N-Q 1 convertible_final.htm convertible_final.htm - Generated by SEC Publisher for SEC Filing

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

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT COMPANY

 

Investment Company Act file number:    811-04627

 

Name of Registrant:   Vanguard Convertible Securities Fund

 

Address of Registrant:

P.O. Box 2600
Valley Forge, PA 19482

 

Name and address of agent for service:

Anne E. Robinson, Esquire
P.O. Box 876
Valley Forge, PA 19482

 

Date of fiscal year end:     November 30th

 

Date of reporting period:    August 31, 2016

 

Item 1: Schedule of Investments

 


Vanguard Convertible Securities Fund

Schedule of Investments (unaudited)
As of August 31, 2016

        Face Market
    Maturity   Amount Value•
  Coupon Date Currency  (000) ($000)
Convertible Bonds (90.7%)          
Consumer Discretionary (12.1%)          
Cineplex Inc. Cvt. 4.500% 12/31/18 CAD 5,713 4,607
Ctrip.com International Ltd. Cvt. 1.000% 7/1/20 USD 19,955 22,163
Ctrip.com International Ltd. Cvt. 1.990% 7/1/25 USD 330 386
1 DISH Network Corp. Cvt. 3.375% 8/15/26 USD 12,385 12,919
Iida Group Holdings Co. Ltd. Cvt. 0.000% 6/18/20 JPY 500,000 5,129
K's Holdings Corp. Cvt. 0.000% 12/20/19 JPY 310,000 3,266
1 Liberty Interactive LLC Cvt. 1.750% 9/30/46 USD 11,400 11,827
Liberty Media Corp. Cvt. 1.375% 10/15/23 USD 20,089 20,315
1 Liberty Media Corp. Cvt. 2.250% 9/30/46 USD 7,060 7,250
Live Nation Entertainment Inc. Cvt. 2.500% 5/15/19 USD 1,410 1,503
LVMH Moet Hennessy Louis Vuitton SE Cvt. 0.000% 2/16/21 USD 4,684 4,733
NH Hoteles SA Cvt. 4.000% 11/8/18 EUR 6,100 7,515
NHK Spring Co. Ltd. Cvt. 0.000% 9/20/19 USD 4,450 4,646
Priceline Group Inc. Cvt. 0.350% 6/15/20 USD 19,095 23,940
Priceline Group Inc. Cvt. 0.900% 9/15/21 USD 8,465 8,999
ResortTrust Inc. Cvt. 0.000% 12/1/21 JPY 560,000 5,636
SAF-Holland SA Cvt. 1.000% 9/12/20 EUR 1,200 1,435
Shutterfly Inc. Cvt. 0.250% 5/15/18 USD 6,865 6,998
Sony Corp. Cvt. 0.000% 9/30/22 JPY 566,000 5,842
Steinhoff Finance Holdings GmbH Cvt. 1.250% 8/11/22 EUR 7,800 8,896
Sumitomo Forestry Co. Ltd. Cvt. 0.000% 8/24/18 JPY 430,000 4,255
Suzuki Motor Corp. Cvt. 0.000% 3/31/23 JPY 770,000 8,361
Valeo SA Cvt. 0.000% 6/16/21 USD 5,000 5,213
          185,834
Consumer Staples (3.6%)          
Herbalife Ltd. Cvt. 2.000% 8/15/19 USD 27,877 27,668
Marine Harvest ASA Cvt. 0.125% 11/5/20 EUR 8,000 9,623
Sonae Investments BV Cvt. 1.625% 6/11/19 EUR 3,900 4,078
Vector Group Ltd. Cvt. 1.750% 4/15/20 USD 12,065 13,445
          54,814
Energy (4.2%)          
BW Group Ltd. Cvt. 1.750% 9/10/19 USD 6,400 5,504
Cheniere Energy Inc. Cvt. 4.250% 3/15/45 USD 10,245 6,320
1 Green Plains Inc. Cvt. 4.125% 9/1/22 USD 5,770 6,354
1 Scorpio Tankers Inc. Cvt. 2.375% 7/1/19 USD 8,940 7,286
SEACOR Holdings Inc. Cvt. 3.000% 11/15/28 USD 10,662 8,776
SM Energy Co. Cvt. 1.500% 7/1/21 USD 7,005 8,266
Technip SA Cvt. 0.875% 1/25/21 EUR 2,600 3,595
TOTAL SA Cvt. 0.500% 12/2/22 USD 8,000 8,144
Weatherford International Ltd. Cvt. 5.875% 7/1/21 USD 9,795 10,824
          65,069
Financials (12.1%)          
AmTrust Financial Services Inc. Cvt. 2.750% 12/15/44 USD 12,385 10,434
Apollo Commercial Real Estate Finance Inc.          
Cvt. 5.500% 3/15/19 USD 2,907 2,971
Aroundtown Property Holdings plc Cvt. 3.000% 5/5/20 EUR 5,500 8,642
Aroundtown Property Holdings plc Cvt. 1.500% 1/18/21 EUR 6,000 7,404
AYC Finance Ltd. Cvt. 0.500% 5/2/19 USD 2,886 3,117

 

 

Azimut Holding SPA Cvt. 2.125% 11/25/20 EUR 10,300 11,834
Beni Stabili SpA SIIQ Cvt. 0.875% 1/31/21 EUR 3,400 3,658
Blackstone Mortgage Trust Inc. Cvt. 5.250% 12/1/18 USD 7,235 7,868
British Land White 2015 Ltd. Cvt. 0.000% 6/9/20 GBP 3,400 4,228
CapitaLand Ltd. Cvt. 2.800% 6/8/25 SGD 15,000 10,740
China Overseas Finance Investment Cayman          
V Ltd. Cvt. 0.000% 1/5/23 USD 3,800 3,914
Colony Financial Inc. Cvt. 5.000% 4/15/23 USD 7,359 7,341
Colony Starwood Homes Cvt. 3.000% 7/1/19 USD 1,320 1,469
1 Element Financial Corp. Cvt. 5.125% 6/30/19 CAD 15,464 12,974
1 Element Financial Corp. Cvt. 4.250% 6/30/20 CAD 8,650 6,728
1 Empire State Realty OP LP Cvt. 2.625% 8/15/19 USD 5,720 6,775
Encore Capital Group Inc. Cvt. 3.000% 7/1/20 USD 8,660 6,971
1 Extra Space Storage LP Cvt. 3.125% 10/1/35 USD 4,088 4,438
EZCORP Inc. Cvt. 2.125% 6/15/19 USD 8,986 8,554
Glanbia Co-operative Society Ltd. Cvt. 1.375% 6/9/21 EUR 5,300 6,154
Grand City Properties SA Cvt. 0.250% 3/2/22 EUR 5,700 6,841
Nexity SA Cvt. 0.125% 1/1/23 EUR 6,960 8,164
Portfolio Recovery Associates Inc. Cvt. 3.000% 8/1/20 USD 8,398 7,364
Remgro Jersey GBP Ltd. Cvt. 2.625% 3/22/21 GBP 3,000 4,322
Spirit Realty Capital Inc. Cvt. 2.875% 5/15/19 USD 5,865 6,474
Spirit Realty Capital Inc. Cvt. 3.750% 5/15/21 USD 5,260 5,973
St. Modwen Properties Securities Jersey Ltd.          
Cvt. 2.875% 3/6/19 GBP 4,800 6,023
Starwood Property Trust Inc. Cvt. 4.550% 3/1/18 USD 5,116 5,624
          186,999
Health Care (13.4%)          
Allscripts Healthcare Solutions Inc. Cvt. 1.250% 7/1/20 USD 9,775 9,952
BioMarin Pharmaceutical Inc. Cvt. 0.750% 10/15/18 USD 12,010 14,735
Depomed Inc. Cvt. 2.500% 9/1/21 USD 8,454 10,441
HealthSouth Corp. Cvt. 2.000% 12/1/43 USD 12,506 14,734
Healthways Inc. Cvt. 1.500% 7/1/18 USD 1,525 2,105
Horizon Pharma Investment Ltd. Cvt. 2.500% 3/15/22 USD 15,701 15,652
Insulet Corp. Cvt. 2.000% 6/15/19 USD 10,614 11,682
Intercept Pharmaceuticals Inc. Cvt. 3.250% 7/1/23 USD 6,030 6,324
Ionis Pharmaceuticals Inc. Cvt. 1.000% 11/15/21 USD 8,315 7,167
Ironwood Pharmaceuticals Inc. Cvt. 2.250% 6/15/22 USD 13,749 14,660
Jazz Investments I Ltd. Cvt. 1.875% 8/15/21 USD 5,078 5,141
1 Medicines Co. Cvt. 2.750% 7/15/23 USD 7,780 8,130
Medidata Solutions Inc. Cvt. 1.000% 8/1/18 USD 12,285 14,404
Nevro Corp. Cvt. 1.750% 6/1/21 USD 8,590 10,533
1 NuVasive Inc. Cvt. 2.250% 3/15/21 USD 17,390 21,770
Qiagen NV Cvt. 0.375% 3/19/19 USD 3,400 3,713
Qiagen NV Cvt. 0.875% 3/19/21 USD 4,600 5,253
Spectranetics Corp. Cvt. 2.625% 6/1/34 USD 10,748 11,346
Terumo Corp. Cvt. 0.000% 12/6/21 JPY 50,000 587
Wright Medical Group Inc. Cvt. 2.000% 2/15/20 USD 8,500 9,143
1 Wright Medical Group NV Cvt. 2.250% 11/15/21 USD 6,665 8,802
          206,274
Industrials (10.5%)          
51job Inc. Cvt. 3.250% 4/15/19 USD 6,240 6,575
Aecon Group Inc. Cvt. 5.500% 12/31/18 CAD 1,852 1,497
Airbus Group SE Cvt. 0.000% 6/14/21 EUR 5,800 6,819
Atlas Air Worldwide Holdings Inc. Cvt. 2.250% 6/1/22 USD 605 562
Brenntag Finance BV Cvt. 1.875% 12/2/22 USD 9,500 10,208
Carillion Finance Jersey Ltd. Cvt. 2.500% 12/19/19 GBP 5,600 6,990

 

 

CRRC Corp. Ltd. Cvt. 0.000% 2/5/21 USD 5,250 5,427
DP World Ltd. Cvt. 1.750% 6/19/24 USD 7,400 7,389
1 Dycom Industries Inc. Cvt. 0.750% 9/15/21 USD 18,615 20,418
Echo Global Logistics Inc. Cvt. 2.500% 5/1/20 USD 7,795 7,902
GVM Debentures Lux 1 SA Cvt. 5.750% 2/14/18 EUR 7,200 6,265
Huron Consulting Group Inc. Cvt. 1.250% 10/1/19 USD 13,495 13,967
International Consolidated Airlines Group SA          
Cvt. 0.625% 11/17/22 EUR 4,900 4,873
Johnson Electric Holdings Ltd. Cvt. 1.000% 4/2/21 USD 4,500 4,759
Keihan Electric Railway Co. Ltd. Cvt. 0.000% 3/30/21 JPY 490,000 4,790
KEYW Holding Corp. Cvt. 2.500% 7/15/19 USD 6,975 6,469
Larsen & Toubro Ltd. Cvt. 0.675% 10/22/19 USD 5,715 5,614
Nagoya Railroad Co. Ltd. Cvt. 0.000% 12/11/24 JPY 750,000 7,941
Prysmian SPA Cvt. 1.250% 3/8/18 EUR 3,300 4,150
Sacyr SA Cvt. 4.000% 5/8/19 EUR 4,400 3,487
Safran SA Cvt. 0.000% 12/31/20 EUR 3,430 4,029
Shimizu Corp. Cvt. 0.000% 10/16/20 JPY 410,000 4,173
Siemens Financieringsmaatschappij NV Cvt. 1.650% 8/16/19 USD 5,250 5,861
1 Tutor Perini Corp. Cvt. 2.875% 6/15/21 USD 11,080 11,939
          162,104
Information Technology (26.3%)          
Abigrove Ltd. Cvt. 0.500% 4/29/21 USD 4,000 4,216
Advanced Semiconductor Engineering Inc.          
Cvt. 0.000% 3/27/18 USD 6,600 6,409
1 Blackhawk Network Holdings Inc. Cvt. 1.500% 1/15/22 USD 9,505 9,529
1 BroadSoft Inc. Cvt. 1.000% 9/1/22 USD 5,445 7,198
Canadian Solar Inc. Cvt. 4.250% 2/15/19 USD 5,420 4,753
Cardtronics Inc. Cvt. 1.000% 12/1/20 USD 17,247 18,260
1 Ciena Corp. Cvt. 3.750% 10/15/18 USD 7,750 9,731
Citrix Systems Inc. Cvt. 0.500% 4/15/19 USD 33,580 38,638
1 CSG Systems International Inc. Cvt. 4.250% 3/15/36 USD 9,290 10,178
1 Cypress Semiconductor Corp. Cvt. 4.500% 1/15/22 USD 14,205 15,821
1 DH Corp. Cvt. 5.000% 9/30/20 CAD 13,003 10,019
Econocom Group Cvt. 1.500% 1/15/19 EUR 6,518 8,574
Electronics For Imaging Inc. Cvt. 0.750% 9/1/19 USD 15,980 17,288
Envestnet Inc. Cvt. 1.750% 12/15/19 USD 5,920 5,824
Euronet Worldwide Inc. Cvt. 1.500% 10/1/44 USD 11,974 14,608
1 Inphi Corp. Cvt. 1.125% 12/1/20 USD 13,457 17,200
InterDigital Inc. Cvt. 1.500% 3/1/20 USD 16,582 19,080
j2 Global Inc. Cvt. 3.250% 6/15/29 USD 18,896 22,368
1 Knowles Corp. Cvt. 3.250% 11/1/21 USD 10,115 10,608
Microchip Technology Inc. Cvt. 1.625% 2/15/25 USD 21,330 27,449
Micron Technology Inc. Cvt. 3.000% 11/15/43 USD 25,910 23,125
Nuance Communications Inc. Cvt. 1.500% 11/1/35 USD 2,222 2,100
NXP Semiconductors NV Cvt. 1.000% 12/1/19 USD 16,409 18,635
1 Pandora Media Inc. Cvt. 1.750% 12/1/20 USD 8,140 8,862
Proofpoint Inc. Cvt. 0.750% 6/15/20 USD 9,800 11,601
Rovi Corp. Cvt. 0.500% 3/1/20 USD 18,299 18,722
Semiconductor Manufacturing International          
Corp. Cvt. 0.000% 7/7/22 USD 7,750 8,641
1 SunPower Corp. Cvt. 4.000% 1/15/23 USD 3,925 2,885
Synchronoss Technologies Inc. Cvt. 0.750% 8/15/19 USD 10,895 11,596
TTM Technologies Inc. Cvt. 1.750% 12/15/20 USD 10,688 13,340
Workday Inc. Cvt. 0.750% 7/15/18 USD 3,635 4,287
Workday Inc. Cvt. 1.500% 7/15/20 USD 3,450 4,282
          405,827

 

 

Materials (6.4%)          
APERAM Cvt. 0.625% 7/8/21 USD 7,400 8,686
Bekaert SA Cvt. 0.000% 6/9/21 EUR 3,500 3,914
Buzzi Unicem SPA Cvt. 1.375% 7/17/19 EUR 3,600 5,283
Cemex SAB de CV Cvt. 3.720% 3/15/20 USD 18,082 19,416
Cemex SAB de CV Cvt. 3.720% 3/15/20 USD 9,765 10,528
1 Chemtrade Logistics Income Fund Cvt. 5.250% 6/30/21 CAD 5,331 4,140
Kansai Paint Co. Ltd. Cvt. 0.000% 6/17/22 JPY 430,000 4,343
OCI Cvt. 3.875% 9/25/18 EUR 4,600 4,751
RTI International Metals Inc. Cvt. 1.625% 10/15/19 USD 12,320 13,105
1 Silver Standard Resources Inc. Cvt. 2.875% 2/1/33 USD 5,145 5,071
Stillwater Mining Co. Cvt. 1.750% 10/15/32 USD 9,972 11,599
Teijin Ltd. Cvt. 0.000% 12/12/18 JPY 80,000 856
Teijin Ltd. Cvt. 0.000% 12/10/21 JPY 610,000 6,868
          98,560
Telecommunication Services (0.5%)          
America Movil SAB de Cvt. 0.000% 5/28/20 EUR 7,600 8,345
 
Utilities (1.6%)          
Northland Power Inc. Cvt. 5.000% 6/30/19 CAD 2,661 2,327
Northland Power Inc. Cvt. 4.750% 6/30/20 CAD 6,225 5,417
1 NRG Yield Inc. Cvt. 3.250% 6/1/20 USD 5,010 4,900
1 Pattern Energy Group Inc. Cvt. 4.000% 7/15/20 USD 10,190 10,406
Superior Plus Corp. Cvt. 6.000% 6/30/19 CAD 2,522 1,992
          25,042
Total Convertible Bonds (Cost $1,338,867)         1,398,868
        Shares  
Convertible Preferred Stocks (6.8%)          
Consumer Staples (0.8%)          
Bunge Ltd. Pfd. 4.875%     129,625 12,614
 
Energy (1.9%)          
Hess Corp. Pfd. 8.000%     36,000 2,386
Kinder Morgan Inc. Pfd. 9.750%     91,500 4,569
McDermott International Inc. Pfd. 6.250%     283,700 5,308
Southwestern Energy Co. Pfd. 6.250%     396,200 12,839
WPX Energy Inc. Pfd. 6.250%     86,900 5,005
          30,107
Financials (2.0%)          
American Tower Corp. Pfd. 5.500%     199,500 21,833
1 Mandatory Exchangeable Trust Pfd. 5.750%     76,000 9,156
          30,989
Health Care (1.5%)          
Allergan plc Pfd. 5.500%     27,162 22,561
 
Information Technology (0.5%)          
Belden Inc. Pfd. 6.750%     66,700 7,153
 
Telecommunication Services (0.1%)          
Frontier Communications Corp. Pfd. 11.125%     22,025 1,991
 
Total Convertible Preferred Stocks (Cost $102,875)         105,415

 

 

Temporary Cash Investment (1.9%)      
Money Market Fund (1.9%)      
2 Vanguard Market Liquidity Fund (Cost      
$29,938) 0.612% 299,383 29,941
 
Total Investments (99.4%) (Cost $1,471,680)     1,534,224
Other Assets and Liabilities-Net (0.6%)3     8,992
Net Assets (100%)     1,543,216

 

1 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 August 31, 2016, the aggregate
value of these securities was $283,314,000, representing 18.4% 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 Cash of $5,189,000 has been segregated as collateral for open forward currency contracts.
CAD—Canadian dollar.
EUR—euro.
GBP—British pound.
JPY—Japanese yen.
SGD—Singapore dollar.
USD—U.S. dollar.

A. 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. Bonds, and 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. Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value. Other temporary cash investments are valued at amortized cost, which approximates market value. 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.

B. 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).

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

 

Convertible Securities Fund

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 market value of the fund's investments as of August 31, 2016, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments ($000) ($000) ($000)
Convertible Bonds — 1,398,868 —
Convertible Preferred Stocks 16,309 89,106 —
Temporary Cash Investments 29,941 — —
Forward Currency Contracts—Assets — 502 —
Forward Currency Contracts—Liabilities — (3,570) —
Total 46,250 1,484,906 —

 

D. Forward Currency Contracts: The fund enters into forward currency contracts to protect the value of securities and related receivables and payables against changes in future foreign exchange rates. 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. The fund mitigates its counterparty risk by entering into forward currency contracts only with a diverse group of prequalified counterparties, monitoring their financial strength, entering into master netting arrangements with its counterparties, and requiring its counterparties to transfer collateral as security for their performance. In the absence of a default, the collateral pledged or received by the fund cannot be repledged, resold or rehypothecated. The master netting arrangements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate the forward currency contracts, determine the net amount owed by either party in accordance with its master netting arrangements, and sell or retain any collateral held up to the net amount owed to the fund under the master netting arrangements. 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 pledged. Any assets pledged as collateral for open contracts are noted in the Schedule of Investments. The value of collateral received or pledged is compared daily to the value of the forward currency contracts exposure with each counterparty, and any difference, if in excess of a specified minimum transfer amount, is adjusted and settled within two business days.

Forward currency contracts are valued at their quoted daily prices obtained from an independent third party, adjusted for currency risk based on the expiration date of each contract. The notional amounts of the contracts are not recorded in the Schedule of Investments. Fluctuations in the value of the contracts are recorded as an asset (liability).

At August 31, 2016, the fund had open forward currency contracts to receive and deliver currencies as follows. Unrealized appreciation (depreciation) on open forward currency contracts, except for Singapore dollar currency contracts, is treated as realized gain (loss) for tax purposes.

 

Convertible Securities Fund

    Contract Amount (000)  
            Unrealized
  Contract         Appreciation
  Settlement         (Depreciation)
Counterparty Date   Receive   Deliver ($000)
UBS AG 10/20/16 JPY 240,000 USD 2,269 55
UBS AG 10/20/16 GBP 1,180 USD 1,562 (11)
UBS AG 10/20/16 JPY 144,113 USD 1,421 (25)
UBS AG 10/20/16 EUR 227 USD 254 —
UBS AG 10/20/16 USD 142,106 EUR 128,665 (1,727)
UBS AG 10/20/16 USD 61,453 JPY 6,530,515 (1,805)
UBS AG 10/20/16 USD 50,632 CAD 66,075 234
UBS AG 10/20/16 USD 21,668 GBP 16,430 68
UBS AG 10/20/16 USD 10,685 SGD 14,522 28
UBS AG 10/20/16 USD 3,765 EUR 3,328 44
UBS AG 10/20/16 USD 3,270 JPY 330,000 73
UBS AG 10/20/16 USD 1,030 GBP 785 (2)
            (3,068)
Refer to the Schedule of Investments for currency abbreviations.          

 

E. At August 31, 2016, the cost of investment securities for tax purposes was $1,471,680,000. Net unrealized appreciation of investment securities for tax purposes was $62,544,000, consisting of unrealized gains of $100,022,000 on securities that had risen in value since their purchase and $37,478,000 in unrealized losses on securities that had fallen in value since their purchase.


Item 2: 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. During the last fiscal quarter, there was no significant change in the Registrant’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3: Exhibits

(a) Certifications

  VANGUARD CONVERTIBLE SECURITIES FUND
 
By: /s/ F. WILLIAM MCNABB III*
  F. WILLIAM MCNABB III
  CHIEF EXECUTIVE OFFICER
 
Date: October 17, 2016  

 

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 CONVERTIBLE SECURITIES FUND
By: /s/ F. WILLIAM MCNABB III*
  F. WILLIAM MCNABB III
  CHIEF EXECUTIVE OFFICER
Date: October 17, 2016  
  VANGUARD CONVERTIBLE SECURITIES FUND
  /s/ THOMAS J. HIGGINS*
  THOMAS J. HIGGINS
  CHIEF FINANCIAL OFFICER
Date: October 17, 2016  

 

* By:/s/ ANNE E. ROBINSON
Anne E. Robinson, pursuant to a Power of Attorney filed on October 4, 2016, see file Number 33-32548, Incorporated by Reference.