  ($000) 
  Kyushu Electric     
  Power Co. Inc.  660,851  13,493 
  Toray Industries Inc.  2,331,172  13,280 
  Sumitomo Trust &     
  Banking Co. Ltd.  2,483,449  12,939 
  Sumitomo Realty &     
  Development Co. Ltd.  664,120  12,593 
  Dai Nippon     
  Printing Co. Ltd.  977,691  12,250 
  Asahi Breweries Ltd.  676,611  11,962 
  ORIX Corp.  183,070  11,825 
  Olympus Corp.  378,487  11,814 
  Inpex Holdings, Inc.  1,439  11,751 
  TDK Corp.  203,584  11,705 
  Mitsui OSK Lines Ltd.  2,000,308  11,615 
  Osaka Gas Co. Ltd.  3,398,164  11,374 
  Rohm Co. Ltd.  170,880  11,332 
  Shionogi & Co. Ltd.  522,363  11,268 
  Shiseido Co. Ltd.  609,192  11,122 
  Asahi Kasei Corp.  2,206,989  10,936 
  Ajinomoto Co. Inc.  1,164,475  10,929 
  Sumitomo     
  Chemical Co. Ltd.  2,738,177  10,910 
  SMC Corp.  94,006  10,736 
  Nippon Oil Corp.  2,176,708  10,726 
  West Japan Railway Co.  2,966  10,511 
  Shizuoka Bank Ltd.  1,055,162  10,484 
  T&D Holdings Inc.  405,667  10,480 
  Bank of Yokohama Ltd.  2,133,400  10,476 
  Nikon Corp.  560,960  10,455 
  Resona Holdings Inc.  848,529  10,103 
  Kintetsu Corp.  2,832,138  10,072 
  Yamato Holdings Co. Ltd.  678,714  10,012 
  Aeon Co. Ltd.  1,117,395  9,967 
  NGK Insulators Ltd.  440,978  9,891 
  Chugoku Electric     
  Power Co. Inc.  485,194  9,819 
^,*  NEC Corp.  3,373,035  9,587 
  Daiwa House     
  Industry Co. Ltd.  887,530  9,482 
^,*  Mitsubishi Motors Corp.  6,286,141  9,299 
  Yamada Denki Co. Ltd.  151,439  9,228 
  Sompo Japan     
  Insurance Inc.  1,550,380  9,066 
  Odakyu Electric     
  Railway Co. Ltd.  1,095,915  8,927 
  Hankyu Hanshin     
  Holdings Inc.  1,996,467  8,894 
  Shikoku Electric     
  Power Co.  311,077  8,753 
  Toppan Printing Co. Ltd.  976,764  8,730 
  Nitto Denko Corp.  287,701  8,689 
  Tokyu Corp.  1,983,850  8,670 
  Rakuten Inc.  12,550  8,595 
  Aisin Seiki Co. Ltd.  334,314  8,500 
  Toyota Industries Corp.  312,835  8,473 

43


Pacific Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Panasonic Electric     
  Works Co. Ltd.  656,122  8,282 
  Chiba Bank Ltd.  1,326,620  8,181 
  Ibiden Co. Ltd.  223,569  8,004 
  Kobe Steel Ltd.  4,331,025  7,871 
  Mitsubishi Chemical     
  Holdings Corp.  2,104,554  7,815 
  Konica Minolta     
  Holdings Inc.  831,468  7,811 
  Tobu Railway Co. Ltd.  1,421,988  7,777 
  Yahoo! Japan Corp.  25,322  7,761 
  Sekisui House Ltd.  883,917  7,644 
  Chugai Pharmaceutical     
  Co. Ltd.  389,924  7,628 
  Hokuriku Electric     
  Power Co.  327,091  7,457 
  Nippon Building     
  Fund Inc. Class A  898  7,361 
^,*  Sanyo Electric Co. Ltd.  2,932,914  7,270 
  Electric Power     
  Development Co. Ltd.  232,834  7,179 
  Nippon Yusen KK  1,930,747  7,127 
  JS Group Corp.  434,639  7,094 
  Ono Pharmaceutical     
  Co. Ltd.  147,450  7,001 
  JGC Corp.  361,396  6,908 
  Unicharm Corp.  72,028  6,903 
  Nippon Mining     
  Holdings Inc.  1,539,382  6,868 
  Nippon Electric     
  Glass Co. Ltd.  609,006  6,558 
  Makita Corp.  195,861  6,491 
  OJI Paper Co. Ltd.  1,487,340  6,473 
  Japan Steel Works Ltd.  584,632  6,448 
  NTT Data Corp.  2,205  6,345 
  Trend Micro Inc.  183,156  6,339 
  Keio Corp.  1,006,085  6,335 
  Dentsu Inc.  291,322  6,241 
  Chuo Mitsui Trust     
  Holdings Inc.  1,707,996  6,237 
  Kuraray Co. Ltd.  602,465  6,219 
  Nipponkoa Insurance     
  Co. Ltd.  1,136,234  6,186 
  Advantest Corp.  279,027  6,163 
  Japan Real Estate     
  Investment Corp.     
  Class A  772  6,160 
  Kawasaki Heavy     
  Industries Ltd.  2,460,339  6,148 
  JSR Corp.  313,851  6,121 
  Keihin Electric Express     
  Railway Co. Ltd.  767,193  6,107 
  Hokkaido Electric     
  Power Co. Inc.  317,131  6,106 
  Nippon Express Co. Ltd.  1,481,712  6,067 

      Market 
      Value• 
    Shares  ($000) 
  Kurita Water     
  Industries Ltd.  196,218  6,001 
  Omron Corp.  354,655  5,972 
  Oriental Land Co. Ltd.  87,202  5,911 
  Isetan Mitsukoshi     
  Holdings Ltd.  611,091  5,857 
  Mazda Motor Corp.  2,579,482  5,822 
  Benesse Corp.  131,029  5,777 
  Daito Trust     
  Construction Co. Ltd.  138,569  5,760 
^,*  GS Yuasa Corp.  641,998  5,530 
  Taiyo Nippon Sanso Corp.  491,193  5,455 
  Hirose Electric Co. Ltd.  52,522  5,414 
  Sankyo Co. Ltd.  93,820  5,359 
  SBI Holdings Inc.  29,115  5,350 
  Toyota Tsusho Corp.  368,651  5,271 
  Nitori Co. Ltd.  64,252  5,225 
  Kyowa Hakko Kirin Co. Ltd.  451,854  5,223 
  Lawson Inc.  113,634  5,080 
  Joyo Bank Ltd.  1,147,017  5,046 
  Mitsubishi Tanabe     
  Pharma Corp.  391,608  5,000 
  Mitsubishi     
  Materials Corp.  1,888,805  4,981 
*  MEIJI Holdings Co. Ltd.  121,504  4,949 
  Bank of Kyoto Ltd.  544,188  4,938 
  Fukuoka Financial     
  Group Inc.  1,345,418  4,919 
  Stanley Electric Co. Ltd.  245,555  4,808 
  Teijin Ltd.  1,631,481  4,795 
  Hokuhoku Financial     
  Group Inc.  2,197,083  4,761 
  NSK Ltd.  815,240  4,736 
  Showa Denko KK  2,402,976  4,625 
  Sega Sammy Holdings Inc.  320,498  4,551 
  Sumitomo Heavy     
  Industries Ltd.  1,000,274  4,538 
  Sekisui Chemical Co. Ltd.  749,896  4,536 
  Shimano Inc.  117,920  4,509 
  Ube Industries Ltd.  1,746,684  4,501 
  Brother Industries Ltd.  394,593  4,493 
  TonenGeneral Sekiyu KK  492,300  4,493 
  Yamaha Motor Co. Ltd.  375,421  4,471 
  Santen Pharmaceutical     
  Co. Ltd.  128,738  4,417 
  Toyo Seikan Kaisha Ltd.  262,438  4,409 
^  Hitachi Construction     
  Machinery Co. Ltd.  188,538  4,394 
*  IHI Corp.  2,300,195  4,387 
  Nisshin Seifun Group Inc.  328,334  4,380 
  Yakult Honsha Co. Ltd.  167,263  4,356 
  Isuzu Motors Ltd.  2,059,729  4,355 
  Sony Financial     
  Holdings Inc.  1,514  4,345 
  Suzuken Co. Ltd.  122,750  4,344 

44


Pacific Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Nissin Foods     
  Holdings Co., Ltd.  122,180  4,311 
  Nippon Paper Group Inc.  162,203  4,304 
  Obayashi Corp.  1,132,262  4,276 
  Fuji Heavy Industries Ltd.  1,089,534  4,258 
  Furukawa Electric Co. Ltd.  1,113,157  4,222 
  Hachijuni Bank Ltd.  700,180  4,142 
  Toho Gas Co. Ltd.  794,831  4,122 
  Chugoku Bank Ltd.  303,088  4,093 
  Taisho Pharmaceutical     
  Co. Ltd.  223,761  4,078 
*  Elpida Memory Inc.  308,109  4,025 
  Toyo Suisan Kaisha Ltd.  153,498  4,017 
  All Nippon     
  Airways Co. Ltd.  1,427,688  3,983 
^  J Front Retailing Co. Ltd.  839,113  3,977 
  Shimizu Corp.  1,035,867  3,972 
  Hisamitsu     
  Pharmaceutical Co. Inc.  115,490  3,970 
  Sojitz Corp.  2,139,078  3,949 
  Kawasaki Kisen     
  Kaisha Ltd.  1,063,270  3,874 
  Sumco Corp.  202,145  3,858 
  Jupiter     
  Telecommunications     
  Co. Ltd.  4,212  3,850 
  Nomura Research     
  Institute Ltd.  175,560  3,796 
  Iyo Bank Ltd.  420,864  3,795 
  Aioi Insurance Co. Ltd.  854,696  3,763 
  Seiko Epson Corp.  241,594  3,735 
  Nippon Meat Packers Inc.  318,426  3,733 
  Shimamura Co. Ltd.  38,077  3,640 
  THK Co. Ltd.  210,616  3,639 
  Amada Co. Ltd.  590,398  3,612 
  Hitachi Chemical Co. Ltd.  181,457  3,602 
  Yamaguchi Financial     
  Group Inc.  376,052  3,593 
  Tsumura & Co.  104,313  3,590 
  Mediceo Paltac     
  Holdings Co. Ltd.  256,208  3,578 
  Gunma Bank Ltd.  685,254  3,570 
  Mitsui Chemicals Inc.  1,033,812  3,550 
  JTEKT Corp.  334,317  3,532 
  Namco Bandai     
  Holdings Inc.  345,164  3,529 
  Takashimaya Co. Ltd.  517,981  3,492 
  Kikkoman Corp.  299,537  3,467 
  77 Bank Ltd.  600,424  3,455 
  Kajima Corp.  1,468,173  3,437 
  Mizuho Securities Co. Ltd.  992,149  3,424 
  Daihatsu Motor Co. Ltd.  333,646  3,413 
  Kamigumi Co. Ltd.  453,548  3,407 
  Yaskawa Electric Corp.  428,873  3,374 
  Kaneka Corp.  517,582  3,370 
  Taisei Corp.  1,712,639  3,361 

      Market 
      Value• 
    Shares  ($000) 
  Mitsui Engineering &     
  Shipbuilding Co. Ltd.  1,291,352  3,344 
  Suruga Bank Ltd.  369,422  3,338 
  Hiroshima Bank Ltd.  867,205  3,328 
  Nippon Sheet     
  Glass Co. Ltd.  1,106,696  3,261 
  Toyoda Gosei Co. Ltd.  116,075  3,254 
  Showa Shell Sekiyu KK  328,485  3,235 
  NGK Spark Plug Co. Ltd.  284,963  3,230 
  Yokogawa Electric Corp.  398,114  3,227 
  Kansai Paint Co. Ltd.  377,664  3,196 
  Nissan Chemical     
  Industries Ltd.  246,840  3,181 
  Tokyu Land Corp.  788,540  3,180 
  Tokuyama Corp.  503,282  3,162 
  Ushio Inc.  198,275  3,117 
  NTN Corp.  824,901  3,115 
  Denki Kagaku Kogyo KK  847,643  3,110 
  Mitsubishi UFJ Lease &     
  Finance Co. Ltd.  104,039  3,099 
  Mitsubishi Gas     
  Chemical Co. Inc.  669,093  3,086 
  Credit Saison Co. Ltd.  275,012  3,074 
  FamilyMart Co. Ltd.  102,322  3,048 
  Nomura Real Estate     
  Office Fund Inc. Class A  492  3,040 
  Mitsubishi Rayon Co. Ltd.  879,746  3,039 
^  Casio Computer Co. Ltd.  413,522  3,034 
  Aeon Mall Co. Ltd.  144,420  3,026 
  Shimadzu Corp.  435,941  3,019 
  Konami Corp.  165,575  3,013 
  Dainippon Sumitomo     
  Pharma Co. Ltd.  287,447  2,988 
  Rinnai Corp.  67,436  2,963 
  Toho Co. Ltd.  196,274  2,950 
^  Oracle Corp. Japan  66,487  2,930 
  Nishi-Nippon City     
  Bank Ltd.  1,179,688  2,918 
  Mitsumi Electric Co. Ltd.  144,066  2,906 
  Idemitsu Kosan Co. Ltd.  39,021  2,862 
  Daicel Chemical     
  Industries Ltd.  468,140  2,827 
  Yamaha Corp.  273,426  2,825 
  Square Enix     
  Holdings Co., Ltd.  113,475  2,825 
  Hitachi Metals Ltd.  295,331  2,818 
  Sumitomo Rubber     
  Industries Ltd.  305,645  2,818 
  Japan Retail Fund     
  Investment Corp. Class A  598  2,811 
  Citizen Holdings Co. Ltd.  497,327  2,798 
  Alfresa Holdings Corp.  64,279  2,779 
  Cosmo Oil Co. Ltd.  1,055,406  2,772 
^  TOTO Ltd.  463,738  2,748 
  Keisei Electric     
  Railway Co. Ltd.  477,950  2,687 

45


Pacific Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Yamazaki Baking Co. Ltd.  217,113  2,664 
  Dowa Holdings Co., Ltd.  452,845  2,644 
  Nomura Real Estate     
  Holdings Inc.  164,117  2,613 
  Minebea Co. Ltd.  622,016  2,607 
  NOK Corp.  193,842  2,572 
*  Mitsui Mining &     
  Smelting Co. Ltd.  997,223  2,570 
*  Mizuho Trust &     
  Banking Co. Ltd.  2,692,452  2,566 
  Asics Corp.  286,772  2,556 
  Japan Petroleum     
  Exploration Co.  51,141  2,553 
  Tokyo Tatemono Co. Ltd.  507,732  2,421 
  Mabuchi Motor Co. Ltd.  50,433  2,413 
  Toyota Boshoku Corp.  115,385  2,406 
^  Sapporo Holdings Ltd.  458,117  2,392 
  UNY Co. Ltd.  320,400  2,380 
  Seven Bank Ltd.  972  2,375 
*  McDonald’s Holdings Co.     
  Japan Ltd.  117,399  2,373 
  Tosoh Corp.  881,152  2,369 
  USS Co. Ltd.  39,121  2,367 
  Tokyo Steel     
  Manufacturing Co. Ltd.  177,801  2,329 
  Yamato Kogyo Co. Ltd.  76,252  2,288 
  Nisshinbo Holdings Inc.  231,166  2,272 
  Marui Group Co. Ltd.  388,687  2,233 
  NHK Spring Co. Ltd.  285,269  2,227 
  Mitsubishi Logistics Corp.  204,466  2,225 
  Japan Prime Realty     
  Investment Corp.     
  Class A  991  2,158 
^,*  Shinsei Bank Ltd.  1,613,892  2,105 
^,*  Japan Airlines Corp.  1,611,136  2,087 
  Obic Co. Ltd.  12,306  2,081 
  Hakuhodo DY Holdings Inc.  40,517  2,035 
  Hitachi High-Technologies     
  Corp.  122,733  2,033 
  Nisshin Steel Co. Ltd.  1,187,901  1,982 
  Kinden Corp.  238,192  1,934 
  Canon Marketing Japan Inc.  119,290  1,933 
*  Senshu Ikeda Holdings Inc.  554,600  1,898 
  Ito En Ltd.  112,254  1,888 
  Coca-Cola West Co. Ltd.  99,071  1,840 
  Sapporo Hokuyo     
  Holdings Inc.  540,605  1,825 
  Shinko Electric     
  Industries Co. Ltd.  122,366  1,822 
  Fuji Electric     
  Holdings Co. Ltd.  971,927  1,806 
  Taiheiyo Cement Corp.  1,467,576  1,704 
  DIC Corp.  1,040,785  1,703 
  Hino Motors Ltd.  453,656  1,677 
^  Dena Co. Ltd.  483  1,670 
  Daido Steel Co. Ltd.  485,706  1,653 

      Market 
      Value• 
    Shares  ($000) 
  NTT Urban     
  Development Corp.  2,052  1,648 
*  Aozora Bank Ltd.  1,338,514  1,583 
^  Matsui Securities Co. Ltd.  215,498  1,551 
^  Jafco Co. Ltd.  56,561  1,521 
  Otsuka Corp.  28,432  1,499 
  Itochu Techno-     
  Solutions Corp.  50,327  1,383 
  Nissay Dowa General     
  Insurance Co. Ltd.  311,266  1,382 
  Aeon Credit Service Co. Ltd.   141,503  1,362 
  Onward Holdings Co. Ltd.  218,519  1,357 
  ABC-Mart Inc.  44,336  1,285 
^  Maruichi Steel Tube Ltd.  66,680  1,244 
  Fuji Media Holdings Inc.  841  1,236 
  Leopalace21 Corp.  217,393  1,176 
  Tokyo Broadcasting     
  System Holdings Inc.  67,242  1,003 
^  Acom Co. Ltd.  69,883  893 
^  Hikari Tsushin Inc.  46,374  870 
^  OSAKA Titanium     
  Technologies Co.  32,761  868 
^  Promise Co. Ltd.  130,296  828 
*  Dowa Mining Co. Ltd.     
  Rights Exp. 1/29/10  425,000  127 
      3,563,175 
New Zealand (0.3%)     
  Fletcher Building Ltd.  1,052,394  6,216 
  Telecom Corp. of     
  New Zealand Ltd.  3,204,877  5,787 
  Sky City Entertainment     
  Group Ltd.  981,561  2,425 
  Contact Energy Ltd.  523,571  2,332 
  Auckland International     
  Airport Ltd.  1,518,903  2,185 
      18,945 
Singapore (4.1%)     
  Singapore     
  Telecommunications     
  Ltd.  13,911,220  28,848 
  DBS Group Holdings Ltd.  2,984,727  27,333 
  United Overseas     
  Bank Ltd.  2,130,395  25,537 
  Oversea-Chinese     
  Banking Corp. Ltd.  4,371,869  23,560 
  CapitaLand Ltd.  4,443,028  12,884 
  Keppel Corp. Ltd.  2,229,123  12,811 
  Wilmar International Ltd.  2,224,176  9,806 
  Singapore Airlines Ltd.  928,290  8,902 
  Singapore Exchange Ltd.  1,499,107  8,495 
  Singapore Press     
  Holdings Ltd.  2,765,084  7,572 
*  Genting Singapore PLC  8,046,522  6,147 
  City Developments Ltd.  866,551  6,071 
  Singapore Technologies     
  Engineering Ltd.  2,355,691  4,746 

46


Pacific Stock Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Fraser and Neave Ltd.  1,694,771  4,614 
  CapitaMall Trust  3,887,977  4,367 
  Noble Group Ltd.  2,372,741  4,336 
  SembCorp Industries Ltd.  1,714,370  4,039 
  Olam International Ltd.  2,072,126  3,978 
  Jardine Cycle &     
  Carriage Ltd.  217,229  3,568 
  ComfortDelgro Corp. Ltd.  3,274,723  3,558 
*  Golden Agri-     
  Resources Ltd.  11,699,926  3,521 
  SembCorp Marine Ltd.  1,436,414  3,504 
  Ascendas Real Estate     
  Investment Trust  2,614,826  3,399 
  UOL Group Ltd.  901,345  2,150 
  Neptune Orient Lines Ltd.  1,587,688  1,767 
  StarHub Ltd.  1,079,945  1,446 
  Cosco Corp.     
  Singapore Ltd.  1,817,007  1,438 
*  Golden Agri-Resources     
  Ltd. Warrants Exp.     
  7/23/12  699,582  58 
      228,455 
Total Common Stocks     
(Cost $7,372,447)    5,602,184 
Temporary Cash Investments (1.6%)1   
Money Market Fund (1.5%)     
2,3  Vanguard Market     
  Liquidity Fund, 0.225%  86,082,132  86,082 
 
    Face   
    Amount   
    ($000)   
U.S. Government and Agency Obligations (0.1%) 
4,5  Federal Home Loan     
  Bank Discount Notes,     
  0.275%, 2/19/10  4,000  3,999 
Total Temporary Cash Investments   
(Cost $90,079)    90,081 
Total Investments (101.1%)     
(Cost $7,462,526)    5,692,265 

  Market 
  Value• 
  ($000) 
Other Assets and Liabilities (–1.1%)   
Other Assets  59,919 
Liabilities3  (123,471) 
  (63,552) 
Net Assets (100%)  5,628,713 
 
 
At October 31, 2009, net assets consisted of: 
  Amount 
  ($000) 
Paid-in Capital  8,411,407 
Undistributed Net Investment Income  126,000 
Accumulated Net Realized Losses  (1,138,246) 
Unrealized Appreciation (Depreciation)   
Investment Securities  (1,770,261) 
Futures Contracts  (259) 
Foreign Currencies and   
Forward Currency Contracts  72 
Net Assets  5,628,713 
 
Investor Shares—Net Assets   
Applicable to 295,978,414 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  2,845,721 
Net Asset Value Per Share—   
Investor Shares  $9.61 
 
Admiral Shares—Net Assets   
Applicable to 13,486,989 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  849,073 
Net Asset Value Per Share—   
Admiral Shares  $62.95 

47


Pacific Stock Index Fund   
 
 
 
 
  Amount 
  ($000) 
Signal Shares—Net Assets   
Applicable to 7,269,799 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  158,983 
Net Asset Value Per Share—   
Signal Shares  $21.87 
 
Institutional Shares—Net Assets   
Applicable to 50,523,532 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  486,638 
Net Asset Value Per Share—   
Institutional Shares  $9.63 
 
ETF Shares—Net Assets   
Applicable to 25,302,255 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  1,288,298 
Net Asset Value Per Share—   
ETF Shares  $50.92 

• See Note A in Notes to Financial Statements.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $81,024,000.
* Non-income-producing security.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures investments, the fund’s effective common stock and temporary cash investment positions represent 99.8% and 1.3%, respectively, of net assets.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
3 Includes $86,082,000 of collateral received for securities on loan.
4 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
5 Securities with a value of $3,999,000 have been segregated as initial margin for open futures contracts.
ADR—American Depositary Receipt.
REIT—Real Estate Investment Trust.
See accompanying Notes, which are an integral part of the Financial Statements.

48


Pacific Stock Index Fund   
 
 
 
Statement of Operations   
 
 
  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Dividends1  176,360 
Interest2  394 
Security Lending  5,190 
Total Income  181,944 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  345 
Management and Administrative—Investor Shares  7,156 
Management and Administrative—Admiral Shares  825 
Management and Administrative—Signal Shares  151 
Management and Administrative—Institutional Shares  606 
Management and Administrative—ETF Shares  1,034 
Marketing and Distribution—Investor Shares  1,409 
Marketing and Distribution—Admiral Shares  179 
Marketing and Distribution—Signal Shares  48 
Marketing and Distribution—Institutional Shares  477 
Marketing and Distribution—ETF Shares  388 
Custodian Fees  1,155 
Auditing Fees  36 
Shareholders’ Reports and Proxies—Investor Shares  163 
Shareholders’ Reports and Proxies—Admiral Shares  10 
Shareholders’ Reports and Proxies—Signal Shares  2 
Shareholders’ Reports and Proxies—Institutional Shares  2 
Shareholders’ Reports and Proxies—ETF Shares  224 
Trustees’ Fees and Expenses  13 
Total Expenses  14,223 
Expenses Paid Indirectly  (86) 
Net Expenses  14,137 
Net Investment Income  167,807 
Realized Net Gain (Loss)   
Investment Securities Sold  (1,022,718) 
Futures Contracts  (23,661) 
Foreign Currencies and Forward Currency Contracts  8,568 
Realized Net Gain (Loss)  (1,037,811) 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  1,863,207 
Futures Contracts  25,173 
Foreign Currencies and Forward Currency Contracts  (1,523) 
Change in Unrealized Appreciation (Depreciation)  1,886,857 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,016,853 

1 Dividends are net of foreign withholding taxes of $6,537,000.
2 Interest income from an affiliated company of the fund was $251,000.
See accompanying Notes, which are an integral part of the Financial Statements.

49


Pacific Stock Index Fund     
 
 
Statement of Changes in Net Assets     
 
  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  167,807  344,567 
Realized Net Gain (Loss)  (1,037,811)  597,304 
Change in Unrealized Appreciation (Depreciation)  1,886,857  (8,006,379) 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,016,853  (7,064,508) 
Distributions     
Net Investment Income     
Investor Shares  (90,208)  (247,822) 
Admiral Shares  (13,868)  (29,349) 
Signal Shares  (2,869)  (6,128) 
Institutional Shares  (32,221)  (59,339) 
ETF Shares  (22,623)  (34,784) 
Realized Capital Gain     
Investor Shares  —  — 
Admiral Shares  —  — 
Signal Shares  —  — 
Institutional Shares  —  — 
ETF Shares  —  — 
Total Distributions  (161,789)  (377,422) 
Capital Share Transactions     
Investor Shares  (2,494,500)  (1,532,226) 
Admiral Shares  (30,359)  34,355 
Signal Shares  (17,973)  31,639 
Institutional Shares  (1,316,524)  93,372 
ETF Shares  (114,249)  519,132 
Net Increase (Decrease) from Capital Share Transactions  (3,973,605)  (853,728) 
Total Increase (Decrease)  (3,118,541)  (8,295,658) 
Net Assets     
Beginning of Period  8,747,254  17,042,912 
End of Period1  5,628,713  8,747,254 
1 Net Assets—End of Period includes undistributed net investment income of $126,000,000 and $100,521,000.   

See accompanying Notes, which are an integral part of the Financial Statements.

50


Pacific Stock Index Fund           
 
 
Financial Highlights           
 
 
Investor Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $7.94  $14.19  $12.13  $10.39  $8.63 
Investment Operations           
Net Investment Income  .1891  .281  .236  .190  .156 
Net Realized and Unrealized Gain (Loss)           
on Investments  1.621  (6.228)  2.091  1.710  1.761 
Total from Investment Operations  1.810  (5.947)  2.327  1.900  1.917 
Distributions           
Dividends from Net Investment Income  (.140)  (.303)  (.267)  (.160)  (.157) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.140)  (.303)  (.267)  (.160)  (.157) 
Net Asset Value, End of Period  $9.61  $7.94  $14.19  $12.13  $10.39 
 
Total Return2  23.23%  –42.71%  19.52%  18.39%  22.48% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $2,846  $5,065  $11,281  $7,814  $5,202 
Ratio of Total Expenses to           
Average Net Assets  0.27%  0.22%  0.22%  0.27%  0.32% 
Ratio of Net Investment Income to           
Average Net Assets  2.42%  2.32%  1.80%  1.73%  1.76% 
Portfolio Turnover Rate3  8%  9%  3%  2%  7% 

1 Calculated based on average shares outstanding.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months or the account service fee that may be applicable to certain accounts with balanced below $10,000.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

51


Pacific Stock Index Fund           
 
 
Financial Highlights           
 
 
Admiral Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $52.04  $92.94  $79.43  $68.05  $56.47 
Investment Operations           
Net Investment Income  1.3861  1.933  1.613  1.302  1.069 
Net Realized and Unrealized Gain (Loss)           
on Investments  10.531  (40.773)  13.714  11.185  11.583 
Total from Investment Operations  11.917  (38.840)  15.327  12.487  12.652 
Distributions           
Dividends from Net Investment Income  (1.007)  (2.060)  (1.817)  (1.107)  (1.072) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (1.007)  (2.060)  (1.817)  (1.107)  (1.072) 
Net Asset Value, End of Period  $62.95  $52.04  $92.94  $79.43  $68.05 
 
Total Return2  23.38%  –42.62%  19.64%  18.46%  22.68% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $849  $737  $1,292  $1,128  $720 
Ratio of Total Expenses to           
Average Net Assets  0.16%  0.12%  0.12%  0.17%  0.20% 
Ratio of Net Investment Income to           
Average Net Assets  2.53%  2.42%  1.90%  1.83%  1.90% 
Portfolio Turnover Rate3  8%  9%  3%  2%  7% 

1 Calculated based on average shares outstanding.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

52


Pacific Stock Index Fund       
 
 
Financial Highlights       
 
 
Signal Shares       
      June 4, 
  Year Ended  20071 to 
  October 31,  Oct. 31, 
For a Share Outstanding Throughout Each Period  2009  2008  2007 
Net Asset Value, Beginning of Period  $18.08  $32.28  $30.53 
Investment Operations       
Net Investment Income  .4812  .667  .250 
Net Realized and Unrealized Gain (Loss) on Investments  3.658  (14.158)  1.500 
Total from Investment Operations  4.139  (13.491)  1.750 
Distributions       
Dividends from Net Investment Income  (.349)  (.709)  — 
Distributions from Realized Capital Gains  —  —  — 
Total Distributions  (.349)  (.709)  — 
Net Asset Value, End of Period  $21.87  $18.08  $32.28 
 
Total Return3  23.38%  –42.61%  5.73% 
 
Ratios/Supplemental Data       
Net Assets, End of Period (Millions)  $159  $150  $247 
Ratio of Total Expenses to Average Net Assets  0.16%  0.12%  0.12%4 
Ratio of Net Investment Income to Average Net Assets  2.53%  2.42%  1.90%4 
Portfolio Turnover Rate5  8%  9%  3% 

1 Inception.
2 Calculated based on average shares outstanding.
3 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months.
4 Annualized.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

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Pacific Stock Index Fund           
 
 
Financial Highlights           
 
 
Institutional Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $7.96  $14.22  $12.15  $10.41  $8.64 
Investment Operations           
Net Investment Income  .2151  .300  .251  .206  .180 
Net Realized and Unrealized Gain (Loss)           
on Investments  1.613  (6.242)  2.102  1.710  1.760 
Total from Investment Operations  1.828  (5.942)  2.353  1.916  1.940 
Distributions           
Dividends from Net Investment Income  (.158)  (.318)  (.283)  (.176)  (.170) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.158)  (.318)  (.283)  (.176)  (.170) 
Net Asset Value, End of Period  $9.63  $7.96  $14.22  $12.15  $10.41 
 
Total Return2  23.46%  –42.62%  19.72%  18.52%  22.74% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $487  $1,610  $2,720  $1,788  $1,280 
Ratio of Total Expenses to           
Average Net Assets  0.12%  0.09%  0.09%  0.12%  0.14% 
Ratio of Net Investment Income to           
Average Net Assets  2.57%  2.45%  1.93%  1.88%  1.95% 
Portfolio Turnover Rate3  8%  9%  3%  2%  7% 

1 Calculated based on average shares outstanding.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

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Pacific Stock Index Fund           
 
 
Financial Highlights           
 
 
ETF Shares           
          March 4, 
          20051 to 
    Year Ended October 31,  Oct. 31, 
For a Share Outstanding Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $42.10  $75.17  $64.24  $55.09  $50.71 
Investment Operations           
Net Investment Income  1.1092  1.573  1.314  1.060  .750 
Net Realized and Unrealized Gain (Loss)           
on Investments  8.534  (32.974)  11.089  9.020  3.630 
Total from Investment Operations  9.643  (31.401)  12.403  10.080  4.380 
Distributions           
Dividends from Net Investment Income  (.823)  (1.669)  (1.473)  (.930)  — 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.823)  (1.669)  (1.473)  (.930)  — 
Net Asset Value, End of Period  $50.92  $42.10  $75.17  $64.24  $55.09 
 
Total Return  23.38%  –42.61%  19.65%  18.43%  8.64% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $1,288  $1,186  $1,503  $693  $164 
Ratio of Total Expenses to Average Net Assets  0.16%  0.11%  0.12%  0.18%  0.18%3 
Ratio of Net Investment Income to           
Average Net Assets  2.53%  2.43%  1.90%  1.82%  1.89%3 
Portfolio Turnover Rate4  8%  9%  3%  2%  7% 

1 Inception.
2 Calculated based on average shares outstanding.
3 Annualized.
4 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

55


Pacific Stock Index Fund

Notes to Financial Statements

Vanguard Pacific Stock Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund invests in securities of foreign issuers, which may subject it to investment risks not normally associated with investing in securities of U.S. corporations. The fund offers five classes of shares: Investor Shares, Admiral Shares, Signal Shares, Institutional Shares, and ETF Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size criteria. Signal Shares are designed for institutional investors who meet certain administrative, service, and account-size criteria. Institutional Shares are designed for investors who meet certain administrative and service criteria and invest a minimum of $5 million. ETF Shares are listed for trading on the NYSE Arca, Inc.; they can be purchased and sold through a broker.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments acquired over 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value.

2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

3. Futures and Forward Currency Contracts: The fund uses index futures contracts to a limited extent, with the objectives of maintaining full exposure to the stock market, enhancing returns, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. The fund may seek to enhance returns by using futures contracts instead of the underlying securities when

56


Pacific Stock Index Fund

futures are believed to be priced more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

The fund also may enter into forward currency contracts to provide the appropriate currency exposure related to any open futures contracts. The fund’s risks in using these contracts include movement in the values of the foreign currencies relative to the U.S. dollar and the ability of the counterparties to fulfill their obligations under the contracts. Counterparty risk is mitigated by entering into forward currency contracts only with highly rated counterparties, by a master netting arrangement between the fund and the counterparty, and by the posting of collateral by the counterparty. The forward currency contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has posted. Any securities posted as collateral for open contracts are noted in the Statement of Net Assets

Futures and forward currency contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures or forward currency contracts.

4. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

5. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

6. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.

7. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold. Fees assessed on redemptions of capital shares are credited to paid-in capital.

Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses), shareholder reporting, and proxies. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.

57


Pacific Stock Index Fund

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At October 31, 2009, the fund had contributed capital of $1,210,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.48% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. The fund’s custodian bank has agreed to reduce its fees when the fund maintains cash on deposit in the non-interest-bearing custody account. For the year ended October 31, 2009, custodian fee offset arrangements reduced the fund’s expenses by $86,000 (an annual rate of 0.00% of average net assets).

D. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of October 31, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Common Stocks  4,168  5,598,016  — 
Temporary Cash Investments  86,082  3,999  — 
Futures Contracts—Assets1  271  —  — 
Forward Currency Contracts—Assets  147  —  — 
Forward Currency Contracts—Liabilities  (71)  —  — 
Total  90,597  5,602,015  — 
1 Represents variation margin on the last day of the reporting period.       

E. At October 31, 2009, the fair values of derivatives were reflected in the Statement of Net Assets as follows:

    Foreign   
  Equity  Exchange   
  Contracts1  Contracts  Total 
Statement of Net Assets Caption  ($000)  ($000)  ($000) 
Other Assets  271  147  418 
Liabilities  —  (71)  (71) 
1 Represents variation margin on the last day of the reporting period.       

58


Pacific Stock Index Fund

Realized net gain (loss) and the change in unrealized appreciation (depreciation) on derivatives for the year ended October 31, 2009, were:

    Foreign   
  Equity  Exchange   
  Contracts  Contracts  Total 
Realized Net Gain (Loss) on Derivatives  ($000)  ($000)  ($000) 
Futures Contracts  (23,661)  —  (23,661) 
Forward Currency Contracts  —  (2,698)  (2,698) 
Realized Net Gain (Loss) on Derivatives  (23,661)  (2,698)  (26,359) 
 
Change in Unrealized Appreciation (Depreciation) on Derivatives       
Futures Contracts  25,173  —  25,173 
Forward Currency Contracts  —  3,436  3,436 
Change in Unrealized Appreciation (Depreciation) on Derivatives  25,173  3,436  28,609 

At October 31, 2009, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

        ($000) 
    Number of  Aggregate  Unrealized 
    Long (Short)  Settlement  Appreciation 
Futures Contracts  Expiration  Contracts  Value  (Depreciation) 
Topix Index  December 2009  130  12,839  (152) 
S&P ASX 200 Index  December 2009  41  4,283  (107) 

At October 31, 2009, the fund had open forward currency contracts to receive and deliver currencies as follows. Unrealized appreciation (depreciation) on open forward currency contracts is treated as realized gain (loss) for tax purposes.

        Unrealized 
        Appreciation 
  Contract Amount (000)  (Depreciation) 
Contract Settlement Date    Receive  Deliver  ($000) 
12/16/2009  USD  12,514  JPY 1,132,494  (62) 
12/23/2009  AUD  4,631  USD 4,163  138 
AUD—Australian dollar.         
JPY—Japanese yen.         
USD—U.S. dollar.         

The fund had net unrealized foreign currency losses of $4,000 resulting from the translation of other assets and liabilities at October 31, 2009.

59


Pacific Stock Index Fund

F. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

During the year ended October 31, 2009, the fund realized net foreign currency gains of $11,266,000, which increased distributable net income for tax purposes; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Certain of the fund’s investments are in securities considered to be “passive foreign investment companies,” for which any unrealized appreciation and/or realized gains are required to be included in distributable net income for tax purposes. Unrealized appreciation of $9,510,000 on the fund’s passive foreign investment company holdings at October 31, 2008, has been distributed and is reflected in the balance of undistributed net investment income. During the year ended October 31, 2009, the fund realized gains on the sale of passive foreign investment companies of $8,195,000, which have been included in current and prior periods’ taxable income; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Unrealized appreciation on the fund’s passive foreign investment company holdings at October 31, 2009, was $3,675,000.

During the year ended October 31, 2009, the fund realized $532,937,000 of net capital losses resulting from in-kind redemptions—in which shareholders exchanged fund shares for securities held by the fund rather than for cash. Because such losses are not taxable losses to the fund, they have been reclassified from accumulated net realized losses to paid-in capital.

For tax purposes, at October 31, 2009, the fund had $142,861,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $1,138,170,000 to offset future net capital gains of $68,660,000 through October 31, 2010, $4,471,000 through October 31, 2011, $4,674,000 through October 31, 2013, $453,022,000 through October 31, 2016, and $607,343,000 through October 31, 2017. Capital loss carryforwards of $1,920,000 expired on October 31, 2009; accordingly, such losses have been reclassified from accumulated net realized losses to paid-in capital.

At October 31, 2009, the cost of investment securities for tax purposes was $7,466,201,000. Net unrealized depreciation of investment securities for tax purposes was $1,773,936,000, consisting of unrealized gains of $218,393,000 on securities that had risen in value since their purchase and $1,992,329,000 in unrealized losses on securities that had fallen in value since their purchase.

G. During the year ended October 31, 2009, the fund purchased $815,024,000 of investment securities and sold $4,678,274,000 of investment securities, other than temporary cash investments.

60


Pacific Stock Index Fund

H. Capital share transactions for each class of shares were:       
      Year Ended October 31, 
    2009    2008 
  Amount  Shares  Amount  Shares 
  ($000)  (000)  ($000)  (000) 
Investor Shares         
Issued  697,406  89,584  2,411,768  203,868 
Issued in Lieu of Cash Distributions  89,093  11,571  244,964  19,319 
Redeemed1  (3,280,999)  (442,815)  (4,188,958)  (380,723) 
Net Increase (Decrease)—Investor Shares  (2,494,500)  (341,660)  (1,532,226)  (157,536) 
Admiral Shares         
Issued  122,233  2,241  226,260  2,951 
Issued in Lieu of Cash Distributions  11,409  227  24,546  296 
Redeemed1  (164,001)  (3,133)  (216,451)  (2,998) 
Net Increase (Decrease)—Admiral Shares  (30,359)  (665)  34,355  249 
Signal Shares         
Issued  60,869  3,310  119,279  4,249 
Issued in Lieu of Cash Distributions  2,555  146  5,089  176 
Redeemed1  (81,397)  (4,472)  (92,729)  (3,794) 
Net Increase (Decrease)—Signal Shares  (17,973)  (1,016)  31,639  631 
Institutional Shares         
Issued  405,620  51,039  918,220  82,517 
Issued in Lieu of Cash Distributions  29,986  3,894  51,874  4,047 
Redeemed1  (1,752,130)  (206,617)  (876,722)  (75,668) 
Net Increase (Decrease)—Institutional Shares  (1,316,524)  (151,684)  93,372  10,896 
ETF Shares         
Issued  150,908  3,422  541,682  8,588 
Issued in Lieu of Cash Distributions  —  —  —  — 
Redeemed1  (265,157)  (6,300)  (22,550)  (400) 
Net Increase (Decrease)—ETF Shares  (114,249)  (2,878)  519,132  8,188 
1 Net of redemption fees for fiscal 2009 and 2008 of $361,000 and $911,000, respectively (fund totals).     

I. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 15, 2009, for potential recognition or disclosure in these financial statements.

61


Emerging Markets Stock Index Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics     
    Target  Broad 
  Fund  Index1  Index2 
Number of Stocks  799  748  1,806 
Turnover Rate  12%  —  — 
Expense Ratio3    —  — 
Investor Shares  0.39%     
Admiral Shares  0.27%     
Signal Shares  0.27%     
Institutional Shares  0.20%     
ETF Shares  0.27%     
Short-Term Reserves  0.0%  —  — 

Sector Diversification (% of equity exposure) 
    Target  Broad 
  Fund  Index1  Index2 
Consumer Discretionary  5.4%  5.3%  8.3% 
Consumer Staples  5.4  5.4  8.6 
Energy  15.3  15.3  11.2 
Financials  24.7  25.4  26.6 
Health Care  2.2  2.1  6.4 
Industrials  6.8  6.7  9.8 
Information Technology  13.0  12.7  6.5 
Materials  14.6  14.5  11.2 
Telecommunication       
Services  9.1  9.1  6.4 
Utilities  3.5  3.5  5.0 

Volatility Measures4   
  Fund Versus  Fund Versus 
  Target Index1  Broad Index2 
R-Squared  0.99  0.94 
Beta  1.01  1.25 

Ten Largest Holdings5 (% of total net assets) 
Petroleo Brasileiro SA  integrated oil   
  and gas  4.0% 
Vale SA  diversified metals   
  and mining  2.9 
Samsung     
Electronics Co. Ltd.  semiconductors  2.6 
Gazprom OAO ADR  integrated oil   
  and gas  2.0 
China Mobile Ltd.  wireless   
  telecommunication   
  services  1.9 
Teva Pharmaceutical     
Industries Ltd.  pharmaceuticals  1.5 
Taiwan Semiconductor     
Manufacturing Co. Ltd.  semiconductors  1.5 
America Movil  wireless   
SAB de CV  telecommunication   
  services  1.4 
Itau Unibanco Holding SA  diversified banks  1.4 
China Construction     
Bank Corp.  diversified banks  1.3 
Top Ten    20.5% 

1 MSCI Emerging Markets Index.
2 MSCI All Country World Index ex USA.
3 The expense ratios shown are from the prospectuses dated February 27, 2009, and represent estimated costs for the current fiscal year based on the fund’s net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the expense ratios were 0.40% for Investor Shares, 0.27% for Admiral Shares, 0.27% for Signal Shares, 0.23% for Institutional Shares, and 0.27% for ETF Shares.
4 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
5 The holdings listed exclude any temporary cash investments and equity index products.

62


Emerging Markets Stock Index Fund

Market Diversification (% of equity exposure) 
    Target 
  Fund  Index1 
China  18.5%  18.6% 
Brazil  16.4  16.3 
South Korea  12.8  12.8 
Taiwan  11.3  11.1 
India  7.3  7.2 
South Africa  7.0  6.9 
Russia  6.7  6.6 
Mexico  4.4  4.3 
Malaysia  2.8  2.8 
Israel  2.8  2.7 
Indonesia  1.8  1.8 
Turkey  1.5  1.5 
Chile  1.4  1.3 
Thailand  1.3  1.3 
Poland  1.3  1.2 
Other Emerging Markets  2.7  3.6 

1 MSCI Emerging Markets Index.

63


Emerging Markets Stock Index Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: October 31, 1999–October 31, 2009
Initial Investment of $10,000


    Average Annual Total Returns  Final Value 
    Periods Ended October 31, 2009  of a $10,000 
  One Year  Five Years  Ten Years  Investment 
Emerging Markets Stock Index Fund         
Investor Shares1  58.90%  15.66%  11.06%  $28,550 
MSCI All Country World Index ex USA  34.79  7.58  3.95  14,733 
Spliced Emerging Markets Index2  64.13  16.47  11.64  30,087 
Emerging Markets Funds Average3  56.47  14.15  10.64  27,494 
 
        Final Value of 
      Since  a $100,000 
  One Year    Inception4  Investment 
Emerging Markets Stock Index Fund Admiral Shares1  59.11%    9.61%  $136,084 
MSCI All Country World Index ex USA  34.79    1.51  105,142 
Spliced Emerging Markets Index2  64.13    10.48  139,711 

1 Performance figures are adjusted for the 0.50% (0.25% prior to October 30, 2009, 0.50% prior to June 26, 2008) transaction fee on purchases and 0.25% (0.50% prior to June 26, 2008) transaction fee on redemptions. Total returns do not reflect the 2% fee assessed until March 23, 2005, on redemptions of shares purchased on or after June 27, 2003, and held for less than two months, or for Investor
Shares, the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Select Emerging Markets Index through August 23, 2006; MSCI Emerging Markets Index thereafter.
3 Derived from data provided by Lipper Inc.
4 Performance for the fund’s Admiral Shares and comparative standards is calculated since the Admiral Shares’ inception: June 23, 2006.

64


Emerging Markets Stock Index Fund         
 
 
 
 
        Final Value of 
      Since  a $10,000,000 
  One Year    Inception1  Investment 
Emerging Markets Stock Index Fund Signal Shares2  59.15%    2.08%  $10,589,045 
MSCI All Country World Index ex USA  34.79    –4.92  8,691,755 
MSCI Emerging Markets Index  64.13    3.11  10,889,315 
 
        Final Value of 
      Since  a $5,000,000 
  One Year  Five Years  Inception1  Investment 
Emerging Markets Stock Index Fund         
Institutional Shares2  59.23%  15.86%  10.87%  $13,127,023 
MSCI All Country World Index ex USA  34.79  7.58  3.35  6,803,220 
Spliced Emerging Markets Index3  64.13  16.47  11.29  13,609,219 
 
        Final Value of 
      Since  a $10,000 
  One Year    Inception1  Investment 
Emerging Markets Stock Index Fund ETF Shares         
Net Asset Value4  60.28%    11.51%  $16,617 
MSCI All Country World Index ex USA  34.79    4.73  12,403 
Spliced Emerging Markets Index3  64.13    12.09  17,024 
 
 
Cumulative Returns: ETF Shares, March 4, 2005–October 31, 2009     
        Since 
      One Year  Inception1 
Emerging Markets Stock Index Fund ETF Shares Market Price    58.93%  64.99% 
Emerging Markets Stock Index Fund Shares Net Asset Value    60.28  66.17 
Spliced Emerging Markets Index3      64.13  70.24 

1 Performance for the fund and its comparative standards is calculated since the following inception dates: January 19, 2007, for the Signal Shares; June 22, 2000, for the Institutional Shares; and March 4, 2005, for the ETF Shares.
2 Performance figures are adjusted for the 0.50% (0.25% prior to October 30, 2009, 0.50% prior to June 26, 2008) transaction fee on purchases and 0.25% (0.50% prior to June 26, 2008) transaction fee on redemptions. Total returns do not reflect the 2% fee assessed until March 23, 2005, on redemptions of shares purchased on or after June 27, 2003, and held for less than two months.
3 Select Emerging Markets Index through August 23, 2006; MSCI Emerging Markets Index thereafter.
4 For more information about how the ETF Shares’ market prices have compared with their net asset value, visit www.vanguard.com, select your ETF, and then select the Performance tab. The Premium/Discount table there shows the percentages of days on which the ETF Shares’ market price was above or below the NAV.

65


Emerging Markets Stock Index Fund

Fiscal-Year Total Returns (%): October 31, 1999–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009
This table presents average annual total returns through the latest calendar quarter—rather than through the end
of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

  Inception Date  One Year  Five Years  Ten Years 
Emerging Markets Stock Index Fund         
Investor Shares2  5/4/1994  17.38%  16.67%  11.71% 
Fee-Adjusted Returns3    16.81  16.56  11.66 
Admiral Shares  6/23/2006  17.49  10.584  — 
Fee-Adjusted Returns3    16.92  10.424  — 
Signal Shares  1/19/2007  17.51  2.944  — 
Fee-Adjusted Returns3    16.94  2.754  — 
Institutional Shares  6/22/2000  17.57  16.87  11.214 
Fee-Adjusted Returns3    17.00  16.76  11.164 
ETF Shares  3/4/2005       
Market Price    17.28  12.204  — 
Net Asset Value    17.52  12.074  — 

1 Select Emerging Markets Index through August 23, 2006; MSCI Emerging Markets Index thereafter.
2 Returns do not reflect the $10 annual account maintenance fee applied on balances under $10,000.
3 Performance figures are adjusted for the 0.25% (0.50% prior to June 26, 2008) transaction fee on purchases and redemptions that were in effect as of September 30, 2009. Total returns do not reflect the 2% fee assessed until March 23, 2005.
4 Returns since inception.
Note: See Financial Highlights tables for dividend and capital gains information.

66


Emerging Markets Stock Index Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

      Market 
      Value• 
    Shares  ($000) 
Common Stocks (99.7%)1     
Brazil (16.4%)     
  Petroleo Brasileiro     
  SA Pfd.  17,720,912  351,280 
  Petroleo Brasileiro SA  12,701,496  292,013 
  Petroleo Brasileiro SA     
  Series A ADR  6,028,266  241,854 
  Vale SA  10,233,577  230,337 
*  Vale SA Class B ADR  9,860,918  227,787 
  Petroleo Brasileiro     
  SA ADR  4,456,295  205,970 
  Itau Unibanco Holding SA  9,878,408  187,912 
  Itau Unibanco     
  Holding SA ADR  9,544,713  182,686 
  Vale SA  6,981,638  177,355 
  Banco Bradesco SA  8,711,900  170,420 
*  Vale SA Class B ADR  6,665,271  169,898 
  Investimentos Itau SA  20,693,452  118,292 
  Banco Bradesco SA ADR  5,800,557  114,271 
  OGX Petroleo e     
  Gas Participacoes SA  117,073  94,371 
  Cia de Bebidas das     
  Americas  845,306  76,752 
  BRF - Brasil Foods SA  3,034,000  73,146 
  BM&FBOVESPA SA  11,312,020  72,883 
  Cia Siderurgica     
  Nacional SA ADR  2,002,498  66,403 
  Usinas Siderurgicas     
  de Minas Gerais SA  2,349,455  61,350 
  Cia Siderurgica     
  Nacional SA  1,790,860  59,157 
  Cia de Bebidas     
  das Americas ADR  583,580  52,569 
*  Banco Santander     
  Brasil SA ADR  4,418,424  52,402 
  Companhia Brasileira de     
  Meios de Pagamento  5,641,512  51,912 
  Banco do Brasil SA  3,084,765  49,399 
  Gerdau SA Pfd.  3,143,500  47,377 
  Gerdau SA  3,108,446  46,938 

      Market 
      Value• 
    Shares  ($000) 
  Metalurgica Gerdau     
  SA Class A  2,549,208  46,814 
  Redecard SA  3,078,885  45,198 
  Bradespar SA  2,108,971  43,278 
  Vivo Participacoes SA  1,437,552  34,992 
  Cia de Concessoes     
  Rodoviarias  1,710,624  33,638 
  Cia Energetica de     
  Minas Gerais  1,997,632  31,355 
  Tele Norte Leste     
  Participacoes SA  1,587,863  30,196 
  Centrais Eletricas     
  Brasileiras SA  2,057,681  29,307 
  Ultrapar Participacoes SA  666,516  29,190 
  Natura Cosmeticos SA  1,580,965  28,414 
  Cia Brasileira de     
  Distribuicao Grupo Pao     
  de Acucar ADR  463,049  28,010 
  All America Latina     
  Logistica SA  3,533,063  25,932 
  Usinas Siderurgicas     
  de Minas Gerais SA  1,045,883  25,708 
  Souza Cruz SA  696,573  24,722 
*  Global Village Telecom     
  Holding SA  845,792  24,270 
  Cia Energetica de Minas     
  Gerais ADR  1,450,322  22,901 
  Centrais Eletricas     
  Brasileiras SA Pfd. B  1,770,359  22,511 
*  NET Servicos de     
  Comunicacao SA  1,688,791  20,813 
  Lojas Americanas SA  2,983,798  19,462 
  Cia Energetica de     
  Sao Paulo  1,603,621  18,662 
  Cyrela Brazil Realty SA  1,427,746  18,114 
  Tele Norte Leste     
  Participacoes SA ADR  923,045  17,593 
  JBS SA  3,107,446  17,146 
*  Empresa Brasileira     
  de Aeronautica SA ADR  794,361  16,086 
  CPFL Energia SA  905,339  15,855 

67


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Eletropaulo Metropolitana     
  Eletricidade de     
  Sao Paulo SA  834,813  15,747 
  Tractebel Energia SA  1,287,597  15,715 
  MRV Engenharia e     
  Participacoes SA  791,627  14,874 
  B2W Cia Global Do Varejo  493,134  14,293 
*  Marfrig Alimentos SA  1,230,448  14,074 
  Tele Norte Leste     
  Participacoes SA  591,381  13,328 
  Cia de Saneamento     
  Basico do Estado de     
  Sao Paulo ADR  345,752  13,318 
*  Duratex SA  1,792,702  12,415 
  Cia Paranaense de     
  Energia ADR  700,030  12,320 
*  Votorantim Celulose     
  e Papel SA  880,416  12,060 
  Suzano Papel e     
  Celulose SA  1,334,227  11,596 
  Gerdau SA  982,900  11,243 
  Banco do Estado do     
  Rio Grande do Sul  1,759,402  11,186 
  AES Tiete SA  936,700  10,555 
  EDP - Energias do     
  Brasil SA  641,805  10,296 
  Klabin SA  4,312,661  10,282 
*  Cosan SA Industria e     
  Comercio  959,050  10,153 
  Brasil Telecom     
  Participacoes SA  977,726  9,879 
  Cia de Saneamento     
  Basico do Estado de     
  Sao Paulo  508,882  9,822 
*  Empresa Brasileira de     
  Aeronautica SA  1,888,649  9,628 
*  Braskem SA  1,456,924  9,594 
  Brasil Telecom SA  1,114,832  9,499 
*,^  Aracruz Celulose SA ADR  484,518  9,022 
*  Fertilizantes Fosfatados SA  923,079  8,908 
  Porto Seguro SA  823,524  8,691 
  Telemar Norte Leste SA  261,350  8,225 
  Cia de Transmissao de     
  Energia Eletrica Paulista  286,000  7,923 
  Tim Participacoes SA  3,297,732  7,806 
  Tim Participacoes SA ADR  297,445  7,017 
*  Banco Santander Brasil SA  577,500  6,819 
  Brasil Telecom     
  Participacoes SA ADR  132,666  6,677 
  Cia Paranaense de Energia  360,439  6,279 
*  BRF–Brasil Foods SA ADR  40,346  1,952 
*  Aracruz Celulose SA  994,205  1,857 
  Cia Brasileira de     
  Distribuicao Grupo     
  Pao de Acucar  48,619  1,467 
  Vivo Participacoes SA ADR  57,000  1,382 

      Market 
      Value• 
    Shares  ($000) 
  Centrais Eletricas     
  Brasileiras SA ADR  58,000  832 
*  NET Servicos de     
  Comunicacao SA ADR  36,796  452 
      4,492,087 
Chile (1.4%)     
  Empresas COPEC SA  4,279,504  56,993 
  Empresas CMPC SA  967,647  34,627 
  Centros Comerciales     
  Sudamericanos SA  8,096,141  24,931 
  Empresa Nacional de     
  Electricidad SA  15,839,753  24,344 
  Empresa Nacional de     
  Electricidad SA ADR  523,033  24,002 
  Enersis SA  65,135,530  23,137 
  Sociedad Quimica y     
  Minera de Chile SA ADR   610,654  22,441 
  Banco Santander     
  Chile ADR  416,014  21,899 
  Enersis SA ADR  1,208,948  21,374 
  CAP SA  740,167  19,238 
  Lan Airlines SA  1,284,298  17,055 
  Colbun SA  68,869,010  16,214 
  ENTEL Chile SA  1,083,766  14,411 
  SACI Falabella  2,755,256  13,078 
  Sociedad Quimica y     
  Minera de Chile SA     
  Class B  337,642  12,400 
  AES Gener SA  24,584,231  10,418 
  Vina Concha y Toro SA  4,677,503  9,911 
  Cia Cervecerias     
  Unidas SA  1,313,267  9,263 
  Banco de Credito     
  e Inversiones  302,311  8,774 
  Banco Santander Chile  54,517,082  2,772 
      387,282 
China (18.5%)     
  China Mobile Ltd.  56,862,967  533,058 
  China Construction     
  Bank Corp.  422,377,493  364,145 
  Industrial & Commercial     
  Bank of China  431,501,659  343,309 
  China Life Insurance     
  Co. Ltd.  70,287,470  323,170 
  Bank of China Ltd.  538,683,525  312,486 
  CNOOC Ltd.  168,975,952  253,065 
  PetroChina Co. Ltd.  200,127,679  240,810 
  Tencent Holdings Ltd.  8,531,980  148,564 
  China Shenhua     
  Energy Co. Ltd.  30,809,325  138,214 
  China Petroleum &     
  Chemical Corp.  151,841,540  128,773 
^  Ping An Insurance     
  Group Co. of China Ltd.  12,290,488  107,712 
  China Overseas Land     
  & Investment Ltd.  39,079,076  84,251 

68


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
^  China Merchants     
  Bank Co. Ltd.  32,664,949  83,568 
  China Unicom     
  Hong Kong Ltd.  57,135,048  72,647 
^  Bank of Communications     
  Co. Ltd.  55,606,232  66,488 
  China Telecom     
  Corp. Ltd.  133,777,683  59,127 
  China Coal Energy Co.  33,956,000  47,240 
  China Resources     
  Land Ltd.  19,458,000  46,971 
*,^  Byd Co. Ltd.  5,129,755  46,964 
  China Communications     
  Construction Co. Ltd.  40,946,834  44,021 
^  Aluminum Corp. of     
  China Ltd.  38,081,880  41,485 
  China Resources     
  Enterprise  12,065,460  40,410 
  Hengan International     
  Group Co. Ltd.  6,275,000  40,393 
  Zijin Mining     
  Group Co. Ltd.  39,558,120  38,290 
  Belle International     
  Holdings Ltd.  36,117,500  36,465 
  Tingyi Cayman Islands     
  Holding Corp.  16,112,752  35,951 
  China Citic Bank  46,771,933  35,011 
  China Merchants     
  Holdings International     
  Co. Ltd.  10,819,510  34,507 
  Dongfeng Motor     
  Group Co. Ltd.  27,126,044  32,251 
  China Resources Power     
  Holdings Co. Ltd.  15,462,548  32,033 
^  Jiangxi Copper Co. Ltd.  13,853,992  31,390 
*  China Mengniu     
  Dairy Co. Ltd.  11,023,676  30,887 
  Yanzhou Coal     
  Mining Co. Ltd.  19,752,112  30,536 
^  China COSCO     
  Holdings Co. Ltd.  23,569,000  29,049 
  Shimao Property     
  Holdings Ltd.  15,435,772  28,673 
  Sino-Ocean Land     
  Holdings Ltd.  29,175,802  28,373 
*  China Railway     
  Group Ltd.  35,794,608  28,180 
  Beijing Enterprises     
  Holdings Ltd.  4,684,000  28,038 
  Citic Pacific Ltd.  10,473,874  26,992 
^  Anhui Conch     
  Cement Co. Ltd.  4,156,698  26,895 
^  Alibaba.com Ltd.  11,629,632  26,794 
*,^  China Taiping Insurance     
  Holdings Co. Ltd.  7,024,007  24,756 

      Market 
      Value• 
    Shares  ($000) 
  China National Building     
  Material Co. Ltd.  11,502,180  24,696 
  Shanghai Industrial     
  Holdings Ltd.  5,243,045  24,631 
  Lenovo Group Ltd.  43,569,309  24,259 
  Denway Motors Ltd.  49,130,893  23,517 
^  China Railway     
  Construction Corp. Ltd.  16,231,265  21,515 
^  Angang Steel Co. Ltd.  11,036,396  20,344 
  Huaneng Power     
  International Inc.  31,383,992  20,033 
  Agile Property     
  Holdings Ltd.  15,571,245  19,930 
  Kingboard Chemical     
  Holdings Ltd.  4,934,626  19,861 
^  Li Ning Co. Ltd.  7,140,068  19,372 
  Cnpc Hong Kong Ltd.  18,344,330  19,366 
  Parkson Retail     
  Group Ltd.  11,810,779  19,121 
  Fushan International     
  Energy Group Ltd.  24,719,984  19,039 
  China Yurun Food     
  Group Ltd.  9,127,439  18,760 
*,^  PICC Property &     
  Casualty Co. Ltd.  25,083,551  18,476 
  Inner Mongolia Yitai     
  Coal Co. Class B  2,844,050  18,240 
  Chaoda Modern     
  Agriculture     
  Holdings Ltd.  23,187,067  17,915 
  China Shipping     
  Development Co. Ltd.  12,699,274  17,825 
^  Guangzhou R&F     
  Properties Co. Ltd.  9,462,400  17,731 
*  GOME Electrical     
  Appliances     
  Holdings Ltd.  59,705,805  17,490 
^  China Everbright Ltd.  7,200,010  16,973 
  China Oilfield     
  Services Ltd.  15,144,000  16,363 
^  ZTE Corp.  2,913,849  16,146 
  COSCO Pacific Ltd.  11,378,988  15,719 
^  Datang International     
  Power Generation     
  Co. Ltd.  33,044,568  15,650 
^  China High Speed     
  Transmission Equipment     
  Group Co.  7,703,280  15,449 
^  Country Garden     
  Holdings Co.  40,231,821  15,426 
*,^  China Zhongwang     
  Holdings Ltd.  16,073,732  15,049 
  Shui On Land Ltd.  24,266,737  14,709 
  Want Want China     
  Holdings Ltd.  24,778,285  14,557 

69


Emerging Markets Stock Index Fund

      Market 
      Value• 
    Shares  ($000) 
*  Metallurgical Corp. of     
  China Ltd.  21,386,000  14,487 
  Guangdong     
  Investment Ltd.  26,826,464  14,019 
^  Renhe Commercial     
  Holdings Co. Ltd.  72,447,454  13,936 
  China Vanke Co. Ltd.     
  Class B  10,835,765  13,403 
  Shanghai Electric     
  Group Co. Ltd.  27,930,613  13,152 
  Zhejiang Expressway     
  Co. Ltd.  14,870,704  12,648 
  China Dongxiang     
  Group Co.  20,530,788  12,544 
*,^  Air China Ltd.  22,989,548  12,444 
  Shandong Weigao     
  Group Medical     
  Polymer Co. Ltd.  3,473,550  12,277 
*,^  Beijing Capital     
  International Airport     
  Co. Ltd.  17,891,654  12,032 
  Hopson Development     
  Holdings Ltd.  6,651,840  11,640 
  Tsingtao Brewery     
  Co. Ltd.  2,860,000  11,619 
  China Agri-Industries     
  Holdings Ltd.  11,741,586  11,262 
  Yantai Changyu Pioneer     
  Wine Co. Class B  1,529,703  11,245 
  Huabao International     
  Holdings Ltd.  11,368,838  10,844 
  Jiangsu Expressway     
  Co. Ltd.  12,164,139  10,817 
*,^  Maanshan Iron & Steel  17,803,134  10,717 
^  Soho China Ltd.  19,322,606  10,383 
^  Geely Automobile     
  Holdings Ltd.  28,121,000  10,168 
^  Fosun International  14,897,237  10,091 
^  Sinofert Holdings Ltd.  19,983,917  9,890 
*,^  Hidili Industry     
  International     
  Development Ltd.  9,627,913  9,853 
*  Sinopec Shanghai     
  Petrochemical Co. Ltd.  24,487,888  9,814 
  Weichai Power Co. Ltd.  1,424,800  9,301 
*,^  China Shipping     
  Container Lines     
  Co. Ltd.  25,397,618  9,089 
  China Communications     
  Services Corp. Ltd.  17,058,311  8,824 
  Franshion Properties     
  China Ltd.  30,526,094  8,535 
  China BlueChemical Ltd.  15,869,405  8,443 
^  China South Locomotive     
  and Rolling Stock Corp.   15,222,877  8,442 

      Market 
      Value• 
    Shares  ($000) 
  Shanghai Lujiazui Finance &   
  Trade Zone Development     
  Co. Ltd. Class B  4,304,500  8,034 
  China Travel International     
  Inv HK  31,645,204  6,460 
  Sinotruk Hong Kong Ltd.  5,122,500  6,091 
  Guangshen     
  Railway Co. Ltd.  14,713,975  5,978 
  Dongfang Electric     
  Corp. Ltd.  1,199,315  5,958 
  China International     
  Marine Containers Co.     
  Ltd. Class B  5,432,359  5,417 
  Shanghai Zhenhua     
  Heavy Industry Co.     
  Ltd. Class B  6,000,148  4,966 
  Harbin Power     
  Equipment Co. Ltd.  4,775,460  4,436 
      5,079,363 
Colombia (0.2%)     
  BanColombia SA ADR  1,374,602  54,407 
 
Czech Republic (0.5%)     
  CEZ AS  1,546,290  76,146 
  Komercni Banka AS  151,825  29,773 
  Telefonica O2 Czech     
  Republic AS  1,095,199  25,804 
      131,723 
Egypt (0.3%)     
  Orascom Construction     
  Industries GDR  903,585  43,617 
  Orascom Telecom     
  Holding SAE GDR  899,821  30,597 
      74,214 
Hungary (0.6%)     
*,^  OTP Bank PLC  2,683,466  75,458 
*,^  MOL Hungarian     
  Oil and Gas NyRt  504,566  42,154 
^  Richter Gedeon Nyrt.  141,651  29,500 
  Magyar Telekom     
  Telecommunications     
  PLC  4,604,066  19,849 
      166,961 
India (7.3%)     
  Reliance Industries Ltd.  6,197,051  250,719 
  Infosys Technologies Ltd.  4,319,545  200,602 
  Housing Development     
  Finance Corp.  1,981,489  110,877 
  ICICI Bank Ltd.  5,168,882  85,359 
  Larsen & Toubro Ltd.  1,871,295  61,769 
  Tata Consultancy     
  Services Ltd.  4,426,925  58,856 
  Oil & Natural Gas     
  Corp. Ltd.  2,455,572  58,510 

70


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Sterlite Industries     
  India Ltd.  3,516,273  56,788 
  ITC Ltd.  10,501,311  56,544 
  Bharat Heavy     
  Electricals Ltd.  1,104,528  51,656 
  HDFC Bank Ltd.  1,441,322  49,085 
  Hindustan Unilever Ltd.  8,189,832  48,965 
  Jindal Steel & Power Ltd.  3,485,707  46,964 
  HDFC Bank Ltd. ADR  386,916  42,797 
  Axis Bank Ltd.  2,025,948  38,566 
  NTPC Ltd.  7,720,840  34,653 
  ICICI Bank Ltd. ADR  1,084,354  34,103 
  DLF Ltd.  3,811,839  29,644 
  GAIL India Ltd.  3,555,911  26,172 
  Mahindra & Mahindra Ltd.  1,317,819  25,500 
  Hero Honda Motors Ltd.  768,369  25,378 
  Wipro Ltd.  1,881,847  23,984 
  Tata Motors Ltd.  2,014,165  23,843 
  State Bank of India Ltd.  498,607  23,006 
  Jaiprakash Associates Ltd.  5,183,770  22,828 
  Tata Power Co. Ltd.  786,724  22,117 
  Reliance     
  Communications Ltd.  5,800,483  21,380 
  Reliance     
  Infrastructure Ltd.  950,003  21,022 
  Sun Pharmaceutical     
  Industries Ltd.  673,101  19,587 
  Infrastructure Development     
  Finance Co. Ltd.  6,271,254  19,359 
  Maruti Suzuki India Ltd.  652,470  19,283 
  Unitech Ltd.  11,121,755  19,056 
  Sesa Goa Ltd.  2,975,789  18,901 
  Kotak Mahindra Bank Ltd.  1,261,913  18,842 
  Cipla Ltd.  2,995,234  18,137 
  Tata Steel Ltd.  1,803,404  17,824 
  Wipro Ltd. ADR  950,747  16,305 
  Hindalco Industries Ltd.  6,349,868  16,226 
*  Indiabulls Real Estate Ltd.  2,985,568  15,618 
  United Spirits Ltd.  674,388  15,158 
  Reliance Capital Ltd.  943,223  14,775 
*  Cairn India Ltd.  2,652,249  14,688 
^  Dr Reddys     
  Laboratories Ltd. ADR  670,562  14,571 
  Steel Authority Of     
  India Ltd.  4,210,837  14,513 
  Bajaj Auto Ltd.  402,709  11,798 
  JSW Steel Ltd.  688,479  10,908 
  Ambuja Cements Ltd.  5,665,090  10,636 
  Satyam Computer     
  Services Ltd.  4,868,700  10,521 
  HCL Technologies Ltd.  1,475,287  9,473 
  Power Grid Corp. of     
  India Ltd.  4,247,266  9,317 
*  GMR Infrastructure Ltd.  7,019,658  9,075 
*  Reliance Natural     
  Resources Ltd.  6,728,278  9,025 

      Market 
      Value• 
    Shares  ($000) 
  Grasim Industries Ltd.  194,339  8,959 
  Zee Entertainment     
  Enterprises Ltd.  1,820,957  8,828 
  Bharat Petroleum     
  Corp. Ltd.  803,637  8,734 
  Dr Reddys     
  Laboratories Ltd.  393,566  8,428 
*  Ranbaxy Laboratories Ltd. 983,253  8,097 
  Siemens India Ltd.  739,571  8,005 
  ABB Ltd.  475,183  7,702 
  ACC Ltd.  479,525  7,580 
*  Idea Cellular Ltd.  5,828,930  6,372 
  United Phosphorus Ltd.  1,941,274  5,859 
  Aditya Birla Nuvo Ltd.  307,855  5,134 
  Glenmark     
  Pharmaceuticals Ltd.  983,453  4,644 
  State Bank of     
  India Ltd. GDR  47,357  4,325 
      1,997,950 
Indonesia (1.8%)     
  Telekomunikasi     
  Indonesia Tbk PT  96,309,479  82,933 
  Astra International     
  Tbk PT  19,617,590  63,116 
  Bank Central     
  Asia Tbk PT  118,063,724  55,596 
  Perusahaan Gas     
  Negara PT  115,359,980  42,923 
  Bumi Resources     
  Tbk PT  167,854,552  40,409 
  Bank Rakyat     
  Indonesia  52,717,800  38,363 
  Bank Mandiri Tbk PT  71,996,524  34,548 
  United Tractors Tbk PT  14,658,962  22,476 
  Indocement Tunggal     
  Prakarsa Tbk PT  14,783,603  16,834 
  Unilever Indonesia     
  Tbk PT  14,970,230  15,657 
  Tambang Batubara     
  Bukit Asam Tbk PT  9,192,786  14,321 
  Bank Danamon     
  Indonesia Tbk PT  27,742,349  12,942 
  Indofood Sukses     
  Makmur Tbk PT  38,837,796  12,274 
  Semen Gresik     
  Persero Tbk PT  14,990,820  10,594 
  Indosat Tbk PT  16,244,773  8,629 
*  International Nickel     
  Indonesia Tbk PT  20,428,650  8,466 
  Astra Agro     
  Lestari Tbk PT  3,539,180  7,857 
  Aneka Tambang Tbk PT  33,111,159  7,695 
*  Lippo Karawaci Tbk PT  110,385,730  7,467 
      503,100 

71


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
Israel (2.8%)     
  Teva Pharmaceutical     
  Industries Ltd.  7,823,886  394,445 
  Israel Chemicals Ltd.  4,878,803  56,987 
*  Check Point Software     
  Technologies  1,641,051  50,987 
  Bank Leumi Le-Israel BM  11,297,357  44,122 
*  Bank Hapoalim BM  9,506,511  34,706 
  Teva Pharmaceutical     
  Industries Ltd. ADR  562,697  28,405 
  Bezeq Israeli     
  Telecommunication     
  Corp. Ltd.  11,562,047  25,803 
*  Nice Systems Ltd.  613,807  19,100 
  Partner     
  Communications Co. Ltd.  827,342  15,687 
  Cellcom Israel Ltd.  509,121  15,319 
  Elbit Systems Ltd.  232,181  14,067 
*  Israel Corp. Ltd.  19,078  13,121 
  Makhteshim-Agan     
  Industries Ltd.  2,644,356  12,359 
*  Mizrahi Tefahot Bank Ltd.  1,195,124  9,713 
  Israel Discount Bank Ltd.     
  Class A  4,840,432  9,240 
  Discount     
  Investment Corp.  361,214  8,488 
  Delek Group Ltd.  37,035  6,119 
  Ormat Industries  546,707  4,766 
      763,434 
Malaysia (2.8%)     
  Sime Darby Bhd.  28,034,813  72,487 
  CIMB Group     
  Holdings Bhd.  18,697,432  67,833 
  Malayan Banking Bhd.  33,293,158  64,479 
  IOI Corp. Bhd.  32,252,955  50,009 
  Tenaga Nasional Bhd.  18,658,446  45,732 
  Genting Bhd.  21,267,890  44,708 
  Public Bank Bhd.  10,172,547  31,689 
  MISC Bhd.  10,039,465  26,100 
  Genting Malaysia Bhd.  31,353,410  25,044 
  AMMB Holdings Bhd.  17,360,058  23,869 
  PPB Group Bhd.  5,179,944  22,875 
  Digi.Com Bhd.  3,401,273  21,719 
*  Axiata Group Bhd.  24,870,709  21,181 
  British American     
  Tobacco Malaysia Bhd.  1,403,705  18,435 
  Kuala Lumpur     
  Kepong Bhd.  4,186,608  18,284 
  YTL Corp. Bhd.  7,410,353  15,759 
  IJM Corp. Bhd.  10,774,250  15,028 
  Petronas Gas Bhd.  4,976,228  14,224 
  PLUS Expressways Bhd.  14,661,282  14,132 
  Gamuda Bhd.  15,219,888  13,896 
  YTL Power     
  International Bhd.  20,856,627  13,106 
  Hong Leong Bank Bhd.  4,932,036  10,785 

      Market 
      Value• 
    Shares  ($000) 
  Berjaya Sports Toto Bhd.  7,706,945  9,714 
  UMW Holdings Bhd.  5,240,160  9,651 
  Telekom Malaysia Bhd.  10,611,140  9,325 
  Tanjong PLC  2,101,136  9,297 
  SP Setia Bhd.  8,129,852  9,142 
  Bursa Malaysia Bhd.  3,592,852  8,498 
  Parkson Holdings Bhd.  5,149,616  7,640 
  Petronas Dagangan Bhd.  2,651,600  6,898 
  RHB Capital Bhd.  4,365,335  6,848 
  Alliance Financial     
  Group Bhd.  9,303,417  6,647 
  Lafarge Malayan     
  Cement Bhd.  3,325,820  5,869 
  MMC Corp. Bhd.  7,532,800  5,459 
  Astro All Asia     
  Networks PLC  5,457,890  5,264 
  Hong Leong Financial     
  Group Bhd.  2,879,800  5,210 
*  IGB Corp. Bhd.  8,836,900  5,019 
*  AirAsia Bhd.  12,700,948  4,994 
  KLCC Property     
  Holdings Bhd.  4,981,100  4,758 
  Genting Plantations Bhd.  2,020,400  3,612 
*  Malaysian Airline     
  System Bhd.  2,691,400  2,437 
      777,656 
Mexico (4.4%)     
  America Movil     
  SAB de CV  176,233,467  388,938 
  Wal-Mart de Mexico     
  SAB de CV  27,472,294  95,834 
*  Cemex SAB de CV  87,075,125  90,414 
  Grupo Televisa SA  23,163,526  89,645 
  Fomento Economico     
  Mexicano SAB de CV  20,341,668  88,045 
*  Grupo Mexico SAB     
  de CV Class B  36,448,768  73,153 
  Telefonos de Mexico     
  SAB de CV  52,293,789  43,526 
  Grupo Financiero     
  Banorte SAB de CV  13,546,930  43,297 
  Telmex Internacional     
  SAB de CV  51,393,580  34,564 
  Grupo Elektra SA de CV  725,670  28,469 
*  Carso Global Telecom     
  SAB de CV  6,821,318  26,534 
*  Grupo Modelo SAB     
  de CV  4,939,747  22,421 
  Kimberly-Clark de     
  Mexico SAB de CV     
  Class A  5,313,912  21,048 
  Grupo Bimbo SAB de     
  CV Class A  3,460,888  20,157 
  Industrias Penoles     
  SAB de CV  1,044,224  19,068 

72


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Grupo Financiero     
  Inbursa SA  6,579,698  18,538 
  Grupo Carso SAB de CV  5,574,166  16,464 
  Alfa SAB de CV Class A  3,001,631  15,543 
  Coca-Cola Femsa SAB     
  de CV  2,734,213  14,748 
  Mexichem SAB de CV  9,020,696  14,347 
*  Desarrolladora Homex     
  SAB de CV  2,188,490  13,019 
*  Urbi Desarrollos Urbanos     
  SAB DE CV  5,027,693  9,638 
  Grupo Aeroportuario del     
  Pacifico SAB de CV     
  Class B  3,043,407  7,800 
  Grupo Aeroportuario     
  del Pacifico SAB de     
  CV ADR  146,917  3,745 
      1,198,955 
Peru (0.6%)     
  Southern Copper Corp.     
  (U.S. Shares)  1,421,171  44,767 
  Cia de Minas     
  Buenaventura SA ADR  1,052,945  35,348 
  Credicorp Ltd.  422,657  29,235 
  Cia de Minas     
  Buenaventura SA  750,871  25,812 
  Southern Copper Corp.  628,667  19,803 
  Credicorp Ltd.     
  (New York Shares)  225,455  15,563 
      170,528 
Philippines (0.5%)     
  Philippine Long Distance     
  Telephone Co.  468,370  25,172 
  Manila Electric Co.  4,403,532  17,121 
  Bank of the     
  Philippine Islands  14,637,395  14,242 
  SM Investments Corp.  2,023,876  13,218 
  Ayala Corp.  2,066,646  12,505 
  Ayala Land Inc.  52,653,650  11,385 
  SM Prime Holdings Inc.  41,050,286  8,512 
  Energy     
  Development Corp.  79,682,753  6,882 
  Globe Telecom Inc.  348,773  6,687 
  Banco de Oro     
  Unibank Inc.  7,338,391  5,327 
  Jollibee Foods Corp.  4,591,759  4,885 
  Metropolitan Bank     
  & Trust  5,198,710  4,398 
      130,334 
Poland (1.3%)     
^  Powszechna Kasa     
  Oszczednosci Bank     
  Polski SA  6,018,454  71,313 
*  Bank Pekao SA  1,127,005  60,491 
  KGHM Polska Miedz SA  1,166,580  39,268 

        Market 
        Value• 
      Shares  ($000) 
  Telekomunikacja       
  Polska SA    6,594,815  38,703 
*  Polski Koncern       
  Naftowy Orlen    3,230,109  33,621 
  Polskie Gornictwo Naftowe     
  I Gazownictwo SA    11,836,570  14,413 
*  Bank Zachodni WBK SA  258,200  13,784 
*  Globe Trade Centre SA    1,478,900  12,760 
  Asseco Poland SA    591,971  11,894 
*  BRE Bank SA    102,662  9,517 
*  Getin Holding SA    3,138,117  8,931 
  TVN SA    1,670,154  8,277 
*  ING Bank Slaski SA    33,261  7,464 
*  Bank Handlowy w       
  Warszawie SA    327,029  7,172 
*  PBG SA    89,881  7,001 
*  Bank Millennium SA    3,201,072  5,254 
*  Grupa Lotos SA    557,240  5,065 
  Cyfrowy Polsat SA    866,731  4,184 
        359,112 
Russia (6.7%)       
  Gazprom OAO ADR    22,426,568  537,835 
  Lukoil OAO ADR    4,438,902  257,508 
  Sberbank of Russian       
  Federation    77,187,472  168,293 
  MMC Norilsk Nickel ADR  8,531,650  112,076 
  Rosneft Oil Co. GDR    12,335,536  93,797 
  Mobile Telesystems       
  OJSC ADR    1,913,250  86,670 
  Surgutneftegaz ADR    7,394,614  65,263 
*  Vimpel-Communications     
  ADR    3,210,461  57,563 
  Tatneft ADR    2,094,609  54,244 
  NovaTek OAO GDR    877,129  44,033 
  Polyus Gold Co. ADR    1,463,602  39,540 
  VTB Bank OJSC GDR    9,293,849  36,992 
*  RusHydro  894,208,332  30,969 
*  Uralkali    7,065,436  30,734 
*  Federal Grid Co.       
  Unified Energy       
  System JSC  2,531,825,334  26,963 
  Surgutneftegaz    61,487,229  25,613 
  Mechel ADR    1,294,277  22,210 
  Novolipetsk Steel       
  OJSC GDR    767,773  19,998 
  Gazpromneft JSC    3,223,019  16,442 
  Severstal GDR    2,155,673  15,550 
*  Sistema JSFC GDR    879,052  14,264 
*  Wimm-Bill-Dann Foods       
  OJSC ADR    203,530  13,754 
*  Pharmstandard GDR    797,972  12,896 
  AK Transneft OAO    14,287  11,951 
  Rostelecom ADR    279,978  10,933 
  TMK OAO GDR    539,979  9,755 
  Comstar United       
  Telesystems OJSC GDR  1,588,063  8,198 

73


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
*  Polymetal  678,573  5,833 
  Lukoil OAO ADR  29,160  1,692 
      1,831,569 
South Africa (7.0%)     
  MTN Group Ltd.  13,911,787  207,136 
  Sasol Ltd.  5,441,714  203,875 
  Standard Bank     
  Group Ltd.  11,059,354  138,032 
  Naspers Ltd.  3,636,400  131,268 
  Impala Platinum     
  Holdings Ltd.  5,105,181  112,332 
  AngloGold Ashanti Ltd.  2,858,314  106,756 
  Gold Fields Ltd.  6,365,508  81,440 
  FirstRand Ltd.  26,822,966  60,416 
  Sanlam Ltd.  19,471,813  53,460 
  Anglo Platinum Ltd.  583,308  50,419 
  Remgro Ltd.  4,193,832  49,095 
  ABSA Group Ltd.  3,070,985  48,614 
  Bidvest Group Ltd.  2,739,595  42,899 
  Harmony Gold     
  Mining Co. Ltd.  3,515,823  35,215 
  Shoprite Holdings Ltd.  3,936,223  32,076 
  Tiger Brands Ltd.  1,583,422  31,706 
  African Bank     
  Investments Ltd.  7,388,830  28,849 
  Nedbank Group Ltd.  1,883,089  28,307 
  RMB Holdings Ltd.  7,005,175  25,575 
  Steinhoff International     
  Holdings Ltd.  10,293,306  24,874 
*  Vodacom Group Pty Ltd.  3,576,445  24,799 
  Truworths     
  International Ltd.  4,231,467  24,219 
  ArcelorMittal     
  South Africa Ltd.  1,794,817  24,154 
  Growthpoint     
  Properties Ltd.  13,603,320  24,075 
  Massmart Holdings Ltd.  2,037,305  23,537 
  Kumba Iron Ore Ltd.  787,022  23,498 
  Murray & Roberts     
  Holdings Ltd.  3,015,268  21,522 
*  Redefine Income     
  Fund Ltd.  23,174,569  21,301 
  Aveng Ltd.  3,901,549  20,692 
  Pretoria Portland     
  Cement Co. Ltd.  4,905,575  20,536 
  African Rainbow     
  Minerals Ltd.  1,005,449  19,467 
*  Aspen Pharmacare     
  Holdings Ltd.  2,279,167  19,208 
  Sappi Ltd.  4,974,979  18,384 
  Imperial Holdings Ltd.  1,735,706  17,869 
  Investec Ltd.  2,182,573  16,106 
  Foschini Ltd.  1,902,407  15,056 
  Woolworths Holdings Ltd.  6,702,780  14,965 
  Telkom SA Ltd.  2,620,731  14,683 
  Netcare Ltd.  9,226,441  13,588 

      Market 
      Value• 
    Shares  ($000) 
  Exxaro Resources Ltd.  1,169,424  13,136 
  Reunert Ltd.  1,831,980  12,904 
  Pick n Pay Stores Ltd.  2,262,990  11,764 
  Discovery Holdings Ltd.  2,370,113  9,419 
  Liberty Holdings Ltd.  1,023,216  8,847 
  Northam Platinum Ltd.  1,447,770  6,766 
      1,932,839 
South Korea (12.8%)     
  Samsung Electronics     
  Co. Ltd.  638,760  384,363 
2  Samsung Electronics     
  Co. Ltd. GDR  809,571  245,515 
  POSCO ADR  1,411,619  144,155 
  Hyundai Motor Co.  1,422,428  129,021 
  POSCO  265,340  109,964 
*  Shinhan Financial     
  Group Co. Ltd.  2,253,959  85,517 
  LG Electronics Inc.  892,559  82,973 
*  KB Financial Group Inc.  1,638,654  78,819 
  Hyundai Mobis  586,614  78,221 
  Samsung Electronics     
  Co. Ltd. Pfd.  194,329  77,847 
  LG Chem Ltd.  430,646  74,213 
*  KB Financial     
  Group Inc. ADR  1,449,101  68,745 
*  Hynix Semiconductor Inc.  4,475,740  66,449 
  Samsung Fire & Marine     
  Insurance Co. Ltd.  353,358  64,337 
  KT&G Corp.  1,047,166  60,985 
^  Shinhan Financial     
  Group Co. Ltd. ADR  762,778  57,704 
*  NHN Corp.  384,171  56,661 
  Shinsegae Co. Ltd.  130,568  56,371 
  Hana Financial Group Inc.  1,796,620  53,284 
  SK Energy Co. Ltd.  572,306  52,565 
  LG Display Co. Ltd.  2,135,036  51,090 
  LG Corp.  895,007  50,705 
^  Hyundai Heavy Industries  360,084  49,322 
  Samsung C&T Corp.  1,178,553  47,968 
  Samsung Electro-     
  Mechanics Co. Ltd.  556,663  46,284 
*  Korea Electric     
  Power Corp. ADR  2,814,124  39,060 
  Samsung SDI Co. Ltd.  314,112  35,860 
  Hyundai Steel Co.  506,283  32,162 
  SK Telecom Co. Ltd. ADR  1,905,419  31,840 
*  Woori Finance     
  Holdings Co. Ltd.  2,314,280  31,150 
  GS Engineering &     
  Construction Corp.  346,301  30,368 
*  Korea Electric     
  Power Corp.  1,040,961  29,497 
*  Kia Motors Corp.  1,956,944  29,068 
  Samsung Heavy     
  Industries Co. Ltd.  1,531,995  28,981 

74


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Korea Exchange Bank  2,493,310  28,334 
  Samsung Techwin Co. Ltd.  353,715  27,085 
  Hyundai Engineering &     
  Construction Co. Ltd.  484,946  26,773 
  Samsung Engineering     
  Co. Ltd.  286,471  25,328 
  SK Telecom Co. Ltd.  164,609  25,070 
  Samsung Securities     
  Co. Ltd.  487,841  23,912 
  KT Corp.  688,196  22,433 
  Lotte Shopping Co. Ltd.  77,336  21,842 
  S-Oil Corp.  447,198  21,634 
  Amorepacific Corp.  29,453  20,326 
  OCI Co. Ltd.  115,057  20,214 
*  Industrial Bank Of Korea  1,575,270  19,084 
  Daewoo Securities     
  Co. Ltd.  1,210,560  18,393 
  SK Holdings Co. Ltd.  231,544  18,368 
  LG Household &     
  Health Care Ltd.  87,388  18,150 
  Busan Bank  1,547,259  17,544 
  Daelim Industrial Co. Ltd.  276,013  17,516 
  KT Corp. ADR  1,088,607  17,472 
  Cheil Industries Inc.  440,013  16,416 
  Hyundai Development Co.  552,686  16,358 
  Doosan Heavy Industries     
  and Construction Co. Ltd.  304,235  16,327 
  Woongjin Coway Co. Ltd.  475,869  15,908 
  Daegu Bank  1,175,105  15,591 
^  NCSoft Corp.  137,230  14,676 
  Samsung Card Co.  367,233  14,550 
  LS Corp.  176,261  14,401 
  Hankook Tire Co. Ltd.  734,556  14,041 
*  Korean Air Lines Co. Ltd.  364,914  13,887 
  Hyundai Department     
  Store Co. Ltd.  141,642  13,539 
  Hanwha Corp.  422,876  13,513 
  Hyundai Securities Co.  1,180,781  13,406 
^  Daewoo International Corp.  481,637  13,155 
  KCC Corp.  45,576  13,138 
  Kangwon Land Inc.  969,678  12,957 
  Yuhan Corp.  79,507  12,805 
  GS Holdings Corp.  504,938  12,507 
  Daewoo Shipbuilding &     
  Marine Engineering     
  Co. Ltd.  942,102  12,392 
  CJ CheilJedang Corp.  72,971  12,340 
  Mirae Asset     
  Securities Co. Ltd.  230,739  12,061 
^  Daewoo Engineering &     
  Construction Co. Ltd.  1,153,314  11,749 
  LS Industrial     
  Systems Co. Ltd.  154,925  11,605 
^  Hyosung Corp.  205,242  11,280 
  Korea Zinc Co. Ltd.  71,954  11,121 
^  Doosan Infracore Co. Ltd.  772,442  10,991 

        Market 
        Value• 
      Shares  ($000) 
  Woori Investment &       
  Securities Co. Ltd.    871,841  10,960 
  Dongbu Insurance Co. Ltd.  356,011  10,803 
  Hyundai Motor Co. Pfd.    324,427  10,558 
  LG Telecom Ltd.    1,395,142  10,453 
  Korea Investment       
  Holdings Co. Ltd.    378,485  10,094 
  Korea Gas Corp.    237,626  10,026 
^  Honam Petrochemical Corp.  136,093  9,335 
  Hyundai Mipo Dockyard    113,070  9,315 
  STX Pan Ocean Co. Ltd.    997,530  9,090 
  Hanjin Shipping Co. Ltd.    569,570  7,741 
  LG Electronics Inc.    183,089  7,253 
  Dongkuk Steel Mill Co. Ltd.  333,692  7,086 
  Hite Brewery Co. Ltd.    51,975  7,072 
  Lotte Confectionery Co. Ltd.  6,927  6,966 
  LG Dacom Corp.    432,930  6,837 
  Doosan Corp.    98,051  6,800 
  SK Networks Co. Ltd.    718,620  6,792 
  Tong Yang Securities Inc.    733,436  6,720 
*  SK Broadband Co. Ltd.    1,539,848  6,331 
  Hanwha Chem Corp.    670,040  6,230 
  S1 Corp.    148,120  5,929 
  Hanjin Heavy Industries       
  & Construction Co. Ltd.    311,562  5,567 
^  Taewoong Co. Ltd.    78,578  5,358 
*  Celltrion Inc.    436,449  5,265 
^  STX Offshore &       
  Shipbuilding Co. Ltd.    440,957  4,706 
*  Korea Express Co. Ltd.    74,718  4,103 
  Taihan Electric       
  Wire Co. Ltd.    236,491  3,779 
        3,502,425 
Taiwan (11.0%)       
  HON HAI Precision       
  Industry Co. Ltd.  70,951,633  277,905 
  Taiwan Semiconductor       
  Manufacturing Co. Ltd.  127,718,045  231,680 
  Taiwan Semiconductor       
  Manufacturing Co.       
  Ltd. ADR  19,650,545  187,466 
  MediaTek Inc.    8,401,186  117,583 
*  Cathay Financial       
  Holding Co. Ltd.  54,346,202  93,197 
  China Steel Corp.  91,269,869  81,033 
  Nan Ya Plastics Corp.  47,473,439  75,520 
  Formosa Plastics Corp.  36,973,458  70,918 
  Asustek Computer Inc.  35,722,291  65,610 
  HTC Corp.    6,080,242  60,380 
  Acer Inc.  23,749,014  55,980 
  Formosa Chemicals &       
  Fibre Corp.  26,905,164  50,138 
  Chunghwa       
  Telecom Co. Ltd.  27,143,319  47,644 
  Chinatrust Financial       
  Holding Co. Ltd.  78,352,403  47,064 

75


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
*  Fubon Financial     
  Holding Co. Ltd.  41,719,144  46,293 
  Yuanta Financial     
  Holding Co. Ltd.  68,423,773  45,155 
  Delta Electronics Inc.  15,723,245  43,659 
  Compal Electronics Inc.  34,919,083  43,656 
  Mega Financial     
  Holding Co. Ltd.  72,802,296  40,542 
  Quanta Computer Inc.  20,415,880  38,620 
  Chunghwa     
  Telecom Co. Ltd. ADR  2,151,204  37,388 
*,^  United Microelectronics     
  Corp. ADR  10,880,097  35,796 
  Uni-President     
  Enterprises Corp.  31,401,385  35,037 
  AU Optronics Corp.  38,172,669  33,850 
  Far Eastern     
  Textile Co. Ltd.  26,730,400  31,521 
  Taiwan Mobile Co. Ltd.  17,596,785  31,471 
*  United     
  Microelectronics Corp.  61,451,970  29,541 
  Taiwan Cement Corp.  28,175,583  28,907 
  Formosa     
  Petrochemical Corp.  11,784,559  28,737 
  AU Optronics     
  Corp. ADR  3,093,195  27,313 
  First Financial     
  Holding Co. Ltd.  45,081,761  26,043 
  Lite-On     
  Technology Corp.  19,728,409  25,984 
  Wistron Corp.  15,376,955  25,742 
  InnoLux Display Corp.  19,500,578  25,684 
  Taiwan Fertilizer Co. Ltd.  7,100,800  22,044 
*  China Development     
  Financial Holding Corp.  84,303,785  21,961 
*  Chi Mei     
  Optoelectronics Corp.  42,356,999  21,131 
  Chang Hwa     
  Commercial Bank  47,391,094  20,620 
  Taiwan Cooperative     
  Bank  34,090,450  20,115 
  Siliconware Precision     
  Industries Co.  14,820,860  19,486 
*  Shin Kong Financial     
  Holding Co. Ltd.  47,655,222  19,389 
  Synnex Technology     
  International Corp.  9,801,151  18,544 
*  SinoPac Financial     
  Holdings Co. Ltd.  49,774,113  18,382 
  Hua Nan Financial     
  Holdings Co. Ltd.  31,072,685  18,054 
  Foxconn Technology     
  Co. Ltd.  5,357,976  17,849 
  Far EasTone     
  Telecommunications     
  Co. Ltd.  15,529,043  17,472 

      Market 
      Value• 
    Shares  ($000) 
  Cheng Shin Rubber     
  Industry Co. Ltd.  8,279,344  17,013 
  Asia Cement Corp.  15,896,508  16,691 
  Advanced Semiconductor     
  Engineering Inc.  21,161,400  16,678 
  Siliconware Precision     
  Industries Co. ADR  2,395,885  16,124 
  Macronix International  31,714,944  16,076 
  Epistar Corp.  5,431,732  15,817 
  Pou Chen Corp.  21,625,100  14,827 
  Advanced Semiconductor     
  Engineering Inc. ADR  3,787,845  14,659 
*  Taishin Financial     
  Holding Co. Ltd.  33,835,678  13,242 
  Powertech     
  Technology Inc.  4,771,527  13,062 
  KGI Securities Co. Ltd.  28,397,000  13,011 
  Catcher     
  Technology Co. Ltd.  5,333,663  12,912 
  President Chain     
  Store Corp.  5,405,539  12,230 
*  E.Sun Financial     
  Holding Co. Ltd.  30,472,591  11,862 
  Novatek Microelectronics     
  Corp. Ltd.  4,761,107  10,741 
  Largan Precision Co. Ltd.  920,135  10,538 
*  Polaris Securities     
  Co. Ltd.  20,263,775  10,398 
  Richtek Technology Corp.  1,268,930  9,736 
  Transcend     
  Information Inc.  3,011,981  9,420 
  Inventec Co. Ltd.  17,015,175  9,413 
  Unimicron     
  Technology Corp.  8,239,754  9,401 
  Simplo Technology     
  Co. Ltd.  1,824,000  9,366 
  Yulon Motor Co. Ltd.  8,263,280  9,243 
  Young Fast     
  Optoelectronics Co. Ltd.  801,000  9,165 
  WPG Holdings Co. Ltd.  6,467,000  8,848 
  Tripod Technology Corp.  3,460,657  8,660 
  Chicony Electronics     
  Co. Ltd.  3,888,399  8,503 
  Far Eastern Department     
  Stores Co. Ltd.  8,136,216  8,358 
*  Chunghwa Picture Tubes 78,362,331  8,039 
*  Ruentex Industries Ltd.  4,741,226  7,739 
  Realtek     
  Semiconductor Corp.  3,634,887  7,727 
*  Walsin Lihwa Corp.  23,830,170  7,722 
*  Inotera Memories Inc.  12,470,424  7,368 
  Coretronic Corp.  6,587,000  7,212 
  Taiwan Glass     
  Industrial Corp.  9,364,959  7,199 
  Giant Manufacturing     
  Co. Ltd.  2,775,200  7,196 

76


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  U-Ming Marine     
  Transport Corp.  3,958,988  7,181 
*  HannStar Display Corp.  37,945,202  7,155 
  Everlight Electronics     
  Co. Ltd.  2,594,089  7,091 
*  Qisda Corp.  12,731,928  7,062 
  Pixart Imaging Inc.  989,278  6,974 
*  Tatung Co. Ltd.  31,420,600  6,920 
  Phison Electronics Corp.  1,021,315  6,837 
*  Powerchip     
  Semiconductor Corp.  60,254,716  6,719 
  Motech Industries Inc.  2,481,928  6,571 
  Tung Ho Steel     
  Enterprise Corp.  6,897,144  6,556 
*  Clevo Co.  5,231,938  6,530 
  Feng Hsin Iron &     
  Steel Co.  4,302,310  6,505 
*  Prime View     
  International Co. Ltd.  3,905,000  6,363 
  Teco Electric and     
  Machinery Co. Ltd.  15,001,000  5,972 
*  CMC Magnetics Corp.  26,385,700  5,794 
  Eternal Chemical Co. Ltd.  6,184,395  5,731 
  Advantech Co. Ltd.  3,138,622  5,586 
  Formosa Taffeta Co. Ltd.  8,233,868  5,582 
  Mitac International  11,884,427  5,558 
  TSRC Corp.  4,706,398  5,482 
  Cheng Uei Precision     
  Industry Co. Ltd.  2,858,365  5,430 
  Farglory Land     
  Development Co. Ltd.  2,685,688  5,396 
  Chinese Gamer     
  International Corp.  421,000  5,348 
  Kinsus Interconnect     
  Technology Corp.  2,105,029  5,277 
*  Evergreen Marine Corp.     
  Taiwan Ltd.  10,365,879  5,235 
  Nan Ya Printed Circuit     
  Board Corp.  1,680,623  5,230 
  Compal     
  Communications Inc.  3,458,374  5,104 
  Formosa International     
  Hotels Corp.  402,936  5,028 
  Formosa Sumco     
  Technology Corp.  2,157,450  4,982 
  Taiwan Secom Co. Ltd.  3,169,745  4,845 
*  Capital Securities Corp.  10,404,000  4,824 
*  Taiwan Business Bank  19,601,000  4,786 
*  Nanya Technology Corp.  6,693,655  4,730 
  Micro-Star     
  International Co. Ltd.  7,669,882  4,586 
*  Wan Hai Lines Ltd.  9,606,128  4,419 
*  Wintek Corp.  6,620,000  4,408 
*  Eva Airways Corp.  11,441,891  4,292 
  Sino-American     
  Silicon Products Inc.  1,981,412  4,289 

      Market 
      Value• 
    Shares  ($000) 
*  Winbond     
  Electronics Corp.  23,165,000  4,278 
  Global Unichip Corp.  856,308  3,690 
  Vanguard International     
  Semiconductor Corp.  9,060,396  3,680 
*  China Airlines Ltd.  11,307,765  3,515 
  Yang Ming Marine     
  Transport Corp.  9,941,450  3,512 
  CSBC Corp. Taiwan  3,377,440  3,139 
*  Evergreen International     
  Storage &     
  Transport Corp.  2,914,000  2,358 
  Sincere Navigation  1,900,000  2,112 
*  Tatung Co. Ltd. GDR  392,499  1,758 
*  Via Technologies Inc.  1,160,400  702 
*  Shin Kong Financial     
  Holding Co., Ltd.     
  Rights Exp. 12/7/09  2,167,853  200 
*  Ya Hsin     
  Industrial Co. Ltd.  5,306,018  — 
      3,019,622 
Thailand (1.3%)     
  PTT PCL (Foreign)  7,085,837  50,156 
  PTT Exploration &     
  Production PCL     
  (Foreign)  11,372,618  48,557 
  Bangkok Bank PCL     
  (Foreign)  9,380,231  31,461 
  Kasikornbank PCL     
  (Foreign)  11,839,449  28,702 
  Siam Commercial     
  Bank PCL (Foreign)  11,657,057  26,587 
  Advanced Info Service     
  PCL (Foreign)  7,651,177  19,592 
  Banpu PCL (Foreign)  1,197,417  15,395 
  Bangkok Bank     
  PCL (Local)  4,607,643  15,235 
  Siam Cement     
  PCL (Foreign)  2,456,707  15,221 
  Bank of Ayudhya     
  PLC (Local)  20,991,834  11,146 
  CP ALL PCL (Foreign)  18,883,615  10,653 
  IRPC PCL (Foreign)  91,786,660  10,399 
  Thai Oil PCL (Foreign)  7,851,800  9,538 
  PTT PCL (Local)  1,061,800  7,516 
  Krung Thai Bank     
  PCL (Foreign)  27,600,921  7,196 
  PTT Aromatics &     
  Refining PCL (Foreign)  10,679,011  6,699 
  PTT Chemical PCL     
  (Foreign)  3,556,238  6,527 
  BEC World     
  PCL (Foreign)  9,222,225  6,139 
*  TMB Bank     
  PCL (Foreign)  170,098,844  5,541 

77


Emerging Markets Stock Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Land and Houses     
  PCL (Foreign)  27,749,947  4,963 
  Siam Cement     
  PCL (Local)  815,410  4,925 
  Total Access     
  Communication     
  PCL (Foreign)  4,189,891  4,834 
  Glow Energy     
  PCL (Foreign)  5,030,555  4,782 
  Ratchaburi Electricity     
  Generating Holding PCL  3,728,135  4,108 
  Advanced Info     
  Service PCL (Local)  1,242,000  3,180 
  Total Access     
  Communication     
  PCL (Local)  2,108,400  2,433 
  Banpu PCL (Local)  184,600  2,380 
  IRPC Public     
  Co. Ltd. (Local)  5,727,400  649 
  Thai Oil PCL (Local)  419,200  509 
  PTT Aromatics &     
  Refining PCL  776,600  487 
  Glow Energy PCL  241,100  229 
      365,739 
Turkey (1.5%)     
  Turkiye Garanti     
  Bankasi AS  20,019,775  72,703 
  Turkcell Iletisim     
  Hizmet AS  7,371,596  48,773 
  Akbank TAS  7,277,345  39,311 
  Turkiye Is Bankasi  10,324,272  39,101 
  Anadolu Efes Biracilik     
  Ve Malt Sanayii AS  1,927,797  22,025 
  Tupras Turkiye     
  Petrol Rafine  1,232,595  21,171 
*  Turkiye Vakiflar     
  Bankasi Tao  8,113,512  19,676 
  Turkiye Halk Bankasi AS  3,102,792  18,569 
  Haci Omer Sabanci     
  Holding AS  4,905,568  17,935 
*  Yapi ve Kredi     
  Bankasi AS  8,551,727  17,583 
  Turk     
  Telekomunikasyon AS  5,311,652  16,122 
  BIM Birlesik     
  Magazalar AS  374,083  13,563 
*  KOC Holding AS  5,139,260  13,092 

      Market 
      Value• 
    Shares  ($000) 
*  Eregli Demir ve Celik     
  Fabrikalari TAS  4,442,781  12,061 
  Enka Insaat ve     
  Sanayi AS  2,493,073  10,060 
*  Asya Katilim Bankasi AS  4,432,776  9,168 
  Dogan Sirketler     
  Grubu Holdings  8,209,672  5,401 
  Coca-Cola Icecek AS  635,597  4,907 
*  Petkim     
  Petrokimya Holding  928,475  4,476 
*  Turk Sise ve Cam     
  Fabrikalari AS  4,053,452  4,254 
*  Tekfen Holding AS  1,327,921  3,802 
  Aksigorta AS  1,208,088  3,649 
      417,402 
Total Common Stocks     
(Cost $23,455,884)    27,356,702 
Temporary Cash Investments (2.5%)1   
Money Market Fund (2.4%)     
3,4  Vanguard Market     
  Liquidity Fund, 0.225%  668,769,055  668,769 
 
    Face   
    Amount   
    ($000)   
U.S. Government and Agency Obligations (0.1%) 
5,6,7 Federal Home Loan     
  Bank Discount Notes,     
  0.220%, 3/26/10  7,000  6,996 
5,6  Fannie Mae Discount     
  Notes, 0.200%, 3/24/10  4,000  3,998 
      10,994 
Total Temporary Cash Investments   
(Cost $679,760)    679,763 
Total Investments (102.2%)     
(Cost $24,135,644)    28,036,465 
Other Assets and Liabilities (–2.2%)   
Other Assets    96,280 
Liabilities4    (704,520) 
      (608,240) 
Net Assets (100%)    27,428,225 

78


Emerging Markets Stock Index Fund

At October 31, 2009, net assets consisted of: 
  Amount 
  ($000) 
Paid-in Capital  25,466,974 
Undistributed Net Investment Income  301,998 
Accumulated Net Realized Losses  (2,235,127) 
Unrealized Appreciation (Depreciation)   
Investment Securities  3,900,821 
Futures Contracts  (2,876) 
Swap Contracts  (4,604) 
Foreign Currencies  1,039 
Net Assets  27,428,225 
 
Investor Shares—Net Assets   
Applicable to 293,888,902 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  7,024,208 
Net Asset Value Per Share—   
Investor Shares  $23.90 
 
Admiral Shares—Net Assets   
Applicable to 84,997,277 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  2,673,583 
Net Asset Value Per Share—   
Admiral Shares  $31.45 
 
Signal Shares—Net Assets   
Applicable to 15,309,730 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  463,272 
Net Asset Value Per Share—   
Signal Shares  $30.26 

  Amount 
  ($000) 
Institutional Shares—Net Assets   
Applicable to 72,285,967 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  1,730,528 
Net Asset Value Per Share—   
Institutional Shares  $23.94 
 
ETF Shares—Net Assets   
Applicable to 410,558,942 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  15,536,634 
Net Asset Value Per Share—   
ETF Shares  $37.84 

• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $563,638,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts and swap contracts. After giving effect to futures and swap investments, the fund’s effective common stock and temporary cash investment positions represent 100.1% and 2.1%, respectively, of net assets.
2 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. At October 31, 2009, the value of this security represented 0.9% of net assets.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
4 Includes $617,087,000 of collateral received for securities on loan.
5 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
6 Securities with a value of $5,347,000 have been segregated as collateral for open swap contracts.
7 Securities with a value of $4,498,000 have been segregated as initial margin for open futures contracts.
ADR—American Depositary Receipt.
GDR—Global Depositary Receipt.
See accompanying Notes, which are an integral part of the Financial Statements.

79


Emerging Markets Stock Index Fund   
 
 
 
Statement of Operations   
 
 
  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Dividends1  413,734 
Interest2  286 
Security Lending  16,434 
Total Income  430,454 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  512 
Management and Administrative—Investor Shares  15,615 
Management and Administrative—Admiral Shares  3,517 
Management and Administrative—Signal Shares  605 
Management and Administrative—Institutional Shares  1,588 
Management and Administrative—ETF Shares  14,039 
Marketing and Distribution—Investor Shares  1,752 
Marketing and Distribution—Admiral Shares  410 
Marketing and Distribution—Signal Shares  95 
Marketing and Distribution—Institutional Shares  328 
Marketing and Distribution—ETF Shares  2,115 
Custodian Fees  9,955 
Auditing Fees  40 
Shareholders’ Reports and Proxies—Investor Shares  455 
Shareholders’ Reports and Proxies—Admiral Shares  27 
Shareholders’ Reports and Proxies—Signal Shares  3 
Shareholders’ Reports and Proxies—Institutional Shares  — 
Shareholders’ Reports and Proxies—ETF Shares  867 
Trustees’ Fees and Expenses  28 
Total Expenses  51,951 
Net Investment Income  378,503 
Realized Net Gain (Loss)   
Investment Securities Sold  (1,269,893) 
Futures Contracts  25,109 
Foreign Currencies  (9,547) 
Realized Net Gain (Loss)  (1,254,331) 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  8,594,820 
Futures Contracts  (4,676) 
Swap Contracts  (4,604) 
Foreign Currencies  2,448 
Change in Unrealized Appreciation (Depreciation)  8,587,988 
Net Increase (Decrease) in Net Assets Resulting from Operations  7,712,160 

1 Dividends are net of foreign withholding taxes of $48,944,000.
2 Interest income from an affiliated company of the fund was $229,000.
See accompanying Notes, which are an integral part of the Financial Statements.

80


Emerging Markets Stock Index Fund     
 
 
Statement of Changes in Net Assets     
 
  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  378,503  649,638 
Realized Net Gain (Loss)  (1,254,331)  163,245 
Change in Unrealized Appreciation (Depreciation)  8,587,988  (16,915,849) 
Net Increase (Decrease) in Net Assets Resulting from Operations  7,712,160  (16,102,966) 
Distributions     
Net Investment Income     
Investor Shares  (231,087)  (229,894) 
Admiral Shares  (69,431)  (66,571) 
Signal Shares  (12,807)  (8,343) 
Institutional Shares  (45,949)  (24,830) 
ETF Shares  (251,740)  (111,980) 
Realized Capital Gain     
Investor Shares  —  — 
Admiral Shares  —  — 
Signal Shares  —  — 
Institutional Shares  —  — 
ETF Shares  —  — 
Total Distributions  (611,014)  (441,618) 
Capital Share Transactions     
Investor Shares  (309,416)  (954,191) 
Admiral Shares  333,668  218,311 
Signal Shares  42,629  207,807 
Institutional Shares  304,253  471,828 
ETF Shares  7,449,732  3,320,651 
Net Increase (Decrease) from Capital Share Transactions  7,820,866  3,264,406 
Total Increase (Decrease)  14,922,012  (13,280,178) 
Net Assets     
Beginning of Period  12,506,213  25,786,391 
End of Period1  27,428,225  12,506,213 
1 Net Assets—End of Period includes undistributed net investment income of $301,998,000 and $540,785,000.   

See accompanying Notes, which are an integral part of the Financial Statements.

81


Emerging Markets Stock Index Fund           
 
 
Financial Highlights           
 
 
Investor Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $15.66  $36.78  $22.05  $16.91  $12.88 
Investment Operations           
Net Investment Income  .3981  .780  .6041  .396  .307 
Net Realized and Unrealized Gain (Loss)           
on Investments2  8.542  (21.313)  14.522  5.059  3.982 
Total from Investment Operations  8.940  (20.533)  15.126  5.455  4.289 
Distributions           
Dividends from Net Investment Income  (.700)  (.587)  (.396)  (.315)  (.259) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.700)  (.587)  (.396)  (.315)  (.259) 
Net Asset Value, End of Period  $23.90  $15.66  $36.78  $22.05  $16.91 
 
Total Return3  60.07%  –56.66%  69.59%  32.55%  33.66% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $7,024  $5,345  $14,150  $7,202  $4,937 
Ratio of Total Expenses to           
Average Net Assets  0.40%  0.32%  0.37%  0.42%  0.45% 
Ratio of Net Investment Income to           
Average Net Assets  2.16%  2.81%  2.24%  2.20%  2.48% 
Portfolio Turnover Rate4  12%  20%  9%  26%  15% 

1 Calculated based on average shares outstanding.
2 Includes increases from redemption fees of $.01, $.02, $.01, $.01, and $.00.
3 Total returns do not reflect the 0.50% (0.25% prior to October 30, 2009, 0.50% prior to June 26, 2008) transaction fee on purchases; the 2% fee assessed on redemptions until March 23, 2005, and held for less than two months; the 0.25% (0.50% prior to June 26, 2008) fee on all other redemptions; or the account service fee that may be applicable to certain accounts with balances below $10,000.
4 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

82


Emerging Markets Stock Index Fund         
 
 
Financial Highlights         
 
 
Admiral Shares         
        June 23, 
        20061 to 
  Year Ended October 31,  Oct. 31, 
For a Share Outstanding Throughout Each Period  2009  2008  2007  2006 
Net Asset Value, Beginning of Period  $20.63  $48.47  $29.03  $25.00 
Investment Operations         
Net Investment Income  .5672  1.079  .8532  .222 
Net Realized and Unrealized Gain (Loss) on Investments3  11.222  (28.099)  19.121  3.808 
Total from Investment Operations  11.789  (27.020)  19.974  4.030 
Distributions         
Dividends from Net Investment Income  (.969)  (.820)  (.534)  — 
Distributions from Realized Capital Gains  —  —  —  — 
Total Distributions  (.969)  (.820)  (.534)  — 
Net Asset Value, End of Period  $31.45  $20.63  $48.47  $29.03 
 
Total Return4  60.29%  –56.63%  69.82%  16.12% 
 
Ratios/Supplemental Data         
Net Assets, End of Period (Millions)  $2,674  $1,508  $3,514  $1,491 
Ratio of Total Expenses to Average Net Assets  0.27%  0.20%  0.25%  0.30%5 
Ratio of Net Investment Income to Average Net Assets  2.29%  2.93%  2.36%  2.32%5 
Portfolio Turnover Rate6  12%  20%  9%  26% 

1 Inception.
2 Calculated based on average shares outstanding.
3 Includes increases from redemption fees of $.01, $.03, $.01, and $.01.
4 Total returns do not reflect the 0.50% (0.25% prior to October 30, 2009, 0.50% prior to June 26, 2008) transaction fee on purchases and the 0.25% (0.50% prior to June 26, 2008) transaction fee on redemptions.
5 Annualized.
6 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

83


Emerging Markets Stock Index Fund       
 
 
Financial Highlights       
 
 
Signal Shares       
      Jan. 19, 
  Year Ended  20071 to 
  October 31,  Oct. 31, 
For a Share Outstanding Throughout Each Period  2009  2008  2007 
Net Asset Value, Beginning of Period  $19.85  $46.61  $30.38 
Investment Operations       
Net Investment Income  .5532  1.029  .5802 
Net Realized and Unrealized Gain (Loss) on Investments3  10.795  (27.029)  15.650 
Total from Investment Operations  11.348  (26.000)  16.230 
Distributions       
Dividends from Net Investment Income  (.938)  (.760)  — 
Distributions from Realized Capital Gains  —  —  — 
Total Distributions  (.938)  (.760)  — 
Net Asset Value, End of Period  $30.26  $19.85  $46.61 
 
Total Return4  60.33%  –56.64%  53.42% 
 
Ratios/Supplemental Data       
Net Assets, End of Period (Millions)  $463  $266  $385 
Ratio of Total Expenses to Average Net Assets  0.27%  0.20%  0.25%5 
Ratio of Net Investment Income to Average Net Assets  2.29%  2.93%  2.36%5 
Portfolio Turnover Rate6  12%  20%  9% 

1 Inception.
2 Calculated based on average shares outstanding.
3 Includes increases from redemption fees of $.01, $.02, and $.00.
4 Total returns do not reflect the 0.50% (0.25% prior to October 30, 2009, 0.50% prior to June 26, 2008) transaction fee on purchases and the 0.25% (0.50% prior to June 26, 2008) transaction fee on redemptions.
5 Annualized.
6 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

84


Emerging Markets Stock Index Fund           
 
 
Financial Highlights           
 
 
Institutional Shares           
 
For a Share Outstanding      Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $15.71  $36.90  $22.11  $16.95  $12.90 
Investment Operations           
Net Investment Income  .4371  .835  .6861  .443  .344 
Net Realized and Unrealized Gain (Loss)           
on Investments2  8.547  (21.393)  14.533  5.059  3.982 
Total from Investment Operations  8.984  (20.558)  15.219  5.502  4.326 
Distributions           
Dividends from Net Investment Income  (.754)  (.632)  (.429)  (.342)  (.276) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.754)  (.632)  (.429)  (.342)  (.276) 
Net Asset Value, End of Period  $23.94  $15.71  $36.90  $22.11  $16.95 
 
Total Return3  60.41%  –56.61%  69.90%  32.78%  33.92% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $1,731  $887  $1,463  $559  $468 
Ratio of Total Expenses to           
Average Net Assets  0.23%  0.15%  0.20%  0.25%  0.25% 
Ratio of Net Investment Income to           
Average Net Assets  2.33%  2.98%  2.41%  2.37%  2.64% 
Portfolio Turnover Rate4  12%  20%  9%  26%  15% 

1 Calculated based on average shares outstanding.
2 Includes increases from redemption fees of $.01, $.01, $.01, $.01, and $.00.
3 Total returns do not reflect the 0.50% (0.25% prior to October 30, 2009, 0.50% prior to June 26, 2008) transaction fee on purchases; the 2% fee assessed on redemptions until March 23, 2005, and held for less than two months; or the 0.25% (0.50% prior to June 26, 2008) fee on all other redemptions.
4 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

85


Emerging Markets Stock Index Fund           
 
 
Financial Highlights           
 
 
ETF Shares           
          March 4, 
          20051 to 
    Year Ended October 31,  Oct. 31, 
For a Share Outstanding Throughout Each Period  2009  20082  20072  20062  20052 
Net Asset Value, Beginning of Period  $24.83  $58.31  $34.96  $26.81  $25.28 
Investment Operations           
Net Investment Income  .6683  1.303  1.0653  .667  .435 
Net Realized and Unrealized Gain (Loss)           
on Investments4  13.520  (33.798)  22.955  8.022  1.095 
Total from Investment Operations  14.188  (32.495)  24.020  8.689  1.530 
Distributions           
Dividends from Net Investment Income  (1.178)  (.985)  (.670)  (.539)  — 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (1.178)  (.985)  (.670)  (.539)  — 
Net Asset Value, End of Period  $37.84  $24.83  $58.31  $34.96  $26.81 
 
Total Return  60.28%  –56.62%  69.78%  32.74%  6.05% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $15,537  $4,500  $6,275  $1,582  $375 
Ratio of Total Expenses to           
Average Net Assets  0.27%  0.20%  0.25%  0.30%  0.30%5 
Ratio of Net Investment Income to           
Average Net Assets  2.29%  2.93%  2.36%  2.32%  2.59%5 
Portfolio Turnover Rate6  12%  20%  9%  26%  15% 

1 Inception.
2 Adjusted to reflect a 2-for-1 share split as of the close business on June 13, 2008.
3 Calculated based on average shares outstanding.
4 Includes increases from redemption fees of $.01, $.02, $.03, $.03 and $.00.
5 Annualized.
6 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

See accompanying Notes, which are an integral part of the Financial Statements.

86


Emerging Markets Stock Index Fund

Notes to Financial Statements

Vanguard Emerging Markets Stock Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund invests in securities of foreign issuers, which may subject it to investment risks not normally associated with investing in securities of U.S. corporations. The fund offers five classes of shares: Investor Shares, Admiral Shares, Signal Shares, Institutional Shares, and ETF Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size criteria. Signal Shares are designed for institutional investors who meet certain administrative, service, and account-size criteria. Institutional Shares are designed for investors who meet certain administrative and service criteria and invest a minimum of $5 million. ETF Shares are listed for trading on the NYSE Arca, Inc.; they can be purchased and sold through a broker.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments acquired over 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments are valued at amortized cost, which approximates market value.

2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

3. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objectives of maintaining full exposure to the stock market, enhancing returns, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. The fund may seek to enhance returns by using futures contracts instead of the underlying securities when futures are believed to be priced

87


Emerging Markets Stock Index Fund

more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

Futures contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized futures gains (losses).

4. Swap Contracts: The fund has entered into an equity swap contract to earn the total return on a selected stock in the fund’s target index. Investing through the swap provides a return advantage over buying the individual stock. Under the terms of the swap, the fund receives the total return (either receiving the increase or paying the decrease) on the reference stock, applied to a notional amount that is the value of a designated number of shares of the stock at the beginning of the swap. The counterparty pays the fund a fixed rate less a specified interest rate spread, that is based on short-term interest rates, applied to the notional amount. At the same time, the fund invests an amount equal to the notional amount of the swap in high-quality temporary cash investments.

The notional amounts of swap contracts are not recorded in the Statement of Net Assets. Swaps are valued daily and the change in value is recorded as unrealized appreciation (depreciation) until termination of the swap, at which time realized gain (loss) is recorded. The primary risks associated with the swaps are that a counterparty will default on its obligation to pay net amounts due to the fund, or that the fund will incur fees in the event it terminates a swap prior to the scheduled termination date. The fund’s maximum risk of loss from counterparty credit risk is the amount of unrealized appreciation on the swap contract. This risk is mitigated by entering into swaps only with highly rated counterparties, by a master netting arrangement between the fund and the counterparty, and by the posting of collateral by the counterparty. The swap contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has posted. Any securities posted as collateral for open contracts are noted in the Statement of Net Assets.

5. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

6. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

7. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.

8. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold. Fees assessed on capital share transactions are credited to paid-in capital.

88


Emerging Markets Stock Index Fund

Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses), shareholder reporting, and proxies. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At October 31, 2009, the fund had contributed capital of $5,402,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 2.16% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of October 31, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Common Stocks—North and South America  6,303,259  —  — 
Common Stocks—Other  1,071,341  19,982,102  — 
Temporary Cash Investments  668,769  10,994  — 
Futures Contracts—Assets1  135  —  — 
Swap Contracts—Liabilities  —  (4,604)  — 
Total  8,043,504  19,988,492  — 
1 Represents variation margin on the last day of the reporting period.       

D. At October 31, 2009, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

        ($000) 
    Number of  Aggregate  Unrealized 
    Long (Short)  Settlement  Appreciation 
Futures Contracts  Expiration  Contracts  Value  (Depreciation) 
MSCI Taiwan Index  November 2009  2,700  71,685  (2,876) 

89


Emerging Markets Stock Index Fund         
 
 
 
 
Total Return Swaps           
        Floating  Unrealized 
      Notional  Interest Rate  Appreciation 
  Termination    Amount  Received  (Depreciation) 
Reference Entity  Date  Counterparty1  ($000)  (Paid)2  ($000) 
Cyrela Brazil Realty SA  Jan. 21, 2010  MSCS  21,141  4.89%  (4,604) 
1 MSCS—Morgan Stanley Capital Services.         
2 Based on one-month Fed Funds rate as of October 31, 2009.       

The fund had net unrealized foreign currency gains of $1,039,000 resulting from the translation of other assets and liabilities at October 31, 2009.

E. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

During the year ended October 31, 2009, the fund realized net foreign currency losses of $9,547,000, which decreased distributable net income for tax purposes; accordingly, such losses have been reclassified from accumulated net realized losses to undistributed net investment income.

Certain of the fund’s investments are in securities considered to be “passive foreign investment companies,” for which any unrealized appreciation and/or realized gains are required to be included in distributable net income for tax purposes. Unrealized appreciation of $3,107,000 on the fund’s passive foreign investment company holdings at October 31, 2008, has been distributed and is reflected in the balance of undistributed net investment income. During the year ended October 31, 2009, the fund realized gains on the sale of passive foreign investment companies of $3,271,000, which have been included in current and prior periods’ taxable income; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Unrealized appreciation on the fund’s passive foreign investment company holdings at October 31, 2009, was $17,309,000.

During the year ended October 31, 2009, the fund realized $179,907,000 of net capital gains resulting from in-kind redemptions—in which shareholders exchanged fund shares for securities held by the fund rather than for cash. Because such gains are not taxable to the fund, and are not distributed to shareholders, they have been reclassified from accumulated net realized losses to paid-in capital.

For tax purposes, at October 31, 2009, the fund had $345,678,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $2,235,121,000 to offset future net capital gains of $15,143,000 through October 31, 2012, $167,331,000 through October 31, 2014, $460,853,000 through October 31, 2016, and $1,591,794,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $24,152,956,000. Net unrealized appreciation of investment securities for tax purposes was $3,883,509,000, consisting of unrealized gains of $5,735,715,000 on securities that had risen in value since their purchase and $1,852,206,000 in unrealized losses on securities that had fallen in value since their purchase.

90


Emerging Markets Stock Index Fund

F. During the year ended October 31, 2009, the fund purchased $10,332,952,000 of investment securities and sold $2,765,237,000 of investment securities, other than temporary cash investments.

G. Capital share transactions for each class of shares were:       
      Year Ended October 31, 
    2009    2008 
  Amount  Shares  Amount  Shares 
  ($000)  (000)  ($000)  (000) 
Investor Shares         
Issued  1,853,897  96,420  3,872,977  135,857 
Issued in Lieu of Cash Distributions  223,214  15,577  222,748  6,777 
Redeemed1  (2,386,527)  (159,509)  (5,049,916)  (185,897) 
Net Increase (Decrease)—Investor Shares  (309,416)  (47,512)  (954,191)  (43,263) 
Admiral Shares         
Issued  639,959  25,023  997,071  24,577 
Issued in Lieu of Cash Distributions  60,382  3,205  58,820  1,359 
Redeemed1  (366,673)  (16,316)  (837,580)  (25,354) 
Net Increase (Decrease)—Admiral Shares  333,668  11,912  218,311  582 
Signal Shares         
Issued  154,975  6,912  301,803  8,027 
Issued in Lieu of Cash Distributions  11,476  633  7,172  172 
Redeemed1  (123,822)  (5,646)  (101,168)  (3,051) 
Net Increase (Decrease)—Signal Shares  42,629  1,899  207,807  5,148 
Institutional Shares         
Issued  554,729  28,701  650,503  24,200 
Issued in Lieu of Cash Distributions  28,341  1,978  16,639  505 
Redeemed1  (278,817)  (14,848)  (195,314)  (7,891) 
Net Increase (Decrease)—Institutional Shares  304,253  15,831  471,828  16,814 
ETF Shares         
Issued  7,505,813  231,324  3,410,974  76,0252 
Issued in Lieu of Cash Distributions  —  —  —  — 
Redeemed1  (56,081)  (2,000)  (90,323)  (2,400)2 
Net Increase (Decrease)—ETF Shares  7,449,732  229,324  3,320,651  73,6252 
1 Net of redemption fees for fiscal 2009 and 2008 of $5,687,000 and $14,015,000, respectively (fund totals).     
2 Shares adjusted to reflect a 2-for-1 split as of the close of business on June 13, 2008.       

H. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 15, 2009, for potential recognition or disclosure in these financial statements.

91


Report of Independent Registered Public Accounting Firm

To the Trustees of Vanguard International Equity Index Funds and the Shareholders of Vanguard European Stock Index Fund, Vanguard Pacific Stock Index Fund and Vanguard Emerging Markets Stock Index Fund:

In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard European Stock Index Fund, Vanguard Pacific Stock Index Fund and Vanguard Emerging Markets Stock Index Fund (separate portfolios of Vanguard International Equity Index Funds, hereafter referred to as the “Funds”) at October 31, 2009, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2009 by correspondence with the custodians and brokers and by agreement to the underlying ownership records of the Vanguard funds, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania

December 15, 2009

92


Special 2009 tax information (unaudited) for Vanguard European Stock Index Fund 

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $902,560,000 of qualified dividend income to shareholders during the fiscal year.

The fund will pass through foreign source income of $521,510,000 and foreign taxes paid of $39,234,000 to shareholders. The pass-through of foreign taxes paid will affect only shareholders on the fund’s dividend record date in December 2009. Shareholders will receive more detailed information along with their Form 1099-DIV in January 2010.

Special 2009 tax information (unaudited) for Vanguard Pacific Stock Index Fund 

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $161,789,000 of qualified dividend income to shareholders during the fiscal year.

The fund will pass through foreign source income of $184,952,000 and foreign taxes paid of $9,313,000 to shareholders. The pass-through of foreign taxes paid will affect only shareholders on the fund’s dividend record date in December 2009. Shareholders will receive more detailed information along with their Form 1099-DIV in January 2010.

Special 2009 tax information (unaudited) for Vanguard Emerging Markets Stock Index Fund 

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $393,065,000 of qualified dividend income to shareholders during the fiscal year.

The fund will pass through foreign source income of $501,215,000 and foreign taxes paid of $49,564,000 to shareholders. The pass-through of foreign taxes paid will affect only shareholders on the fund’s dividend record date in December 2009. Shareholders will receive more detailed information along with their Form 1099-DIV in January 2010.

93


Your Fund’s After-Tax Returns

This table presents returns for your fund both before and after taxes. The after-tax returns are shown in two ways: (1) assuming that an investor owned the fund during the entire period and paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s distributions and sold all shares at the end of each period.

Calculations are based on the highest individual federal income tax and capital gains tax rates in effect at the times of the distributions and the hypothetical sales. State and local taxes were not considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures and estimates for 2009. (In the example, returns after the sale of fund shares may be higher than those assuming no sale. This occurs when the sale would have produced a capital loss. The calculation assumes that the investor received a tax deduction for the loss.)

The table shows returns for Investor Shares only; returns for other share classes will differ. Please note that your actual after-tax returns will depend on your tax situation and may differ from those shown. Also note that if you own the fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not subject to current taxes.

Finally, keep in mind that a fund’s performance—whether before or after taxes—does not guarantee future results.

Average Annual Total Returns: International Stock Index Funds       
Periods Ended October 31, 2009       
  One  Five  Ten 
  Year  Years  Years 
European Stock Index Fund Investor Shares1       
Returns Before Taxes  26.25%  5.31%  2.83% 
Returns After Taxes on Distributions  24.84  4.72  2.21 
Returns After Taxes on Distributions and Sale of Fund Shares  18.16  4.47  2.22 
 
Pacific Stock Index Fund Investor Shares1       
Returns Before Taxes  23.23%  4.12%  0.08% 
Returns After Taxes on Distributions  23.05  3.76  –0.24 
Returns After Taxes on Distributions and Sale of Fund Shares  15.54  3.48  –0.04 
 
Emerging Markets Stock Index Fund Investor Shares2       
Returns Before Taxes  58.90%  15.66%  11.06% 
Returns After Taxes on Distributions  57.78  15.27  10.52 
Returns After Taxes on Distributions and Sale of Fund Shares  38.88  13.66  9.57 

1 Total returns do not reflect the 0.50% transaction fee on purchases through March 31, 2000; the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two months; or the account service fee that may be applicable to certain accounts with balances below $10,000.
2 Performance figures are adjusted for the 0.50% (0.25% prior to October 30, 2009, 0.50% prior to June 26, 2008) transaction fee on purchases and 0.25% (0.50% prior to June 26, 2008) transaction fee on redemptions. Total returns do not reflect the 2% fee assessed until March 23, 2005, on redemptions of shares purchased on or after June 27, 2003, and held for less than two months, or the account service fee that may be applicable to certain accounts with balances below $10,000.

94


About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.

A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

The accompanying tables illustrate your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”

• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the transaction fees or the account service fee described in the prospectus. If such fees were applied to your account, your costs would be higher. Your fund does not carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.

95


Six Months Ended October 31, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
International Stock Index Fund  4/30/2009  10/31/2009  Period1 
Based on Actual Fund Return       
European       
Investor Shares  $1,000.00  $1,340.79  $1.48 
Admiral Shares  1,000.00  1,341.39  0.89 
Signal Shares  1,000.00  1,341.35  0.89 
Institutional Shares  1,000.00  1,342.35  0.59 
ETF Shares  1,000.00  1,341.74  0.89 
Pacific       
Investor Shares  $1,000.00  $1,241.60  $1.41 
Admiral Shares  1,000.00  1,243.33  0.79 
Signal Shares  1,000.00  1,243.32  0.79 
Institutional Shares  1,000.00  1,244.19  0.57 
ETF Shares  1,000.00  1,243.47  0.79 
Emerging Markets       
Investor Shares2  $1,000.00  $1,381.50  $2.40 
Admiral Shares2  1,000.00  1,381.81  1.68 
Signal Shares2  1,000.00  1,382.37  1.68 
Institutional Shares2  1,000.00  1,382.22  1.44 
ETF Shares  1,000.00  1,382.03  1.68 

1 The calculations are based on expenses incurred in the most recent six-month period. The funds’ annualized six-month expense ratios for that period are 0.25% for European Stock Index Fund Investor Shares, 0.15% for Admiral Shares, 0.15% for Signal Shares, 0.10% for Institutional Shares, and 0.15% for ETF Shares; 0.25% for Pacific Stock Index Fund Investor Shares, 0.14% for Admiral Shares, 0.14% for Signal Shares, 0.10% for Institutional Shares, and 0.14% for ETF Shares; 0.40% for Emerging Markets Stock Index Fund Investor Shares, 0.28% for Admiral Shares, 0.28% for Signal Shares, 0.24% for Institutional Shares, and 0.28% for ETF Shares. The dollar amounts shown as “Expenses Paid” are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the number of days in the most recent 12-month period.
2 Calculations do not reflect the fund’s 0.50% (0.25% between June 26, 2008 and October 29, 2009) purchase fee, which is deducted from all purchases (including exchanges from other Vanguard funds) but not from reinvested dividends and capital gains.

96


Six Months Ended October 31, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
International Stock Index Fund  4/30/2009  10/31/2009  Period1 
Based on Hypothetical 5% Yearly Return       
European       
Investor Shares  $1,000.00  $1,023.95  $1.28 
Admiral Shares  1,000.00  1,024.45  0.77 
Signal Shares  1,000.00  1,024.45  0.77 
Institutional Shares  1,000.00  1,024.70  0.51 
ETF Shares  1,000.00  1,024.45  0.77 
Pacific       
Investor Shares  $1,000.00  $1,023.95  $1.28 
Admiral Shares  1,000.00  1,024.50  0.71 
Signal Shares  1,000.00  1,024.50  0.71 
Institutional Shares  1,000.00  1,024.70  0.51 
ETF Shares  1,000.00  1,024.50  0.71 
Emerging Markets       
Investor Shares2  $1,000.00  $1,023.19  $2.04 
Admiral Shares2  1,000.00  1,023.79  1.43 
Signal Shares2  1,000.00  1,023.79  1.43 
Institutional Shares2  1,000.00  1,024.00  1.22 
ETF Shares  1,000.00  1,023.79  1.43 

1 The calculations are based on expenses incurred in the most recent six-month period. The funds’ annualized six-month expense ratios for that period are 0.25% for European Stock Index Fund Investor Shares, 0.15% for Admiral Shares, 0.15% for Signal Shares, 0.10% for Institutional Shares, and 0.15% for ETF Shares; 0.25% for Pacific Stock Index Fund nvestor Shares, 0.14% for Admiral Shares, 0.14% for Signal Shares, 0.10% for Institutional Shares, and 0.14% for ETF Shares; 0.40% for Emerging Markets Stock Index Fund Investor Shares, 0.28% for Admiral Shares, 0.28% for Signal Shares, 0.24% for Institutional Shares, and 0.28% for ETF Shares. The dollar amounts shown as “Expenses Paid” are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the number of days in the most recent 12-month period.
2 Calculations do not reflect the fund’s 0.50% (0.25% between June 26, 2008 and October 29, 2009) purchase fee, which is deducted from all purchases (including exchanges from other Vanguard funds) but not from reinvested dividends and capital gains.

97


Glossary

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Equity Exposure. A measure that reflects a fund’s investments in stocks and stock futures. Any holdings in short-term reserves are excluded.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.

Turnover Rate. An indication of the fund’s trading activity. Funds with high turnover rates incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The turnover rate excludes in-kind transactions, which have minimal impact on costs.

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The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 156 Vanguard funds.

The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.

Interested Trustees  Emerson U. Fullwood 
  Born 1948. Trustee Since January 2008. Principal 
John J. Brennan1  Occupation(s) During the Past Five Years: Executive 
Born 1954. Trustee Since May 1987. Chairman of  Chief Staff and Marketing Officer for North America 
the Board. Principal Occupation(s) During the Past  and Corporate Vice President (retired 2008) of Xerox 
Five Years: Chairman of the Board and Director/Trustee  Corporation (photocopiers and printers); Director of 
of The Vanguard Group, Inc., and of each of the  SPX Corporation (multi-industry manufacturing), the 
investment companies served by The Vanguard Group;  United Way of Rochester, the Boy Scouts of America, 
Chief Executive Officer (1996–2008) and President  Amerigroup Corporation (direct health and medical 
(1989–2008) of The Vanguard Group and of each of the  insurance carriers), and Monroe Community College 
investment companies served by The Vanguard Group;  Foundation. 
Chairman of the Financial Accounting Foundation;   
Governor of the Financial Industry Regulatory Authority  Rajiv L. Gupta 
(FINRA); Director of United Way of Southeastern  Born 1945. Trustee Since December 2001.2 Principal 
Pennsylvania.  Occupation(s) During the Past Five Years: Chairman 
  and Chief Executive Officer (retired 2009) and President 
F. William McNabb III1  (2006–2008) of Rohm and Haas Co. (chemicals); Board 
Born 1957. Trustee Since July 2009. Principal  Member of American Chemistry Council; Director of 
Occupation(s) During the Past Five Years: Director of  Tyco International, Ltd. (diversified manufacturing and 
The Vanguard Group, Inc., since 2008; Chief Executive  services) and Hewlett-Packard Co. (electronic computer 
Officer and President of The Vanguard Group and of  manufacturing); Trustee of The Conference Board. 
each of the investment companies served by The   
Vanguard Group since 2008; Director of Vanguard  Amy Gutmann 
Marketing Corporation; Managing Director of The  Born 1949. Trustee Since June 2006. Principal 
Vanguard Group (1995–2008).  Occupation(s) During the Past Five Years: President of 
  the University of Pennsylvania; Christopher H. Browne 
  Distinguished Professor of Political Science in the School 
Independent Trustees  of Arts and Sciences with secondary appointments 
  at the Annenberg School for Communication and the 
Charles D. Ellis  Graduate School of Education of the University of 
Born 1937. Trustee Since January 2001. Principal  Pennsylvania; Director of Carnegie Corporation of 
Occupation(s) During the Past Five Years: Applecore  New York, Schuylkill River Development Corporation, 
Partners (pro bono ventures in education); Senior  and Greater Philadelphia Chamber of Commerce; 
Advisor to Greenwich Associates (international business  Trustee of the National Constitution Center. 
strategy consulting); Successor Trustee of Yale University;   
Overseer of the Stern School of Business at New York   
University; Trustee of the Whitehead Institute for   
Biomedical Research.   


JoAnn Heffernan Heisen  Executive Officers   
Born 1950. Trustee Since July 1998. Principal     
Occupation(s) During the Past Five Years: Corporate  Thomas J. Higgins1   
Vice President and Chief Global Diversity Officer since  Born 1957. Chief Financial Officer Since September 
2006 (retired 2008) and Member of the Executive  2008. Principal Occupation(s) During the Past Five 
Committee (retired 2008) of Johnson & Johnson  Years: Principal of The Vanguard Group, Inc.; Chief 
(pharmaceuticals/consumer products); Vice President  Financial Officer of each of the investment companies 
and Chief Information Officer of Johnson & Johnson  served by The Vanguard Group since 2008; Treasurer 
(1997–2005); Director of the University Medical Center  of each of the investment companies served by The 
at Princeton and Women’s Research and Education  Vanguard Group (1998–2008). 
Institute; Member of the Advisory Board of the Maxwell     
School of Citizenship and Public Affairs at Syracuse     
University.  Kathryn J. Hyatt1   
  Born 1955. Treasurer Since November 2008. Principal 
  Occupation(s) During the Past Five Years: Principal of 
F. Joseph Loughrey  The Vanguard Group, Inc.; Treasurer of each of the 
Born 1949. Trustee Since October 2009. Principal  investment companies served by The Vanguard 
Occupation(s) During the Past Five Years: President and  Group since 2008; Assistant Treasurer of each of the 
Chief Operating Officer since 2005 (retired 2009) and  investment companies served by The Vanguard Group 
Vice Chairman of the Board (2008–2009) of Cummins  (1988–2008).   
Inc. (industrial machinery); Director of SKF AB (industrial     
machinery), Hillenbrand, Inc. (specialized consumer     
services), Sauer-Danfoss Inc. (machinery), the Lumina  Heidi Stam1   
Foundation for Education, and the Columbus Community  Born 1956. Secretary Since July 2005. Principal 
Education Coalition; Chairman of the Advisory Council  Occupation(s) During the Past Five Years: Managing 
for the College of Arts and Letters at the University of  Director of The Vanguard Group, Inc., since 2006; 
Notre Dame.  General Counsel of The Vanguard Group since 2005; 
  Secretary of The Vanguard Group and of each of the 
  investment companies served by The Vanguard Group 
André F. Perold  since 2005; Director and Senior Vice President of 
Born 1952. Trustee Since December 2004. Principal  Vanguard Marketing Corporation since 2005; Principal 
Occupation(s) During the Past Five Years: George Gund  of The Vanguard Group (1997–2006). 
Professor of Finance and Banking, Harvard Business     
School; Chair of the Investment Committee of HighVista     
Strategies LLC (private investment firm).  Vanguard Senior Management Team 
 
Alfred M. Rankin, Jr.  R. Gregory Barton  Michael S. Miller 
Born 1941. Trustee Since January 1993. Principal  Mortimer J. Buckley  James M. Norris 
Occupation(s) During the Past Five Years: Chairman,  Kathleen C. Gubanich  Glenn W. Reed 
President, and Chief Executive Officer of NACCO  Paul A. Heller  George U. Sauter 
Industries, Inc. (forklift trucks/housewares/lignite);     
Director of Goodrich Corporation (industrial products/     
aircraft systems and services); Deputy Chairman of  Founder   
the Federal Reserve Bank of Cleveland; Trustee of     
University Hospitals of Cleveland, The Cleveland     
Museum of Art, and Case Western Reserve University.  John C. Bogle   
  Chairman and Chief Executive Officer, 1974–1996 
 
Peter F. Volanakis     
Born 1955. Trustee Since July 2009. Principal     
Occupation(s) During the Past Five Years: President     
since 2007 and Chief Operating Officer since 2005     
of Corning Incorporated (communications equipment);     
President of Corning Technologies (2001–2005); Director     
of Corning Incorporated and Dow Corning; Trustee of     
the Corning Incorporated Foundation and the Corning     
Museum of Glass; Overseer of the Amos Tuck School     
of Business Administration at Dartmouth College.     

1 These individuals are “interested persons” as defined in the Investment Company Act of 1940.
2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard State Tax-Exempt Funds.


 

 
 P.O. Box 2600 
 Valley Forge, PA 19482-2600 

Connect with Vanguard® > www.vanguard.com

Fund Information > 800-662-7447  All comparative mutual fund data are from Lipper Inc. 
  or Morningstar, Inc., unless otherwise noted. 
Direct Investor Account Services > 800-662-2739   
 
Institutional Investor Services > 800-523-1036  You can obtain a free copy of Vanguard’s proxy voting  
  guidelines by visiting our website, www.vanguard.com, 
Text Telephone for People  and searching for “proxy voting guidelines,” or by 
With Hearing Impairment > 800-749-7273  calling Vanguard at 800-662-2739. The guidelines are 
  also available from the SEC’s website, www.sec.gov. 
  In addition, you may obtain a free report on how your 
  fund voted the proxies for securities it owned during 
This material may be used in conjunction  the 12 months ended June 30. To get the report, visit  
with the offering of shares of any Vanguard  either www.vanguard.com or www.sec.gov. 
fund only if preceded or accompanied by   
the fund’s current prospectus.  You can review and copy information about your fund 
  at the SEC’s Public Reference Room in Washington, D.C. 
The funds or securities referred to herein are not  To find out more about this public service, call the SEC 
sponsored, endorsed, or promoted by MSCI, and MSCI  at 202-551-8090. Information about your fund is also 
bears no liability with respect to any such funds or  available on the SEC’s website, and you can receive 
securities. For any such funds or securities, the  copies of this information, for a fee, by sending a 
prospectus or the Statement of Additional Information  request in either of two ways: via e-mail addressed to 
contains a more detailed description of the limited  publicinfo@sec.gov or via regular mail addressed to the 
relationship MSCI has with The Vanguard Group and  Public Reference Section, Securities and Exchange 
any related funds.  Commission, Washington, DC 20549-1520. 
 
 
 
 
  © 2009 The Vanguard Group, Inc. 
  All rights reserved. 
  Vanguard Marketing Corporation, Distributor. 
  Q720 122009 


Vanguard Developed Markets 
Index Funds Annual Report 
October 31, 2009 

Vanguard Developed Markets Index Fund 
Vanguard Institutional Developed Markets Index Fund 


> Global equity markets began to recover in March and continued to climb as

earnings reports improved and investor confidence revived.

> For the fiscal year ended October 31, 2009, Vanguard Developed Markets Index

Fund and Vanguard Institutional Developed Markets Index Fund both returned

about 25%.

> All ten industry sectors posted gains, with materials, industrials, and financials

leading the way.

Contents   
 
Your Fund’s Total Returns  1 
President’s Letter  2 
Results of Proxy Voting  8 
Developed Markets Index Fund  10 
Institutional Developed Markets Index Fund  31 
Your Fund’s After-Tax Returns  54 
About Your Fund’s Expenses  55 
Glossary  57 


 Developed Markets Index Fund
                          Institutional Developed Markets Index Fund

Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice.
Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the
risks of investing in your fund are spelled out in the prospectus.
Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Fiscal Year Ended October 31, 2009     
  Ticker  Total 
  Symbol  Returns 
Vanguard Developed Markets Index Fund  VDMIX  25.23% 
MSCI EAFE Index    27.71 
International Funds Average1    26.69 
 
Vanguard Institutional Developed Markets Index Fund  VIDMX  25.40% 
MSCI EAFE Index    27.71 
International Funds Average1    26.69 

Your Fund’s Performance at a Glance         
October 31, 2008–October 31, 2009         
      Distributions Per Share 
  Starting  Ending  Income  Capital 
  Share Price  Share Price  Dividends  Gains 
Vanguard Developed Markets Index Fund  $7.79  $9.26  $0.398  $0.000 
Vanguard Institutional Developed Markets         
Index Fund  7.74  9.19  0.414  0.000 

1 Derived from data provided by Lipper Inc.

1


 

 

 

President’s Letter

Dear Shareholder,

As the world emerged from the worst global financial crisis since the 1930s, international stocks outpaced U.S. equities during the 2009 fiscal year.

The Developed Markets Index Fund and Institutional Developed Markets Index Fund, which were previously included in a shareholder report encompassing other Vanguard international equity funds, are now issuing their own report. The funds modified their investment policies in June; as a result of the change, the two former “funds of funds” can invest directly in individual stocks in European and Pacific markets.

This change in policies led to additional developments. First, the funds’ trustees voted to reorganize Vanguard Developed Markets Index Fund and its Institutional counterpart as a single fund, concluding that such a combination would be in the best interest of shareholders in each fund. Second, Vanguard Institutional Developed Markets Index Fund was closed to new accounts. We expect the reorganization to occur on or around January 22, 2010.

The reorganized Vanguard Developed Markets Index Fund will offer Institutional Shares that are expected to have the same expense ratio as the existing Vanguard Institutional Developed Markets Index Fund.

2


The funds each returned about 25% for the 12 months ended October 31. Because of temporary price differences arising from fair-value pricing policies (please see the text box on page 6), the funds did not appear to track their benchmarks as closely as they typically do.

If you own one or more of the funds in a taxable account, you may wish to review the details of the funds’ after-tax returns on page 54.

A vicious bear market quickly turned bullish

A year ago, the global financial system stood on the brink of collapse as the expanding U.S. credit crisis precipitated the deepest worldwide recession since World War II. Since then, markets have

pulled back from the depths and, in fact, have rallied impressively. Although U.S. unemployment has risen to double digits and signs of a robust recovery are hard to find, the global economy has begun to revive. For the first time in more than a year, U.S. gross domestic product registered growth, as reported by the Commerce Department for the third quarter of calendar 2009.

U.S. stocks recorded positive returns for the fiscal year ended October 31 as the market’s losses during the first four months of the period—marking the final plunge of a historic bear market—were erased by a remarkable rally beginning in March. Global stocks did even better, thanks to some renewed strength in developed markets and a powerful upswing in

Market Barometer       
  Average Annual Total Returns 
  Periods Ended October 31, 2009 
  One Year  Three Years  Five Years 
Stocks       
MSCI All Country World Index ex USA (International)  34.79%  –2.49%  7.58% 
Russell 1000 Index (Large-caps)  11.20  –6.84  0.71 
Russell 2000 Index (Small-caps)  6.46  –8.51  0.59 
Dow Jones U.S. Total Stock Market Index  11.34  –6.55  1.06 
 
Bonds       
Barclays Capital U.S. Aggregate Bond Index       
(Broad taxable market)  13.79%  6.35%  5.05% 
Barclays Capital Municipal Bond Index  13.60  4.17  4.15 
Citigroup 3-Month Treasury Bill Index  0.28  2.50  2.94 
 
CPI       
Consumer Price Index  –0.18%  2.32%  2.52% 

3


emerging markets that actually had some prognosticators worrying about a new asset bubble. Reminders of the markets’ travails are nevertheless apparent in the index returns for the past three years, where negative figures are the rule. Even the five-year returns for U.S. stocks as of October 31 are barely positive, further evidence of the long-term damage done by the collapse of the real estate bubble.

The bond market experienced an equally dramatic turnaround

The stock market’s rapid fall and recovery were matched by an equally dramatic turnaround in the bond market. At the end of 2008, as the credit markets virtually shut down, risk-averse investors flocked to U.S. Treasury bonds. The effect was to widen the difference between the lower

yields of Treasuries and the higher yields of corporate bonds to a margin not seen since the Great Depression.

Central banks around the world responded to the economic slowdown by lowering interest rates and implementing other aggressive stimulus programs. Meanwhile, governments boosted spending in hopes of reversing the recessionary tide. As fears of a worldwide depression eased, investors’ appetite for risk returned to more normal levels. The receding pessimism raised demand for corporate bonds, raising their prices and bringing down their yields. Over the past 12 months, both taxable and municipal bonds returned more than 13%.

Expense Ratios1     
Your Fund Compared With Its Peer Group     
    International 
  Expense  Funds 
  Ratio1  Average 
Developed Markets Index Fund  0.29%  1.44% 
Institutional Developed Markets Index Fund  0.13  1.44 

1 The fund expense ratios shown are from the prospectuses dated September 23, 2009, and represent estimated costs for the current fiscal
year based on the funds’ net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the funds’ total operating
expenses represented 0.25% of average net assets for the Developed Markets Index Fund and 0.12% of average net assets for the
Institutional Developed Markets Index Fund. The peer-group expense ratios are derived from data provided by Lipper Inc. and capture
information through year-end 2008.

4


However, the Fed’s easy-money campaign had a predictable effect on short-term savings vehicles such as money market funds, whose yields track prevailing short-term rates. In December 2008, the Fed reduced its target for the federal funds rate, a benchmark for the interest rates paid by money market instruments and other very short-term securities, to between 0% and 0.25%. The Fed has said it expects to maintain its target at this level “for an extended period.”

Developed markets generated gains

The Developed Markets Index Funds seek to track the performance of the MSCI EAFE Index by investing in companies located in the major markets of Europe and the Pacific region. These markets

produced significant returns during the fiscal year, surpassing the U.S. stock market but falling short of their emerging-market counterparts. The MSCI Pacific Index advanced about 28%, and the MSCI Europe Index returned about 27%. During the fiscal year, the dollar depreciated 13% against the euro and 9% against the yen, an advantage for U.S.-based investors in both the European and Pacific markets.

In the United Kingdom, which has been slow to shake off the global recession, stocks still increased almost 24%. France and Germany, which also accounted for hefty fund weightings, made strong contributions. So did Spain, where stocks returned nearly 56%, and Sweden, where stocks rose almost 70%.

Total Returns   
Inception1 Through October 31, 2009   
  Average 
  Annual Return 
Developed Markets Index Fund  1.51% 
MSCI EAFE Index  1.59 
International Funds Average2  0.61 
Institutional Developed Markets Index  1.57 
MSCI EAFE Index  1.61 
International Funds Average2  0.52 

The figures shown represent past performance, which is not a guarantee of future results. (Current performance
may be lower or higher than the performance data cited. For performance data current to the most recent month-
end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal
value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost.

1 Performance for the funds and their comparative standards is calculated since the following inception dates: May 8, 2000, for the
Developed Markets Index Fund, and June 1, 2000, for the Institutional Developed Markets Index Fund.
2 Derived from data provided by Lipper Inc.

5


A note on fair-value pricing 
An index fund’s return sometimes may appear to diverge from the return of its benchmark
index a bit more than would be expected. This may be the result of a fair-value pricing adjustment. 
These adjustments address pricing discrepancies that may arise because of time-zone differences among
global stock markets. Foreign stocks may trade on exchanges that close many hours before a fund’s
closing share price is calculated in the United States, generally at 4 p.m., Eastern time. In the hours
between the foreign close and the U.S. close, the value of these foreign securities may change—because
of company-specific announcements or market-wide developments, for example.  Such price changes
are not immediately reflected in international index values.
 
Fair-value pricing takes such changes into account in calculating the fund’s daily net asset value, thus ensuring
that the NAV doesn’t include “stale” prices. The result can be a temporary divergence between the return of
the fund and that of its benchmark index—a difference that usually corrects itself when the foreign
markets reopen.

Australia, which is dwarfed by Japan in terms of the region’s country weightings, made the greatest contribution to the Pacific index’s return. Signaling the Australian economy’s solid footing, the Reserve Bank of Australia began increasing its key interest rates, and Australian financial and materials stocks each rose more than 70% during the fiscal year. Japan, which accounted for about 70% of the value of developed markets in the Pacific, on average, during the period, also saw a stock market recovery, bolstered by the consumer discretionary, industrial, and information technology sectors.

All ten industry sectors in the benchmark produced positive returns for the fiscal period. Financials, the most significant sector weighting, advanced about 34%. Banks, especially, made a difference, rebounding off their lows as economies began to stabilize.

Strong gains came from the materials, industrial, and energy sectors, reflecting increased demand for commodities. The information technology and telecommunication services sectors rose on the expectation that corporations would boost spending after a period of significant cutbacks, and the consumer discretionary and consumer staples sectors advanced as shoppers began to open their wallets.

6


The funds’ long-term results are aligned with benchmark’s

During the nearly ten years since their inceptions, a span that featured extraordinary turmoil and two savage bear markets, the two Developed Markets Index Funds have met their objective of tracking their benchmark index. Their returns have also outpaced the average annual return of their international funds peer group for the period ended October 31, 2009.

While the investment environment has been volatile and the future is unpredictable, we’re confident that Vanguard Quantitative Equity Group’s expert and disciplined index fund management will help the soon-to-be-reorganized fund capture much of the return of its benchmark index. The reorganized fund’s emphasis on keeping costs low will also help ensure that you keep more of its returns.

International stocks have a place in a diversified program

Investors dealt with two market extremes over the past fiscal year. Through the final months of 2008 and into 2009, stock markets around the world slid as the global financial crisis intensified and credit markets remained gridlocked. In March, however, markets found a bottom and then began to rise on positive economic news and investors’ newfound optimism.

Investors who maintain a long-term view realize that financial markets experience volatility from time to time, and that the market’s inherent risk is, paradoxically, a source of its potential rewards. Although such uncertainty can be hard to live with, it can be managed. Vanguard has long counseled investors to create a broadly diversified investment program that considers their time horizon, risk tolerance, and long-term goals. Such a program may include U.S. and international stock funds as well as bond and money market funds.

International stocks––and economies––often behave differently than their U.S. counterparts. Diversification may add value as long as asset classes are not completely in sync, and Vanguard’s research indicates that international equities can diversify your portfolio over the long term. As part of a well-balanced portfolio, the two Developed Markets Index Funds offer exposure to foreign investment opportunities, potentially helping you meet your long-term investing goals.

Thank you for your confidence in Vanguard.


F. William McNabb III
President and Chief Executive Officer
November 17, 2009

7


Results of Proxy Voting

At a special meeting of shareholders on July 2, 2009, fund shareholders approved the following two proposals:

Proposal 1—Elect trustees for each fund.*

The individuals listed in the table below were elected as trustees for each fund. All trustees with the exception of Messrs. McNabb and Volanakis (both of whom already served as directors of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.

Developed Markets Index Fund, Institutional Developed Markets Index Fund     
      Percentage 
Trustee  For  Withheld  For 
John J. Brennan  3,238,376,491  48,158,442  98.5% 
Charles D. Ellis  3,220,296,621  66,238,311  98.0% 
Emerson U. Fullwood  3,234,626,268  51,908,665  98.4% 
Rajiv L. Gupta  3,233,667,602  52,867,331  98.4% 
Amy Gutmann  3,235,485,956  51,048,977  98.4% 
JoAnn Heffernan Heisen  3,236,403,610  50,131,323  98.5% 
F. William McNabb III  3,236,819,920  49,715,013  98.5% 
André F. Perold  3,232,519,097  54,015,835  98.4% 
Alfred M. Rankin, Jr.  3,236,021,880  50,513,052  98.5% 
Peter F. Volanakis  3,238,134,065  48,400,867  98.5% 
* Results are for all funds within the same trust.       

Proposal 2—Update and standardize the funds’ fundamental policies regarding:
(a) Purchasing and selling real estate.
(b) Issuing senior securities.
(c) Borrowing money.
(d) Making loans.
(e) Purchasing and selling commodities.
(f) Concentrating investments in a particular industry or group of industries.
(g) Eliminating outdated fundamental investment policies not required by law.

The revised fundamental policies are clearly stated and simple, yet comprehensive, making oversight and compliance more efficient than under the former policies. The revised fundamental policies will allow the funds to respond more quickly to regulatory and market changes, while avoiding the costs and delays associated with successive shareholder meetings.

        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
Developed Markets Index Fund           
2a  182,188,405  1,795,124  1,757,729  20,423,838  88.4% 
2b  181,862,892  2,043,196  1,835,170  20,423,838  88.2% 
2c  181,641,819  1,794,713  2,304,726  20,423,838  88.1% 
2d  181,932,601  1,666,963  2,141,694  20,423,838  88.2% 
2e  181,845,903  1,858,565  2,036,791  20,423,837  88.2% 

8


        Broker  Percentage 
Vanguard Fund  For  Abstain  Against  Non-Votes  For 
Developed Markets Index Fund (continued)         
2f  182,216,413  1,833,528  1,691,318  20,423,837  88.4% 
2g  179,635,889  2,088,257  4,017,114  20,423,836  87.1% 
 
Institutional Developed Markets Index Fund         
2a  317,210,967  2,334,834  793,162  22,451,728  92.5% 
2b  317,217,690  2,338,549  782,723  22,451,729  92.5% 
2c  309,185,633  3,411,750  7,741,577  22,451,730  90.2% 
2d  309,183,302  3,411,160  7,744,500  22,451,728  90.2% 
2e  309,493,827  2,339,604  8,505,532  22,451,728  90.3% 
2f  310,294,700  2,340,029  7,704,233  22,451,728  90.5% 
2g  317,237,196  2,344,910  756,858  22,451,727  92.5% 

9


Developed Markets Index Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics     
    Target  Broad 
  Fund  Index1  Index2 
Number of Stocks  977  961  1,806 
Turnover Rate  14%  —  — 
Expense Ratio3  0.29%  —  — 
Short-Term Reserves  0.1%  —  — 

Sector Diversification (% of equity exposure) 
    Target  Broad 
  Fund  Index1  Index2 
Consumer Discretionary  9.7%  9.7%  8.3% 
Consumer Staples  10.2  10.1  8.6 
Energy  8.5  8.4  11.2 
Financials  26.0  26.4  26.6 
Health Care  8.3  8.3  6.4 
Industrials  11.1  11.1  9.8 
Information Technology  4.8  4.8  6.5 
Materials  9.5  9.5  11.2 
Telecommunication       
Services  6.0  5.9  6.4 
Utilities  5.9  5.8  5.0 

Volatility Measures4   
  Fund Versus  Fund Versus 
  Target Index1  Broad Index2 
R-Squared  0.98  0.96 
Beta  1.02  0.95 

Ten Largest Holdings5 (% of total net assets) 
 
HSBC Holdings PLC  diversified banks  1.9% 
Royal Dutch Shell PLC  integrated oil and gas  1.8
BP PLC  integrated oil and gas  1.8
BHP Billiton Ltd.  diversified metals   
  and mining  1.7 
Nestle SA  packaged foods   
  and meats  1.7 
Banco Santander SA  diversified banks  1.3 
Total SA  integrated oil and gas  1.3
Telefonica SA  integrated   
  telecommunication   
  services  1.2 
Vodafone Group PLC  wireless   
  telecommunication   
  services  1.2 
Roche Holdings AG  pharmaceuticals  1.1 
Top Ten    15.0% 

Market Diversification (% of equity exposure) 
    Target 
  Fund  Index1 
United Kingdom  21.4%  21.4% 
Japan  21.1  21.2 
France  10.8  10.7 
Australia  8.2  8.3 
Germany  8.0  7.9 
Switzerland  7.9  7.8 
Spain  4.8  4.7 
Italy  3.6  3.6 
Sweden  2.6  2.7 
Netherlands  2.5  2.5 
Hong Kong  2.4  2.4 
Singapore  1.3  1.4 
Finland  1.1  1.1 
Belgium  1.0  1.0 
Other Developed Markets  3.3  3.3 

1 MSCI EAFE Index.
2 MSCI All Country World Index ex USA.
3 The fund expense ratio shown is from the prospectus dated September 23, 2009, and represents estimated costs for the current fiscal year
based on the fund’s net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the fund’s total operating expenses
represented 0.25% of average net assets.
4 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
5 The holdings listed exclude any temporary cash investments and equity index products.

10


Developed Markets Index Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: May 8, 2000–October 31, 2009
Initial Investment of $10,000

 

  Average Annual Total Returns   
  Periods Ended October 31, 2009  Final Value 
      Since  of a $10,000 
  One Year  Five Years  Inception1  Investment 
Developed Markets Index Fund2  25.23%  4.92%  1.51%  $11,525 
MSCI All Country World Index ex USA  34.79  7.58  3.48  13,837 
MSCI EAFE Index  27.71  5.10  1.59  11,612 
International Funds Average3  26.69  4.57  0.61  10,590 

1 Performance for the fund and its comparative standards is calculated since the fund’s inception: May 8, 2000.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two
months, or the account service fee that may be applicable to certain accounts with balances below $10,000.
3 Derived from data provided by Lipper Inc.

11


Developed Markets Index Fund

Fiscal-Year Total Returns (%): May 8, 2000–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

        Since 
  Inception Date  One Year  Five Years  Inception 
Developed Markets Index Fund1  5/8/2000  1.60%  6.13%  1.78% 

1 Total returns do not reflect the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than two
months, or the account service fee that may be applicable to certain accounts with balances below $10,000.
Note: See Financial Highlights table for dividend and capital gains information.

12


Developed Markets Index Fund

Financial Statements

Statement of Net Assets

As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

    Market 
    Value• 
  Shares  ($000) 
Common Stocks (97.8%)     
Australia (8.0%)     
BHP Billiton Ltd.  994,737  32,624 
Commonwealth Bank     
of Australia  450,265  20,807 
Westpac Banking Corp.  863,466  20,181 
National Australia Bank Ltd.  568,957  15,033 
Australia & New Zealand     
Banking Group Ltd.  689,935  14,072 
Woolworths Ltd.  364,594  9,332 
Wesfarmers Ltd.  298,146  7,440 
Rio Tinto Ltd.  129,257  7,165 
Westfield Group  606,652  6,573 
Woodside Petroleum Ltd.  147,124  6,171 
QBE Insurance Group Ltd.  297,959  6,001 
CSL Ltd.  178,411  5,009 
Newcrest Mining Ltd.  142,988  4,110 
Macquarie Group Ltd.  90,152  3,948 
Telstra Corp. Ltd.  1,294,820  3,848 
Origin Energy Ltd.  260,484  3,735 
Santos Ltd.  241,572  3,220 
AMP Ltd.  596,721  3,144 
Suncorp-Metway Ltd.  378,141  2,958 
Foster’s Group Ltd.  567,963  2,785 
Brambles Ltd.  416,956  2,629 
Orica Ltd.  106,678  2,263 
Stockland  676,436  2,247 
Insurance Australia     
Group Ltd.  607,161  2,042 
Amcor Ltd.  362,297  1,866 
AGL Energy Ltd.  133,404  1,654 
Coca-Cola Amatil Ltd.  165,947  1,578 
ASX Ltd.  51,286  1,546 
Toll Holdings Ltd.  196,993  1,493 
BlueScope Steel Ltd.  543,343  1,440 
Leighton Holdings Ltd.  44,735  1,421 
Transurban Group  335,436  1,361 
GPT Group  2,596,151  1,325 
Sonic Healthcare Ltd.  105,952  1,323 
Computershare Ltd.  129,164  1,254 
*  Fortescue Metals     
  Group Ltd.  358,721  1,201 
  WorleyParsons Ltd.  49,382  1,139 
  TABCORP Holdings Ltd.  178,102  1,136 
  AXA Asia Pacific     
  Holdings Ltd.  298,342  1,117 
  Wesfarmers Ltd.  44,178  1,107 
  OneSteel Ltd.  399,833  1,086 
  Incitec Pivot Ltd.  464,409  1,083 
*  Alumina Ltd.  721,121  1,058 
  Crown Ltd.  144,655  1,053 
  Lend Lease Corp. Ltd.  126,957  1,052 
*  Asciano Group  780,712  1,045 
  Dexus Property Group  1,389,119  981 
  Mirvac Group  733,664  961 
*  OZ Minerals Ltd.  912,750  954 
  Metcash Ltd.  225,963  950 
  Cochlear Ltd.  16,537  948 
  Goodman Group  1,745,162  936 
^  Fairfax Media Ltd.  642,848  911 
  Macquarie     
  Infrastructure Group  704,803  902 
  Boral Ltd.  174,451  890 
  CFS Retail Property Trust  513,570  882 
*  James Hardie     
  Industries NV  130,884  830 
  Bendigo and Adelaide     
  Bank Ltd.  101,116  819 
  Qantas Airways Ltd.  326,762  812 
  Tatts Group Ltd.  358,002  793 
  Sims Metal     
  Management Ltd.  42,277  745 
*  Paladin Energy Ltd.  192,754  697 
  CSR Ltd.  390,364  664 
*  Arrow Energy Ltd.  170,115  615 
  Harvey Norman     
  Holdings Ltd.  160,373  568 
  Goodman Fielder Ltd.  384,274  551 
  Nufarm Ltd.  52,522  537 
  Macquarie Airports  210,241  535 
  Billabong International Ltd.  55,169  510 

13


Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Aristocrat Leisure Ltd.  118,734  474 
  Energy Resources of     
  Australia Ltd.  20,577  425 
  Perpetual Ltd.  10,592  353 
*  Caltex Australia Ltd.  37,588  341 
  SP AusNet  364,839  287 
*  CSR, Ltd. Rights     
  Exp. 11/9/2009  68,315  15 
      235,561 
Austria (0.3%)     
^  Erste Group Bank AG  51,708  2,079 
  OMV AG  45,138  1,860 
  Telekom Austria AG  94,309  1,545 
  Voestalpine AG  35,426  1,211 
  Verbund - Oesterreichische     
  Elektrizitaetswirtschafts AG   
  Class A  22,854  1,026 
^  Raiffeisen International Bank   
  Holding AG  16,011  939 
  Vienna Insurance Group  11,418  643 
      9,303 
Belgium (1.0%)     
  Anheuser-Busch InBev NV  213,664  10,032 
*  Fortis  656,381  2,838 
  Groupe Bruxelles     
  Lambert SA  23,696  2,088 
*  KBC Groep NV  48,168  2,062 
  Delhaize Group SA  29,550  2,007 
  Solvay SA Class A  17,573  1,726 
  Belgacom SA  45,045  1,687 
*,^  Dexia SA  156,747  1,303 
  UCB SA  29,979  1,280 
  Colruyt SA  4,449  1,059 
  Umicore  33,748  1,025 
  Mobistar SA  8,906  612 
  Nationale A Portefeuille  9,940  519 
      28,238 
Denmark (0.9%)     
  Novo Nordisk A/S Class B  133,023  8,264 
*  Vestas Wind Systems A/S  60,098  4,215 
*  Danske Bank A/S  133,988  3,077 
  A P Moller - Maersk A/S     
  Class B  323  2,206 
  Carlsberg A/S Class B  31,449  2,205 
  Novozymes A/S  13,664  1,250 
  A P Moller - Maersk A/S  162  1,077 
*  DSV A/S  63,688  990 
*  Topdanmark A/S  4,191  604 
  Coloplast A/S Class B  6,923  565 
  TrygVesta AS  7,026  506 
*  William Demant Holding  7,006  498 
  H Lundbeck A/S  17,437  338 
      25,795 
Finland (1.1%)     
  Nokia Oyj  1,111,936  14,045 
  Fortum Oyj  130,818  3,096 
  Sampo Oyj  125,666  3,008 
  UPM-Kymmene Oyj  153,516  1,842 
  Kone Oyj Class B  45,492  1,699 
  Stora Enso Oyj  172,176  1,303 
  Metso Oyj  37,888  1,058 
  Wartsila Oyj  24,639  892 
  Elisa Oyj  39,428  764 
  Nokian Renkaat Oyj  31,347  669 
^  Neste Oil Oyj  37,610  665 
  Kesko Oyj Class B  19,506  649 
  Outokumpu Oyj  34,289  567 
  Rautaruukki Oyj  24,863  507 
  Orion Oyj Class B  26,650  506 
  Pohjola Bank PLC  40,725  453 
  Sanoma Oyj  24,074  444 
      32,167 
France (10.5%)     
  Total SA  632,700  37,861 
  Sanofi-Aventis SA  311,937  22,866 
  BNP Paribas  272,793  20,551 
  GDF Suez  357,890  14,962 
  France Telecom SA  543,228  13,461 
  AXA SA  463,861  11,536 
  Societe Generale  168,239  11,174 
  Groupe Danone SA  163,146  9,801 
  Vivendi  347,176  9,632 
  ArcelorMittal  254,733  8,621 
  Carrefour SA  188,613  8,096 
  Air Liquide SA  74,261  7,998 
  LVMH Moet Hennessy     
  Louis Vuitton SA  72,605  7,518 
  L’Oreal SA  70,985  7,258 
  Schneider Electric SA  69,233  7,199 
  Vinci SA  125,264  6,537 
  Unibail-Rodamco SE  24,095  5,336 
  Cie de Saint-Gobain  108,999  5,312 
  Credit Agricole SA  263,105  5,040 
  Pernod-Ricard SA  57,541  4,794 
  Lafarge SA  58,992  4,788 
  Alstom SA  59,709  4,137 
  EDF SA  70,413  3,925 
  Veolia Environnement  112,486  3,675 
  Cie Generale d’Optique     
  Essilor International SA  59,752  3,346 
  Compagnie Generale des     
  Etablissements Michelin     
  Class B  42,958  3,182 
  Bouygues SA  66,157  3,116 
*  Alcatel-Lucent  686,922  2,573 
  Vallourec SA  15,808  2,489 
  PPR  22,714  2,475 
*  Renault SA  55,043  2,463 
  European Aeronautic     
  Defence and Space Co. NV  122,003 2,285 
^  Hermes International  15,556  2,163 
  Cap Gemini SA  43,790  2,029 

14


Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Accor SA  42,002  2,012 
  Technip SA  31,172  1,956 
  Christian Dior SA  18,670  1,862 
  SES SA  82,937  1,797 
  Suez Environnement Co.  78,943  1,754 
  STMicroelectronics NV  200,173  1,606 
  Sodexo  27,760  1,585 
  Lagardere SCA  35,002  1,581 
*  Peugeot SA  45,044  1,467 
*  Natixis  258,596  1,453 
  Publicis Groupe  34,902  1,326 
  Casino Guichard     
  Perrachon SA  16,265  1,292 
  Thales SA  26,512  1,285 
  SCOR SE  49,156  1,251 
  Dassault Systemes SA  19,380  1,118 
  Klepierre  26,886  1,114 
  CNP Assurances  10,991  1,062 
  Eutelsat Communications  29,310  932 
  Safran SA  55,357  893 
  Legrand SA  31,044  842 
*  Cie Generale de     
  Geophysique-Veritas  42,491  842 
  Neopost SA  9,247  809 
  Bureau Veritas SA  14,432  795 
  Fonciere Des Regions  6,878  758 
  Aeroports de Paris  8,767  665 
^  Eiffage SA  12,170  663 
*  Atos Origin SA  13,496  632 
  ICADE  5,883  619 
*  Air France-KLM  40,150  616 
  Gecina SA  5,559  591 
  Imerys SA  10,106  554 
  Societe BIC SA  7,869  546 
  Societe Television     
  Francaise 1  34,333  539 
  Iliad SA  4,803  520 
  Eurazeo  8,164  513 
  Societe Des Autoroutes     
  Paris-Rhin-Rhone  6,718  505 
^  Eramet  1,530  476 
  M6-Metropole Television  19,040  459 
  PagesJaunes Groupe  36,488  447 
  BioMerieux  4,010  445 
*  JC Decaux SA  19,788  400 
  Ipsen SA  7,447  379 
      309,160 
Germany (7.8%)     
  Siemens AG  243,872  22,038 
  E.ON AG  563,614  21,600 
  Bayer AG  226,695  15,728 
  Allianz SE  134,372  15,402 
  BASF SE  273,817  14,657 
  Deutsche Bank AG  175,865  12,777 
  Daimler AG  238,355  11,578 
  SAP AG  254,031  11,506 
  Deutsche Telekom AG  839,746  11,475 
  RWE AG  124,109  10,886 
  Muenchener     
  Rueckversicherungs AG  61,242  9,689 
  Bayerische Motoren     
  Werke AG  98,043  4,796 
  Linde AG  44,875  4,710 
  Deutsche Boerse AG  57,681  4,672 
^  Volkswagen AG  26,243  4,267 
  Deutsche Post AG  250,605  4,240 
  ThyssenKrupp AG  99,143  3,194 
  Volkswagen AG Pfd.  31,309  3,119 
  Fresenius Medical     
  Care AG & Co. KGaA  57,115  2,772 
  Adidas AG  57,451  2,660 
  MAN SE  31,628  2,604 
  HeidelbergCement AG  41,375  2,475 
  K&S AG  43,719  2,386 
  Henkel AG & Co. KGaA  52,386  2,386 
*  Commerzbank AG  212,433  2,213 
  Porsche Automobil     
  Holding SE  25,780  1,972 
  Metro AG  33,409  1,854 
  Merck KGaA  18,962  1,783 
  Beiersdorf AG  26,117  1,609 
  Henkel AG & Co. KGaA  38,502  1,488 
*  Infineon Technologies AG  324,350  1,461 
  Daimler AG  29,358  1,416 
*  QIAGEN NV  66,707  1,383 
  Fresenius AG Pfd.  23,762  1,380 
  Salzgitter AG  11,581  1,041 
  Deutsche Lufthansa AG  67,209  1,038 
  Hochtief AG  12,304  929 
  RWE AG  11,525  904 
  GEA Group AG  46,137  871 
*  Hannover     
  Rueckversicherung AG  17,854  805 
*  Deutsche Postbank AG  25,947  803 
  Wacker Chemie AG  4,620  664 
  Celesio AG  24,887  617 
^  Solarworld AG  24,805  537 
  Fraport AG Frankfurt     
  Airport Services Worldwide  10,964  516 
  Bayerische Motoren     
  Werke AG  14,959  492 
*  United Internet AG  37,533  489 
  Puma AG Rudolf     
  Dassler Sport  1,577  483 
  Fresenius SE  8,346  416 
  Suedzucker AG  19,641  406 
*,^  TUI AG  41,206  286 
  Hamburger Hafen und     
  Logistik AG  7,287  284 
      229,757 

15


Developed Markets Index Fund     
 
 
 
        Market 
        Value• 
      Shares  ($000) 
Greece (0.7%)       
*  National Bank of Greece SA  157,822  5,770 
*  Alpha Bank AE    105,465  2,033 
  OPAP SA    66,013  1,680 
*  Piraeus Bank SA    90,310  1,557 
*  EFG Eurobank Ergasias SA    95,909  1,519 
  Coca Cola Hellenic       
  Bottling Co. SA    54,473  1,420 
  Bank of Cyprus       
  Public Co. Ltd.    166,168  1,315 
  Hellenic Telecommunications     
  Organization SA    50,094  843 
*  National Bank of       
  Greece SA ADR    106,643  775 
  Marfin Investment Group SA  189,363  755 
*  Public Power Corp. SA    34,585  705 
  Titan Cement Co. SA    17,136  592 
  Hellenic Telecommunications     
  Organization SA ADR    47,469  403 
  Hellenic Petroleum SA    27,339  331 
        19,698 
Hong Kong (2.3%)       
  Sun Hung Kai Properties Ltd.  418,557  6,341 
  Hong Kong Exchanges       
  and Clearing Ltd.    301,885  5,314 
  Cheung Kong Holdings Ltd.    407,895  5,177 
  Hutchison Whampoa Ltd.    625,757  4,392 
  CLP Holdings Ltd.    608,824  4,080 
  Hang Seng Bank Ltd.    225,482  3,185 
  Hong Kong &       
  China Gas Co. Ltd.  1,180,467  2,840 
  Li & Fung Ltd.    670,309  2,788 
  Swire Pacific Ltd.    228,091  2,780 
  BOC Hong Kong       
  Holdings Ltd.  1,096,854  2,525 
  Hang Lung Properties Ltd.    615,393  2,326 
  Henderson Land       
  Development Co. Ltd.    319,492  2,259 
  Wharf Holdings Ltd.    410,308  2,217 
  Esprit Holdings Ltd.    332,531  2,214 
  Hongkong Electric       
  Holdings Ltd.    411,634  2,201 
  New World       
  Development Ltd.    727,680  1,566 
  Bank of East Asia Ltd.    441,453  1,548 
  MTR Corp.    411,164  1,456 
  Link REIT    629,585  1,418 
  Hang Lung Group Ltd.    232,969  1,168 
  Kerry Properties Ltd.    207,277  1,156 
  Sino Land Co. Ltd.    489,441  931 
  Wheelock & Co. Ltd.    270,428  869 
  Shangri-La Asia Ltd.    390,812  752 
*  Cathay Pacific Airways Ltd.    359,292  582 
*  Foxconn International       
  Holdings Ltd.    652,098  573 
  Hysan Development Co. Ltd.  193,274  571 
  Yue Yuen Industrial     
  Holdings Ltd.  200,702  559 
  Hopewell Holdings Ltd.  174,179  548 
  Wing Hang Bank Ltd.  53,757  521 
  Cheung Kong Infrastructure     
  Holdings Ltd.  138,603  493 
  NWS Holdings Ltd.  251,483  477 
  ASM Pacific Technology Ltd.  60,826 473 
  Television Broadcasts Ltd.  78,298  370 
*,^  Mongolia Energy Co. Ltd.  879,614  370 
  Chinese Estates     
  Holdings Ltd.  199,456  342 
  Orient Overseas     
  International Ltd.  59,861  292 
  Lifestyle International     
  Holdings Ltd.  161,943  260 
  PCCW Ltd.  1,032,956  254 
  Hong Kong Aircraft     
  Engineering Co. Ltd.  18,292  216 
      68,404 
Ireland (0.3%)     
  CRH PLC  205,252  5,033 
  Kerry Group PLC Class A  41,485  1,230 
*  Elan Corp. PLC  148,105  776 
*  Ryanair Holdings PLC ADR  16,628  453 
*  Ryanair Holdings PLC  25,446  111 
      7,603 
Italy (3.5%)     
  ENI SPA  772,368  19,129 
*  UniCredit SPA  4,224,430  14,153 
  Enel SPA  1,949,635  11,601 
*  Intesa Sanpaolo SPA  2,279,127  9,592 
  Assicurazioni Generali SPA  346,563  8,726 
  Telecom Italia SPA  2,989,981  4,750 
*  Fiat SPA  227,905  3,393 
  Tenaris SA  139,374  2,480 
  Unione di Banche     
  Italiane SCPA  169,190  2,417 
  Saipem SPA  77,750  2,294 
^  Snam Rete Gas SPA  450,013  2,183 
  Finmeccanica SPA  121,388  2,037 
  Telecom Italia SPA RNC  1,767,557  1,945 
  Atlantia SPA  76,319  1,805 
  Mediobanca SPA  140,382  1,791 
*  Banco Popolare SC  189,650  1,647 
  Terna Rete Elettrica     
  Nazionale SPA  384,774  1,525 
  Parmalat SPA  501,499  1,390 
  Mediaset SPA  209,616  1,361 
  Banca Monte dei     
  Paschi di Siena SPA  650,473  1,236 
  Intesa Sanpaolo SPA  276,615  902 
  Banca Popolare di     
  Milano Scarl  117,328  873 
*  Luxottica Group SPA  34,327  836 
  A2A SPA  324,394  598 

16


Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
^  Banca Carige SPA  191,067  539 
  Prysmian SPA  29,553  520 
*  Pirelli & C SPA  778,782  437 
  Exor SPA  20,906  412 
  Mediolanum SPA  62,364  396 
*  Autogrill SPA  30,530  343 
  Fondiaria-Sai SPA  18,380  335 
*  Unipol Gruppo     
  Finanziario SPA  218,505  317 
^  Italcementi SPA  20,431  294 
^  Lottomatica SPA  13,621  290 
  Saras SPA  84,250  273 
  ACEA SPA  22,011  257 
      103,077 
Japan (20.6%)     
  Toyota Motor Corp.  817,592  32,276 
  Honda Motor Co. Ltd.  490,100  15,138 
  Mitsubishi UFJ Financial     
  Group Inc.  2,765,845  14,732 
  Canon Inc.  315,849  11,908 
  Sumitomo Mitsui     
  Financial Group Inc.  269,556  9,162 
  Takeda     
  Pharmaceutical Co. Ltd.  222,859  8,913 
  Tokyo Electric     
  Power Co. Inc.  361,723  8,892 
  Sony Corp.  298,497  8,814 
  Mitsubishi Corp.  403,243  8,549 
  Panasonic Corp.  579,855  8,185 
  Nomura Holdings Inc.  1,057,298  7,452 
  Mizuho Financial     
  Group Inc.  3,743,337  7,383 
  Nintendo Co. Ltd.  29,396  7,373 
  Mitsui & Co. Ltd.  512,768  6,734 
  Toshiba Corp.  1,166,739  6,668 
  NTT DoCoMo Inc.  4,572  6,631 
  East Japan Railway Co.  100,790  6,454 
  Shin-Etsu Chemical Co. Ltd. 121,460  6,441 
  Nippon Telegraph &     
  Telephone Corp.  154,046  6,356 
  Nippon Steel Corp.  1,517,852  5,791 
  Tokio Marine Holdings Inc.  215,154  5,502 
  Komatsu Ltd.  280,403  5,466 
  Nissan Motor Co. Ltd.  734,586  5,316 
  Mitsubishi Estate Co. Ltd.  349,643  5,281 
  Softbank Corp.  223,861  5,275 
  Seven & I Holdings Co. Ltd.   227,368  4,978 
  Astellas Pharma Inc.  133,952  4,933 
  Kansai Electric     
  Power Co. Inc.  225,705  4,877 
  JFE Holdings Inc.  145,238  4,731 
  Fanuc Ltd.  56,718  4,711 
  KDDI Corp.  863  4,580 
  Chubu Electric     
  Power Co. Inc.  196,151  4,379 
  Mitsubishi Electric Corp.  572,721  4,357 
FUJIFILM Holdings Corp.  145,210  4,128 
Kyocera Corp.  48,318  4,053 
Kirin Holdings Co. Ltd.  248,137  4,050 
Mitsui Fudosan Co. Ltd.  248,300  4,017 
Denso Corp.  144,179  3,939 
Daiichi Sankyo Co. Ltd.  200,101  3,909 
Japan Tobacco Inc.  1,335  3,745 
Kao Corp.  160,258  3,570 
Fujitsu Ltd.  554,586  3,266 
Sumitomo Corp.  335,812  3,260 
Hitachi Ltd.  991,147  3,200 
Mitsubishi Heavy     
Industries Ltd.  904,473  3,198 
Sharp Corp.  298,104  3,181 
Murata     
Manufacturing Co. Ltd.  63,108  3,079 
Central Japan Railway Co.  454  3,025 
Bridgestone Corp.  179,404  2,958 
Mitsui Sumitomo     
Insurance Group     
Holdings Inc.  123,851  2,883 
Secom Co. Ltd.  61,788  2,883 
Tokyo Electron Ltd.  50,486  2,840 
ITOCHU Corp.  442,885  2,799 
Nidec Corp.  32,254  2,723 
Tokyo Gas Co. Ltd.  680,936  2,697 
Sumitomo Electric     
Industries Ltd.  222,278  2,697 
Ricoh Co. Ltd.  197,228  2,680 
Hoya Corp.  121,727  2,679 
Eisai Co. Ltd.  74,321  2,639 
Terumo Corp.  49,889  2,626 
Tohoku Electric     
Power Co. Inc.  126,041  2,588 
Sumitomo Metal     
Industries Ltd.  994,066  2,540 
Daiwa Securities Group Inc.  480,167  2,527 
Suzuki Motor Corp.  104,396  2,526 
Asahi Glass Co. Ltd.  298,612  2,516 
Kubota Corp.  322,941  2,509 
Sumitomo Metal     
Mining Co. Ltd.  154,646  2,446 
Keyence Corp.  12,259  2,434 
Marubeni Corp.  486,993  2,409 
Fast Retailing Co. Ltd.  14,289  2,352 
Daikin Industries Ltd.  69,265  2,348 
Kyushu Electric     
Power Co. Inc.  112,055  2,288 
Toray Industries Inc.  395,750  2,255 
Sumitomo Trust &     
Banking Co. Ltd.  421,333  2,195 
Sumitomo Realty &     
Development Co. Ltd.  114,120  2,164 
Dai Nippon Printing Co. Ltd.  166,888  2,091 
Olympus Corp.  64,649  2,018 
INPEX Corp.  247  2,017 

17


Developed Markets Index Fund     
 
      Market 
      Value• 
    Shares  ($000) 
  ORIX Corp.  31,193  2,015 
  Asahi Breweries Ltd.  113,942  2,014 
  TDK Corp.  34,416  1,979 
  Mitsui OSK Lines Ltd.  339,535  1,972 
  Osaka Gas Co. Ltd.  582,532  1,950 
  Rohm Co. Ltd.  29,391  1,949 
  Shionogi & Co. Ltd.  87,524  1,888 
  Sumitomo Chemical Co. Ltd. 469,371  1,870 
  Shiseido Co. Ltd.  102,315  1,868 
  Ajinomoto Co. Inc.  196,781  1,847 
  Asahi Kasei Corp.  369,643  1,832 
  Nippon Oil Corp.  368,830  1,818 
  SMC Corp.  15,895  1,815 
  Bank of Yokohama Ltd.  360,859  1,772 
  West Japan Railway Co.  500  1,772 
  T&D Holdings Inc.  68,504  1,770 
  Nikon Corp.  94,617  1,763 
  Shizuoka Bank Ltd.  176,808  1,757 
  Resona Holdings Inc.  146,263  1,742 
  Kintetsu Corp.  484,982  1,725 
  Aeon Co. Ltd.  192,330  1,715 
  Yamato Holdings Co. Ltd.  115,350  1,702 
  NGK Insulators Ltd.  75,003  1,682 
  Chugoku Electric     
  Power Co. Inc.  81,752  1,654 
*  NEC Corp.  574,512  1,633 
  Daiwa House     
  Industry Co. Ltd.  151,863  1,622 
*,^  Mitsubishi Motors Corp. 1,081,105  1,599 
  Yamada Denki Co. Ltd.  25,951  1,581 
  Shikoku Electric Power Co.  53,955  1,518 
  Sompo Japan Insurance Inc.  259,618  1,518 
  Odakyu Electric     
  Railway Co. Ltd.  186,078  1,516 
  Hankyu Hanshin     
  Holdings Inc.  338,099  1,506 
  Nitto Denko Corp.  49,488  1,495 
  Toppan Printing Co. Ltd.  166,592  1,489 
  Rakuten Inc.  2,163  1,481 
  Tokyu Corp.  335,157  1,465 
  Aisin Seiki Co. Ltd.  57,568  1,464 
  Toyota Industries Corp.  53,902  1,460 
  Chiba Bank Ltd.  227,267  1,402 
  Panasonic Electric     
  Works Co. Ltd.  109,566  1,383 
  Ibiden Co. Ltd.  38,598  1,382 
  Kobe Steel Ltd.  751,215  1,365 
  Konica Minolta     
  Holdings Inc.  143,660  1,350 
  Tobu Railway Co. Ltd.  245,402  1,342 
  Mitsubishi Chemical     
  Holdings Corp.  356,805  1,325 
  Chugai     
  Pharmaceutical Co. Ltd.  67,594  1,322 
  Sekisui House Ltd.  152,307  1,317 
  Yahoo! Japan Corp.  4,245  1,301 
  Hokuriku Electric Power Co.  56,511  1,288 
  Nippon Building Fund Inc.     
  Class A  155  1,271 
*,^  Sanyo Electric Co. Ltd.  509,641  1,263 
  Nippon Yusen KK  329,833  1,218 
  Electric Power     
  Development Co. Ltd.  38,693  1,193 
  JS Group Corp.  72,735  1,187 
  Ono Pharmaceutical Co. Ltd.  24,548  1,165 
  Unicharm Corp.  12,105  1,160 
  JGC Corp.  60,296  1,153 
  Nippon Mining Holdings Inc.  256,118  1,143 
  Makita Corp.  32,943  1,092 
  Nippon Electric     
  Glass Co. Ltd.  101,009  1,088 
  OJI Paper Co. Ltd.  246,995  1,075 
  Japan Steel Works Ltd.  97,413  1,074 
  Keio Corp.  168,565  1,061 
  Trend Micro Inc.  30,527  1,057 
  NTT Data Corp.  366  1,053 
  Chuo Mitsui Trust     
  Holdings Inc.  285,715  1,043 
  Keihin Electric Express     
  Railway Co. Ltd.  130,809  1,041 
  Dentsu Inc.  48,453  1,038 
  Advantest Corp.  46,792  1,033 
  Kuraray Co. Ltd.  100,080  1,033 
  Nipponkoa     
  Insurance Co. Ltd.  189,667  1,033 
  Oriental Land Co. Ltd.  15,232  1,032 
  Japan Real Estate     
  Investment Corp. Class A  129  1,029 
  Kawasaki Heavy     
  Industries Ltd.  411,778  1,029 
  JSR Corp.  52,651  1,027 
  Hokkaido Electric     
  Power Co. Inc.  53,171  1,024 
  Isetan Mitsukoshi     
  Holdings Ltd.  105,899  1,015 
  Nippon Express Co. Ltd.  246,591  1,010 
  Kurita Water Industries Ltd.  32,813  1,004 
  Omron Corp.  59,575  1,003 
  Mazda Motor Corp.  435,096  982 
  Daito Trust     
  Construction Co. Ltd.  23,382  972 
  Benesse Corp.  21,714  957 
*,^  GS Yuasa Corp.  107,161  923 
  Taiyo Nippon Sanso Corp.  82,728  919 
  Hirose Electric Co. Ltd.  8,781  905 
  Sankyo Co. Ltd.  15,789  902 
  SBI Holdings Inc.  4,886  898 
  Nitori Co. Ltd.  10,990  894 
  Toyota Tsusho Corp.  62,059  887 
  Kyowa Hakko Kirin Co. Ltd.  76,522  885 
  Lawson Inc.  18,938  847 
  Joyo Bank Ltd.  191,403  842 

18


Developed Markets Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Mitsubishi Tanabe     
  Pharma Corp.  65,945  842 
  Mitsubishi Materials Corp.  315,995  833 
  Bank of Kyoto Ltd.  91,728  832 
  Fukuoka Financial Group Inc.  224,467 821 
  Stanley Electric Co. Ltd.  41,743  817 
*  MEIJI Holdings Co. Ltd.  19,994  814 
  NSK Ltd.  139,971  813 
  Teijin Ltd.  272,942  802 
  Hokuhoku Financial     
  Group Inc.  366,119  793 
  Showa Denko KK  406,562  783 
  Sega Sammy Holdings Inc.  54,827  778 
  Sumitomo Heavy     
  Industries Ltd.  171,133  776 
  Sekisui Chemical Co. Ltd.  126,917  768 
  Yakult Honsha Co. Ltd.  29,443  767 
  Brother Industries Ltd.  67,273  766 
^  Hitachi Construction     
  Machinery Co. Ltd.  32,816  765 
  Ube Industries Ltd.  296,590  764 
  Isuzu Motors Ltd.  361,371  764 
  Santen     
  Pharmaceutical Co. Ltd.  22,154  760 
  TonenGeneral Sekiyu KK  83,053  758 
  Shimano Inc.  19,797  757 
  Suzuken Co. Ltd.  21,348  755 
  Yamaha Motor Co. Ltd.  63,277  754 
*  IHI Corp.  394,291  752 
  Nisshin Seifun Group Inc.  55,902  746 
  Toyo Seikan Kaisha Ltd.  44,294  744 
  Sony Financial Holdings Inc.  258  740 
  Nissin Foods     
  Holdings Co., Ltd.  20,975  740 
  Fuji Heavy Industries Ltd.  185,558  725 
  Obayashi Corp.  189,132  714 
  Furukawa Electric Co. Ltd.  187,808  712 
  Chugoku Bank Ltd.  52,479  709 
  Hachijuni Bank Ltd.  119,652  708 
  Nippon Paper Group Inc.  26,656  707 
  Toho Gas Co. Ltd.  136,138  706 
  Taisho     
  Pharmaceutical Co. Ltd.  38,351  699 
  Toyo Suisan Kaisha Ltd.  26,540  694 
  Hisamitsu     
  Pharmaceutical Co. Inc.  20,115  692 
  J Front Retailing Co. Ltd.  143,798  682 
  All Nippon Airways Co. Ltd.  242,992  678 
*  Elpida Memory Inc.  51,704  676 
  Sojitz Corp.  363,595  671 
  Shimizu Corp.  174,916  671 
  Jupiter     
  Telecommunications Co. Ltd. 732  669 
  Sumco Corp.  34,863  665 
  Nomura Research     
  Institute Ltd.  30,473  659 
Seiko Epson Corp.  42,156  652 
Iyo Bank Ltd.  72,062  650 
Kawasaki Kisen Kaisha Ltd.  178,132  649 
Aioi Insurance Co. Ltd.  145,349  640 
Nippon Meat Packers Inc.  54,378  638 
Shimamura Co. Ltd.  6,643  635 
THK Co. Ltd.  36,513  631 
Hitachi Chemical Co. Ltd.  31,627  628 
Amada Co. Ltd.  102,377  626 
Tsumura & Co.  18,173  625 
Mediceo Paltac     
Holdings Co. Ltd.  44,582  623 
Mitsui Chemicals Inc.  180,754  621 
JTEKT Corp.  58,407  617 
Gunma Bank Ltd.  117,971  615 
Namco Bandai Holdings Inc.  59,799  611 
Takashimaya Co. Ltd.  89,158  601 
Mizuho Securities Co. Ltd.  172,727  596 
Yamaguchi Financial     
Group Inc.  62,320  595 
77 Bank Ltd.  103,458  595 
Mitsui Engineering &     
Shipbuilding Co. Ltd.  228,456  592 
Kikkoman Corp.  50,702  587 
Kaneka Corp.  89,943  586 
Kajima Corp.  249,969  585 
Kamigumi Co. Ltd.  77,783  584 
Yaskawa Electric Corp.  73,986  582 
Hiroshima Bank Ltd.  149,582  574 
Nippon Sheet Glass Co. Ltd.  194,430 573 
Suruga Bank Ltd.  63,377  573 
Kansai Paint Co. Ltd.  67,107  568 
Daihatsu Motor Co. Ltd.  55,027  563 
Taisei Corp.  286,428  562 
Yokogawa Electric Corp.  69,069  560 
Toyoda Gosei Co. Ltd.  19,959  560 
Showa Shell Sekiyu KK  56,756  559 
NGK Spark Plug Co. Ltd.  48,614  551 
Nissan Chemical     
Industries Ltd.  42,594  549 
Tokyu Land Corp.  135,863  548 
Mitsubishi Gas     
Chemical Co. Inc.  116,485  537 
Mitsubishi Rayon Co. Ltd.  155,511  537 
Tokuyama Corp.  84,972  534 
Ushio Inc.  33,683  530 
Denki Kagaku Kogyo KK  144,187  529 
Shimadzu Corp.  76,381  529 
Toho Co. Ltd.  35,183  529 
FamilyMart Co. Ltd.  17,697  527 
Mitsubishi UFJ Lease &     
Finance Co. Ltd.  17,607  524 
Casio Computer Co. Ltd.  71,194  522 
Aeon Mall Co. Ltd.  24,905  522 
NTN Corp.  137,917  521 

19


Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Nomura Real Estate Office     
  Fund Inc. Class A  84  519 
  Credit Saison Co. Ltd.  46,313  518 
  Nishi-Nippon City Bank Ltd.  208,814  517 
^  Oracle Corp. Japan  11,684  515 
  Konami Corp.  28,275  514 
  Dainippon Sumitomo     
  Pharma Co. Ltd.  48,926  509 
  Mitsumi Electric Co. Ltd.  25,143  507 
  Rinnai Corp.  11,530  507 
  Daicel Chemical     
  Industries Ltd.  83,566  505 
  Japan Retail Fund     
  Investment Corp. Class A  106  498 
  Yamaha Corp.  48,061  497 
  Citizen Holdings Co. Ltd.  87,734  494 
  Idemitsu Kosan Co. Ltd.  6,681  490 
  Sumitomo Rubber     
  Industries Ltd.  52,626  485 
  Square Enix     
  Holdings Co., Ltd.  19,459  484 
  Hitachi Metals Ltd.  50,439  481 
  Cosmo Oil Co. Ltd.  179,538  472 
  Alfresa Holdings Corp.  10,851  469 
  Dowa Holdings Co., Ltd.  79,675  465 
  TOTO Ltd.  78,350  464 
  Minebea Co. Ltd.  110,242  462 
  Yamazaki Baking Co. Ltd.  37,405  459 
  Nomura Real Estate     
  Holdings Inc.  28,797  458 
  NOK Corp.  34,086  452 
*  Mitsui Mining &     
  Smelting Co. Ltd.  174,970  451 
  Japan Petroleum     
  Exploration Co.  8,869  443 
  Keisei Electric     
  Railway Co. Ltd.  77,999  439 
  Asics Corp.  49,122  438 
  USS Co. Ltd.  7,187  435 
  Mabuchi Motor Co. Ltd.  9,013  431 
  Toyota Boshoku Corp.  20,592  429 
*  Mizuho Trust &     
  Banking Co. Ltd.  450,258  429 
  Tokyo Tatemono Co. Ltd.  89,350  426 
*  McDonald’s Holdings Co.     
  Japan Ltd.  20,932  423 
  UNY Co. Ltd.  56,097  417 
^  Sapporo Holdings Ltd.  79,485  415 
  Yamato Kogyo Co. Ltd.  13,578  407 
  Marui Group Co. Ltd.  68,880  396 
  Nisshinbo Holdings Inc.  39,567  389 
  Mitsubishi Logistics Corp.  35,459  386 
  Tosoh Corp.  141,727  381 
  Hakuhodo DY Holdings Inc.  7,393  371 
  Seven Bank Ltd.  152  371 
  Tokyo Steel     
  Manufacturing Co. Ltd.  27,956  366 
*,^  Japan Airlines Corp.  272,888  353 
  Hitachi     
  High-Technologies Corp.  21,283  353 
  NHK Spring Co. Ltd.  43,891  343 
  Japan Prime Realty     
  Investment Corp. Class A  156  340 
*,^  Shinsei Bank Ltd.  257,082  335 
  Obic Co. Ltd.  1,939  328 
  Nisshin Steel Co. Ltd.  193,078  322 
*  Senshu Ikeda Holdings Inc.  93,000  318 
  Canon Marketing Japan Inc.  18,908  306 
  Ito En Ltd.  17,794  299 
  Kinden Corp.  36,648  298 
  Fuji Electric Holdings Co. Ltd. 153,079  284 
  Coca-Cola West Co. Ltd.  15,243  283 
  Sapporo Hokuyo     
  Holdings Inc.  83,177  281 
  Shinko Electric     
  Industries Co. Ltd.  18,827  280 
  Taiheiyo Cement Corp.  237,185  275 
  DIC Corp.  163,673  268 
  Hino Motors Ltd.  72,107  267 
  Daido Steel Co. Ltd.  78,269  266 
^  Dena Co. Ltd.  74  256 
  NTT Urban     
  Development Corp.  316  254 
*  Aozora Bank Ltd.  205,943  243 
  Matsui Securities Co. Ltd.  33,156  239 
  Jafco Co. Ltd.  8,703  234 
  Otsuka Corp.  4,374  231 
  Itochu Techno-Solutions Corp.  8,097 223 
  Nissay Dowa General     
  Insurance Co. Ltd.  47,891  213 
  Aeon Credit Service Co. Ltd.  21,772  210 
  Onward Holdings Co. Ltd.  33,621  209 
  ABC-Mart Inc.  6,822  198 
  Leopalace21 Corp.  35,448  192 
  Maruichi Steel Tube Ltd.  10,259  191 
  Fuji Media Holdings Inc.  129  190 
  Tokyo Broadcasting System     
  Holdings Inc.  10,346  154 
^  Acom Co. Ltd.  11,071  141 
  Hikari Tsushin Inc.  7,135  134 
^  OSAKA Titanium     
  Technologies Co.  5,041  134 
^  Promise Co. Ltd.  20,578  131 
      604,886 
Netherlands (2.5%)     
  Unilever NV  483,423  14,896 
  Koninklijke KPN NV  509,053  9,233 
*  ING Groep NV  581,304  7,565 
  Koninklijke Philips     
  Electronics NV  288,231  7,241 

20


Developed Markets Index Fund     
 
 
      Market 
      Value• 
    Shares  ($000) 
  Koninklijke Ahold NV  351,613  4,429 
  Akzo Nobel NV  69,018  4,075 
  ASML Holding NV  123,889  3,341 
*  Aegon NV  460,414  3,272 
  Heineken NV  72,045  3,185 
  TNT NV  109,259  2,897 
  Reed Elsevier NV  214,592  2,501 
  Koninklijke DSM NV  45,708  2,003 
  Wolters Kluwer NV  82,646  1,842 
  Heineken Holding NV  32,429  1,262 
*  Randstad Holding NV  30,128  1,143 
  Fugro NV  19,294  1,075 
  Corio NV  15,730  1,067 
  SBM Offshore NV  44,674  855 
  Koninklijke Boskalis     
  Westminster NV  16,492  579 
  ASML Holding NV  3,077  83 
*  Aegon NV  311  2 
      72,546 
New Zealand (0.1%)     
  Fletcher Building Ltd.  176,809  1,044 
  Telecom Corp. of     
  New Zealand Ltd.  540,792  977 
  Sky City Entertainment     
  Group Ltd.  176,413  436 
  Contact Energy Ltd.  92,711  413 
  Auckland International     
  Airport Ltd.  271,164  390 
      3,260 
Norway (0.7%)     
  StatoilHydro ASA  332,452  7,834 
*  Telenor ASA  250,628  3,232 
*  DnB NOR ASA  216,602  2,481 
  Orkla ASA  231,423  2,139 
  Yara International ASA  56,173  1,857 
*  Seadrill Ltd.  82,897  1,722 
*  Norsk Hydro ASA  203,490  1,334 
*,^  Renewable Energy Corp. AS  97,918  583 
      21,182 
Portugal (0.3%)     
  EDP - Energias de     
  Portugal SA  537,561  2,377 
  Portugal Telecom SGPS SA  172,792  1,975 
  Banco Espirito Santo SA  155,332  1,146 
  Banco Comercial     
  Portugues SA  696,058  992 
  Galp Energia SGPS SA     
  Class B  45,697  770 
*  EDP Renovaveis SA  64,864  647 
  Jeronimo Martins SGPS SA  68,727  612 
  Cimpor Cimentos de     
  Portugal SGPS SA  69,872  545 
  Brisa Auto-Estradas de     
  Portugal SA  53,154  525 
      9,589 
Singapore (1.3%)     
  Singapore     
  Telecommunications Ltd. 2,355,988  4,886 
  DBS Group Holdings Ltd.  506,613  4,639 
  United Overseas Bank Ltd.  361,705  4,336 
  Oversea-Chinese     
  Banking Corp. Ltd.  743,807  4,008 
  CapitaLand Ltd.  756,755  2,194 
  Keppel Corp. Ltd.  379,048  2,178 
  Wilmar International Ltd.  371,969  1,640 
  Singapore Airlines Ltd.  155,134  1,488 
  Singapore Exchange Ltd.  256,036  1,451 
  Singapore Press     
  Holdings Ltd.  462,434  1,266 
*  Genting Singapore PLC  1,465,404  1,120 
  City Developments Ltd.  145,096  1,017 
  Singapore Technologies     
  Engineering Ltd.  400,984  808 
  Fraser and Neave Ltd.  284,834  776 
  CapitaMall Trust  658,356  740 
  Noble Group Ltd.  396,529  725 
  Olam International Ltd.  359,816  691 
  SembCorp Industries Ltd.  292,849  690 
  Jardine Cycle &     
  Carriage Ltd.  37,500  616 
  ComfortDelgro Corp. Ltd.  565,001  614 
  SembCorp Marine Ltd.  251,083  612 
*  Golden Agri-Resources Ltd. 2,012,990  606 
  Ascendas Real Estate     
  Investment Trust  437,157  568 
  UOL Group Ltd.  142,219  339 
  Neptune Orient Lines Ltd.  251,050  279 
  StarHub Ltd.  166,160  222 
  Cosco Corp. Singapore Ltd.  279,563  221 
*  Golden Agri-Resources Ltd.     
  Warrants Exp. 07/23/2012  107,636  9 
      38,739 
Spain (4.7%)     
  Banco Santander SA  2,417,308  38,900 
  Telefonica SA  1,231,596  34,394 
  Banco Bilbao Vizcaya     
  Argentaria SA  1,053,992  18,840 
  Iberdrola SA  1,090,545  9,879 
  Repsol YPF SA  217,501  5,790 
  Inditex SA  65,058  3,819 
  Banco Popular Espanol SA  258,140  2,299 
*

ACS Actividades de Construccion y
  Servicios SA  42,174  2,025 
  Abertis Infraestructuras SA  84,500  1,797 
^  Banco de Sabadell SA  263,869  1,781 
  Red Electrica Corp. SA  32,037  1,655 
  Gas Natural SDG SA  66,243  1,331 
  Criteria Caixacorp SA  248,102  1,209 
  Iberdrola Renovables SA  250,361  1,113 
  Enagas  52,629  1,083 

21


Developed Markets Index Fund     
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Gamesa Corp.     
  Tecnologica SA  54,079  988 
  Acciona SA  7,541  919 
  Mapfre SA  211,849  908 
  Bankinter SA  84,123  887 
  Acerinox SA  41,674  829 
  Zardoya Otis SA  39,308  789 
^  Grupo Ferrovial SA  16,661  690 
  Indra Sistemas SA  29,051  683 
  Telefonica SA ADR  7,834  657 
  Grifols SA  37,720  609 
  Cintra Concesiones de     
  Infraestructuras de     
  Transporte SA  59,106  608 
^  Banco de Valencia SA  62,909  533 
  Fomento de Construcciones     
  y Contratas SA  11,278  459 
^  Sacyr Vallehermoso SA  27,017  409 
*  Iberia Lineas Aereas     
  de Espana  138,850  383 
  Gestevision Telecinco SA  29,134  301 
      136,567 
Sweden (2.6%)     
  Nordea Bank AB  958,458  10,288 
  Telefonaktiebolaget LM     
  Ericsson Class B  884,621  9,242 
  Hennes & Mauritz AB     
  Class B  151,054  8,580 
  TeliaSonera AB  666,431  4,417 
  Svenska Handelsbanken     
  AB Class A  145,510  3,760 
  Sandvik AB  298,954  3,302 
  Volvo AB Class B  323,099  3,060 
*  Skandinaviska Enskilda     
  Banken AB Class A  446,966  2,707 
  Atlas Copco AB Class A  197,232  2,645 
  Investor AB Class B  135,932  2,405 
  Svenska Cellulosa AB     
  Class B  169,208  2,325 
  SKF AB  116,338  1,842 
  Skanska AB Class B  117,085  1,718 
*  Electrolux AB Class B  70,740  1,696 
  Assa Abloy AB Class B  91,843  1,605 
  Swedish Match AB  75,579  1,551 
*  Millicom International     
  Cellular SA  22,145  1,422 
  Atlas Copco AB Class B  115,729  1,379 
  Tele2 AB  90,569  1,320 
*  Swedbank AB Class A  149,055  1,284 
  Alfa Laval AB  101,881  1,244 
  Scania AB Class B  94,458  1,212 
  Volvo AB Class A  130,068  1,201 
  Getinge AB  59,428  1,108 
  Securitas AB Class B  92,296  861 
  SSAB AB Class A  52,689  803 
*  Husqvarna AB  120,664  760 
*  Lundin Petroleum AB  64,974  550 
  Holmen AB  15,578  421 
  SSAB AB Class B  24,854  348 
      75,056 
Switzerland (7.7%)     
  Nestle SA  1,078,445  50,149 
  Roche Holdings AG  208,238  33,352 
  Novartis AG  626,852  32,643 
  Credit Suisse Group AG  333,776  17,843 
*  UBS AG  1,044,257  17,413 
  ABB Ltd.  654,850  12,181 
  Zurich Financial     
  Services AG  43,562  9,975 
  Syngenta AG  28,744  6,806 
  Holcim Ltd.  72,995  4,646 
  Compagnie Financiere     
  Richemont SA  155,466  4,352 
  Swiss Reinsurance Co. Ltd. 102,845  4,188 
  Swisscom AG  7,058  2,547 
  Julius Baer Group Ltd.  62,059  2,336 
  Swatch Group AG  9,126  2,131 
  Synthes Inc.  17,417  2,066 
  Geberit AG  12,080  1,998 
  SGS SA  1,378  1,841 
  Givaudan SA  2,264  1,681 
*  Actelion Ltd.  29,655  1,635 
  Adecco SA  36,200  1,618 
  Kuehne & Nagel     
  International AG  15,946  1,445 
  Sonova Holding AG  13,666  1,406 
  Baloise Holding AG  14,794  1,267 
  Swiss Life Holding AG  8,854  1,060 
  Lonza Group AG  13,465  1,047 
  Nobel Biocare Holding AG  36,884  1,046 
  Schindler Holding AG  14,613  999 
*  Logitech International SA  54,012  922 
  Lindt & Spruengli AG  33  838 
  GAM Holding Ltd.  62,059  757 
  Pargesa Holding SA  7,953  637 
  Swatch Group AG  12,821  575 
  Lindt & Spruengli AG  269  566 
  Straumann Holding AG  2,326  561 
*  Aryzta AG  13,483  529 
  Schindler Holding AG  6,418  445 
*  Aryzta AG (Ireland Shares)  10,490  406 
  BKW FMB Energie AG  3,898  321 
*  UBS AG  8,975  149 
      226,377 
United Kingdom (20.9%)     
  HSBC Holdings PLC  5,132,032  56,710 
  BP PLC  5,365,827  50,279 
  Vodafone Group PLC  14,633,296  32,249 
  GlaxoSmithKline PLC  1,537,827  31,545 
  Royal Dutch Shell PLC     
  Class B  799,033  23,002 

22


Developed Markets Index Fund   
 
 
 
      Market 
      Value• 
    Shares  ($000) 
  Royal Dutch Shell PLC     
  Class A     
  (Amsterdam Shares)  738,494  21,895 
  AstraZeneca PLC  429,691  19,289 
  British American     
  Tobacco PLC  590,996  18,833 
  Rio Tinto PLC  405,844  17,942 
  BHP Billiton PLC  653,392  17,606 
*  Barclays PLC  3,274,698  17,163 
  BG Group PLC  995,850  17,142 
  Tesco PLC  2,343,752  15,627 
  Standard Chartered PLC  596,219  14,626 
*  Anglo American PLC  390,562  14,132 
  Diageo PLC  742,471  12,093 
  Unilever PLC  381,308  11,392 
  Royal Dutch Shell PLC     
  Class A  312,435  9,224 
  Reckitt Benckiser     
  Group PLC  179,458  8,915 
  Imperial Tobacco     
  Group PLC  301,031  8,871 
*  Xstrata PLC  566,001  8,152 
  SABMiller PLC  278,430  7,298 
  National Grid PLC  719,764  7,130 
  Prudential PLC  748,279  6,797 
*,^  Lloyds Banking Group PLC 4,820,066  6,796 
  Centrica PLC  1,515,721  6,158 
  BAE Systems PLC  1,047,575  5,387 
  Cadbury PLC  405,421  5,126 
  Aviva PLC  811,502  5,074 
  BT Group PLC  2,303,137  4,936 
  Scottish & Southern     
  Energy PLC  273,922  4,835 
  Tullow Oil PLC  238,365  4,618 
  Rolls-Royce Group PLC  551,273  4,066 
  Compass Group PLC  544,274  3,452 
*  Royal Bank of Scotland     
  Group PLC  4,981,483  3,398 
  Pearson PLC  241,800  3,287 
  WPP PLC  334,425  2,997 
  British Sky Broadcasting     
  Group PLC  340,696  2,971 
  Shire PLC  167,610  2,964 
  WM Morrison     
  Supermarkets PLC  618,888  2,836 
  Experian PLC  301,512  2,755 
  Old Mutual PLC  1,578,193  2,739 
  Reed Elsevier PLC  358,745  2,716 
  Marks & Spencer     
  Group PLC  472,637  2,647 
  Man Group PLC  510,774  2,583 
  Kingfisher PLC  697,975  2,551 
  Land Securities Group PLC  226,512  2,451 
  Standard Life PLC  653,892  2,331 
  Smith & Nephew PLC  259,451  2,294 
  Capita Group PLC  182,705  2,282 
  Legal & General Group PLC 1,756,761  2,254 
  Vodafone Group PLC ADR  92,384  2,050 
  British Land Co. PLC  252,592  1,951 
  RSA Insurance Group PLC  977,119  1,936 
  J Sainsbury PLC  349,710  1,887 
  International Power PLC  449,044  1,864 
  Cable & Wireless PLC  751,457  1,783 
  BP PLC ADR  31,340  1,774 
*  Cairn Energy PLC  40,467  1,745 
  Randgold Resources Ltd.  26,375  1,739 
  Next PLC  58,453  1,715 
*  Wolseley PLC  84,006  1,699 
  Smiths Group PLC  115,219  1,682 
  G4S PLC  374,279  1,547 
  Carnival PLC  48,110  1,491 
  Antofagasta PLC  116,662  1,470 
  Johnson Matthey PLC  63,570  1,464 
  United Utilities Group PLC  200,007  1,442 
  Vedanta Resources PLC  41,842  1,432 
  Associated British Foods PLC  105,480 1,428 
*  Autonomy Corp. PLC  63,340  1,393 
  Hammerson PLC  205,964  1,366 
  Sage Group PLC  388,043  1,355 
  AMEC PLC  98,260  1,294 
  Segro PLC  221,487  1,276 
  Home Retail Group PLC  259,003  1,233 
  3i Group PLC  284,459  1,224 
  Cobham PLC  336,035  1,207 
  Serco Group PLC  143,882  1,190 
  Rexam PLC  259,789  1,176 
  Burberry Group PLC  128,787  1,136 
  Kazakhmys PLC  63,253  1,126 
  Invensys PLC  238,568  1,103 
*  Lonmin PLC  45,741  1,094 
  Severn Trent PLC  69,831  1,088 
  Liberty International PLC  146,501  1,081 
  Whitbread PLC  51,687  1,075 
  Bunzl PLC  96,997  1,055 
  Eurasian Natural     
  Resources Corp.  76,055  1,035 
  ICAP PLC  153,573  1,021 
  Intercontinental Hotels     
  Group PLC  76,519  978 
  Petrofac Ltd.  60,284  928 
  Admiral Group PLC  54,829  922 
  Friends Provident     
  Group PLC  686,742  916 
  Investec PLC  123,452  881 
  Balfour Beatty PLC  202,334  880 
  Firstgroup PLC  142,738  878 
  Drax Group PLC  106,008  807 
  Tomkins PLC  263,063  722 
  Fresnillo PLC  52,948  642 
  Schroders PLC  35,532  639 
  TUI Travel PLC  164,435  627 

23


Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
^  London Stock Exchange     
  Group PLC  43,608  607 
^  Ladbrokes PLC  261,379  521 
*  Berkeley Group     
  Holdings PLC  36,159  505 
*,^ British Airways PLC 166,497  494 
  Thomas Cook Group PLC  144,227  483 
  Carphone Warehouse     
  Group PLC  121,785  367 
  WPP PLC ADR  7,036  315 
*  Resolution Ltd.  201,621  298 
      613,453 
Total Common Stocks     
(Cost $2,461,884)    2,870,418 
Temporary Cash Investment (1.2%)   
Money Market Fund (1.2%)     
1,2  Vanguard Market     
  Liquidity Fund, 0.225%     
  (Cost $35,626)  35,626,000  35,626 
Total Investments (99.0%)     
(Cost $2,497,510)    2,906,044 
Other Assets and Liabilities (1.0%)   
Other Assets    78,953 
Liabilities2    (49,248) 
      29,705 
Net Assets (100%)     
Applicable to 317,000,195 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  2,935,749 
Net Asset Value Per Share    $9.26 

At October 31, 2009, net assets consisted of: 
  Amount 
  ($000) 
Paid-in Capital  3,095,857 
Undistributed Net Investment Income  18,755 
Accumulated Net Realized Losses  (587,413) 
Unrealized Appreciation (Depreciation)   
Investment Securities  408,534 
Foreign Currencies  16 
Net Assets  2,935,749 

• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $30,911,000.
1 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the
7-day yield.
2 Includes $33,265,000 of collateral received for securities on loan.
ADR—American Depositary Receipt.
REIT—Real Estate Investment Trust.
See accompanying Notes, which are an integral part of the Financial Statements.

24


Developed Markets Index Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Dividends1,2  141,443 
Security Lending  326 
Total Income  141,769 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  42 
Management and Administrative  1,987 
Marketing and Distribution  68 
Custodian Fees  151 
Auditing Fees  36 
Shareholders’ Reports and Proxies  102 
Trustees’ Fees and Expenses  1 
Total Expenses  2,387 
Net Investment Income  139,382 
Realized Net Gain (Loss)   
Investment Securities Sold2  (526,538) 
Foreign Currencies  17 
Realized Net Gain (Loss)  (526,521) 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  947,076 
Foreign Currencies  16 
Change in Unrealized Appreciation (Depreciation)  947,092 
Net Increase (Decrease) in Net Assets Resulting from Operations  559,953 

1 Dividends are net of foreign withholding taxes of $5,158,000.
2 Dividend income and realized net gain (loss) from affiliated companies of the fund were $122,026,000 and ($527,040,000), respectively.

See accompanying Notes, which are an integral part of the Financial Statements.

25


Developed Markets Index Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  139,382  107,155 
Realized Net Gain (Loss)  (526,521)  (60,515) 
Change in Unrealized Appreciation (Depreciation)  947,092  (1,992,254) 
Net Increase (Decrease) in Net Assets Resulting from Operations  559,953  (1,945,614) 
Distributions     
Net Investment Income  (121,978)  (107,258) 
Realized Capital Gain1  —  (1,386) 
Total Distributions  (121,978)  (108,644) 
Capital Share Transactions     
Issued  865,447  1,208,773 
Issued in Lieu of Cash Distributions  110,662  98,662 
Redeemed2  (777,097)3  (930,804) 
Net Increase (Decrease) from Capital Share Transactions  199,012  376,631 
Total Increase (Decrease)  636,987  (1,677,627) 
Net Assets     
Beginning of Period  2,298,762  3,976,389 
End of Period4  2,935,749  2,298,762 

1 Includes fiscal 2008 short-term gain distributions totaling $1,386,000. Short-term gain distributions are treated as ordinary income
dividends for tax purposes.
2 The fund collected redemption fees of $192,000 and $298,000, which were reallocated proportionately to the funds in which it invested.
3 Net of redemption fees of $45,000.
4 Net Assets—End of Period includes undistributed net investment income of $18,755,000 and $1,334,000.

See accompanying Notes, which are an integral part of the Financial Statements.

26


Developed Markets Index Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $7.79  $14.91  $12.15  $9.75  $8.43 
Investment Operations           
Net Investment Income  .4521  .3692  .305  .219  .190 
Capital Gain Distributions Received  —  —  —  —  — 
Net Realized and Unrealized Gain (Loss)           
on Investments  1.416  (7.097)  2.759  2.400  1.320 
Total from Investment Operations  1.868  (6.728)  3.064  2.619  1.510 
Distributions           
Dividends from Net Investment Income  (.398)  (.387)  (.299)  (.219)  (.190) 
Distributions from Realized Capital Gains  —  (.005)  (.005)  —  — 
Total Distributions  (.398)  (.392)  (.304)  (.219)  (.190) 
Net Asset Value, End of Period  $9.26  $7.79  $14.91  $12.15  $9.75 
 
Total Return3  25.23%  –46.24%  25.67%  27.27%  18.07% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $2,936  $2,299  $3,976  $2,572  $1,623 
Ratio of Total Expenses to           
Average Net Assets  0.10%4  0%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  5.93%1  3.04%  2.05%  1.82%  1.77% 
Portfolio Turnover Rate  14%5  13%  7%  9%  10% 

1 Net investment income per share and the ratio of net investment income to average net assets include $ .400 and 5.19%, respectively, of
annual dividends received from Vanguard mutual funds in December 2008. Effective in June 2009, the fund’s equity investments are solely
in common stocks.
2 Calculated based on average shares outstanding.
3 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months, or the account service fee that
may be applicable to certain accounts with balances below $10,000.
4 The acquired fund fees and expenses were 0.15% for 2009. Including the acquired fund fees and expenses, the fund’s total operating
expenses represented 0.25% of average net assets.
5 Excludes the value of securities received and mutual fund shares delivered in connection with a change in the fund’s investment policy to
invest directly in individual stocks and reduce the fund’s investment in Vanguard mutual funds.

See accompanying Notes, which are an integral part of the Financial Statements.

27


Developed Markets Index Fund

Notes to Financial Statements

Vanguard Developed Markets Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. Through June 18, 2009, the fund invested solely in the Vanguard European and Pacific Stock Index Funds. Effective June 19, 2009, the fund’s equity investments are solely in common stocks. The fund’s direct and indirect investments in foreign securities involve investment risks not normally associated with investing in securities of United States corporations.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value.

2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

5. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.

28


Developed Markets Index Fund

6. Other: Dividend income is recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold. Through June 18, 2009, fees assessed on redemptions of capital shares were reallocated proportionately to the funds in which the fund invested; effective June 19, 2009, such fees are credited to paid-in capital.

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. With respect to assets invested in other Vanguard funds through June 18, 2009, the fund’s direct expenses were reduced to the extent of savings realized by the Vanguard funds by the operation of the fund. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At October 31, 2009, the fund had contributed capital of $605,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.24% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of October 31, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Common Stocks  8,078  2,862,340  — 
Temporary Cash Investments  35,626  —  — 
Total  43,704  2,862,340  — 

D. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

29


Developed Markets Index Fund

During the year ended October 31, 2009, the fund realized net foreign currency gains of $17,000, which increased distributable net income for tax purposes; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Certain of the fund’s investments are in securities considered to be “passive foreign investment companies,” for which any unrealized appreciation and/or realized gains are required to be included in distributable net income for tax purposes. Unrealized appreciation on the fund’s passive foreign investment company holdings at October 31, 2009 was $4,433,000.

For tax purposes, at October 31, 2009, the fund had $23,902,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $587,365,000 to offset future net capital gains of $11,015,000 through October 31, 2016, and $576,350,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $2,501,943,000. Net unrealized appreciation of investment securities for tax purposes was $404,101,000, consisting of unrealized gains of $438,654,000 on securities that had risen in value since their purchase and $34,553,000 in unrealized losses on securities that had fallen in value since their purchase.

E. During the year ended October 31, 2009, the fund purchased $2,840,638,000 of investment securities and sold $2,683,674,000 of investment securities, other than temporary cash investments.

F. Capital shares issued and redeemed were:     
  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  112,058  101,813 
Issued in Lieu of Cash Distributions  14,874  7,287 
Redeemed  (104,948)  (80,732) 
Net Increase (Decrease) in Shares Outstanding  21,984  28,368 

G. In September 2009, the fund’s board of trustees approved a plan of reorganization of Vanguard Institutional Developed Markets Index Fund into Vanguard Developed Markets Index Fund. The reorganization does not require shareholder approval. Shares of Vanguard Institutional Developed Markets Index Fund will be exchanged for new Institutional Shares of Vanguard Developed Markets Index Fund. The reorganization is expected to qualify as a tax-free reorganization for federal income tax purposes, and to be completed on or around January 22, 2010.

H. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 15, 2009, for potential recognition or disclosure in these financial statements.

30


Institutional Developed Markets Index Fund

Fund Profile
As of October 31, 2009

Portfolio Characteristics     
    Target  Broad 
  Fund  Index1  Index2 
Number of Stocks  976  961  1,806 
Turnover Rate  20%  —  — 
Expense Ratio3  0.13%  —  — 
Short-Term Reserves  0.0%  —  — 

Sector Diversification (% of equity exposure) 
    Target  Broad 
  Fund  Index1  Index2 
Consumer Discretionary  9.7%  9.7%  8.3% 
Consumer Staples  10.2  10.1  8.6 
Energy  8.4  8.4  11.2 
Financials  26.1  26.4  26.6 
Health Care  8.3  8.3  6.4 
Industrials  11.1  11.1  9.8 
Information Technology  4.8  4.8  6.5 
Materials  9.5  9.5  11.2 
Telecommunication       
Services  6.0  5.9  6.4 
Utilities  5.9  5.8  5.0 

Volatility Measures4   
  Fund Versus  Fund Versus 
  Target Index1  Broad Index2 
R-Squared  0.98  0.96 
Beta  1.02  0.94 

Ten Largest Holdings5 (% of total net assets) 
 
HSBC Holdings PLC  diversified banks  2.0% 
Royal Dutch Shell PLC  integrated oil and gas  1.9
BP PLC  integrated oil and gas  1.8
BHP Billiton Ltd.  diversified metals   
  and mining  1.7 
Nestle SA  packaged foods   
  and meats  1.7 
Banco Santander SA  diversified banks  1.4 
Total SA  integrated oil and gas  1.3
Telefonica SA  integrated   
  telecommunication   
  services  1.2 
Vodafone Group PLC  wireless   
  telecommunication   
  services  1.2 
Roche Holdings AG  pharmaceuticals  1.2 
Top Ten    15.4% 

Market Diversification (% of equity exposure) 
    Target 
  Fund  Index1 
United Kingdom  21.3%  21.4% 
Japan  21.1  21.2 
France  10.8  10.7 
Australia  8.2  8.3 
Germany  8.0  7.9 
Switzerland  7.9  7.8 
Spain  4.8  4.7 
Italy  3.6  3.6 
Sweden  2.6  2.7 
Netherlands  2.5  2.5 
Hong Kong  2.4  2.4 
Singapore  1.4  1.4 
Finland  1.1  1.1 
Belgium  1.0  1.0 
Other Developed Markets  3.3  3.3 

1 MSCI EAFE Index.
2 MSCI All Country World Index ex USA.
3 The fund expense ratio shown is from the prospectus dated September 23, 2009, and represents estimated costs for the current fiscal year
based on the fund’s net assets as of the prospectus date. For the fiscal year ended October 31, 2009, the fund’s total operating expenses
represented 0.12% of average net assets.
4 For an explanation of R-squared, beta, and other terms used here, see the Glossary.
5 The holdings listed exclude any temporary cash investments and equity index products.

31


Institutional Developed Markets Index Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at www.vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Cumulative Performance: June 1, 2000–October 31, 2009

Initial Investment of $5,000,000

 

  Average Annual Total Returns   
  Periods Ended October 31, 2009  Final Value of 
      Since  a $5,000,000 
  One Year  Five Years  Inception1  Investment 
Institutional Developed Markets Index Fund2  25.40%  5.10%  1.57%  $5,792,418 
MSCI All Country World Index ex USA  34.79  7.58  3.43  6,869,945 
MSCI EAFE Index  27.71  5.10  1.61  5,810,397 
International Funds Average3  26.69  4.57  0.52  5,249,368 

1 Performance for the fund and its comparative standards is calculated since the fund’s inception: June 1, 2000.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than
two months.
3 Derived from data provided by Lipper Inc.

32


Institutional Developed Markets Index Fund

Fiscal-Year Total Returns (%): June 1, 2000–October 31, 2009


Average Annual Total Returns: Periods Ended September 30, 2009

This table presents average annual total returns through the latest calendar quarter—rather than through the end of the fiscal period. Securities and Exchange Commission rules require that we provide this information.

        Since 
  Inception Date  One Year  Five Years  Inception 
Institutional Developed Markets Index Fund1  6/1/2000  1.93%  6.29%  1.85% 

1 Total returns do not reflect the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than
two months.
Note: See Financial Highlights table for dividend and capital gains information.

33


Institutional Developed Markets Index Fund

Financial Statements

Statement of Net Assets
As of October 31, 2009

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at www.sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).

    Market 
    Value• 
  Shares  ($000) 
Common Stocks (99.9%)     
Australia (8.2%)     
BHP Billiton Ltd.  1,772,785  58,141 
Commonwealth Bank     
of Australia  802,282  37,075 
Westpac Banking Corp.  1,537,796  35,942 
National Australia Bank Ltd.1,013,319  26,774 
Australia & New Zealand     
Banking Group Ltd.  1,231,697  25,122 
Woolworths Ltd.  651,169  16,667 
Wesfarmers Ltd.  529,822  13,221 
Rio Tinto Ltd.  231,201  12,816 
Westfield Group  1,079,320  11,693 
Woodside Petroleum Ltd.  261,569  10,972 
QBE Insurance Group Ltd.  528,354  10,640 
CSL Ltd.  320,204  8,991 
Newcrest Mining Ltd.  254,911  7,327 
Macquarie Group Ltd.  161,241  7,062 
Telstra Corp. Ltd.  2,325,709  6,911 
Origin Energy Ltd.  463,669  6,648 
Santos Ltd.  436,494  5,818 
AMP Ltd.  1,065,056  5,612 
Suncorp-Metway Ltd.  660,208  5,164 
Foster’s Group Ltd.  1,010,503  4,956 
Brambles Ltd.  746,427  4,706 
Orica Ltd.  190,085  4,032 
Stockland  1,210,234  4,020 
Insurance Australia     
Group Ltd.  1,107,737  3,726 
Amcor Ltd.  643,763  3,315 
AGL Energy Ltd.  236,594  2,933 
Coca-Cola Amatil Ltd.  295,390  2,808 
ASX Ltd.  90,895  2,740 
Toll Holdings Ltd.  350,109  2,654 
BlueScope Steel Ltd.  967,053  2,563 
Transurban Group  618,605  2,510 
Leighton Holdings Ltd.  77,765  2,469 
Sonic Healthcare Ltd.  194,999  2,434 
GPT Group  4,463,304  2,278 
Computershare Ltd.  230,165  2,235 

*  Fortescue Metals     
  Group Ltd.  658,813  2,206 
  TABCORP Holdings Ltd.  318,986  2,035 
  WorleyParsons Ltd.  88,056  2,032 
  Wesfarmers Ltd.  79,198  1,984 
  AXA Asia Pacific     
  Holdings Ltd.  528,175  1,977 
  Incitec Pivot Ltd.  827,399  1,930 
*  Alumina Ltd.  1,296,645  1,903 
  Crown Ltd.  259,708  1,890 
  Lend Lease Corp. Ltd.  226,917  1,881 
*  Asciano Group  1,394,180  1,867 
  OneSteel Ltd.  685,527  1,861 
  Mirvac Group  1,363,570  1,785 
  Dexus Property Group  2,483,822  1,755 
*  OZ Minerals Ltd.  1,647,384  1,723 
  Metcash Ltd.  401,956  1,690 
  Cochlear Ltd.  29,320  1,680 
  Goodman Group  3,119,816  1,673 
  Boral Ltd.  316,369  1,614 
  CFS Retail Property Trust  914,650  1,572 
^  Fairfax Media Ltd.  1,095,110  1,552 
  Macquarie     
  Infrastructure Group  1,162,312  1,487 
  Qantas Airways Ltd.  593,142  1,475 
  Bendigo and     
  Adelaide Bank Ltd.  181,472  1,471 
*  James Hardie Industries NV  222,190  1,408 
  Tatts Group Ltd.  633,955  1,404 
  Sims Metal     
  Management Ltd.  75,472  1,331 
*  Paladin Energy Ltd.  344,426  1,246 
*  Arrow Energy Ltd.  308,641  1,115 
  CSR Ltd.  637,095  1,084 
  Harvey Norman     
  Holdings Ltd.  287,488  1,018 
  Goodman Fielder Ltd.  697,944  1,001 
  Nufarm Ltd.  94,912  970 
  Billabong International Ltd.  99,997  925 
  Macquarie Airports  342,855  872 
  Aristocrat Leisure Ltd.  215,532  860 

34


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Energy Resources of     
  Australia Ltd.  36,982  764 
  Perpetual Ltd.  21,535  718 
*  Caltex Australia Ltd.  75,194  682 
  SP AusNet  639,738  503 
*  CSR, Ltd. Rights     
  Exp. 11/9/2009  111,492  24 
      419,943 
Austria (0.3%)     
^  Erste Group Bank AG  91,859  3,693 
  OMV AG  77,876  3,209 
  Telekom Austria AG  168,180  2,755 
  Voestalpine AG  63,076  2,157 
  Verbund - Oesterreichische     
  Elektrizitaetswirtschafts     
  AG Class A  40,593  1,822 
^  Raiffeisen International     
  Bank Holding AG  28,315  1,660 
  Vienna Insurance Group  20,192  1,138 
      16,434 
Belgium (1.0%)     
  Anheuser-Busch InBev NV  380,203  17,851 
*  Fortis  1,186,337  5,129 
  Groupe Bruxelles     
  Lambert SA  43,004  3,790 
  Delhaize Group SA  53,783  3,653 
*  KBC Groep NV  85,262  3,650 
  Solvay SA Class A  31,008  3,045 
  Belgacom SA  79,648  2,983 
*  Dexia SA  277,707  2,308 
  UCB SA  53,017  2,263 
  Colruyt SA  7,867  1,872 
  Umicore  59,683  1,813 
  Mobistar SA  15,750  1,082 
  Nationale A Portefeuille  17,578  919 
      50,358 
Denmark (0.9%)     
  Novo Nordisk A/S Class B  236,128  14,670 
*  Vestas Wind Systems A/S  108,081  7,580 
*  Danske Bank A/S  238,352  5,474 
  A P Moller - Maersk A/S     
  Class B  586  4,001 
  Carlsberg A/S Class B  56,967  3,994 
  Novozymes A/S  24,165  2,211 
  A P Moller - Maersk A/S  289  1,922 
*  DSV A/S  110,494  1,717 
*  Topdanmark A/S  7,412  1,069 
  Coloplast A/S Class B  12,244  1,000 
  TrygVesta AS  12,426  895 
*  William Demant Holding  12,390  881 
  H Lundbeck A/S  30,836  597 
      46,011 
Finland (1.1%)     
  Nokia Oyj  1,978,256  24,988 
  Fortum Oyj  235,747  5,580 
  Sampo Oyj  223,299  5,345 

  UPM-Kymmene Oyj  280,387  3,365 
  Kone Oyj Class B  80,450  3,004 
  Stora Enso Oyj  304,486  2,305 
  Metso Oyj  67,003  1,871 
  Wartsila Oyj  43,673  1,581 
  Elisa Oyj  69,727  1,350 
  Nokian Renkaat Oyj  55,437  1,183 
^  Neste Oil Oyj  66,511  1,176 
  Kesko Oyj Class B  34,495  1,148 
  Outokumpu Oyj  65,839  1,089 
  Rautaruukki Oyj  43,969  896 
  Orion Oyj Class B  47,130  895 
  Pohjola Bank PLC  72,020  800 
^  Sanoma Oyj  42,574  786 
      57,362 
France (10.8%)     
^  Total SA  1,127,575  67,474 
  Sanofi-Aventis SA  555,927  40,751 
  BNP Paribas  486,012  36,613 
  GDF Suez  637,348  26,646 
  France Telecom SA  966,863  23,958 
  AXA SA  827,683  20,585 
^  Societe Generale  299,948  19,922 
  Groupe Danone SA  291,384  17,505 
  Vivendi  618,551  17,160 
  ArcelorMittal  455,097  15,402 
  Carrefour SA  336,483  14,443 
  Air Liquide SA  132,525  14,273 
  LVMH Moet Hennessy     
  Louis Vuitton SA  130,035  13,465 
  L’Oreal SA  126,152  12,899 
  Schneider Electric SA  123,937  12,888 
  Vinci SA  224,449  11,714 
  Unibail-Rodamco SE  42,958  9,513 
  Cie de Saint-Gobain  193,841  9,446 
  Credit Agricole SA  469,062  8,985 
  Lafarge SA  105,222  8,541 
  Pernod-Ricard SA  102,152  8,510 
  Alstom SA  107,614  7,456 
  EDF SA  125,291  6,983 
  Veolia Environnement  199,139  6,506 
  Cie Generale d’Optique     
  Essilor International SA  105,923  5,931 
  Compagnie Generale des     
  Etablissements Michelin     
  Class B  76,798  5,689 
  Bouygues SA  118,053  5,559 
*  Alcatel-Lucent  1,232,609  4,616 
  Vallourec SA  28,595  4,502 
*  Renault SA  98,880  4,425 
  PPR  40,211  4,382 
  European Aeronautic     
  Defence and     
  Space Co. NV  216,186  4,048 
^  Hermes International  28,318  3,938 
  Accor SA  76,056  3,642 
  Cap Gemini SA  77,747  3,602 

35


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Technip SA  54,450  3,416 
  Christian Dior SA  33,323  3,323 
  SES SA  151,114  3,274 
  Suez Environnement Co.  141,033  3,134 
  STMicroelectronics NV  357,955  2,873 
  Sodexo  49,409  2,822 
  Lagardere SCA  61,886  2,796 
*  Peugeot SA  79,659  2,595 
*  Natixis  457,318  2,569 
  Publicis Groupe  61,722  2,345 
  Casino Guichard     
  Perrachon SA  28,782  2,287 
  Thales SA  46,885  2,272 
  SCOR SE  86,931  2,212 
  Dassault Systemes SA  34,273  1,978 
  Klepierre  47,547  1,971 
  CNP Assurances  19,437  1,878 
  Eutelsat Communications  51,834  1,648 
  Safran SA  97,896  1,579 
  Legrand SA  54,900  1,489 
*  Cie Generale de     
  Geophysique-Veritas  75,143  1,488 
  Neopost SA  16,352  1,431 
  Bureau Veritas SA  25,521  1,405 
  Fonciere Des Regions  12,162  1,340 
  Aeroports de Paris  15,504  1,177 
^  Eiffage SA  21,522  1,172 
*  Atos Origin SA  23,866  1,117 
  ICADE  10,405  1,095 
*  Air France-KLM  71,004  1,089 
  Gecina SA  9,831  1,046 
  Imerys SA  17,873  980 
  Societe BIC SA  13,917  966 
  Societe Television     
  Francaise 1  60,716  953 
  Iliad SA  8,493  920 
  Eurazeo  14,439  908 
^  Societe Des Autoroutes     
  Paris-Rhin-Rhone  11,880  892 
^  Eramet  2,738  853 
  M6-Metropole Television  33,672  811 
  PagesJaunes Groupe  64,527  791 
  BioMerieux  7,091  787 
*  JC Decaux SA  34,995  708 
  Ipsen SA  13,169  671 
      551,033 
Germany (8.0%)     
  Siemens AG  434,617  39,275 
  E.ON AG  1,004,146  38,484 
  Bayer AG  403,756  28,013 
  Allianz SE  239,319  27,432 
  BASF SE  487,631  26,103 
  Deutsche Bank AG  312,796  22,725 
  Daimler AG  424,458  20,617 
  SAP AG  453,278  20,531 
  Deutsche Telekom AG  1,497,883  20,469 

  RWE AG  221,247  19,406 
  Muenchener     
  Rueckversicherungs AG  108,978  17,242 
  Bayerische Motoren     
  Werke AG  176,360  8,627 
  Deutsche Boerse AG  103,814  8,408 
  Linde AG  79,898  8,386 
^  Volkswagen AG  47,180  7,672 
  Deutsche Post AG  445,662  7,540 
  ThyssenKrupp AG  177,174  5,707 
  Volkswagen AG Pfd.  55,684  5,548 
  Fresenius Medical     
  Care AG & Co. KGaA  101,484  4,925 
  Adidas AG  102,452  4,744 
  MAN SE  56,239  4,631 
  HeidelbergCement AG  74,247  4,441 
  K&S AG  79,200  4,323 
  Henkel AG & Co. KGaA  93,533  4,260 
*  Commerzbank AG  372,170  3,876 
  Porsche Automobil     
  Holding SE  46,942  3,591 
  Metro AG  59,327  3,293 
  Merck KGaA  34,542  3,247 
  Beiersdorf AG  46,186  2,845 
  Henkel AG & Co. KGaA  68,090  2,631 
*  Infineon Technologies AG  568,389  2,559 
  Daimler AG  51,918  2,504 
*,^  QIAGEN NV  120,458  2,498 
  Fresenius AG Pfd.  42,217  2,453 
  Salzgitter AG  20,481  1,841 
  Deutsche Lufthansa AG  119,198  1,841 
  Hochtief AG  21,748  1,641 
  RWE AG  20,381  1,599 
  GEA Group AG  81,591  1,540 
*  Hannover     
  Rueckversicherung AG  31,573  1,423 
*  Deutsche Postbank AG  45,887  1,421 
  Wacker Chemie AG  8,171  1,174 
  Celesio AG  44,012  1,092 
^  Solarworld AG  43,865  949 
  Fraport AG Frankfurt     
  Airport Services     
  Worldwide  19,389  913 
  Bayerische Motoren     
  Werke AG  26,454  870 
*  United Internet AG  66,375  864 
  Puma AG Rudolf     
  Dassler Sport  2,820  864 
  Fresenius SE  14,761  735 
  Suedzucker AG  34,735  718 
*,^  TUI AG  72,871  505 
  Hamburger Hafen     
  und Logistik AG  12,885  502 
      409,498 

36


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
Greece (0.7%)     
*  National Bank of Greece SA  295,503  10,804 
*  Alpha Bank AE  191,868  3,699 
  OPAP SA  119,276  3,036 
*  Piraeus Bank SA  158,483  2,732 
*  EFG Eurobank Ergasias SA  168,898  2,675 
  Coca Cola Hellenic     
  Bottling Co. SA  95,412  2,487 
  Bank of Cyprus     
  Public Co. Ltd.  291,053  2,303 
  Hellenic     
  Telecommunications     
  Organization SA  94,532  1,590 
  Marfin Investment     
  Group SA  331,680  1,322 
*  Public Power Corp. SA  60,578  1,236 
  Titan Cement Co. SA  30,015  1,037 
*  National Bank of     
  Greece SA ADR  133,031  967 
  Hellenic     
  Telecommunications     
  Organization SA ADR  70,727  600 
  Hellenic Petroleum SA  47,884  580 
      35,068 
Hong Kong (2.4%)     
  Sun Hung Kai     
  Properties Ltd.  745,996  11,302 
  Hong Kong Exchanges     
  and Clearing Ltd.  540,169  9,508 
  Cheung Kong Holdings Ltd.  735,083  9,329 
  Hutchison Whampoa Ltd.  1,120,734  7,866 
  CLP Holdings Ltd.  1,087,334  7,287 
  Hang Seng Bank Ltd.  401,215  5,668 
  Hong Kong & China     
  Gas Co. Ltd.  2,104,584  5,063 
  Swire Pacific Ltd.  406,182  4,950 
  Li & Fung Ltd.  1,182,460  4,918 
  BOC Hong Kong     
  Holdings Ltd.  1,956,454  4,504 
  Hang Lung Properties Ltd.  1,100,085  4,157 
  Henderson Land     
  Development Co. Ltd.  569,067  4,023 
  Wharf Holdings Ltd.  732,803  3,959 
  Esprit Holdings Ltd.  594,118  3,955 
  Hongkong Electric     
  Holdings Ltd.  734,751  3,929 
  New World     
  Development Ltd.  1,341,921  2,888 
  Bank of East Asia Ltd.  787,925  2,764 
  MTR Corp.  759,433  2,690 
  Link REIT  1,163,439  2,620 
  Hang Lung Group Ltd.  412,850  2,070 
  Kerry Properties Ltd.  368,496  2,055 
  Sino Land Co. Ltd.  878,845  1,672 
  Wheelock & Co. Ltd.  481,925  1,548 
  Shangri-La Asia Ltd.  696,171  1,339 

*  Cathay Pacific Airways Ltd.  642,988  1,042 
  Yue Yuen Industrial     
  Holdings Ltd.  362,981  1,012 
  Hysan     
  Development Co. Ltd.  342,350  1,011 
  Hopewell Holdings Ltd.  311,298  979 
  Wing Hang Bank Ltd.  97,359  945 
*  Foxconn International     
  Holdings Ltd.  1,065,324  936 
  Cheung Kong Infrastructure     
  Holdings Ltd.  245,143  872 
  NWS Holdings Ltd.  450,502  855 
  ASM Pacific Technology Ltd. 96,533  750 
*,^  Mongolia Energy Co. Ltd.  1,587,167  667 
  Television Broadcasts Ltd.  139,077  657 
  Orient Overseas     
  International Ltd.  123,298  602 
  Chinese Estates     
  Holdings Ltd.  349,187  599 
  Lifestyle International     
  Holdings Ltd.  283,513  456 
  PCCW Ltd.  1,808,391  444 
  Hong Kong Aircraft     
  Engineering Co. Ltd.  32,023  378 
      122,269 
Ireland (0.3%)     
  CRH PLC  364,654  8,942 
  Kerry Group PLC Class A  73,452  2,177 
*  Elan Corp. PLC  264,011  1,383 
*  Ryanair Holdings PLC ADR  29,406  802 
*  Ryanair Holdings PLC  45,002  196 
      13,500 
Italy (3.6%)     
  ENI SPA  1,375,249  34,060 
*  UniCredit SPA  7,522,395  25,202 
  Enel SPA  3,477,054  20,689 
*  Intesa Sanpaolo SPA  4,080,630  17,173 
  Assicurazioni Generali SPA  618,875  15,583 
  Telecom Italia SPA  5,341,565  8,486 
*  Fiat SPA  405,478  6,037 
  Tenaris SA  252,116  4,487 
  Unione di Banche     
  Italiane SCPA  306,279  4,375 
  Saipem SPA  141,328  4,170 
^  Snam Rete Gas SPA  798,706  3,874 
  Finmeccanica SPA  215,815  3,621 
  Telecom Italia SPA RNC  3,207,092  3,529 
  Atlantia SPA  135,031  3,193 
  Mediobanca SPA  247,797  3,161 
*  Banco Popolare SC  335,154  2,911 
  Terna Rete Elettrica     
  Nazionale SPA  680,458  2,698 
  Parmalat SPA  887,271  2,459 
  Mediaset SPA  370,697  2,407 
  Banca Monte dei Paschi     
  di Siena SPA  1,150,336  2,186 

37


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Intesa Sanpaolo SPA  489,184  1,595 
  Banca Popolare di     
  Milano Scarl  207,490  1,544 
*  Luxottica Group SPA  60,706  1,478 
  A2A SPA  573,678  1,058 
^  Banca Carige SPA  337,896  953 
  Prysmian SPA  52,263  919 
*  Pirelli & C SPA  1,377,245  774 
  Exor SPA  36,972  729 
^  Mediolanum SPA  110,698  702 
*  Autogrill SPA  53,991  607 
  Fondiaria-Sai SPA  32,504  592 
*  Unipol Gruppo     
  Finanziario SPA  386,419  560 
^  Italcementi SPA  36,131  520 
^  Lottomatica SPA  24,089  513 
  Saras SPA  148,992  484 
  ACEA SPA  38,926  455 
      183,784 
Japan (21.0%)     
  Toyota Motor Corp.  1,457,190  57,525 
  Honda Motor Co. Ltd.  872,418  26,946 
  Mitsubishi UFJ Financial     
  Group Inc.  4,922,489  26,219 
  Canon Inc.  563,841  21,258 
  Sumitomo Mitsui Financial     
  Group Inc.  479,502  16,298 
  Takeda     
  Pharmaceutical Co. Ltd.  395,471  15,816 
  Tokyo Electric     
  Power Co. Inc.  641,523  15,769 
  Sony Corp.  530,038  15,651 
  Mitsubishi Corp.  715,985  15,179 
  Panasonic Corp.  1,033,697  14,591 
  Nomura Holdings Inc.  1,880,265  13,253 
  Nintendo Co. Ltd.  52,463  13,159 
  Mizuho Financial     
  Group Inc.  6,630,415  13,078 
  Mitsui & Co. Ltd.  913,552  11,998 
  Toshiba Corp.  2,072,047  11,842 
  NTT DoCoMo Inc.  8,104  11,753 
  East Japan Railway Co.  179,373  11,487 
  Shin-Etsu Chemical Co. Ltd.  216,559 11,484 
  Nippon Telegraph     
  & Telephone Corp.  273,731  11,295 
  Nippon Steel Corp.  2,693,221  10,275 
  Komatsu Ltd.  503,287  9,812 
  Tokio Marine Holdings Inc.  381,558  9,757 
  Nissan Motor Co. Ltd.  1,316,002  9,523 
  Mitsubishi Estate Co. Ltd.  624,352  9,431 
  Softbank Corp.  398,826  9,398 
  Seven & I Holdings Co. Ltd. 406,093  8,890 
  Astellas Pharma Inc.  239,178  8,807 
  Kansai Electric     
  Power Co. Inc.  402,430  8,695 
  JFE Holdings Inc.  259,936  8,467 
Fanuc Ltd.  101,843  8,459 
KDDI Corp.  1,540  8,174 
Chubu Electric     
Power Co. Inc.  351,516  7,848 
Mitsubishi Electric Corp.  1,021,383  7,770 
FUJIFILM Holdings Corp.  256,962  7,305 
Kirin Holdings Co. Ltd.  442,650  7,225 
Kyocera Corp.  85,938  7,209 
Mitsui Fudosan Co. Ltd.  440,935  7,134 
Denso Corp.  256,881  7,019 
Daiichi Sankyo Co. Ltd.  355,931  6,953 
Japan Tobacco Inc.  2,366  6,638 
Kao Corp.  285,306  6,355 
Fujitsu Ltd.  987,884  5,817 
Sumitomo Corp.  595,137  5,777 
Hitachi Ltd.  1,785,404  5,765 
Mitsubishi Heavy     
Industries Ltd.  1,603,910  5,672 
Sharp Corp.  526,373  5,616 
Murata     
Manufacturing Co. Ltd.  112,280  5,478 
Bridgestone Corp.  324,323  5,348 
Central Japan Railway Co.  793  5,283 
Secom Co. Ltd.  112,120  5,231 
Mitsui Sumitomo     
Insurance Group     
Holdings Inc.  222,795  5,186 
Tokyo Electron Ltd.  90,359  5,083 
ITOCHU Corp.  790,088  4,994 
Nidec Corp.  57,315  4,839 
Ricoh Co. Ltd.  353,278  4,801 
Tokyo Gas Co. Ltd.  1,210,831  4,797 
Sumitomo Electric     
Industries Ltd.  395,231  4,796 
Hoya Corp.  216,802  4,771 
Eisai Co. Ltd.  132,184  4,694 
Tohoku Electric     
Power Co. Inc.  228,254  4,687 
Terumo Corp.  88,764  4,672 
Sumitomo Metal     
Industries Ltd.  1,762,511  4,503 
Daiwa Securities Group Inc.  853,285  4,491 
Asahi Glass Co. Ltd.  532,764  4,488 
Suzuki Motor Corp.  185,387  4,486 
Kubota Corp.  574,607  4,465 
Sumitomo Metal     
Mining Co. Ltd.  278,232  4,400 
Keyence Corp.  21,962  4,360 
Marubeni Corp.  870,304  4,306 
Daikin Industries Ltd.  123,284  4,179 
Fast Retailing Co. Ltd.  25,290  4,163 
Kyushu Electric     
Power Co. Inc.  198,494  4,053 
Toray Industries Inc.  703,818  4,010 
Sumitomo Trust &     
Banking Co. Ltd.  747,606  3,895 

38


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  Sumitomo Realty &     
  Development Co. Ltd.  202,032  3,831 
  Dai Nippon Printing Co. Ltd.  295,162 3,698 
  ORIX Corp.  56,136  3,626 
  Asahi Breweries Ltd.  204,347  3,613 
  Olympus Corp.  114,728  3,581 
  INPEX Corp.  437  3,569 
  TDK Corp.  61,700  3,547 
  Mitsui OSK Lines Ltd.  604,157  3,508 
  Osaka Gas Co. Ltd.  1,022,304  3,422 
  Rohm Co. Ltd.  51,529  3,417 
  Shionogi & Co. Ltd.  156,475  3,375 
  Shiseido Co. Ltd.  184,617  3,371 
  Ajinomoto Co. Inc.  352,744  3,311 
  Asahi Kasei Corp.  666,368  3,302 
  Sumitomo     
  Chemical Co. Ltd.  828,452  3,301 
  SMC Corp.  28,576  3,264 
  Nippon Oil Corp.  656,941  3,237 
  T&D Holdings Inc.  124,789  3,224 
  Bank of Yokohama Ltd.  653,741  3,210 
  West Japan Railway Co.  900  3,189 
  Nikon Corp.  170,141  3,171 
  Shizuoka Bank Ltd.  319,030  3,170 
  Yamato Holdings Co. Ltd.  206,936  3,053 
  Kintetsu Corp.  855,030  3,041 
  Resona Holdings Inc.  253,608  3,020 
  Aeon Co. Ltd.  337,875  3,014 
  NGK Insulators Ltd.  133,553  2,996 
  Chugoku Electric     
  Power Co. Inc.  146,944  2,974 
  Daiwa House     
  Industry Co. Ltd.  271,607  2,902 
*  NEC Corp.  1,014,265  2,883 
*,^  Mitsubishi Motors Corp.  1,898,374  2,808 
  Yamada Denki Co. Ltd.  45,946  2,800 
  Sompo Japan     
  Insurance Inc.  470,002  2,749 
  Odakyu Electric     
  Railway Co. Ltd.  334,007  2,721 
  Hankyu Hanshin     
  Holdings Inc.  606,392  2,701 
  Toppan Printing Co. Ltd.  296,644  2,651 
  Nitto Denko Corp.  87,611  2,646 
  Tokyu Corp.  604,993  2,644 
  Shikoku Electric Power Co.  93,356  2,627 
  Rakuten Inc.  3,835  2,626 
  Aisin Seiki Co. Ltd.  102,156  2,597 
  Toyota Industries Corp.  95,363  2,583 
  Panasonic Electric     
  Works Co. Ltd.  201,312  2,541 
  Chiba Bank Ltd.  404,113  2,492 
  Ibiden Co. Ltd.  68,372  2,448 
  Kobe Steel Ltd.  1,329,855  2,417 
  Konica Minolta     
  Holdings Inc.  253,872  2,385 
  Mitsubishi Chemical     
  Holdings Corp.  638,141  2,370 
  Tobu Railway Co. Ltd.  432,610  2,366 
  Sekisui House Ltd.  271,634  2,349 
  Chugai     
  Pharmaceutical Co. Ltd.  119,782  2,343 
  Yahoo! Japan Corp.  7,566  2,319 
  Hokuriku Electric Power Co.  99,830  2,276 
  Nippon Building Fund Inc.     
  Class A  274  2,246 
*,^  Sanyo Electric Co. Ltd.  905,445  2,244 
  Electric Power     
  Development Co. Ltd.  71,413  2,202 
  JS Group Corp.  134,134  2,189 
  Nippon Yusen KK  592,420  2,187 
  Ono Pharmaceutical Co. Ltd.  45,275  2,150 
  Nippon Mining Holdings Inc. 470,500  2,099 
  JGC Corp.  108,308  2,070 
  Unicharm Corp.  21,467  2,057 
  OJI Paper Co. Ltd.  457,405  1,991 
  Japan Steel Works Ltd.  179,787  1,983 
  Keio Corp.  310,350  1,954 
  NTT Data Corp.  678  1,951 
  Nippon Electric     
  Glass Co. Ltd.  181,082  1,950 
  Makita Corp.  58,396  1,935 
  Chuo Mitsui Trust     
  Holdings Inc.  529,689  1,934 
  Kawasaki Heavy     
  Industries Ltd.  770,883  1,926 
  Nipponkoa     
  Insurance Co. Ltd.  352,292  1,918 
  Dentsu Inc.  89,525  1,918 
  Kuraray Co. Ltd.  185,455  1,915 
  Hokkaido Electric     
  Power Co. Inc.  98,659  1,900 
  Trend Micro Inc.  54,817  1,897 
  Nippon Express Co. Ltd.  460,697  1,886 
  Kurita Water Industries Ltd.  61,069  1,868 
  Keihin Electric Express     
  Railway Co. Ltd.  232,998  1,855 
  Japan Real Estate     
  Investment Corp. Class A  231  1,843 
  Advantest Corp.  82,917  1,831 
  Oriental Land Co. Ltd.  26,766  1,814 
  JSR Corp.  92,998  1,814 
  Isetan Mitsukoshi     
  Holdings Ltd.  186,990  1,792 
  Omron Corp.  105,170  1,771 
  Mazda Motor Corp.  777,844  1,755 
  Daito Trust     
  Construction Co. Ltd.  41,233  1,714 
  Benesse Corp.  38,614  1,703 
*,^  GS Yuasa Corp.  190,841  1,644 
  Taiyo Nippon Sanso Corp.  147,079  1,633 
  Hirose Electric Co. Ltd.  15,497  1,597 

39


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  SBI Holdings Inc.  8,653  1,590 
  Sankyo Co. Ltd.  27,791  1,587 
  Nitori Co. Ltd.  19,426  1,580 
  Toyota Tsusho Corp.  109,594  1,567 
  Mitsubishi Materials Corp.  593,200  1,564 
  Kyowa Hakko Kirin Co. Ltd.  134,213  1,551 
  Mitsubishi Tanabe     
  Pharma Corp.  117,447  1,499 
  Lawson Inc.  33,428  1,494 
  Joyo Bank Ltd.  339,580  1,494 
  Bank of Kyoto Ltd.  161,084  1,462 
  Fukuoka Financial     
  Group Inc.  398,715  1,458 
*  MEIJI Holdings Co. Ltd.  35,628  1,451 
  Stanley Electric Co. Ltd.  73,702  1,443 
  NSK Ltd.  247,789  1,440 
  Teijin Ltd.  482,577  1,418 
  Hokuhoku Financial     
  Group Inc.  648,198  1,405 
  Showa Denko KK  726,462  1,398 
  Sega Sammy Holdings Inc.  97,107  1,379 
  Sumitomo Heavy     
  Industries Ltd.  302,593  1,373 
  Yakult Honsha Co. Ltd.  52,294  1,362 
  Hitachi Construction     
  Machinery Co. Ltd.  58,324  1,359 
  Brother Industries Ltd.  119,196  1,357 
  Sekisui Chemical Co. Ltd.  224,187  1,356 
  Ube Industries Ltd.  525,726  1,355 
  Isuzu Motors Ltd.  639,628  1,352 
  Nippon Paper Group Inc.  50,841  1,349 
  Suzuken Co. Ltd.  38,022  1,346 
  Santen     
  Pharmaceutical Co. Ltd.  39,108  1,342 
  Shimano Inc.  35,083  1,342 
  TonenGeneral Sekiyu KK  146,647  1,338 
  Yamaha Motor Co. Ltd.  112,102  1,335 
*  IHI Corp.  696,514  1,328 
  Nisshin Seifun Group Inc.  99,364  1,325 
  Toyo Seikan Kaisha Ltd.  78,068  1,312 
  Sony Financial Holdings Inc.  456  1,309 
  Nissin Foods     
  Holdings Co., Ltd.  37,045  1,307 
  Fuji Heavy Industries Ltd.  329,097  1,286 
  Obayashi Corp.  334,606  1,264 
  Furukawa Electric Co. Ltd.  333,035  1,263 
  Toyo Suisan Kaisha Ltd.  47,962  1,255 
  Toho Gas Co. Ltd.  241,328  1,251 
  Hachijuni Bank Ltd.  210,718  1,247 
  Chugoku Bank Ltd.  91,872  1,241 
  Hisamitsu     
  Pharmaceutical Co. Inc.  35,540  1,222 
  Taisho     
  Pharmaceutical Co. Ltd.  66,888  1,219 
*  Elpida Memory Inc.  92,447  1,208 
  J Front Retailing Co. Ltd.  254,489  1,206 
All Nippon Airways Co. Ltd.  432,083  1,206 
Sumco Corp.  62,308  1,189 
Sojitz Corp.  642,527  1,186 
Shimizu Corp.  309,217  1,186 
Jupiter     
Telecommunications     
Co. Ltd.  1,296  1,185 
Nomura Research     
Institute Ltd.  53,847  1,164 
Seiko Epson Corp.  74,750  1,156 
Kawasaki Kisen Kaisha Ltd.  315,598  1,150 
Iyo Bank Ltd.  127,405  1,149 
Aioi Insurance Co. Ltd.  257,955  1,136 
Hitachi Chemical Co. Ltd.  56,816  1,128 
Nippon Meat Packers Inc.  96,196  1,128 
Shimamura Co. Ltd.  11,780  1,126 
THK Co. Ltd.  64,771  1,119 
Mediceo Paltac     
Holdings Co. Ltd.  79,671  1,113 
Tsumura & Co.  32,314  1,112 
Amada Co. Ltd.  180,225  1,103 
Mitsui Chemicals Inc.  319,434  1,097 
JTEKT Corp.  103,599  1,094 
Gunma Bank Ltd.  208,775  1,088 
Namco Bandai Holdings Inc.  105,837  1,082 
Daihatsu Motor Co. Ltd.  103,834  1,062 
77 Bank Ltd.  184,118  1,060 
Takashimaya Co. Ltd.  156,833  1,057 
Yamaguchi Financial     
Group Inc.  110,101  1,052 
Mitsui Engineering &     
Shipbuilding Co. Ltd.  406,192  1,052 
Kajima Corp.  441,858  1,035 
Kamigumi Co. Ltd.  137,669  1,034 
Kaneka Corp.  158,457  1,032 
Yaskawa Electric Corp.  130,521  1,027 
Hiroshima Bank Ltd.  264,863  1,016 
Suruga Bank Ltd.  112,201  1,014 
Nippon Sheet Glass Co. Ltd. 343,874  1,013 
Yokogawa Electric Corp.  124,014  1,005 
Mizuho Securities Co. Ltd.  289,124  998 
Taisei Corp.  506,933  995 
Kikkoman Corp.  85,761  993 
Showa Shell Sekiyu KK  100,659  991 
Toyoda Gosei Co. Ltd.  35,266  989 
Tokyu Land Corp.  241,597  974 
Mitsubishi Rayon Co. Ltd.  276,743  956 
Ushio Inc.  60,742  955 
Tokuyama Corp.  151,746  954 
Mitsubishi Gas     
Chemical Co. Inc.  205,422  948 
Aeon Mall Co. Ltd.  44,975  942 
NTN Corp.  247,182  933 
Kansai Paint Co. Ltd.  110,229  933 
FamilyMart Co. Ltd.  31,281  932 
Shimadzu Corp.  134,465  931 

40


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
  NGK Spark Plug Co. Ltd.  82,105  931 
  Mitsubishi UFJ Lease &     
  Finance Co. Ltd.  31,234  930 
^  Oracle Corp. Japan  21,029  927 
^  Casio Computer Co. Ltd.  126,084  925 
  Toho Co. Ltd.  61,543  925 
  Konami Corp.  50,699  922 
  Nomura Real Estate Office     
  Fund Inc. Class A  149  921 
  Dainippon Sumitomo     
  Pharma Co. Ltd.  88,427  919 
  Credit Saison Co. Ltd.  82,127  918 
  Nishi-Nippon City Bank Ltd.  368,805  912 
  Mitsumi Electric Co. Ltd.  45,191  912 
  Rinnai Corp.  20,734  911 
  Nissan Chemical     
  Industries Ltd.  70,566  909 
  Denki Kagaku Kogyo KK  245,170  899 
  Citizen Holdings Co. Ltd.  156,839  882 
  Sumitomo Rubber     
  Industries Ltd.  95,529  881 
  Yamaha Corp.  85,213  880 
  Idemitsu Kosan Co. Ltd.  11,845  869 
  Square Enix     
  Holdings Co., Ltd.  34,566  860 
  Keisei Electric     
  Railway Co. Ltd.  150,051  844 
  Cosmo Oil Co. Ltd.  319,056  838 
  Alfresa Holdings Corp.  19,370  837 
  Japan Retail Fund     
  Investment Corp. Class A  178  837 
  Daicel Chemical     
  Industries Ltd.  138,294  835 
  Dowa Holdings Co., Ltd.  141,480  826 
  TOTO Ltd.  138,912  823 
  NOK Corp.  61,972  822 
*  Mitsui Mining &     
  Smelting Co. Ltd.  318,807  821 
  Nomura Real Estate     
  Holdings Inc.  50,688  807 
  Hitachi Metals Ltd.  84,550  807 
  Asics Corp.  88,245  787 
  USS Co. Ltd.  12,882  779 
  Yamazaki Baking Co. Ltd.  62,482  767 
*  Mizuho Trust &     
  Banking Co. Ltd.  797,240  760 
*  McDonald’s     
  Holdings Co. Japan Ltd.  37,569  759 
  Minebea Co. Ltd.  180,742  758 
  Tosoh Corp.  281,121  756 
  Mabuchi Motor Co. Ltd.  15,754  754 
  Tokyo Tatemono Co. Ltd.  156,918  748 
  Seven Bank Ltd.  303  740 
^  Sapporo Holdings Ltd.  141,398  738 
  Yamato Kogyo Co. Ltd.  24,470  734 
  UNY Co. Ltd.  97,803  726 
  Japan Petroleum     
  Exploration Co.  14,275  713 
  Marui Group Co. Ltd.  122,533  704 
  NHK Spring Co. Ltd.  88,840  694 
  Mitsubishi Logistics Corp.  63,075  686 
  Japan Prime Realty     
  Investment Corp. Class A  313  682 
  Toyota Boshoku Corp.  32,623  680 
*,^  Shinsei Bank Ltd.  510,072  665 
  Hakuhodo DY Holdings Inc.  13,030  654 
  Tokyo Steel     
  Manufacturing Co. Ltd.  49,843  653 
  Nisshin Steel Co. Ltd.  383,021  639 
  Hitachi     
  High-Technologies Corp.  38,159  632 
  Nisshinbo Holdings Inc.  64,267  632 
*,^  Japan Airlines Corp.  483,976  627 
  Coca-Cola West Co. Ltd.  31,986  594 
  Fuji Electric     
  Holdings Co. Ltd.  315,994  587 
  Obic Co. Ltd.  3,395  574 
*  Senshu Ikeda Holdings Inc.  167,400  573 
  Taiheiyo Cement Corp.  471,239  547 
  Canon Marketing Japan Inc.  33,202  538 
  Kinden Corp.  65,160  529 
  Ito En Ltd.  31,352  527 
  NTT Urban     
  Development Corp.  650  522 
^  Matsui Securities Co. Ltd.  70,846  510 
  Shinko Electric     
  Industries Co. Ltd.  33,360  497 
  Sapporo Hokuyo     
  Holdings Inc.  145,618  492 
  DIC Corp.  286,542  469 
  Hino Motors Ltd.  126,237  467 
  Daido Steel Co. Ltd.  137,025  466 
^  Dena Co. Ltd.  130  449 
*  Aozora Bank Ltd.  360,543  426 
  Jafco Co. Ltd.  15,236  410 
  Otsuka Corp.  7,658  404 
  Itochu Techno-Solutions Corp.  14,176  390 
  Nissay Dowa General     
  Insurance Co. Ltd.  83,843  372 
  Aeon Credit Service Co. Ltd.  38,115  367 
  Onward Holdings Co. Ltd.  58,860  365 
  ABC-Mart Inc.  11,942  346 
  Leopalace21 Corp.  62,059  336 
  Maruichi Steel Tube Ltd.  17,961  335 
  Fuji Media Holdings Inc.  226  332 
  Tokyo Broadcasting System     
  Holdings Inc.  18,112  270 
^  Acom Co. Ltd.  19,381  248 
  Hikari Tsushin Inc.  12,491  234 
^  OSAKA Titanium     
  Technologies Co.  8,824  234 
^  Promise Co. Ltd.  36,026  229 
      1,078,071 

41


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
Netherlands (2.5%)     
  Unilever NV  860,494  26,514 
  Koninklijke KPN NV  908,763  16,484 
*  ING Groep NV  1,038,579  13,516 
  Koninklijke Philips     
  Electronics NV  512,741  12,880 
  Koninklijke Ahold NV  631,031  7,949 
  Akzo Nobel NV  122,094  7,209 
  ASML Holding NV  222,699  6,006 
*  Aegon NV  820,240  5,830 
  Heineken NV  129,702  5,733 
  TNT NV  196,308  5,206 
  Reed Elsevier NV  385,564  4,493 
  Koninklijke DSM NV  80,887  3,544 
  Wolters Kluwer NV  147,406  3,286 
  Heineken Holding NV  57,298  2,229 
*  Randstad Holding NV  53,281  2,022 
  Fugro NV  34,121  1,900 
  Corio NV  27,818  1,886 
  SBM Offshore NV  79,004  1,513 
  Koninklijke Boskalis     
  Westminster NV  29,166  1,024 
  ASML Holding NV  5,442  147 
*  Aegon NV  549  4 
      129,375 
New Zealand (0.1%)     
  Fletcher Building Ltd.  322,740  1,906 
  Telecom Corp. of     
  New Zealand Ltd.  955,756  1,726 
  Sky City Entertainment     
  Group Ltd.  320,936  793 
  Contact Energy Ltd.  147,256  656 
  Auckland International     
  Airport Ltd.  419,762  604 
      5,685 
Norway (0.7%)     
  StatoilHydro ASA  592,328  13,958 
*  Telenor ASA  445,905  5,749 
*  DnB NOR ASA  385,652  4,418 
  Orkla ASA  411,866  3,808 
  Yara International ASA  99,640  3,294 
*  Seadrill Ltd.  146,899  3,051 
*  Norsk Hydro ASA  359,865  2,358 
*,^  Renewable     
  Energy Corp. AS  173,164  1,031 
      37,667 
Portugal (0.3%)     
  EDP - Energias de     
  Portugal SA  974,845  4,311 
  Portugal Telecom SGPS SA  305,651  3,494 
  Banco Espirito Santo SA  274,699  2,027 
  Banco Comercial     
  Portugues SA  1,230,952  1,755 
  Galp Energia SGPS SA     
  Class B  80,813  1,361 
*  EDP Renovaveis SA  115,000  1,146 
  Jeronimo Martins SGPS SA  113,047  1,007 
  Cimpor Cimentos de     
  Portugal SGPS SA  123,567  963 
  Brisa Auto-Estradas de     
  Portugal SA  94,001  929 
      16,993 
Singapore (1.4%)     
  Singapore     
  Telecommunications Ltd.  4,196,756 8,703 
  DBS Group Holdings Ltd.  906,401  8,301 
  United Overseas Bank Ltd.  643,467  7,713 
  Oversea-Chinese Banking     
  Corp. Ltd.  1,316,392  7,094 
  CapitaLand Ltd.  1,351,559  3,919 
  Keppel Corp. Ltd.  674,329  3,876 
  Wilmar International Ltd.  669,855  2,953 
  Singapore Airlines Ltd.  286,586  2,748 
  Singapore Exchange Ltd.  445,227  2,523 
  Singapore Press     
  Holdings Ltd.  828,315  2,268 
*  Genting Singapore PLC  2,477,874  1,893 
  City Developments Ltd.  259,765  1,820 
  Singapore Technologies     
  Engineering Ltd.  714,732  1,440 
  Fraser and Neave Ltd.  506,895  1,380 
  CapitaMall Trust  1,178,048  1,323 
  Noble Group Ltd.  721,930  1,319 
  Olam International Ltd.  642,158  1,233 
  SembCorp Industries Ltd.  522,174  1,230 
  Jardine Cycle &     
  Carriage Ltd.  68,399  1,123 
  ComfortDelgro Corp. Ltd.  1,020,862  1,109 
*  Golden Agri-Resources Ltd. 3,685,270  1,109 
  SembCorp Marine Ltd.  453,303  1,106 
  Ascendas Real Estate     
  Investment Trust  781,017  1,015 
  UOL Group Ltd.  289,982  692 
  Neptune Orient Lines Ltd.  443,512  494 
  StarHub Ltd.  290,895  390 
  Cosco Corp. Singapore Ltd.  489,430  387 
*  Golden Agri-Resources Ltd.     
  Warrants Exp. 07/23/2012  188,439  16 
      69,177 
Spain (4.8%)     
  Banco Santander SA  4,308,033  69,326 
  Telefonica SA  2,195,225  61,305 
  Banco Bilbao Vizcaya     
  Argentaria SA  1,880,815  33,620 
  Iberdrola SA  1,942,663  17,598 
  Repsol YPF SA  386,023  10,276 
^  Inditex SA  114,932  6,746 
^  Banco Popular Espanol SA  462,428  4,119 
^  ACS Actividades de     
  Construccion y     
  Servicios SA  76,474  3,672 

42


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
^  Banco de Sabadell SA  481,574  3,251 
  Abertis Infraestructuras SA  150,209  3,194 
  Red Electrica Corp. SA  58,443  3,019 
  Gas Natural SDG SA  117,149  2,354 
  Criteria Caixacorp SA  438,999  2,140 
  Enagas  97,871  2,013 
  Iberdrola Renovables SA  443,220  1,970 
  Gamesa Corp.     
  Tecnologica SA  95,636  1,748 
  Acciona SA  13,336  1,624 
  Mapfre SA  374,646  1,605 
^  Bankinter SA  148,768  1,568 
  Acerinox SA  73,698  1,466 
  Zardoya Otis SA  69,516  1,395 
^  Grupo Ferrovial SA  29,465  1,221 
  Indra Sistemas SA  51,375  1,208 
  Telefonica SA ADR  13,855  1,163 
  Grifols SA  66,706  1,078 
  Cintra Concesiones de     
  Infraestructuras     
  de Transporte SA  104,527  1,075 
^  Banco de Valencia SA  111,251  943 
  Fomento de Construcciones   
  y Contratas SA  19,945  811 
^  Sacyr Vallehermoso SA  47,779  723 
*  Iberia Lineas Aereas     
  de Espana  245,552  677 
  Gestevision Telecinco SA  51,522  532 
      243,440 
Sweden (2.6%)     
  Nordea Bank AB  1,703,203  18,281 
  Telefonaktiebolaget LM     
  Ericsson Class B  1,578,733  16,494 
  Hennes & Mauritz AB     
  Class B  269,614  15,315 
  TeliaSonera AB  1,183,714  7,846 
  Svenska     
  Handelsbanken AB     
  Class A  259,474  6,705 
  Sandvik AB  533,920  5,898 
  Volvo AB Class B  576,952  5,464 
*  Skandinaviska Enskilda     
  Banken AB Class A  808,044  4,894 
  Atlas Copco AB Class A  358,889  4,812 
  Investor AB Class B  242,453  4,290 
  Svenska Cellulosa AB     
  Class B  300,424  4,128 
  SKF AB  208,956  3,309 
  Skanska AB Class B  213,944  3,140 
*  Electrolux AB Class B  125,401  3,006 
  Assa Abloy AB Class B  164,282  2,871 
  Swedish Match AB  134,659  2,764 
*  Millicom     
  International Cellular SA  39,615  2,544 
  Atlas Copco AB Class B  204,662  2,438 
  Tele2 AB  160,166  2,335 
*  Swedbank AB Class A  263,598  2,271 
  Alfa Laval AB  180,173  2,201 
  Scania AB Class B  167,245  2,145 
  Volvo AB Class A  230,021  2,124 
  Getinge AB  105,096  1,958 
  Securitas AB Class B  163,221  1,523 
  SSAB AB Class A  93,379  1,423 
*  Husqvarna AB  213,389  1,344 
*  Lundin Petroleum AB  114,903  973 
  Holmen AB  27,549  743 
  SSAB AB Class B  43,953  615 
      133,854 
Switzerland (7.9%)     
  Nestle SA  1,921,962  89,374 
  Roche Holdings AG  371,117  59,439 
  Novartis AG  1,117,156  58,175 
  Credit Suisse Group AG  594,479  31,779 
*  UBS AG  1,863,619  31,075 
  ABB Ltd.  1,165,638  21,682 
  Zurich Financial     
  Services AG  77,833  17,823 
  Syngenta AG  51,490  12,192 
  Holcim Ltd.  130,642  8,315 
  Compagnie Financiere     
  Richemont SA  274,994  7,698 
  Swiss Reinsurance Co. Ltd.  181,973  7,410 
  Swisscom AG  12,773  4,610 
  Julius Baer Group Ltd.  111,728  4,206 
  Swatch Group AG  16,177  3,777 
  Synthes Inc.  31,666  3,757 
  Geberit AG  21,391  3,539 
  SGS SA  2,512  3,356 
  Givaudan SA  4,004  2,972 
  Adecco SA  65,916  2,945 
*  Actelion Ltd.  52,525  2,895 
  Kuehne & Nagel     
  International AG  28,200  2,555 
  Sonova Holding AG  24,215  2,492 
  Baloise Holding AG  26,164  2,240 
  Swiss Life Holding AG  15,658  1,876 
  Lonza Group AG  23,801  1,851 
  Nobel Biocare Holding AG  65,227  1,851 
  Schindler Holding AG  25,843  1,767 
*  Logitech International SA  95,517  1,630 
  Lindt & Spruengli AG  58  1,473 
  GAM Holding Ltd.  111,728  1,363 
  Pargesa Holding SA  14,065  1,126 
  Swatch Group AG  22,673  1,017 
  Lindt & Spruengli AG  477  1,004 
  Straumann Holding AG  4,112  993 
*  Aryzta AG  23,844  936 
  Schindler Holding AG  11,351  787 
*  Aryzta AG (Ireland Shares)  18,551  718 
  BKW FMB Energie AG  6,894  567 
*  UBS AG  15,873  263 
      403,528 

43


Institutional Developed Markets Index Fund

      Market 
      Value• 
    Shares  ($000) 
United Kingdom (21.3%)     
  HSBC Holdings PLC  9,146,086  101,065 
  BP PLC  9,897,870  92,746 
  Vodafone Group PLC  26,091,570  57,501 
  GlaxoSmithKline PLC  2,740,664  56,218 
  Royal Dutch Shell PLC     
  Class B  1,424,015  40,994 
  Royal Dutch Shell PLC     
  Class A     
  (Amsterdam Shares)  1,215,815  36,047 
  AstraZeneca PLC  764,802  34,333 
  British American     
  Tobacco PLC  1,054,524  33,604 
  Rio Tinto PLC  724,090  32,012 
  BHP Billiton PLC  1,165,818  31,413 
  BG Group PLC  1,774,783  30,550 
*  Barclays PLC  5,828,466  30,547 
  Tesco PLC  4,172,959  27,824 
  Standard Chartered PLC  1,061,747  26,047 
*  Anglo American PLC  695,420  25,162 
  Diageo PLC  1,320,724  21,512 
  Unilever PLC  678,156  20,260 
  Royal Dutch Shell PLC     
  Class A  657,115  19,400 
  Reckitt Benckiser     
  Group PLC  321,189  15,955 
  Imperial Tobacco     
  Group PLC  538,768  15,877 
*  Xstrata PLC  1,011,094  14,563 
  SABMiller PLC  499,820  13,101 
  National Grid PLC  1,291,509  12,794 
*,^  Lloyds Banking     
  Group PLC  8,651,012  12,198 
  Prudential PLC  1,330,180  12,083 
  Centrica PLC  2,712,796  11,021 
  BAE Systems PLC  1,879,695  9,666 
  Cadbury PLC  719,251  9,093 
  Aviva PLC  1,442,638  9,021 
  BT Group PLC  4,078,994  8,741 
  Scottish & Southern     
  Energy PLC  484,705  8,555 
  Tullow Oil PLC  422,214  8,179 
  Rolls-Royce Group PLC  975,683  7,195 
  Compass Group PLC  980,657  6,219 
*  Royal Bank of Scotland     
  Group PLC  8,903,321  6,074 
  Pearson PLC  429,455  5,837 
  WPP PLC  604,072  5,414 
  British Sky Broadcasting     
  Group PLC  602,959  5,257 
  Shire PLC  297,032  5,253 
  WM Morrison     
  Supermarkets PLC  1,116,575  5,117 
  Experian PLC  544,796  4,979 
  Reed Elsevier PLC  644,527  4,880 
  Old Mutual PLC  2,802,521  4,864 
  Marks & Spencer     
  Group PLC  836,705  4,686 
  Man Group PLC  908,122  4,593 
  Kingfisher PLC  1,238,529  4,527 
  Land Securities Group PLC  402,005  4,350 
  Smith & Nephew PLC  470,022  4,155 
  Capita Group PLC  331,836  4,145 
  Standard Life PLC  1,162,628  4,145 
  Legal & General     
  Group PLC  3,131,117  4,018 
  Vodafone Group PLC ADR  163,378  3,625 
  RSA Insurance Group PLC  1,779,605  3,527 
  British Land Co. PLC  446,475  3,448 
  International Power PLC  817,345  3,393 
  J Sainsbury PLC  621,335  3,353 
*  Cairn Energy PLC  73,897  3,187 
  Cable & Wireless PLC  1,330,269  3,156 
^  Randgold Resources Ltd.  47,330  3,120 
  Next PLC  103,069  3,024 
*  Wolseley PLC  148,989  3,014 
  Smiths Group PLC  203,760  2,974 
  G4S PLC  661,211  2,734 
  United Utilities Group PLC  367,461  2,649 
  Carnival PLC  85,175  2,641 
  Antofagasta PLC  206,311  2,599 
  Johnson Matthey PLC  112,421  2,589 
  Vedanta Resources PLC  73,995  2,532 
  Associated British     
  Foods PLC  186,537  2,526 
*  Autonomy Corp. PLC  112,413  2,472 
  Hammerson PLC  364,239  2,416 
  Sage Group PLC  686,240  2,396 
  AMEC PLC  173,770  2,289 
  Segro PLC  388,157  2,237 
  Home Retail Group PLC  458,038  2,180 
  3i Group PLC  503,056  2,165 
  Cobham PLC  594,525  2,136 
  Serco Group PLC  254,450  2,105 
  Rexam PLC  459,425  2,080 
  Burberry Group PLC  227,754  2,008 
  Kazakhmys PLC  111,861  1,991 
  Invensys PLC  421,898  1,950 
*  Lonmin PLC  80,892  1,935 
  Liberty International PLC  262,109  1,935 
  Severn Trent PLC  123,494  1,924 
  Whitbread PLC  91,407  1,902 
  Bunzl PLC  171,536  1,865 
  Eurasian Natural     
  Resources Corp.  134,500  1,830 
  ICAP PLC  271,588  1,805 
  Intercontinental     
  Hotels Group PLC  135,321  1,730 
  Petrofac Ltd.  108,780  1,674 
  Admiral Group PLC  96,962  1,630 
  Friends Provident     
  Group PLC  1,214,477  1,619 

44


Institutional Developed Markets Index Fund

        Market 
        Value• 
      Shares  ($000) 
  Investec PLC    219,760  1,569 
  Balfour Beatty PLC    357,821  1,556 
  Firstgroup PLC    252,426  1,552 
  Drax Group PLC    188,302  1,433 
  Tomkins PLC    465,216  1,276 
  Schroders PLC    68,452  1,231 
  Fresnillo PLC    93,635  1,135 
  TUI Travel PLC    290,798  1,108 
^  London Stock Exchange     
  Group PLC    77,119  1,073 
^  Ladbrokes PLC    462,238  921 
*  Berkeley Group       
  Holdings PLC    65,247  911 
*,^  British Airways PLC    294,387  874 
  Thomas Cook Group PLC  226,071  757 
  Carphone Warehouse     
  Group PLC    215,372  650 
  WPP PLC ADR    12,444  557 
*  Resolution Ltd.    367,954  544 
        1,093,302 
Total Common Stocks       
(Cost $4,384,979)      5,116,352 
Temporary Cash Investment (3.1%)   
Money Market Fund (3.1%)     
1,2  Vanguard Market       
  Liquidity Fund, 0.225%     
  (Cost $158,831)  158,830,717  158,831 
Total Investments (103.0%)     
(Cost $4,543,810)      5,275,183 
Other Assets and Liabilities (–3.0%)   
Other Assets      37,947 
Liabilities2      (190,007) 
        (152,060) 
Net Assets (100%)       
Applicable to 557,760,818 outstanding   
$.001 par value shares of beneficial   
interest (unlimited authorization)  5,123,123 
Net Asset Value Per Share    $9.19 

At October 31, 2009, net assets consisted of: 
  Amount 
  ($000) 
Paid-in Capital  5,635,302 
Undistributed Net Investment Income  35,238 
Accumulated Net Realized Losses  (1,278,826) 
Unrealized Appreciation (Depreciation)   
Investment Securities  731,373 
Foreign Currencies  36 
Net Assets  5,123,123 

• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $146,674,000.
1 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the
7-day yield.
2 Includes $158,831,000 of collateral received for securities on loan.
ADR—American Depositary Receipt.
REIT—Real Estate Investment Trust.
See accompanying Notes, which are an integral part of the Financial Statements.

45


Institutional Developed Markets Index Fund

Statement of Operations

  Year Ended 
  October 31, 2009 
  ($000) 
Investment Income   
Income   
Dividends1,2  236,581 
Security Lending  620 
Total Income  237,201 
Expenses   
The Vanguard Group—Note B   
Investment Advisory Services  60 
Management and Administrative  1,802 
Marketing and Distribution  125 
Custodian Fees  284 
Auditing Fees  36 
Shareholders’ Reports and Proxies  17 
Trustees’ Fees and Expenses  2 
Total Expenses  2,326 
Net Investment Income  234,875 
Realized Net Gain (Loss)   
Investment Securities Sold2  (1,216,829) 
Foreign Currencies  374 
Realized Net Gain (Loss)  (1,216,455) 
Change in Unrealized Appreciation (Depreciation)   
Investment Securities  2,011,504 
Foreign Currencies  36 
Change in Unrealized Appreciation (Depreciation)  2,011,540 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,029,960 

1 Dividends are net of foreign withholding taxes of $8,289,000.
2 Dividend income and realized net gain (loss) from affiliated companies of the fund were $201,833,000 and ($1,220,252,000), respectively.

See accompanying Notes, which are an integral part of the Financial Statements.

46


Institutional Developed Markets Index Fund

Statement of Changes in Net Assets

  Year Ended October 31, 
  2009  2008 
  ($000)  ($000) 
Increase (Decrease) in Net Assets     
Operations     
Net Investment Income  234,875  137,824 
Realized Net Gain (Loss)  (1,216,455)  (51,686) 
Change in Unrealized Appreciation (Depreciation)  2,011,540  (2,799,636) 
Net Increase (Decrease) in Net Assets Resulting from Operations  1,029,960  (2,713,498) 
Distributions     
Net Investment Income  (201,492)  (138,374) 
Realized Capital Gain  —  — 
Total Distributions  (201,492)  (138,374) 
Capital Share Transactions     
Issued  1,710,373  2,406,003 
Issued in Lieu of Cash Distributions  177,724  118,333 
Redeemed1  (1,253,927)2  (1,123,411) 
Net Increase (Decrease) from Capital Share Transactions  634,170  1,400,925 
Total Increase (Decrease)  1,462,638  (1,450,947) 
Net Assets     
Beginning of Period  3,660,485  5,111,432 
End of Period3  5,123,123  3,660,485 

1 The fund collected redemption fees of $0 and $16,000, which were reallocated proportionately to the funds in which the fund invested.
2 Net of redemption fees of $12,000.
3 Net Assets—End of Period includes undistributed net investment income of $35,238,000 and $1,409,000.

See accompanying Notes, which are an integral part of the Financial Statements.

47


Institutional Developed Markets Index Fund

Financial Highlights

For a Share Outstanding  Year Ended October 31, 
Throughout Each Period  2009  2008  2007  2006  2005 
Net Asset Value, Beginning of Period  $7.74  $14.79  $12.05  $9.67  $8.35 
Investment Operations           
Net Investment Income  .4731  .3572  .323  .229  .200 
Capital Gain Distributions Received  —  —  —  —  — 
Net Realized and Unrealized Gain (Loss)           
on Investments  1.391  (7.011)  2.733  2.380  1.320 
Total from Investment Operations  1.864  (6.654)  3.056  2.609  1.520 
Distributions           
Dividends from Net Investment Income  (.414)  (.396)  (.316)  (.229)  (.200) 
Distributions from Realized Capital Gains  —  —  —  —  — 
Total Distributions  (.414)  (.396)  (.316)  (.229)  (.200) 
Net Asset Value, End of Period  $9.19  $7.74  $14.79  $12.05  $9.67 
 
Total Return3  25.40%  –46.12%  25.84%  27.41%  18.37% 
 
Ratios/Supplemental Data           
Net Assets, End of Period (Millions)  $5,123  $3,660  $5,111  $3,607  $1,748 
Ratio of Total Expenses to           
Average Net Assets  0.06%4  0%  0%  0%  0% 
Ratio of Net Investment Income to           
Average Net Assets  5.80%1  3.02%  2.25%  1.72%  1.86% 
Portfolio Turnover Rate  20%5  18%  11%5  14%  6% 

1 Net investment income per share and the ratio of net investment income to average net assets include $.415 and 4.99%, respectively, of
annual dividends received from Vanguard mutual funds in December 2008. Effective in June 2009, the fund’s equity investments are solely
in common stocks.
2 Calculated based on average shares outstanding.
3 Total returns do not reflect the 2% fee assessed on redemptions of shares held for less than two months.
4 The acquired fund fees and expenses were 0.06% for 2009. Including the acquired fund fees and expenses, the fund’s total operating
expenses represented 0.12% of average net assets.
5 Excludes the value of securities received and mutual fund shares delivered in connection with a change in the fund’s investment policy to
invest directly in individual stocks and reduce the fund’s investments in Vanguard mutual funds.

See accompanying Notes, which are an integral part of the Financial Statements.

48


Institutional Developed Markets Index Fund

Notes to Financial Statements

Vanguard Institutional Developed Markets Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. Through June 18, 2009, the fund invested solely in the Vanguard European and Pacific Stock Index Funds. Effective June 19, 2009, the fund’s equity investments are solely in common stocks. The fund’s direct and indirect investments in foreign securities involve investment risks not normally associated with investing in securities of U.S. corporations.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. mutual funds. The fund consistently follows such policies in preparing its financial statements.

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value.

2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (October 31, 2006–2009), and has concluded that no provision for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

5. Security Lending: The fund may lend its securities to qualified institutional borrowers to earn additional income. Security loans are required to be secured at all times by collateral at least equal to the market value of securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability for the return of the collateral, during the period the securities are on loan. Security lending income represents the income earned on investing cash collateral, less expenses associated with the loan.

49


Institutional Developed Markets Index Fund

6. Other: Dividend income is recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold. Through June 18, 2009, fees assessed on redemptions of capital shares were reallocated proportionately to the funds in which the fund invested; effective June 19, 2009, such fees are credited to paid-in capital.

B. The Vanguard Group furnishes at cost investment advisory, corporate management, administrative, marketing, and distribution services. The costs of such services are allocated to the fund under methods approved by the board of trustees. With respect to assets invested in other Vanguard funds through June 18, 2009, the fund’s direct expenses were reduced to the extent of savings realized by the operation of the fund. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At October 31, 2009, the fund had contributed capital of $1,092,000 to Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.44% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).

The following table summarizes the fund’s investments as of October 31, 2009, based on the inputs used to value them:

  Level 1  Level 2  Level 3 
Investments  ($000)  ($000)  ($000) 
Common Stocks  10,632  5,105,720  — 
Temporary Cash Investments  158,831  —  — 
Total  169,463  5,105,720  — 

D. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

50


Institutional Developed Markets Index Fund

During the year ended October 31, 2009, the fund realized net foreign currency gains of $374,000, which increased distributable net income for tax purposes; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Certain of the fund’s investments are in securities considered to be “passive foreign investment companies,” for which any unrealized appreciation and/or realized gains are required to be included in distributable net income for tax purposes. During the year ended October 31, 2009, the fund realized gains on the sale of passive foreign investment companies of $72,000, which have been included in the current period’s taxable income; accordingly, such gains have been reclassified from accumulated net realized losses to undistributed net investment income. Unrealized appreciation on the fund’s passive foreign investment company holdings at October 31, 2009, was $8,002,000.

For tax purposes, at October 31, 2009, the fund had $44,260,000 of ordinary income available for distribution. The fund had available capital loss carryforwards totaling $1,276,283,000 to offset future net capital gains of $8,142,000 through October 31, 2011, and $1,268,141,000 through October 31, 2017.

At October 31, 2009, the cost of investment securities for tax purposes was $4,554,355,000. Net unrealized appreciation of investment securities for tax purposes was $720,828,000, consisting of unrealized gains of $784,371,000 on securities that had risen in value since their purchase and $63,543,000 in unrealized losses on securities that had fallen in value since their purchase.

E. During the year ended October 31, 2009, the fund purchased $5,607,964,000 of investment securities and sold $4,944,711,000 of investment securities, other than temporary cash investments.

F. Capital shares issued and redeemed were:

  Year Ended October 31, 
  2009  2008 
  Shares  Shares 
  (000)  (000) 
Issued  226,147  213,601 
Issued in Lieu of Cash Distributions  24,114  8,811 
Redeemed  (165,321)  (95,151) 
Net Increase (Decrease) in Shares Outstanding  84,940  127,261 

G. In September 2009, the fund’s board of trustees approved a plan of reorganization of Vanguard Institutional Developed Markets Index Fund into Vanguard Developed Markets Index Fund. The reorganization does not require shareholder approval. Shares of Vanguard Institutional Developed Markets Index Fund will be exchanged for new Institutional Shares of Vanguard Developed Markets Index Fund. The reorganization is expected to qualify as a tax-free reorganization for federal income tax purposes, and to be completed on or around January 22, 2010.

H. In preparing the financial statements as of October 31, 2009, management considered the impact of subsequent events occurring through December 15, 2009, for potential recognition or disclosure in these financial statements.

51


Report of Independent Registered
Public Accounting Firm

To the Trustees of Vanguard STAR Funds and the Shareholders of Vanguard Developed Markets Index Fund and Vanguard Institutional Developed Markets Index Fund:

In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard Developed Markets Index Fund and Vanguard Institutional Developed Markets Index Fund (separate portfolios of Vanguard STAR Funds, hereafter referred to as the “Funds”) at October 31, 2009, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.

We believe that our audits, which included confirmation of securities at October 31, 2009 by correspondence with the custodians and brokers and by agreement to the underlying ownership records of Vanguard Market Liquidity Fund, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania

December 15, 2009

52



Special 2009 tax information (unaudited) for Vanguard Developed Markets Index Fund

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $96,119,000 of qualified dividend income to shareholders during the fiscal year.

The fund will pass through foreign source income of $81,929,000 and foreign taxes paid of $4,903,000 to shareholders. The pass-through of foreign taxes paid will affect only shareholders on the fund’s dividend record date in December 2009. Shareholders will receive more detailed information along with their Form 1099-DIV in January 2010.


Special 2009 tax information (unaudited) for Vanguard Institutional Developed Markets Index Fund

This information for the fiscal year ended October 31, 2009, is included pursuant to provisions of the Internal Revenue Code.

The fund distributed $159,622,000 of qualified dividend income to shareholders during the fiscal year.

The fund will pass through foreign source income of $133,399,000 and foreign taxes paid of $7,753,000 to shareholders. The pass-through of foreign taxes paid will affect only shareholders on the fund’s dividend record date in December 2009. Shareholders will receive more detailed information along with their Form 1099-DIV in January 2010.

53


Your Fund’s After-Tax Returns

This table presents returns for your fund both before and after taxes. The after-tax returns are shown in two ways: (1) assuming that an investor owned the fund during the entire period and paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s distributions and sold all shares at the end of each period.

Calculations are based on the highest individual federal income tax and capital gains tax rates in effect at the times of the distributions and the hypothetical sales. State and local taxes were not considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures and estimates for 2009. (In the example, returns after the sale of fund shares may be higher than those assuming no sale. This occurs when the sale would have produced a capital loss. The calculation assumes that the investor received a tax deduction for the loss.)

Please note that your actual after-tax returns will depend on your tax situation and may differ from those shown. Also note that if you own the fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not subject to current taxes.

Finally, keep in mind that a fund’s performance—whether before or after taxes—does not guarantee future results.

Average Annual Total Returns: Developed Markets Index Fund and
Institutional Developed Markets Index Fund
Periods Ended October 31, 2009

  One  Five  Since 
  Year  Years  Inception1 
Developed Markets Index Fund2       
Returns Before Taxes  25.23%  4.92%  1.51% 
Returns After Taxes on Distributions  24.01  4.31  0.93 
Returns After Taxes on Distributions and Sale of Fund Shares  17.05  4.06  1.04 
 
Institutional Developed Markets Index Fund2       
Returns Before Taxes  25.40%  5.10%  1.57% 
Returns After Taxes on Distributions  24.13  4.46  0.96 
Returns After Taxes on Distributions and Sale of Fund Shares  17.20  4.20  1.08 

1 Inception dates are May 8, 2000, for the Developed Markets Index Fund and June 1, 2000, for the Institutional Developed Markets
Index Fund.
2 Total returns do not reflect the 2% fee assessed on redemptions of shares purchased on or after June 27, 2003, and held for less than
two months, or for the Developed Markets Index Fund, the account service fee that may be applicable to certain accounts with balances
below $10,000.

54


About Your Fund’s Expenses

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.

A typical fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The costs are calculated using each fund’s acquired fund fees and expenses.

The accompanying table illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading “Expenses Paid During Period.”

• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Six Months Ended October 31, 2009       
  Beginning  Ending  Expenses 
  Account Value  Account Value  Paid During 
Developed Markets Index Fund  4/30/2009  10/31/2009  Period1 
Based on Actual Fund Return       
Developed Markets  $1,000.00  $1,306.06  $1.45 
Institutional Developed Markets  1,000.00  1,307.25  0.76 
Based on Hypothetical 5% Yearly Return       
Developed Markets  $1,000.00  $1,023.95  $1.28 
Institutional Developed Markets  1,000.00  1,024.55  0.66 

1 The calculations are based on expenses incurred in the most recent six-month period. The funds’ annualized six-month operating expenses
for that period represented 0.25% of average net assets for the Developed Markets Index Fund and 0.13% of average net assets for the
Institutional Developed Markets Index Fund. The dollar amounts shown as “Expenses Paid” are equal to the annualized expense ratio
multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then
divided by the number of days in the most recent 12-month period.

55


Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the transaction fees or the account service fee described in the prospectus. If such fees were applied to your account, your costs would be higher. Your fund does not carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.

56


Glossary

Acquired Fund Fees and Expenses. Funds that invest in other Vanguard funds incur no direct expenses, but they do bear proportionate shares of the operating, administrative, and advisory expenses of the underlying funds, and they must pay any fees charged by those funds. The figure for acquired fund fees and expenses represents a weighted average of these underlying costs. Acquired is a term that the Securities and Exchange Commission applies to any mutual fund whose shares are owned by another fund.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Equity Exposure. A measure that reflects a fund’s investments in stocks and stock futures. Any holdings in short-term reserves are excluded.

Expense Ratio. The percentage of a fund’s average net assets used to pay its annual administrative and advisory expenses. These expenses directly reduce returns to investors.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.

Turnover Rate. An indication of the fund’s trading activity. Funds with high turnover rates incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The turnover rate excludes in-kind transactions, which have minimal impact on costs.

57


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The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 156 Vanguard funds.

The following table provides information for each trustee and executive officer of the fund. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at www.vanguard.com.

Interested Trustees  Emerson U. Fullwood 
  Born 1948. Trustee Since January 2008. Principal 
John J. Brennan1  Occupation(s) During the Past Five Years: Executive 
Born 1954. Trustee Since May 1987. Chairman of  Chief Staff and Marketing Officer for North America 
the Board. Principal Occupation(s) During the Past  and Corporate Vice President (retired 2008) of Xerox 
Five Years: Chairman of the Board and Director/Trustee  Corporation (photocopiers and printers); Director of 
of The Vanguard Group, Inc., and of each of the  SPX Corporation (multi-industry manufacturing), the 
investment companies served by The Vanguard Group;  United Way of Rochester, the Boy Scouts of America, 
Chief Executive Officer (1996–2008) and President  Amerigroup Corporation (direct health and medical 
(1989–2008) of The Vanguard Group and of each of the  insurance carriers), and Monroe Community College 
investment companies served by The Vanguard Group;  Foundation. 
Chairman of the Financial Accounting Foundation;   
Governor of the Financial Industry Regulatory Authority  Rajiv L. Gupta 
(FINRA); Director of United Way of Southeastern  Born 1945. Trustee Since December 2001.2 Principal 
Pennsylvania.  Occupation(s) During the Past Five Years: Chairman 
  and Chief Executive Officer (retired 2009) and President 
F. William McNabb III1  (2006–2008) of Rohm and Haas Co. (chemicals); Board 
Born 1957. Trustee Since July 2009. Principal  Member of American Chemistry Council; Director of 
Occupation(s) During the Past Five Years: Director of  Tyco International, Ltd. (diversified manufacturing and 
The Vanguard Group, Inc., since 2008; Chief Executive  services) and Hewlett-Packard Co. (electronic computer 
Officer and President of The Vanguard Group and of  manufacturing); Trustee of The Conference Board. 
each of the investment companies served by The   
Vanguard Group since 2008; Director of Vanguard  Amy Gutmann 
Marketing Corporation; Managing Director of The  Born 1949. Trustee Since June 2006. Principal 
Vanguard Group (1995–2008).  Occupation(s) During the Past Five Years: President of 
  the University of Pennsylvania; Christopher H. Browne 
  Distinguished Professor of Political Science in the School 
Independent Trustees  of Arts and Sciences with secondary appointments 
  at the Annenberg School for Communication and the 
Charles D. Ellis  Graduate School of Education of the University of 
Born 1937. Trustee Since January 2001. Principal  Pennsylvania; Director of Carnegie Corporation of 
Occupation(s) During the Past Five Years: Applecore  New York, Schuylkill River Development Corporation, 
Partners (pro bono ventures in education); Senior  and Greater Philadelphia Chamber of Commerce; 
Advisor to Greenwich Associates (international business  Trustee of the National Constitution Center. 
strategy consulting); Successor Trustee of Yale University;   
Overseer of the Stern School of Business at New York   
University; Trustee of the Whitehead Institute for   
Biomedical Research.   


JoAnn Heffernan Heisen  Executive Officers   
Born 1950. Trustee Since July 1998. Principal     
Occupation(s) During the Past Five Years: Corporate  Thomas J. Higgins1   
Vice President and Chief Global Diversity Officer since  Born 1957. Chief Financial Officer Since September 
2006 (retired 2008) and Member of the Executive  2008. Principal Occupation(s) During the Past Five 
Committee (retired 2008) of Johnson & Johnson  Years: Principal of The Vanguard Group, Inc.; Chief 
(pharmaceuticals/consumer products); Vice President  Financial Officer of each of the investment companies 
and Chief Information Officer of Johnson & Johnson  served by The Vanguard Group since 2008; Treasurer 
(1997–2005); Director of the University Medical Center  of each of the investment companies served by The 
at Princeton and Women’s Research and Education  Vanguard Group (1998–2008). 
Institute; Member of the Advisory Board of the Maxwell     
School of Citizenship and Public Affairs at Syracuse     
University.  Kathryn J. Hyatt1   
  Born 1955. Treasurer Since November 2008. Principal 
  Occupation(s) During the Past Five Years: Principal of 
F. Joseph Loughrey  The Vanguard Group, Inc.; Treasurer of each of the 
Born 1949. Trustee Since October 2009. Principal  investment companies served by The Vanguard 
Occupation(s) During the Past Five Years: President and  Group since 2008; Assistant Treasurer of each of the 
Chief Operating Officer since 2005 (retired 2009) and  investment companies served by The Vanguard Group 
Vice Chairman of the Board (2008–2009) of Cummins  (1988–2008).   
Inc. (industrial machinery); Director of SKF AB (industrial     
machinery), Hillenbrand, Inc. (specialized consumer     
services), Sauer-Danfoss Inc. (machinery), the Lumina  Heidi Stam1   
Foundation for Education, and the Columbus Community  Born 1956. Secretary Since July 2005. Principal 
Education Coalition; Chairman of the Advisory Council  Occupation(s) During the Past Five Years: Managing 
for the College of Arts and Letters at the University of  Director of The Vanguard Group, Inc., since 2006; 
Notre Dame.  General Counsel of The Vanguard Group since 2005; 
  Secretary of The Vanguard Group and of each of the 
  investment companies served by The Vanguard Group 
André F. Perold  since 2005; Director and Senior Vice President of 
Born 1952. Trustee Since December 2004. Principal  Vanguard Marketing Corporation since 2005; Principal 
Occupation(s) During the Past Five Years: George Gund  of The Vanguard Group (1997–2006). 
Professor of Finance and Banking, Harvard Business     
School; Chair of the Investment Committee of HighVista     
Strategies LLC (private investment firm).  Vanguard Senior Management Team 
 
Alfred M. Rankin, Jr.  R. Gregory Barton  Michael S. Miller 
Born 1941. Trustee Since January 1993. Principal  Mortimer J. Buckley  James M. Norris 
Occupation(s) During the Past Five Years: Chairman,  Kathleen C. Gubanich  Glenn W. Reed 
President, and Chief Executive Officer of NACCO  Paul A. Heller  George U. Sauter 
Industries, Inc. (forklift trucks/housewares/lignite);     
Director of Goodrich Corporation (industrial products/     
aircraft systems and services); Deputy Chairman of   
the Federal Reserve Bank of Cleveland; Trustee of     
University Hospitals of Cleveland, The Cleveland  Founder   
Museum of Art, and Case Western Reserve University.  John C. Bogle   
  Chairman and Chief Executive Officer, 1974–1996 
 
Peter F. Volanakis     
Born 1955. Trustee Since July 2009. Principal     
Occupation(s) During the Past Five Years: President     
since 2007 and Chief Operating Officer since 2005     
of Corning Incorporated (communications equipment);     
President of Corning Technologies (2001–2005); Director     
of Corning Incorporated and Dow Corning; Trustee of     
the Corning Incorporated Foundation and the Corning     
Museum of Glass; Overseer of the Amos Tuck School     
of Business Administration at Dartmouth College.     

1 These individuals are “interested persons” as defined in the Investment Company Act of 1940.
2 December 2002 for Vanguard Equity Income Fund, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


P.O. Box 2600
Valley Forge, PA 19482-2600

Connect with Vanguard® > www.vanguard.com

Fund Information > 800-662-7447  All comparative mutual fund data are from Lipper Inc. 
  or Morningstar, Inc., unless otherwise noted. 
Direct Investor Account Services > 800-662-2739   
 
Institutional Investor Services > 800-523-1036  You can obtain a free copy of Vanguard’s proxy voting 
  guidelines by visiting our website, www.vanguard.com, 
Text Telephone for People  and searching for “proxy voting guidelines,” or by 
With Hearing Impairment > 800-749-7273  calling Vanguard at 800-662-2739. The guidelines are 
  also available from the SEC’s website, www.sec.gov. 
  In addition, you may obtain a free report on how your 
  fund voted the proxies for securities it owned during 
the 12 months ended June 30. To get the report, visit 
This material may be used in conjunction  either www.vanguard.com or www.sec.gov.
with the offering of shares of any Vanguard 
fund only if preceded or accompanied by   
the fund’s current prospectus.  You can review and copy information about your fund 
  at the SEC’s Public Reference Room in Washington, D.C. 
The funds or securities referred to herein are not  To find out more about this public service, call the SEC 
sponsored, endorsed, or promoted by MSCI, and MSCI  at 202-551-8090. Information about your fund is also 
bears no liability with respect to any such funds or  available on the SEC’s website, and you can receive 
securities. For any such funds or securities, the  copies of this information, for a fee, by sending a 
prospectus or the Statement of Additional Information  request in either of two ways: via e-mail addressed to 
contains a more detailed description of the limited  publicinfo@sec.gov or via regular mail addressed to the 
relationship MSCI has with The Vanguard Group and  Public Reference Section, Securities and Exchange 
any related funds.  Commission, Washington, DC 20549-1520. 
 
 
 
 
  © 2009 The Vanguard Group, Inc. 
  All rights reserved. 
  Vanguard Marketing Corporation, Distributor. 
  Q2270 122009 


Item 2: Code of Ethics. The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics was amended during the reporting period covered by this report to make certain technical, non-material changes.

Item 3: Audit Committee Financial Expert. The following members of the Audit Committee have been determined by the Registrant’s Board of Trustees to be Audit Committee Financial Experts serving on its Audit Committee, and to be independent: Charles D. Ellis, Rajiv L. Gupta, JoAnn Heffernan Heisen, André F. Perold, and Alfred M. Rankin, Jr.

Item 4: Principal Accountant Fees and Services.

(a) Audit Fees.

Audit Fees of the Registrant

Fiscal Year Ended October 31, 2009: $178,000
Fiscal Year Ended October 31, 2008: $111,000

Aggregate Audit Fees of Registered Investment Companies in the Vanguard Group.

Fiscal Year Ended October 31, 2009: $3,354,640
Fiscal Year Ended October 31, 2008: $3,055,590

(b) Audit-Related Fees.

Fiscal Year Ended October 31, 2009: $876,210
Fiscal Year Ended October 31, 2008: $626,240

Includes fees billed in connection with assurance and related services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(c) Tax Fees.

Fiscal Year Ended October 31, 2009: $423,070
Fiscal Year Ended October 31, 2008: $230,400

Includes fees billed in connection with tax compliance, planning and advice services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group and related to income and excise taxes.


(d) All Other Fees.

Fiscal Year Ended October 31, 2009: $0
Fiscal Year Ended October 31, 2008: $0

Includes fees billed for services related to risk management and privacy matters. Services were provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(e) (1) Pre-Approval Policies. The policy of the Registrant’s Audit Committee is to consider and, if appropriate, approve before the principal accountant is engaged for such services, all specific audit and non-audit services provided to: (1) the Registrant; (2) The Vanguard Group, Inc.; (3) other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant; and (4) other registered investment companies in the Vanguard Group. In making a determination, the Audit Committee considers whether the services are consistent with maintaining the principal accountant’s independence.

     In the event of a contingency situation in which the principal accountant 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 non-audit 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 the accountant’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 the principal accountant’s independence.

     The Registrant’s Audit Committee is informed at least annually of all audit and non-audit services provided by the principal accountant to the Vanguard complex, whether such services are provided to: (1) the Registrant; (2) The Vanguard Group, Inc.; (3) other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant; or (4) other registered investment companies in the Vanguard Group.

     (2) No percentage of the principal accountant’s fees or services were approved pursuant to the waiver provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) For the most recent fiscal year, over 50% of the hours worked under the principal accountant’s engagement were not performed by persons other than full-time, permanent employees of the principal accountant.


(g) Aggregate Non-Audit Fees.

Fiscal Year Ended October 31, 2009: $423,070
Fiscal Year Ended October 31, 2008: $230,400

Includes fees billed for non-audit services provided to the Registrant, The Vanguard Group, Inc., Vanguard Marketing Corporation, and other registered investment companies in the Vanguard Group.

(h) For the most recent fiscal year, the Audit Committee has determined that the provision of all non-audit services was consistent with maintaining the principal accountant’s independence.

Item 5: Not Applicable.

Item 6: Not Applicable.

Item 7: Not Applicable.

Item 8: Not Applicable.

Item 9: Not Applicable.

Item 10: Not Applicable.

Item 11: Controls and Procedures.

     (a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

     (b) Internal Control Over Financial Reporting. There were no significant changes in Registrant’s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Item 12: Exhibits.

(a) Code of Ethics.
(b) Certifications.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  VANGUARD STAR FUNDS 
 
 
BY:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
 
Date: December 18, 2009 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  VANGUARD STAR FUNDS 
 
BY:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
Date: December 18, 2009 
  VANGUARD STAR FUNDS 
 
BY:  /s/ THOMAS J. HIGGINS* 
  THOMAS J. HIGGINS 
  CHIEF FINANCIAL OFFICER 
Date: December 18, 2009 

* By: /s/ Heidi Stam

Heidi Stam, pursuant to a Power of Attorney filed on July 24, 2009, see file Number 2-88373, and a Power of Attorney filed on October 16, 2009, see File Number 2-52698, both Incorporated by Reference.