intequityindex_final.htm - Generated by SEC Publisher for SEC Filing

The mission continues

On May 1, 1975, Vanguard began operations, a fledgling company based on the simple but revolutionary idea that a mutual fund company should be managed solely in the interest of its investors.

Four decades later, that revolutionary spirit continues to animate the enterprise. Vanguard remains on a mission to give investors the best chance of investment success.

As we mark our 40th anniversary, we thank you for entrusting your assets to Vanguard and giving us the opportunity to help you reach your financial goals in the decades to come.


Contents
Your Fund’s Total Returns.	1
Chairman’s Letter.	4
European Stock Index Fund.	12
Pacific Stock Index Fund.	37
Emerging Markets Stock Index Fund.	61
Your Fund’s After-Tax Returns.	88
About Your Fund’s Expenses.	89
Glossary.	92

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.
See the Glossary for definitions of investment terms used in this report.
About the cover: Since our founding, Vanguard has drawn inspiration from the enterprise and valor demonstrated by British naval hero Horatio Nelson and his command at the Battle of the Nile in 1798. The photograph displays a replica of a merchant ship from the same era as Nelson’s flagship, the HMS Vanguard.

Your Fund’s Total Returns


Fiscal Year Ended October 31, 2014

	Total
	Returns
Vanguard European Stock Index Fund
Investor Shares	-0.73%
Admiral™ Shares	-0.61
Institutional Shares	-0.55
FTSE Europe ETF Shares
Market Price	-0.72
Net Asset Value	-0.60
FTSE Developed Europe Index	-0.96
European Region Funds Average	-2.85
European Region Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

Vanguard Pacific Stock Index Fund
Investor Shares	1.21%
Admiral Shares	1.32
Institutional Shares	1.28
FTSE Pacific ETF Shares
Market Price	1.91
Net Asset Value	1.31
FTSE Developed Asia Pacific Index	-0.47
Japan/Pacific Region Funds Average	2.44

Japan/Pacific Region Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.
Admiral Shares carry lower expenses and are available to investors who meet certain account-balance requirements. Institutional Shares and Institutional Plus Shares are available to certain institutional investors who meet specific administrative, service, and account-size criteria. The Vanguard ETF® Shares shown are traded on the NYSE Arca exchange and are available only through brokers. The table provides ETF returns based on both the NYSE Arca market price and the net asset value for a share. U.S. Pat. Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.

Your Fund’s Total Returns


Fiscal Year Ended October 31, 2014

	Total
	Returns
Vanguard Emerging Markets Stock Index Fund
Investor Shares	3.59%
Admiral Shares	3.79
Institutional Shares	3.85
Institutional Plus Shares	3.83
FTSE Emerging Markets ETF Shares
Market Price	4.71
Net Asset Value	3.77
FTSE Emerging Index	3.37
Emerging Markets Funds Average	1.00

Emerging Markets Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.
Admiral Shares carry lower expenses and are available to investors who meet certain account-balance requirements. Institutional Shares and Institutional Plus Shares are available to certain institutional investors who meet specific administrative, service, and account-size criteria. The Vanguard ETF® Shares shown are traded on the NYSE Arca exchange and are available only through brokers. The table provides ETF returns based on both the NYSE Arca market price and the net asset value for a share. U.S. Pat. Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.
For the ETF Shares, the market price is determined by the midpoint of the bid-offer spread as of the closing time of the New York Stock Exchange (generally 4 p.m., Eastern time). The net asset value is also determined as of the NYSE closing time. For more information about how the ETF Shares' market prices have compared with their net asset value, visit vanguard.com, select your ETF, and then select the Price and Performance tab. The ETF premium/discount analysis there shows the percentages of days on which the ETF Shares' market price was above or below the NAV.

Your Fund’s Performance at a Glance


October 31, 2013, Through October 31, 2014
			Distributions Per Share
	Starting	Ending	Income	Capital
	Share Price	Share Price	Dividends	Gains
Vanguard European Stock Index Fund
Investor Shares	$30.42	$29.05	$1.225	$0.000
Admiral Shares	70.85	67.64	2.960	0.000
Institutional Shares	30.21	28.85	1.271	0.000
FTSE Europe ETF Shares	56.64	54.08	2.367	0.000
Vanguard Pacific Stock Index Fund
Investor Shares	$11.76	$11.59	$0.305	$0.000
Admiral Shares	76.32	75.19	2.085	0.000
Institutional Shares	11.68	11.50	0.322	0.000
FTSE Pacific ETF Shares	61.71	60.80	1.687	0.000
Vanguard Emerging Markets Stock Index Fund
Investor Shares	$26.78	$27.02	$0.703	$0.000
Admiral Shares	35.17	35.49	0.987	0.000
Institutional Shares	26.74	26.99	0.759	0.000
Institutional Plus Shares	88.97	89.77	2.540	0.000
FTSE Emerging Markets ETF Shares	42.28	42.66	1.185	0.000

Chairman’s Letter

Dear Shareholder,

For the 12 months ended October 31, 2014, international stock markets overall lagged the broad U.S. market. Not surprisingly, given diverging economic growth prospects, there were notable differences in performance among developed and emerging markets—as reflected in the results of the three Vanguard International Stock Index Funds covered in this report.

Vanguard Emerging Markets Stock Index Fund led, with a return of 3.59%. Vanguard Pacific Stock Index Fund returned 1.21%, and Vanguard European Stock Index Fund returned –0.73%. (All returns are for Investor Shares.)

The returns of the European Stock Index Fund and the Emerging Markets Stock Index Fund were in line with those of their target indexes and ahead of the average returns of their peer groups. The Pacific Stock Index Fund diverged from its target index because of temporary price differences arising from fair-value pricing policies (see the box on page 9); this fund’s return lagged the average return of its peers.

If you own shares of the funds in a taxable account, you may wish to review the information about after-tax returns presented later in this report.

Also, please note that the conversion of the funds’ Signal^®Shares to Admiral Shares, which was announced last year, was completed as planned in October 2014.

Their smooth ride turned jagged, but U.S. stocks ended higher
The global stock market’s occasional zigs and zags during the year included a roller-coaster ride in October that left international markets several steps behind the broad U.S. market for the 12 months ended October 31. Emerging markets advanced modestly while the developed European and Pacific markets finished in negative territory.

In contrast, the broad U.S. stock market returned about 16% for the period. Impressive corporate earnings and various global stimulus measures generally supported stocks against a bleaker backdrop that included tensions in the Middle East and Ukraine. After falling in the first two weeks of October, several major U.S. indexes rebounded to finish at record highs. The Federal Reserve announced late in the month that it was ending its stimulative bond-buying program as anticipated, reflecting confidence in the U.S. economy.

Bonds posted mixed returns as already low yields declined
International bond markets (as measured by the Barclays Global Aggregate Index ex USD, unhedged) slid in September and October en route to a –2.53% return for the 12 months, a modestly steeper decline than in the 12 months ended October 2013. However, after currency hedging, the index return was positive.


Market Barometer
		Average Annual Total Returns
		Periods Ended October 31, 2014
	One	Three	Five
	Year	Years	Years
Stocks
Russell 1000 Index (Large-caps)	16.78%	19.90%	16.98%
Russell 2000 Index (Small-caps)	8.06	18.18	17.39
Russell 3000 Index (Broad U.S. market)	16.07	19.77	17.01
FTSE All-World ex US Index (International)	0.45	8.07	6.38

Bonds
Barclays U.S. Aggregate Bond Index (Broad taxable market)	4.14%	2.73%	4.22%
Barclays Municipal Bond Index (Broad tax-exempt market)	7.82	4.93	5.26
Citigroup Three-Month U.S. Treasury Bill Index	0.04	0.04	0.06

CPI
Consumer Price Index	1.66%	1.60%	1.89%

The broad U.S. taxable bond market returned 4.14%, more than reversing its year-ago loss. Bond prices, which backtracked at times over the summer, climbed in October as investors sought sanctuary from stock market volatility.

U.S. bond returns were strong despite many analysts’ expectations that already low yields wouldn’t decline further. Even as the Fed began steadily reducing its bond purchases in January, prices rose and the yield of the 10-year U.S. Treasury note ended October at 2.31%, down from 2.54% a year earlier. (Bond prices and yields move in opposite directions.)

Municipal bonds returned 7.82%, with tax-exempt issues in high demand even at a time of reduced supply.

The Fed’s target for short-term interest rates remained at 0%–0.25%, restraining returns for money market funds and savings accounts.

Japan, emerging markets advanced while developed Europe lost steam
Investors seeking an example of the potential benefits of global diversification need look no further than the fiscal year that just ended. In the first half, the broad U.S. and developed European stock markets returned about 8%, while emerging markets and developed Pacific markets returned about –3%.

In the second half, the tables turned. U.S. stocks tacked on another gain (almost 8%) but developed Europe returned about –9%. Meanwhile, emerging markets and


Expense Ratios
Your Fund Compared With Its Peer Group
						Peer
	Investor	Admiral	Institutional	Institutional	ETF	Group
	Shares	Shares	Shares	Plus Shares	Shares	Average
European Stock Index Fund	0.26%	0.12%	0.09%	—	0.12%	1.27%
Pacific Stock Index Fund	0.26	0.12	0.09	—	0.12	1.39
Emerging Markets Stock Index Fund	0.33	0.15	0.12	0.10%	0.15	1.54
The fund expense ratios shown are from the prospectus dated February 27, 2014, and represent estimated costs for the current fiscal year. For the fiscal year ended October 31, 2014, the funds’ expense ratios were: for the European Stock Index Fund, 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.09% for Institutional Shares, and 0.12% for FTSE Europe ETF Shares; for the Pacific Stock Index Fund, 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.09% for Institutional Shares, and 0.12% for FTSE Pacific ETF Shares; and for the Emerging Markets Stock Index Fund, 0.33% for Investor Shares, 0.15% for Admiral Shares, 0.12% for Institutional Shares, 0.10% for Institutional Plus Shares, and 0.15% for FTSE Emerging Markets ETF Shares.

Peer groups: For the European Stock Index Fund, European Region Funds; for the Pacific Stock Index Fund, Japan/Pacific Region Funds; for the
Emerging Markets Stock Index Fund, Emerging Markets Funds.

developed Pacific markets rebounded with six-month gains of about 7% and more than 2%, respectively. Of course, you shouldn’t draw conclusions based on a short period, but this shift is a reminder that global markets don’t always move in lockstep.

Even though emerging markets were buffeted by the same volatility that gripped developed international markets later in the year, they held up better. The Emerging Markets Stock Index Fund returned more than 3% for the 12 months. Two of the largest developing countries, Brazil and China, struggled with political uncertainty and decelerating growth. Brazilian stocks declined while the Chinese market—with an economy growing at a still-enviable rate—advanced. Indian stocks stood out, returning about 34% as investors were encouraged by the election of a pro-business prime minister. At the other end, Russian stocks sustained a double-digit decline amid concerns about conflict with Ukraine and the impact of international sanctions on Russia’s economy.


Total Returns
Ten Years Ended October 31, 2014
	Average
	Annual Return
European Stock Index Fund Investor Shares	6.11%
Spliced European Index	6.03
European Region Funds Average	6.03
For a benchmark description, see the Glossary. European Region Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.


Pacific Stock Index Fund Investor Shares	5.62%
Spliced Pacific Stock Index	5.51
Japan/Pacific Region Funds Average	4.24
For a benchmark description, see the Glossary. Japan/Pacific Region Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.


Emerging Markets Stock Index Fund Investor Shares	10.24%
Spliced Emerging Markets Index	10.58
Emerging Markets Funds Average	9.28
For a benchmark description, see the Glossary.
Emerging Markets Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

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 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.

Given China’s voracious appetite for commodities and other imports, mounting concerns about the country’s ability to meet its 7.5% annual growth target weighed on developed markets, including those in Europe. The European Stock Index Fund returned about –1% for the

fiscal year for U.S. dollar-based investors, whose returns were weakened by the strengthening of the dollar, notably against the euro. Local-currency returns were positive. (For more on currency fluctuation, see the box below.)

Currency fluctuation is one reason U.S. and international stocks diverge

Diversification is a proven way to reduce volatility and manage risk. That’s why it can make

sense for investors to allocate a portion of their stock portfolios to international equities

(20% of the equity allocation can be a good starting point). International stocks, which make

up about half of the world’s stock market capitalization, perform somewhat differently than

stocks in the U.S. market. One of the many reasons for this is currency fluctuation. Currency

movements historically have not been correlated to stock price movements, meaning they

tend not to move together.

International stocks have underperformed U.S. stocks recently for U.S.-based investors,

in part because many foreign currencies have weakened against the U.S. dollar. But that

divergence actually highlights the diversification benefit of owning both U.S. and international

stocks. As you can see from the accompanying chart, at other times, international stocks have

outshone their U.S. counterparts. (For more insight, see Global Equities: Balancing Home Bias

and Diversification, available at vanguard.com/research.)

Trailing 12-month return differential between U.S. and non-U.S. stocks

Notes: U.S. equities are represented by the MSCI USA Index; international equities are represented by the MSCI All Country World Index ex USA.

Data are from October 31, 1994, through October 31, 2014.

Sources: Vanguard, Thomson Reuters Datastream, and MSCI.

Early in the period, it looked as if Europe had emerged from a double-dip recession, but clouds reappeared on the economic horizon. Germany’s economy, Europe’s largest, contracted in the second calendar quarter and Italy slipped back into recession. Amid high unemployment and looming deflation, the European Central Bank cut interest rates twice and took other steps to try to stimulate growth.

The United Kingdom, with its growing economy, was a relatively bright spot. Europe’s largest stock market, representing about one-third of the fund’s index, was just above breakeven. Many other markets, including Germany, France, and Italy, lost ground.

The third fund in this report, the Pacific Stock Index Fund, returned about 1%. In Japan, which represented more than half of the fund and its benchmark, Prime Minister Shinzo Abe continued to implement economic reforms aimed at spurring growth in the world’s third-largest economy. And in a move that stunned global markets at the end of October, the Bank of Japan announced an expanded quantitative easing program with even more aggressive asset purchases, especially of Japanese government bonds.

After rising almost 35% a year ago, Japan’s stock market returned just less than zero for U.S. dollar-based investors—about the same as the entire FTSE

A note on fair-value pricing

The reported return of a fund that tracks an index sometimes diverges from the index’s return

a bit more than would be expected. This may be the result of a fair-value pricing adjustment.

These adjustments, which are required by the Securities and Exchange Commission, 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.

Developed Asia Pacific Index. In local currency, the Japanese market posted a double-digit gain: Japan’s yen weakened notably versus the dollar as part of the country’s growth strategy.

From a sector perspective, health care stocks were among the best performers across both developed and emerging markets. Oil and gas stocks were some of the weakest, amid significant declines in oil prices later in the period.

Over the long term, the funds have closely tracked their indexes
For any index fund, success is defined as closely tracking the performance of its target index, which of course incurs no expenses. For the decade ended October 31—a period marked by the Great Recession, followed by record highs for many global markets—the Vanguard International Stock Index Funds continued to meet their objective.

This is a testament to the experience, talent, and sophisticated systems of the funds’ advisor, Vanguard Equity Investment Group. The funds are aided by their low expenses, which enable shareholders to keep more of the returns on their investments.

The funds’ average annual returns also surpassed those of their peer groups.

When market volatility heats up, the best response is to stay cool
After several years of strength, stocks hit an especially rough patch late in the fiscal year. As I mentioned earlier, global stock markets tumbled in the first half of October, then rebounded dramatically, undoubtedly leaving many investors feeling unsettled.

What’s my best advice to anxious shareholders? Remain calm and remember that volatility is a normal part of stock market investing. The value of keeping a cool head is highlighted in a Vanguard research paper on investor behavior during the financial crisis, when global stocks declined about 58% and U.S. stocks about 55%.

The 2010 study, Resilience in Volatile Markets: 401(k) Participant Behavior, September 2007–December 2009, from the Vanguard Center for Retirement Research, examined the behavior of participants in Vanguard-administered retirement plans. During that time, about three-quarters of the participants made no changes to their accounts, and only 3% gave up on stocks completely.

As stocks recovered, this discipline yielded big benefits. Between the end of 2008 and the end of 2013, the average Vanguard 401(k) portfolio nearly doubled in value, largely because of the surge in stock prices.

European Stock Index Fund

Fund Profile
As of October 31, 2014


Share-Class Characteristics

	Investor	Admiral	Institutional	FTSE Europe ETF
	Shares	Shares	Shares	Shares
Ticker Symbol	VEURX	VEUSX	VESIX	VGK
Expense Ratio¹	0.26%	0.12%	0.09%	0.12%


Portfolio Characteristics
			FTSE
		FTSE	Global
		Developed	All Cap
		Europe	ex US
	Fund	Index	Index
Number of Stocks	527	521	5,554
Median Market Cap	$49.7B	$49.7B	$25.7B
Price/Earnings Ratio	19.5x	19.5x	17.1x
Price/Book Ratio	1.8x	1.8x	1.7x
Return on Equity	15.9%	15.9%	14.4%
Earnings Growth
Rate	8.8%	8.8%	12.0%
Dividend Yield	3.4%	3.3%	2.9%
Turnover Rate	7%	—	—
Short-Term Reserves	0.0%	—	—


Sector Diversification (% of equity exposure)
			FTSE
		FTSE	Global
		Developed	All Cap
		Europe	ex US
	Fund	Index	Index
Basic Materials	8.3%	8.3%	7.8%
Consumer Goods	17.4	17.4	14.9
Consumer Services	6.7	6.6	8.1
Financials	22.8	22.8	26.5
Health Care	12.3	12.3	7.7
Industrials	12.2	12.2	13.9
Oil & Gas	8.5	8.5	7.9
Technology	2.9	3.0	4.9
Telecommunications	4.5	4.5	4.7
Utilities	4.4	4.4	3.6


Volatility Measures
	Spliced	FTSE Global
	European	All Cap
	Stock	ex US
	Index	Index
R-Squared	0.99	0.89
Beta	0.97	1.03

These measures show the degree and timing of the fund’s fluctuations compared with the indexes over 36 months.


Ten Largest Holdings (% of total net assets)
Nestle SA	Food Products	2.7%
Royal Dutch Shell plc	Integrated Oil & Gas	2.7
Novartis AG	Pharmaceuticals	2.5
Roche Holding AG	Pharmaceuticals	2.4
HSBC Holdings plc	Banks	2.3
BP plc	Integrated Oil & Gas	1.6
Total SA	Integrated Oil & Gas	1.4
Bayer AG	Specialty Chemicals	1.4
GlaxoSmithKline plc	Pharmaceuticals	1.3
Unilever plc	Personal Products	1.3
Top Ten		19.6%

The holdings listed exclude any temporary cash investments and equity index products.

1 The expense ratios shown are from the prospectus dated February 27, 2014, and represent estimated costs for the current fiscal year. For the fiscal
year ended October 31, 2014, the expense ratios were 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.09% for Institutional Shares, and 0.12% for FTSE Europe ETF Shares.

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 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, 2004, Through October 31, 2014
Initial Investment of $10,000


		Average Annual Total Returns
		Periods Ended October 31, 2014
					Final Value
		One	Five	Ten	of a $10,000
		Year	Years	Years	Investment
	European Stock Index Fund Investor
	Shares	-0.73%	6.91%	6.11%	$18,091
••••••••	Spliced European Index	-0.96	6.70	6.03	17,955
– – – –	European Region Funds Average	-2.85	7.05	6.03	17,963
	FTSE Global All Cap ex US Index	0.37	6.55	7.27	20,175

For a benchmark description, see the Glossary.
European Region Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.


				Final Value
	One	Five	Ten	of a $10,000
	Year	Years	Years	Investment
European Stock Index Fund Admiral Shares	-0.61%	7.05%	6.23%	$18,296
Spliced European Index	-0.96	6.70	6.03	17,955
FTSE Global All Cap ex US Index	0.37	6.55	7.27	20,175

See Financial Highlights for dividend and capital gains information.

European Stock Index Fund

Financial Statements

Statement of Net Assets—Investments Summary
As of October 31, 2014

This Statement summarizes the fund’s holdings by asset type. Details are reported for each of the fund’s 50 largest individual holdings and for investments that, in total for any issuer, represent more than 1% of the fund’s net assets. The total value of smaller holdings is reported as a single amount within each category.

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 complete listing of the fund’s holdings is available electronically on vanguard.com and on the Securities and Exchange Commission’s website (sec.gov), or you can have it mailed to you without charge by calling 800-662-7447. For the first and third fiscal quarters, the fund files the lists with the SEC on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website. 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	Percentage
		Value	of Net
	Shares	($000)	Assets
Common Stocks
Austria †		59,850	0.3%

Belgium
Anheuser-Busch InBev NV	1,633,510	181,033	1.0%
Belgium—Other †		148,781	0.9%
		329,814	1.9%
Denmark
Novo Nordisk A/S Class B	3,990,306	180,343	1.0%
Denmark—Other †		250,566	1.5%
		430,909	2.5%

Finland †		241,437	1.4%

France
Total SA	4,169,247	248,797	1.5%
Sanofi	2,344,626	217,180	1.3%
BNP Paribas SA	2,000,671	126,162	0.7%
Schneider Electric SE	1,140,769	90,308	0.5%
AXA SA	3,887,396	89,821	0.5%
France—Other †		1,641,691	9.4%
		2,413,959	13.9%
Germany
Bayer AG	1,694,823	241,065	1.4%
Siemens AG	1,622,006	182,845	1.0%
BASF SE	1,894,672	166,887	1.0%
Daimler AG	1,957,707	152,177	0.9%
Allianz SE	930,172	147,759	0.8%
SAP SE	1,830,156	124,432	0.7%
Deutsche Telekom AG	6,393,833	96,382	0.6%
Deutsche Bank AG	2,839,303	88,590	0.5%


European Stock Index Fund



		Market	Percentage
		Value	of Net
	Shares	($000)	Assets
* Kabel Deutschland Holding AG	43,500	5,891	0.0%
Germany—Other †		1,092,592	6.3%
		2,298,620	13.2%

Greece †		30,144	0.2%

Ireland †		68,133	0.4%

Italy
Eni SPA	5,022,497	106,967	0.6%
Italy—Other †		541,955	3.1%
		648,922	3.7%
Netherlands
Unilever NV	3,196,614	124,111	0.7%
* ING Groep NV	7,916,265	113,757	0.6%
Netherlands—Other †		516,342	3.0%
		754,210	4.3%

¹Norway †		210,667	1.2%

Portugal †		51,489	0.3%

Spain
* Banco Santander SA	24,509,035	216,245	1.2%
Banco Bilbao Vizcaya Argentaria SA	12,010,980	134,299	0.8%
Telefonica SA	8,126,753	122,211	0.7%
Spain—Other †		455,588	2.6%
		928,343	5.3%

Sweden †		811,782	4.7%

Switzerland
Nestle SA	6,533,243	478,304	2.8%
Novartis AG	4,779,180	443,240	2.5%
Roche Holding AG	1,441,975	425,897	2.5%
UBS AG	7,217,278	125,437	0.7%
ABB Ltd.	4,723,793	103,589	0.6%
Zurich Insurance Group AG	300,436	90,926	0.5%
Cie Financiere Richemont SA	1,044,372	87,995	0.5%
Credit Suisse Group AG	3,291,134	87,665	0.5%
Switzerland—Other †		606,823	3.5%
		2,449,876	14.1%
United Kingdom
HSBC Holdings plc	39,136,800	400,637	2.3%
BP plc	37,876,588	272,881	1.6%
Royal Dutch Shell plc Class A	6,364,975	227,923	1.3%
GlaxoSmithKline plc	9,977,760	226,188	1.3%
British American Tobacco plc	3,825,188	217,262	1.2%
AstraZeneca plc	2,589,948	188,575	1.1%
Royal Dutch Shell plc Class B	5,032,934	186,719	1.1%
Vodafone Group plc	54,524,170	181,177	1.0%
Diageo plc	5,168,998	152,138	0.9%
* Lloyds Banking Group plc	110,933,371	137,080	0.8%


European Stock Index Fund



			Market	Percentage
			Value	of Net
		Shares	($000)	Assets
Barclays plc		33,646,789	128,975	0.7%
Rio Tinto plc		2,560,616	122,295	0.7%
Prudential plc		5,236,232	121,004	0.7%
BG Group plc		6,989,287	116,482	0.7%
National Grid plc		7,730,939	114,621	0.7%
BHP Billiton plc		4,385,395	113,544	0.6%
Glencore plc		21,901,952	112,298	0.6%
Reckitt Benckiser Group plc		1,322,849	111,200	0.6%
SABMiller plc		1,940,484	109,600	0.6%
Unilever plc		2,475,186	99,607	0.6%
BT Group plc		16,685,450	98,202	0.6%
Royal Dutch Shell plc Class A (Amsterdam Shares)		1,712,537	61,384	0.3%
1 United Kingdom—Other †			2,169,212	12.5%
			5,669,004	32.5%
Total Common Stocks (Cost $20,131,391)			17,397,159	99.9%²

	Coupon
Temporary Cash Investments
Money Market Fund
^3,4Vanguard Market Liquidity Fund	0.114%	128,518,000	128,518	0.7%

^5,6U.S. Government and Agency Obligations †			12,199	0.1%
Total Temporary Cash Investments (Cost $140,716)			140,717	0.8%²
⁷Total Investments (Cost $20,272,107)			17,537,876	100.7%
Other Assets and Liabilities
Other Assets			49,836	0.3%
Liabilities⁴			(175,537)	(1.0%)
			(125,701)	(0.7%)
Net Assets			17,412,175	100.0%


At October 31, 2014, net assets consisted of:
				Amount
				($000)
Paid-in Capital				22,245,024
Undistributed Net Investment Income				18,346
Accumulated Net Realized Losses				(2,113,074)
Unrealized Appreciation (Depreciation)
Investment Securities				(2,734,231)
Futures Contracts				(925)
Forward Currency Contracts				(550)
Foreign Currencies				(2,415)
Net Assets				17,412,175

Investor Shares—Net Assets
Applicable to 26,929,580 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)				782,227
Net Asset Value Per Share—Investor Shares				$29.05


European Stock Index Fund



	Amount
	($000)
Admiral Shares—Net Assets
Applicable to 58,373,367 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	3,948,568
Net Asset Value Per Share—Admiral Shares	$67.64

Institutional Shares—Net Assets
Applicable to 34,860,245 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	1,005,610
Net Asset Value Per Share—Institutional Shares	$28.85

ETF Shares—Net Assets
Applicable to 215,905,213 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	11,675,770
Net Asset Value Per Share—ETF Shares	$54.08

See Note A in Notes to Financial Statements.
* Non-income-producing security.
† Represents the aggregate value, by category, of securities that are not among the 50 largest holdings and, in total for any issuer, represent
1% or less of net assets.
1 Certain of the fund’s securities are 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, 2014, the aggregate value of these securities was $7,956,000.
2 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 0.8%, respectively, 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 $128,517,000 of collateral received for securities on loan.
5 Securities with a value of $600,000 have been segregated as initial margin for open futures contracts.
6 Securities with a value of $1,287,000 have been segregated as collateral for open forward currency contracts.
7 The total value of securities on loan is $118,686,000.
See accompanying Notes, which are an integral part of the Financial Statements.

European Stock Index Fund

Statement of Operations


	Year Ended
	October 31, 2014
	($000)
Investment Income
Income
Dividends¹	907,022
Interest²	93
Securities Lending	17,179
Total Income	924,294
Expenses
The Vanguard Group—Note B
Investment Advisory Services	1,993
Management and Administrative—Investor Shares	1,859
Management and Administrative—Admiral Shares	3,277
Management and Administrative—Signal Shares	255
Management and Administrative—Institutional Shares	474
Management and Administrative—Institutional Plus Shares	9
Management and Administrative—ETF Shares	11,219
Marketing and Distribution—Investor Shares	162
Marketing and Distribution—Admiral Shares	525
Marketing and Distribution—Signal Shares	102
Marketing and Distribution—Institutional Shares	234
Marketing and Distribution—Institutional Plus Shares	15
Marketing and Distribution—ETF Shares	3,476
Custodian Fees	2,055
Auditing Fees	45
Shareholders’ Reports—Investor Shares	38
Shareholders’ Reports—Admiral Shares	25
Shareholders’ Reports—Signal Shares	6
Shareholders’ Reports—Institutional Shares	3
Shareholders’ Reports—Institutional Plus Shares	—
Shareholders’ Reports—ETF Shares	433
Trustees’ Fees and Expenses	15
Total Expenses	26,220
Net Investment Income	898,074
Realized Net Gain (Loss)
Investment Securities Sold	1,142,281
Futures Contracts	6,143
Foreign Currencies and Forward Currency Contracts	(1,654)
Realized Net Gain (Loss)	1,146,770
Change in Unrealized Appreciation (Depreciation)
Investment Securities	(2,265,744)
Futures Contracts	(3,152)
Foreign Currencies and Forward Currency Contracts	(4,203)
Change in Unrealized Appreciation (Depreciation)	(2,273,099)
Net Increase (Decrease) in Net Assets Resulting from Operations	(228,255)

1 Dividends are net of foreign withholding taxes of $35,504,000.
2 Interest income from an affiliated company of the fund was $85,000.
See accompanying Notes, which are an integral part of the Financial Statements.

European Stock Index Fund

Statement of Changes in Net Assets


	Year Ended October 31,
	2014	2013
	($000)	($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	898,074	353,210
Realized Net Gain (Loss)	1,146,770	234,579
Change in Unrealized Appreciation (Depreciation)	(2,273,099)	2,243,153
Net Increase (Decrease) in Net Assets Resulting from Operations	(228,255)	2,830,942
Distributions
Net Investment Income
Investor Shares	(33,657)	(25,588)
Admiral Shares	(156,533)	(98,333)
Signal Shares	(15,253)	(11,793)
Institutional Shares	(42,503)	(25,112)
Institutional Plus Shares	(470)	(2,226)
ETF Shares	(643,629)	(214,905)
Realized Capital Gain
Investor Shares	—	—
Admiral Shares	—	—
Signal Shares	—	—
Institutional Shares	—	—
Institutional Plus Shares	—	—
ETF Shares	—	—
Total Distributions	(892,045)	(377,957)
Capital Share Transactions
Investor Shares	(49,003)	(59,529)
Admiral Shares	803,980	232,687
Signal Shares	(426,309)	100,005
Institutional Shares	159,390	(22,260)
Institutional Plus Shares	(115,592)	102,225
ETF Shares	450,062	6,686,863
Net Increase (Decrease) from Capital Share Transactions	822,528	7,039,991
Total Increase (Decrease)	(297,772)	9,492,976
Net Assets
Beginning of Period	17,709,947	8,216,971
End of Period¹	17,412,175	17,709,947
1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of $18,346,000 and $9,132,000.

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

European Stock Index Fund

Financial Highlights


Investor Shares

For a Share Outstanding	Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$30.42	$24.69	$24.48	$27.15	$25.77
Investment Operations
Net Investment Income	1.235¹	.830	.836	.882²	.768²
Net Realized and Unrealized Gain (Loss)
on Investments	(1.380)	5.800	.925	(2.545)	1.594
Total from Investment Operations	(.145)	6.630	1.761	(1.663)	2.362
Distributions
Dividends from Net Investment Income	(1.225)	(.900)	(1.551)	(1.007)	(.982)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(1.225)	(.900)	(1.551)	(1.007)	(.982)
Net Asset Value, End of Period	$29.05	$30.42	$24.69	$24.48	$27.15

Total Return³	-0.73%	27.47%	7.77%	-6.35%	9.35%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$782	$868	$760	$851	$1,884
Ratio of Total Expenses to Average Net Assets	0.26%	0.26%	0.26%	0.26%	0.26%
Ratio of Net Investment Income to
Average Net Assets	4.12%¹	3.02%	3.75%	3.46%	2.98%
Portfolio Turnover Rate ⁴	7%	10%	7%	6%	11%

1 Net investment income per share and the ratio of net investment income to average net assets include $.299 and 0.97%, respectively, resulting from income received from Vodafone Group plc in the form of cash and shares in Verizon Communications Inc. in February 2014.
2 Calculated based on average shares outstanding.
3 Total returns do not include transaction or account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction and account service fees.
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.

European Stock Index Fund

Financial Highlights


Admiral Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$70.85	$57.54	$57.09	$63.75	$60.51
Investment Operations
Net Investment Income	2.983¹	2.026	2.032	2.222 ²	1.758²
Net Realized and Unrealized Gain (Loss)
on Investments	(3.233)	13.503	2.152	(6.020)	3.864
Total from Investment Operations	(.250)	15.529	4.184	(3.798)	5.622
Distributions
Dividends from Net Investment Income	(2.960)	(2.219)	(3.734)	(2.862)	(2.382)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(2.960)	(2.219)	(3.734)	(2.862)	(2.382)
Net Asset Value, End of Period	$67.64	$70.85	$57.54	$57.09	$63.75

Total Return³	-0.61%	27.64%	7.93%	-6.22%	9.49%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$3,949	$3,340	$2,508	$2,531	$2,087
Ratio of Total Expenses to Average Net Assets	0.12%	0.12%	0.12%	0.14%	0.14%
Ratio of Net Investment Income to
Average Net Assets	4.26%¹	3.16%	3.89%	3.58%	3.10%
Portfolio Turnover Rate ⁴	7%	10%	7%	6%	11%

1 Net investment income per share and the ratio of net investment income to average net assets include $.695 and 0.97%, respectively, resulting from income received from Vodafone Group plc in the form of cash and shares in Verizon Communications Inc. in February 2014.
2 Calculated based on average shares outstanding.
3 Total returns do not include transaction or account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction and account service fees.
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.

European Stock Index Fund

Financial Highlights


Signal Shares
	Nov. 1,
	2013 to
For a Share Outstanding	Oct. 24,		Year Ended October 31,
Throughout Each Period	2014¹	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$27.41	$22.26	$22.09	$24.68	$23.42
Investment Operations
Net Investment Income	1.139 ²	.786	.788	.852³	.686 ³
Net Realized and Unrealized Gain (Loss)
on Investments	(1.676)	5.224	.827	(2.327)	1.497
Total from Investment Operations	(.537)	6.010	1.615	(1.475)	2.183
Distributions
Dividends from Net Investment Income	(1.143)	(.860)	(1.445)	(1.115)	(.923)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(1.143)	(.860)	(1.445)	(1.115)	(.923)
Net Asset Value, End of Period	$25.73¹	$27.41	$22.26	$22.09	$24.68

Total Return ⁴	-2.28%	27.65%	7.91%	-6.24%	9.52%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	—	$430	$259	$227	$272
Ratio of Total Expenses to Average Net Assets	0.12%⁵	0.12%	0.12%	0.14%	0.14%
Ratio of Net Investment Income to
Average Net Assets	4.66%^2,5	3.16%	3.89%	3.58%	3.10%
Portfolio Turnover Rate⁶	7%	10%	7%	6%	11%

1 Net asset value as of October 24, 2014, on which date the Signal Shares were converted to Admiral Shares.
2 Net investment income per share and the ratio of net investment income to average net assets include $.269 and 0.97%, respectively, resulting from income received from Vodafone Group plc in the form of cash and shares in Verizon Communications Inc. in February 2014.
3 Calculated based on average shares outstanding.
4 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.

European Stock Index Fund

Financial Highlights


Institutional Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$30.21	$24.54	$24.36	$27.20	$25.80
Investment Operations
Net Investment Income	1.282¹	.871	.875	.898²	.764²
Net Realized and Unrealized Gain (Loss)
on Investments	(1.371)	5.755	.912	(2.510)	1.644
Total from Investment Operations	(.089)	6.626	1.787	(1.612)	2.408
Distributions
Dividends from Net Investment Income	(1.271)	(.956)	(1.607)	(1.228)	(1.008)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(1.271)	(.956)	(1.607)	(1.228)	(1.008)
Net Asset Value, End of Period	$28.85	$30.21	$24.54	$24.36	$27.20

Total Return³	-0.55%	27.66%	7.95%	-6.19%	9.53%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$1,006	$901	$762	$606	$1,349
Ratio of Total Expenses to Average Net Assets	0.09%	0.09%	0.09%	0.10%	0.10%
Ratio of Net Investment Income to
Average Net Assets	4.29%¹	3.19%	3.92%	3.62%	3.14%
Portfolio Turnover Rate ⁴	7%	10%	7%	6%	11%

1 Net investment income per share and the ratio of net investment income to average net assets include $.297 and 0.97%, respectively, resulting from income received from Vodafone Group plc in the form of cash and shares in Verizon Communications Inc. in February 2014.
2 Calculated based on average shares outstanding.
3 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.

European Stock Index Fund

Financial Highlights


Institutional Plus Shares
	Nov. 1,	May 17,
	2013 to	2013¹to
	March 17,	Oct. 31,
For a Share Outstanding Throughout Each Period	2014²	2013
Net Asset Value, Beginning of Period	$126.52	$116.90
Investment Operations
Net Investment Income	2.253 ³	2.257
Net Realized and Unrealized Gain (Loss) on Investments	2.866	9.966
Total from Investment Operations	5.119	12.223
Distributions
Dividends from Net Investment Income	(.539)	(2.603)
Distributions from Realized Capital Gains	—	—
Total Distributions	(.539)	(2.603)
Net Asset Value, End of Period	$131.10²	$126.52

Total Return⁴	4.06%	10.81%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	—	$110
Ratio of Total Expenses to Average Net Assets	0.08%⁵	0.08%⁵
Ratio of Net Investment Income to Average Net Assets	4.80%^3,5	3.20%⁵
Portfolio Turnover Rate ⁶	7%	10%

1 Inception.
2 Net asset value as of March 17, 2014, on which date the sole shareholder converted to ETF Shares.
3 Net investment income per share and the ratio of net investment income to average net assets include $1.242 and 0.97%, respectively, resulting from income received from Vodafone Group plc in the form of cash and shares in Verizon Communications Inc. in February 2014.
4 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.

European Stock Index Fund

Financial Highlights


FTSE Europe ETF Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$56.64	$46.01	$45.66	$51.00	$48.41
Investment Operations
Net Investment Income	2.384¹	1.626	1.630	1.826²	1.420²
Net Realized and Unrealized Gain (Loss)
on Investments	(2.577)	10.787	1.706	(4.860)	3.082
Total from Investment Operations	(.193)	12.413	3.336	(3.034)	4.502
Distributions
Dividends from Net Investment Income	(2.367)	(1.783)	(2.986)	(2.306)	(1.912)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(2.367)	(1.783)	(2.986)	(2.306)	(1.912)
Net Asset Value, End of Period	$54.08	$56.64	$46.01	$45.66	$51.00

Total Return	-0.60%	27.67%	7.95%	-6.22%	9.48%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$11,676	$12,061	$3,928	$2,630	$2,858
Ratio of Total Expenses to Average Net Assets	0.12%	0.12%	0.12%	0.14%	0.14%
Ratio of Net Investment Income to
Average Net Assets	4.26%¹	3.16%	3.89%	3.58%	3.10%
Portfolio Turnover Rate ³	7%	10%	7%	6%	11%

1 Net investment income per share and the ratio of net investment income to average net assets include $.556 and 0.97%, respectively, resulting from income received from Vodafone Group plc in the form of cash and shares in Verizon Communications Inc. in February 2014.
2 Calculated based on average shares outstanding.
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.

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, Institutional Shares, Institutional Plus Shares, and ETF Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares, Institutional Shares, and Institutional Plus Shares are designed for investors who meet certain administrative, service, and account-size criteria. ETF Shares, known as Vanguard FTSE Europe ETF Shares, are listed for trading on NYSE Arca; they can be purchased and sold through a broker. On March 17, 2014, the sole shareholder in the Institutional Plus class converted to ETF Shares. The fund has not issued any additional Institutional Plus Shares as of October 31, 2014; subsequently, Institutional Plus Shares were issued on December 8, 2014. Prior to October 24, 2014, the fund offered Signal Shares. Effective at the close of business on October 24, 2014, the Signal Shares were converted to Admiral Shares.

A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. 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).

European Stock Index Fund

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. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund’s performance and requires daily settlement of variation margin representing changes in the market value of each contract.

The fund also enters 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. 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. 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 Statement of Net Assets. 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.

Futures contracts are valued at their quoted daily settlement prices. 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 aggregate settlement values and notional 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.

European Stock Index Fund

During the year ended October 31, 2014, the fund’s average investments in long and short futures contracts represented less than 1% and 0% of net assets, respectively, based on the average of aggregate settlement values at each quarter-end during the period. The fund’s average investment in forward currency contracts represented less than 1% of net assets, based on the average of notional amounts at each quarter-end during the period.

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, 2011–2014), 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. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the absence of a default the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the Statement of Net Assets for the return of the collateral, during the period the securities are on loan. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan.

7. Credit Facility: The fund and certain other funds managed by The Vanguard Group participate in a $2.89 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement that may be renewed annually; each fund is individually liable for its borrowings, if any, under the credit facility. Borrowings may be utilized for temporary and emergency purposes, and are subject to the fund’s regulatory and contractual borrowing restrictions. The participating funds are charged administrative fees and an annual commitment fee of 0.06% of the undrawn amount of the facility; these fees are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under this facility bear interest at a rate equal to the higher of the federal funds rate or LIBOR reference rate plus an agreed-upon spread.

The fund had no borrowings outstanding at October 31, 2014, or at any time during the period then ended.

European Stock Index Fund

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. Premiums and discounts on debt securities purchased are amortized and accreted, respectively, to interest income over the lives of the respective securities. 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.

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) and shareholder reporting. 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 based on methods approved by the board of trustees. The fund has committed to invest up to 0.40% of its net assets in Vanguard. At October 31, 2014, the fund had contributed capital of $1,992,000 to Vanguard (included in Other Assets), representing 0.01% of the fund’s net assets and 0.80% 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 market value of the fund’s investments as of October 31, 2014, based on the inputs used to value them:


	Level 1	Level 2	Level 3
Investments	($000)	($000)	($000)
Common Stocks	16,829	17,380,330	—
Temporary Cash Investments	128,518	12,199	—
Futures Contracts—Assets¹	147	—	—
Forward Currency Contracts—Assets	—	408	—
Forward Currency Contracts—Liabilities	—	(958)	—
Total	145,494	17,391,979	—
1 Represents variation margin on the last day of the reporting period.

European Stock Index Fund

D. At October 31, 2014, the fair values of derivatives were reflected in the Statement of Net Assets as follows:


		Foreign
	Equity	Exchange
	Contracts	Contracts	Total
Statement of Net Assets Caption	($000)	($000)	($000)
Other Assets	147	408	555
Liabilities	—	(958)	(958)

Realized net gain (loss) and the change in unrealized appreciation (depreciation) on derivatives for the year ended October 31, 2014, were:


		Foreign
	Equity	Exchange
	Contracts	Contracts	Total
Realized Net Gain (Loss) on Derivatives	($000)	($000)	($000)
Futures Contracts	6,143	—	6,143
Forward Currency Contracts	—	(19)	(19)
Realized Net Gain (Loss) on Derivatives	6,143	(19)	6,124

Change in Unrealized Appreciation (Depreciation) on Derivatives
Futures Contracts	(3,152)	—	(3,152)
Forward Currency Contracts	—	(1,368)	(1,368)
Change in Unrealized Appreciation (Depreciation) on Derivatives	(3,152)	(1,368)	(4,520)

At October 31, 2014, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:


				($000)
			Aggregate
		Number of	Settlement	Unrealized
		Long (Short)	Value	Appreciation
Futures Contracts	Expiration	Contracts	Long (Short)	(Depreciation)
FTSE 100 Index	December 2014	39	4,059	(334)
Dow Jones EURO STOXX 50 Index	December 2014	103	4,002	(591)
				(925)

Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.

European Stock Index Fund

At October 31, 2014, 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
	Contract					Appreciation
	Settlement			Contract Amount (000)		(Depreciation)
Counterparty	Date		Receive		Deliver	($000)
UBS AG	12/24/14	GBP	14,777	USD	24,086	(458)
BNP Paribas	12/24/14	EUR	11,367	USD	14,747	(497)
Deutsche Bank AG	12/24/14	USD	9,972	EUR	7,899	71
Morgan Stanley Capital Services LLC	12/24/14	USD	9,756	GBP	6,019	132
Deutsche Bank AG	12/24/14	USD	9,578	GBP	5,861	205
Goldman Sachs International	12/24/14	USD	622	GBP	390	(2)
UBS AG	12/24/14	USD	438	EUR	350	(1)
						(550)
EUR—Euro.
GBP—British pound.
USD—U.S. dollar.

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, 2014, the fund realized net foreign currency losses of $1,635,000, 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. During the year ended October 31, 2014, the fund realized gains on the sale of passive foreign investment companies of $4,820,000, 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. Passive foreign investment companies held at October 31, 2014, had unrealized appreciation of $7,004,000.

During the year ended October 31, 2014, the fund realized $889,463,000 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.

European Stock Index Fund

For tax purposes, at October 31, 2014, the fund had $39,033,000 of ordinary income available for distribution. The fund used capital loss carryforwards of $252,208,000 to offset taxable capital gains realized during the year ended October 31, 2014. At October 31, 2014, the fund had available capital losses totaling $2,110,155,000 to offset future net capital gains of $150,463,000 through October 31, 2016, $1,510,053,000 through October 31, 2017, $282,886,000 through October 31, 2018, and $166,753,000 through October 31, 2019.

At October 31, 2014, the cost of investment securities for tax purposes was $20,282,419,000. Net unrealized depreciation of investment securities for tax purposes was $2,744,543,000, consisting of unrealized gains of $873,175,000 on securities that had risen in value since their purchase and $3,617,718,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the year ended October 31, 2014, the fund purchased $6,682,128,000 of investment securities and sold $5,930,819,000 of investment securities, other than temporary cash investments. Purchases and sales include $4,417,718,000 and $4,501,405,000, respectively, in connection with in-kind purchases and redemptions of the fund’s capital shares.


G. Capital share transactions for each class of shares were:
			Year Ended October 31,
		2014		2013
	Amount	Shares	Amount	Shares
	($000)	(000)	($000)	(000)
Investor Shares
Issued	159,279	5,113	125,211	4,544
Issued in Lieu of Cash Distributions	28,720	916	21,969	836
Redeemed	(237,002)	(7,630)	(206,709)	(7,636)
Net Increase (Decrease)—Investor Shares	(49,003)	(1,601)	(59,529)	(2,256)
Admiral Shares
Issued¹	1,159,727	16,220	487,201	7,587
Issued in Lieu of Cash Distributions	134,055	1,835	84,425	1,378
Redeemed	(489,802)	(6,826)	(338,939)	(5,404)
Net Increase (Decrease) —Admiral Shares	803,980	11,229	232,687	3,561
Signal Shares
Issued	118,028	4,197	211,984	8,620
Issued in Lieu of Cash Distributions	8,991	320	8,895	375
Redeemed¹	(553,328)	(20,200)	(120,874)	(4,948)
Net Increase (Decrease)—Signal Shares	(426,309)	(15,683)	100,005	4,047
Institutional Shares
Issued	434,652	14,030	287,365	10,449
Issued in Lieu of Cash Distributions	34,138	1,095	16,017	612
Redeemed	(309,400)	(10,083)	(325,642)	(12,276)
Net Increase (Decrease)—Institutional Shares	159,390	5,042	(22,260)	(1,215)

European Stock Index Fund


			Year Ended October 31,
		2014		2013
	Amount	Shares	Amount	Shares
	($000)	(000)	($000)	(000)
Institutional Plus Shares²
Issued	—	—	100,915	861
Issued in Lieu of Cash Distributions	470	4	1,310	12
Redeemed	(116,062)	(877)	—	—
Net Increase (Decrease)—Institutional Plus Shares	(115,592)	(873)	102,225	873
ETF Shares
Issued	4,956,251	85,065	7,281,111	139,552
Issued in Lieu of Cash Distributions	—	—	—	—
Redeemed	(4,506,189)	(82,100)	(594,248)	(12,000)
Net Increase (Decrease)—ETF Shares	450,062	2,965	6,686,863	127,552

1 Admiral Shares Issued and Signal Shares Redeemed include $319,504,000 from the conversion of Signal Shares to Admiral Shares during the 2014 fiscal year.
2 Inception was May 17, 2013, for Institutional Plus Shares. On March 17, 2014, the sole shareholder in Institutional Plus Shares converted to ETF Shares.

H. Management has determined that, other than the aforementioned issuance of Institutional Plus Shares, no material events or transactions occurred subsequent to October 31, 2014, that would require recognition or disclosure in these financial statements.

Pacific Stock Index Fund

Fund Profile
As of October 31, 2014


Share-Class Characteristics

	Investor	Admiral	Institutional	FTSE Pacific ETF
	Shares	Shares	Shares	Shares
Ticker Symbol	VPACX	VPADX	VPKIX	VPL
Expense Ratio¹	0.26%	0.12%	0.09%	0.12%


Portfolio Characteristics
			FTSE
		FTSE	Global
		Developed	All Cap
		Asia Pacific	ex US
	Fund	Index	Index
Number of Stocks	834	829	5,554
Median Market Cap	$18.8B	$19.3B	$25.7B
Price/Earnings Ratio	15.2x	15.2x	17.1x
Price/Book Ratio	1.4x	1.4x	1.7x
Return on Equity	10.7%	10.7%	14.4%
Earnings Growth
Rate	15.7%	15.6%	12.0%
Dividend Yield	2.3%	2.3%	2.9%
Turnover Rate	5%	—	—
Short-Term Reserves	-0.1%	—	—


Sector Diversification (% of equity exposure)
			FTSE
		FTSE	Global
		Developed	All Cap
		Asia Pacific	ex US
	Fund	Index	Index
Basic Materials	7.2%	7.2%	7.8%
Consumer Goods	19.1	19.0	14.9
Consumer Services	9.9	10.0	8.1
Financials	28.6	28.7	26.5
Health Care	4.9	4.9	7.7
Industrials	17.1	17.0	13.9
Oil & Gas	2.2	2.2	7.9
Technology	4.0	4.0	4.9
Telecommunications	4.1	4.1	4.7
Utilities	2.9	2.9	3.6


Volatility Measures
	Spliced	FTSE Global
	Pacific	All Cap
	Stock	ex US
	Index	Index
R-Squared	0.90	0.74
Beta	0.98	0.86

These measures show the degree and timing of the fund’s fluctuations compared with the indexes over 36 months.


Ten Largest Holdings (% of total net assets)
Toyota Motor Corp.	Automobiles	2.9%
Samsung Electronics Co.	Consumer
Ltd.	Electronics	2.3
Commonwealth Bank of
Australia	Banks	2.1
BHP Billiton Ltd.	General Mining	1.8
Westpac Banking Corp.	Banks	1.7
Mitsubishi UFJ Financial
Group Inc.	Banks	1.5
Australia & New Zealand
Banking Group Ltd.	Banks	1.5
National Australia Bank
Ltd.	Banks	1.3
SoftBank Corp.	Mobile
	Telecommunications	1.3
AIA Group Ltd.	Life Insurance	1.2
Top Ten		17.6%

The holdings listed exclude any temporary cash investments and equity index products.

1 The expense ratios shown are from the prospectus dated February 27, 2014, and represent estimated costs for the current fiscal year. For the fiscal year ended October 31, 2014, the expense ratios were 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.09% for Institutional Shares, and 0.12% for FTSE Pacific ETF Shares.

Pacific Stock Index Fund

Performance Summary

Cumulative Performance: October 31, 2004, Through October 31, 2014
Initial Investment of $10,000


		Average Annual Total Returns
		Periods Ended October 31, 2014

					Final Value
		One	Five	Ten	of a $10,000
		Year	Years	Years	Investment

	Pacific Stock Index Fund*Investor
	Shares	1.21%	7.15%	5.62%	$17,277
••••••••	Spliced Pacific Stock Index	-0.47	6.50	5.51	17,092
– – – –	Japan/Pacific Region Funds Average	2.44	7.45	4.24	15,145
	FTSE Global All Cap ex US Index	0.37	6.55	7.27	20,175

For a benchmark description, see the Glossary.
Japan/Pacific Region Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.


				Final Value
	One	Five	Ten	of a $10,000
	Year	Years	Years	Investment
Pacific Stock Index Fund Admiral Shares	1.32%	7.27%	5.75%	$17,484
Spliced Pacific Stock Index	-0.47	6.50	5.51	17,092
FTSE Global All Cap ex US Index	0.37	6.55	7.27	20,175

See Financial Highlights for dividend and capital gains information.

Pacific Stock Index Fund


		Average Annual Total Returns
	Periods Ended October 31, 2014
				Final Value
	One	Five	Ten	of a $5,000,000
	Year	Years	Years	Investment
Pacific Stock Index Fund Institutional Shares	1.28%	7.30%	5.78%	$8,773,189
Spliced Pacific Stock Index	-0.47	6.50	5.51	8,545,916

FTSE Global All Cap ex US Index	0.37	6.55	7.27	10,087,747


			Since	Final Value
	One	Five	Inception	of a $10,000
	Year	Years	(3/4/2005)	Investment
FTSE Pacific ETF Shares
Net Asset Value	1.31%	7.26%	4.63%	$15,478
Spliced Pacific Stock Index	-0.47	6.50	4.43	15,196
FTSE Global All Cap ex US Index	0.37	6.55	5.82	17,269
"Since Inception" performance is calculated from the ETF Shares’ inception date for both the fund and its comparative standards.

Cumulative Returns of ETF Shares: March 4, 2005, Through October 31, 2014


			Since
	One	Five	Inception
	Year	Years	(3/4/2005)
FTSE Pacific ETF Shares Market Price	1.91%	43.79%	55.59%
FTSE Pacific ETF Shares Net Asset Value	1.31	41.98	54.78
Spliced Pacific Stock Index	-0.47	37.03	51.96
"Since Inception" performance is calculated from the ETF Shares’ inception date for both the fund and its comparative standards.

Fiscal-Year Total Returns (%): October 31, 2004, Through October 31, 2014

For a benchmark description, see the Glossary.

Pacific Stock Index Fund

Financial Statements

Statement of Net Assets—Investments Summary
As of October 31, 2014


		Market	Percentage
		Value	of Net
	Shares	($000)	Assets
Common Stocks
Australia
Commonwealth Bank of Australia	1,620,742	115,275	2.1%
BHP Billiton Ltd.	3,231,640	96,457	1.8%
Westpac Banking Corp.	3,101,391	95,360	1.7%
Australia & New Zealand Banking Group Ltd.	2,775,807	82,151	1.5%
National Australia Bank Ltd.	2,382,469	73,630	1.3%
Wesfarmers Ltd.	1,146,801	44,717	0.8%
Woolworths Ltd.	1,233,703	39,186	0.7%
CSL Ltd.	514,997	36,461	0.7%
Woodside Petroleum Ltd.	721,530	25,562	0.5%
Rio Tinto Ltd.	438,388	23,392	0.4%
Australia—Other †		448,841	8.2%
		1,081,032	19.7%
Hong Kong
AIA Group Ltd.	12,124,645	67,649	1.2%
Hong Kong Exchanges and Clearing Ltd.	1,157,197	25,623	0.5%
Hutchison Whampoa Ltd.	2,012,531	25,516	0.5%
Cheung Kong Holdings Ltd.	1,327,636	23,524	0.4%
Sun Hung Kai Properties Ltd.	1,551,118	23,099	0.4%
1 Hong Kong—Other †		337,086	6.1%
		502,497	9.1%
Japan
Toyota Motor Corp.	2,667,571	160,471	2.9%
Mitsubishi UFJ Financial Group Inc.	14,247,724	84,953	1.6%
SoftBank Corp.	947,770	70,229	1.3%
Honda Motor Co. Ltd.	1,806,227	57,468	1.1%
Sumitomo Mitsui Financial Group Inc.	1,353,034	55,001	1.0%
Mizuho Financial Group Inc.	24,094,941	43,907	0.8%
Hitachi Ltd.	4,672,258	37,515	0.7%
Japan Tobacco Inc.	1,060,859	36,755	0.7%
KDDI Corp.	551,200	35,510	0.6%


Pacific Stock Index Fund



		Market	Percentage
		Value	of Net
	Shares	($000)	Assets
Astellas Pharma Inc.	2,221,970	35,098	0.6%
Canon Inc.	1,139,517	35,094	0.6%
FANUC Corp.	198,076	34,801	0.6%
Takeda Pharmaceutical Co. Ltd.	779,191	33,989	0.6%
Mitsubishi Estate Co. Ltd.	1,270,982	32,638	0.6%
Seven & I Holdings Co. Ltd.	784,854	30,991	0.6%
Mitsui Fudosan Co. Ltd.	956,580	30,980	0.6%
East Japan Railway Co.	381,885	30,201	0.6%
Central Japan Railway Co.	191,100	29,483	0.5%
Mitsubishi Corp.	1,422,234	28,355	0.5%
Shin-Etsu Chemical Co. Ltd.	414,855	26,986	0.5%
Mitsui & Co. Ltd.	1,742,400	26,695	0.5%
Mitsubishi Electric Corp.	1,985,954	25,897	0.5%
Panasonic Corp.	2,141,590	25,833	0.5%
NTT DOCOMO Inc.	1,415,600	23,735	0.4%
Nissan Motor Co. Ltd.	2,555,346	23,652	0.4%
Tokio Marine Holdings Inc.	717,590	23,254	0.4%
Nippon Telegraph & Telephone Corp.	371,944	23,236	0.4%
Komatsu Ltd.	959,209	23,049	0.4%
Murata Manufacturing Co. Ltd.	202,219	22,997	0.4%
Nippon Steel & Sumitomo Metal Corp.	8,515,309	22,838	0.4%
Hino Motors Ltd.	270,709	3,978	0.1%
Daihatsu Motor Co. Ltd.	213,657	2,982	0.1%
Japan—Other †		1,911,681	34.8%
		3,090,252	56.3%

New Zealand †		25,992	0.5%

Singapore
DBS Group Holdings Ltd.	1,745,779	25,228	0.5%
Oversea-Chinese Banking Corp. Ltd.	3,060,191	23,567	0.4%
Singapore—Other †		154,589	2.8%
		203,384	3.7%
South Korea
Samsung Electronics Co. Ltd.	108,052	125,174	2.3%
* SK Hynix Inc.	535,541	24,671	0.5%
Hyundai Motor Co.	154,471	24,636	0.4%
South Korea—Other †		400,999	7.3%
		575,480	10.5%
Total Common Stocks (Cost $6,159,894)		5,478,637	99.8%²


Pacific Stock Index Fund


			Market	Percentage
			Value	of Net
	Coupon	Shares	($000)	Assets
Temporary Cash Investments
Money Market Fund
^3,4Vanguard Market Liquidity Fund	0.114%	72,362,961	72,363	1.3%

^5,6U.S. Government and Agency Obligations †			2,400	0.1%
Total Temporary Cash Investments (Cost $74,763)			74,763	1.4%²
⁷Total Investments (Cost $6,234,657)			5,553,400	101.2%
Other Assets and Liabilities
Other Assets			23,940	0.4%
Liabilities⁴			(89,509)	(1.6%)
			(65,569)	(1.2%)
Net Assets			5,487,831	100.0%


At October 31, 2014, net assets consisted of:
				Amount
				($000)
Paid-in Capital				7,310,785
Undistributed Net Investment Income				14,099
Accumulated Net Realized Losses				(1,156,056)
Unrealized Appreciation (Depreciation)
Investment Securities				(681,257)
Futures Contracts				510
Forward Currency Contracts				335
Foreign Currencies				(585)
Net Assets				5,487,831

Investor Shares—Net Assets
Applicable to 31,058,669 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)				359,817
Net Asset Value Per Share—Investor Shares				$11.59

Admiral Shares—Net Assets
Applicable to 27,028,353 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)				2,032,156
Net Asset Value Per Share—Admiral Shares				$75.19

Institutional Shares—Net Assets
Applicable to 29,205,508 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)				335,999
Net Asset Value Per Share—Institutional Shares				$11.50


Pacific Stock Index Fund



	Amount
	($000)
ETF Shares—Net Assets
Applicable to 45,396,041 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	2,759,859
Net Asset Value Per Share—ETF Shares	$60.80

See Note A in Notes to Financial Statements.
* Non-income-producing security.
† Represents the aggregate value, by category, of securities that are not among the 50 largest holdings and, in total for any issuer, represent 1% or less of net assets.
1 Certain of the fund’s securities are 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, 2014, the aggregate value of these securities was $2,070,000.
2 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 100.0% and 1.2%, respectively, 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 $72,363,000 of collateral received for securities on loan.
5 Securities with a value of $800,000 have been segregated as initial margin for open futures contracts.
6 Securities with a value of $565,000 have been segregated as collateral for open forward currency contracts.
7 The total value of securities on loan is $67,353,000.
See accompanying Notes, which are an integral part of the Financial Statements.

Pacific Stock Index Fund

Statement of Operations


	Year Ended
	October 31, 2014
	($000)
Investment Income
Income
Dividends¹	144,198
Interest²	15
Securities Lending	1,502
Total Income	145,715
Expenses
The Vanguard Group—Note B
Investment Advisory Services	938
Management and Administrative—Investor Shares	732
Management and Administrative—Admiral Shares	1,338
Management and Administrative—Signal Shares	77
Management and Administrative—Institutional Shares	103
Management and Administrative—ETF Shares	1,589
Marketing and Distribution—Investor Shares	75
Marketing and Distribution—Admiral Shares	257
Marketing and Distribution—Signal Shares	37
Marketing and Distribution—Institutional Shares	77
Marketing and Distribution—ETF Shares	618
Custodian Fees	840
Auditing Fees	45
Shareholders’ Reports—Investor Shares	32
Shareholders’ Reports—Admiral Shares	12
Shareholders’ Reports—Signal Shares	3
Shareholders’ Reports—Institutional Shares	9
Shareholders’ Reports—ETF Shares	92
Trustees’ Fees and Expenses	4
Total Expenses	6,878
Net Investment Income	138,837
Realized Net Gain (Loss)
Investment Securities Sold	65,672
Futures Contracts	1,097
Foreign Currencies and Forward Currency Contracts	(2,317)
Realized Net Gain (Loss)	64,452
Change in Unrealized Appreciation (Depreciation)
Investment Securities	(145,985)
Futures Contracts	26
Foreign Currencies and Forward Currency Contracts	(379)
Change in Unrealized Appreciation (Depreciation)	(146,338)
Net Increase (Decrease) in Net Assets Resulting from Operations	56,951

1 Dividends are net of foreign withholding taxes of $7,359,000.
2 Interest income from an affiliated company of the fund was $12,000.

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

Pacific Stock Index Fund

Statement of Changes in Net Assets


	Year Ended October 31,
	2014	2013
	($000)	($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	138,837	112,157
Realized Net Gain (Loss)	64,452	26,810
Change in Unrealized Appreciation (Depreciation)	(146,338)	896,389
Net Increase (Decrease) in Net Assets Resulting from Operations	56,951	1,035,356
Distributions
Net Investment Income
Investor Shares	(9,804)	(10,849)
Admiral Shares	(51,732)	(48,519)
Signal Shares	(3,961)	(4,825)
Institutional Shares	(9,260)	(13,074)
ETF Shares	(74,497)	(58,556)
Realized Capital Gain
Investor Shares	—	—
Admiral Shares	—	—
Signal Shares	—	—
Institutional Shares	—	—
ETF Shares	—	—
Total Distributions	(149,254)	(135,823)
Capital Share Transactions
Investor Shares	(32,507)	(39,472)
Admiral Shares	223,950	98,798
Signal Shares	(169,429)	(17,751)
Institutional Shares	(95,317)	(51,755)
ETF Shares	166,435	694,621
Net Increase (Decrease) from Capital Share Transactions	93,132	684,441
Total Increase (Decrease)	829	1,583,974
Net Assets
Beginning of Period	5,487,002	3,903,028
End of Period¹	5,487,831	5,487,002
1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of $14,099,000 and $24,236,000.

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


Pacific Stock Index Fund


Financial Highlights


Investor Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$11.76	$9.63	$9.74	$10.40	$9.61
Investment Operations
Net Investment Income	. 282	.246	.278	.289¹	.243¹
Net Realized and Unrealized Gain (Loss)
on Investments	(.147)	2.187	.037	(. 619)	. 803
Total from Investment Operations	.135	2.433	.315	(.330)	1.046
Distributions
Dividends from Net Investment Income	(. 305)	(. 303)	(. 425)	(. 330)	(. 256)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(. 305)	(. 303)	(. 425)	(. 330)	(. 256)
Net Asset Value, End of Period	$11.59	$11.76	$9.63	$9.74	$10.40

Total Return²	1.21%	25.72%	3.47%	-3.45%	11.09%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$360	$398	$360	$438	$868
Ratio of Total Expenses to Average Net Assets	0.26%	0.26%	0.26%	0.26%	0.26%
Ratio of Net Investment Income to
Average Net Assets	2.45%	2.27%	2.93%	2.85%	2.37%
Portfolio Turnover Rate ³	5%	22%	4%	4%	3%

1 Calculated based on average shares outstanding.
2 Total returns do not include transaction or account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction and account service fees.
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.


Pacific Stock Index Fund


Financial Highlights


Admiral Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$76.32	$62.54	$63.28	$68.06	$62.95
Investment Operations
Net Investment Income	1.937	1.695	1.905	2.051¹	1.533¹
Net Realized and Unrealized Gain (Loss)
on Investments	(.982)	14.194	. 249	(4.080)	5.337
Total from Investment Operations	.955	15.889	2.154	(2.029)	6.870
Distributions
Dividends from Net Investment Income	(2.085)	(2.109)	(2.894)	(2.751)	(1.760)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(2.085)	(2.109)	(2.894)	(2.751)	(1.760)
Net Asset Value, End of Period	$75.19	$76.32	$62.54	$63.28	$68.06

Total Return²	1.32%	25.89%	3.65%	-3.33%	11.13%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$2,032	$1,832	$1,415	$1,451	$1,165
Ratio of Total Expenses to Average Net Assets	0.12%	0.12%	0.12%	0.14%	0.14%
Ratio of Net Investment Income to
Average Net Assets	2.59%	2.41%	3.07%	2.97%	2.49%
Portfolio Turnover Rate ³	5%	22%	4%	4%	3%

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

Pacific Stock Index Fund

Financial Highlights


Signal Shares
	Nov. 1,
	2013 to
For a Share Outstanding	Oct. 24,		Year Ended October 31,
Throughout Each Period	2014¹	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$26.51	$21.72	$21.98	$23.64	$21.87
Investment Operations
Net Investment Income	.661	.588	.662	.695²	.541²
Net Realized and Unrealized Gain (Loss)
on Investments	(1.398)	4.933	.083	(1.394)	1.840
Total from Investment Operations	(.737)	5.521	.745	(.699)	2.381
Distributions
Dividends from Net Investment Income	(.723)	(.731)	(1.005)	(.961)	(.611)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(.723)	(.731)	(1.005)	(.961)	(.611)
Net Asset Value, End of Period	$25.05¹	$26.51	$21.72	$21.98	$23.64

Total Return ³	-2.83%	25.91%	3.64%	-3.31%	11.10%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	—	$174	$159	$149	$171
Ratio of Total Expenses to Average Net Assets	0.12%⁴	0.12%	0.12%	0.14%	0.14%
Ratio of Net Investment Income to
Average Net Assets	2.63%⁴	2.41%	3.07%	2.97%	2.49%
Portfolio Turnover Rate⁵	5%	22%	4%	4%	3%

1 Net asset value as of October 24, 2014, on which date the Signal Shares were converted to Admiral Shares.
2 Calculated based on average shares outstanding.
3 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.

Pacific Stock Index Fund

Financial Highlights


Institutional Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$11.68	$9.57	$9.69	$10.42	$9.63
Investment Operations
Net Investment Income	.300	.263	.295	.303¹	.243¹
Net Realized and Unrealized Gain (Loss)
on Investments	(.158)	2.174	.034	(.609)	.816
Total from Investment Operations	.142	2.437	.329	(.306)	1.059
Distributions
Dividends from Net Investment Income	(.322)	(.327)	(. 449)	(. 424)	(. 269)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(.322)	(.327)	(. 449)	(. 424)	(. 269)
Net Asset Value, End of Period	$11.50	$11.68	$9.57	$9.69	$10.42

Total Return²	1.28%	25.96%	3.65%	-3.29%	11.22%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$336	$437	$406	$354	$799
Ratio of Total Expenses to Average Net Assets	0.09%	0.09%	0.09%	0.10%	0.10%
Ratio of Net Investment Income to
Average Net Assets	2.62%	2.44%	3.10%	3.01%	2.53%
Portfolio Turnover Rate ³	5%	22%	4%	4%	3%

1 Calculated based on average shares outstanding.
2 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.

Pacific Stock Index Fund

Financial Highlights


FTSE Pacific ETF Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$61.71	$50.57	$51.18	$55.06	$50.92
Investment Operations
Net Investment Income	1.568	1.372	1.544	1.638¹	1.265¹
Net Realized and Unrealized Gain (Loss)
on Investments	(.791)	11.475	.190	(3.275)	4.296
Total from Investment Operations	.777	12.847	1.734	(1.637)	5.561
Distributions
Dividends from Net Investment Income	(1.687)	(1.707)	(2.344)	(2.243)	(1.421)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(1.687)	(1.707)	(2.344)	(2.243)	(1.421)
Net Asset Value, End of Period	$60.80	$61.71	$50.57	$51.18	$55.06

Total Return	1.31%	25.88%	3.65%	-3.34%	11.11%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$2,760	$2,645	$1,563	$1,472	$1,482
Ratio of Total Expenses to Average Net Assets	0.12%	0.12%	0.12%	0.14%	0.14%
Ratio of Net Investment Income to
Average Net Assets	2.59%	2.41%	3.07%	2.97%	2.49%
Portfolio Turnover Rate²	5%	22%	4%	4%	3%

1 Calculated based on average shares outstanding.
2 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.

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, Institutional Shares, Institutional Plus Shares, and ETF Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares, Institutional Shares, and Institutional Plus Shares are designed for investors who meet certain administrative, service, and account-size criteria. ETF Shares, known as Vanguard FTSE Pacific ETF Shares, are listed for trading on NYSE Arca; they can be purchased and sold through a broker. The fund has not issued any Institutional Plus Shares through October 31, 2014. Prior to October 24, 2014, the fund offered Signal Shares. Effective at the close of business on October 24, 2014, the Signal Shares were converted to Admiral Shares.

Pacific Stock Index Fund

During the year ended October 31, 2014, the fund’s average investments in long and short futures contracts represented less than 1% and 0% of net assets, respectively, based on the average of aggregate settlement values at each quarter-end during the period. The fund’s average investment in forward currency contracts represented less than 1% of net assets, based on the average notional amounts at each quarter-end during the period.

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

The fund had no borrowings outstanding at October 31, 2014, or at any time during the period then ended.

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 based on methods approved by the board of trustees. The fund has committed to invest up to 0.40% of its net assets in Vanguard. At October 31, 2014, the fund had contributed capital of $537,000 to Vanguard (included in Other Assets), representing 0.01% of the fund’s net assets and 0.21% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

The following table summarizes the market value of the fund’s investments as of October 31, 2014, based on the inputs used to value them:


	Level 1	Level 2	Level 3
Investments	($000)	($000)	($000)
Common Stocks	1,014	5,474,209	3,414
Temporary Cash Investments	72,363	2,400	—
Futures Contracts—Assets¹	325	—	—
Forward Currency Contracts—Assets	—	555	—
Forward Currency Contracts—Liabilities	—	(220)	—
Total	73,702	5,476,944	3,414
1 Represents variation margin on the last day of the reporting period.

Pacific Stock Index Fund

D. At October 31, 2014, the fair values of derivatives were reflected in the Statement of Net Assets as follows:


		Foreign
	Equity	Exchange
	Contracts	Contracts	Total
Statement of Net Assets Caption	($000)	($000)	($000)
Other Assets	325	555	880
Liabilities	—	(220)	(220)

Realized net gain (loss) and the change in unrealized appreciation (depreciation) on derivatives for the year ended October 31, 2014, were:


		Foreign
	Equity	Exchange
	Contracts	Contracts	Total
Realized Net Gain (Loss) on Derivatives	($000)	($000)	($000)
Futures Contracts	1,097	—	1,097
Forward Currency Contracts	—	(692)	(692)
Realized Net Gain (Loss) on Derivatives	1,097	(692)	405

Change in Unrealized Appreciation (Depreciation) on Derivatives
Futures Contracts	26	—	26
Forward Currency Contracts	—	310	310
Change in Unrealized Appreciation (Depreciation) on Derivatives	26	310	336

At October 31, 2014, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:


				($000)
			Aggregate
		Number of	Settlement	Unrealized
		Long (Short)	Value	Appreciation
Futures Contracts	Expiration	Contracts	Long (Short)	(Depreciation)
Topix Index	December 2014	56	6,679	238
S&P ASX 200 Index	December 2014	30	3,638	272
				510

Pacific Stock Index Fund


						Unrealized
	Contract					Appreciation
	Settlement			Contract Amount (000)		(Depreciation)
Counterparty	Date		Receive		Deliver	($000)
Bank of America, NA	12/23/14	AUD	7,208	USD	6,467	(148)
Morgan Stanley Capital Services LLC	12/16/14	JPY	306,860	USD	2,799	(66)
Citibank NA	12/23/14	AUD	2,495	USD	2,166	21
BNP Paribas	12/16/14	USD	12,300	JPY	1,344,922	320
UBS AG	12/16/14	USD	3,435	JPY	368,100	156
BNP Paribas	12/23/14	USD	1,991	AUD	2,278	(6)
Deutsche Bank AG	12/23/14	USD	1,889	AUD	2,145	8
Morgan Stanley Capital Services LLC	12/23/14	USD	1,077	AUD	1,220	8
The Toronto-Dominion Bank	12/16/14	USD	1,077	JPY	116,235	42
						335
AUD—Australian dollar.
JPY—Japanese yen.
USD—U.S. dollar.

During the year ended October 31, 2014, the fund realized net foreign currency losses of $1,625,000, 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. During the year ended October 31, 2014, the fund realized gains on the sale of passive foreign investment companies of $1,905,000, 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. Passive foreign investment companies held at October 31, 2014, had unrealized appreciation of $14,592,000.

During the year ended October 31, 2014, the fund realized $31,078,000 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.

Pacific Stock Index Fund

For tax purposes, at October 31, 2014, the fund had $35,942,000 of ordinary income available for distribution. The fund used capital loss carryforwards of $34,095,000 to offset taxable capital gains realized during the year ended October 31, 2014. At October 31, 2014, the fund had available capital losses totaling $1,155,019,000 to offset future net capital gains. Of this amount, $1,144,492,000 is subject to expiration dates; $453,022,000 may be used to offset future net capital gains through October 31, 2016, $607,343,000 through October 31, 2017, $29,742,000 through October 31, 2018, and $54,385,000 through October 31, 2019. Capital losses of $10,527,000 realized beginning in fiscal 2012 may be carried forward indefinitely under the Regulated Investment Company Modernization Act of 2010, but must be used before any expiring loss carryforwards.

At October 31, 2014, the cost of investment securities for tax purposes was $6,249,950,000. Net unrealized depreciation of investment securities for tax purposes was $696,550,000, consisting of unrealized gains of $627,712,000 on securities that had risen in value since their purchase and $1,324,262,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the year ended October 31, 2014, the fund purchased $583,162,000 of investment securities and sold $503,230,000 of investment securities, other than temporary cash investments. Purchases and sales include $318,402,000 and $227,318,000, respectively, in connection with in-kind purchases and redemptions of the fund’s capital shares.

G. Capital share transactions for each class of shares were:


			Year Ended October 31,
		2014		2013
	Amount	Shares	Amount	Shares
	($000)	(000)	($000)	(000)
Investor Shares
Issued	58,007	5,061	77,260	7,140
Issued in Lieu of Cash Distributions	9,268	811	10,267	992
Redeemed	(99,782)	(8,663)	(126,999)	(11,637)
Net Increase (Decrease)—Investor Shares	(32,507)	(2,791)	(39,472)	(3,505)
Admiral Shares
Issued¹	392,179	5,284	287,864	4,076
Issued in Lieu of Cash Distributions	44,509	600	41,581	617
Redeemed	(212,738)	(2,863)	(230,647)	(3,316)
Net Increase (Decrease)—Admiral Shares	223,950	3,021	98,798	1,377
Signal Shares
Issued	31,226	1,214	46,608	1,930
Issued in Lieu of Cash Distributions	3,197	125	4,061	174
Redeemed¹	(203,852)	(7,921)	(68,420)	(2,833)
Net Increase (Decrease)—Signal Shares	(169,429)	(6,582)	(17,751)	(729)
Institutional Shares
Issued	62,585	5,485	68,532	6,385
Issued in Lieu of Cash Distributions	7,052	622	8,378	816
Redeemed	(164,954)	(14,354)	(128,665)	(12,206)
Net Increase (Decrease) —Institutional Shares	(95,317)	(8,247)	(51,755)	(5,005)

Emerging Markets Stock Index Fund

Fund Profile
As of October 31, 2014


Share-Class Characteristics

					FTSE
					Emerging
	Investor	Admiral	Institutional	Institutional	Markets ETF
	Shares	Shares	Shares	Plus Shares	Shares
Ticker Symbol	VEIEX	VEMAX	VEMIX	VEMRX	VWO
Expense Ratio¹	0.33%	0.15%	0.12%	0.10%	0.15%


Portfolio Characteristics
			FTSE
			Global
		FTSE	All Cap
		Emerging	ex US
	Fund	Index	Index
Number of Stocks	990	907	5,554
Median Market Cap	$17.4B	$17.4B	$25.7B
Price/Earnings Ratio	14.6x	14.1x	17.1x
Price/Book Ratio	1.9x	1.8x	1.7x
Return on Equity	18.7%	18.6%	14.4%
Earnings Growth
Rate	14.6%	14.6%	12.0%
Dividend Yield	2.6%	2.8%	2.9%
Turnover Rate	9%	—	—
Short-Term Reserves	0.0%	—	—


Sector Diversification (% of equity exposure)
			FTSE
			Global
		FTSE	All Cap
		Emerging	ex US
	Fund	Index	Index
Basic Materials	7.1%	7.1%	7.8%
Consumer Goods	9.8	9.8	14.9
Consumer Services	7.2	7.2	8.1
Financials	29.8	30.0	26.5
Health Care	2.4	2.4	7.7
Industrials	10.4	10.3	13.9
Oil & Gas	10.7	10.8	7.9
Technology	10.3	10.2	4.9
Telecommunications	8.4	8.4	4.7
Utilities	3.9	3.8	3.6


Volatility Measures
	FTSE Global
	Spliced	All Cap
	Emerging	ex US
	Mkts Index	Index
R-Squared	0.97	0.80
Beta	0.98	1.05
These measures show the degree and timing of the fund’s fluctuations compared with the indexes over 36 months.


Ten Largest Holdings (% of total net assets)
Taiwan Semiconductor
Manufacturing Co. Ltd.	Semiconductors	2.9%
Tencent Holdings Ltd.	Internet	2.1
China Mobile Ltd.	Mobile
	Telecommunications	1.8
China Construction Bank
Corp.	Banks	1.5
Petroleo Brasileiro SA	Integrated Oil & Gas	1.4
Industrial & Commercial
Bank of China Ltd.	Banks	1.3
Naspers Ltd.	Broadcasting &
	Entertainment	1.3
Itau Unibanco Holding
SA	Banks	1.2
Hon Hai Precision	Electrical
Industry Co. Ltd.	Components &
	Equipment	1.1
Banco Bradesco SA	Banks	1.1
Top Ten		15.7%
The holdings listed exclude any temporary cash investments and equity index products.

1 The expense ratios shown are from the prospectus dated February 27, 2014, and represent estimated costs for the current fiscal year. For the fiscal year ended October 31, 2014, the expense ratios were 0.33% for Investor Shares, 0.15% for Admiral Shares, 0.12% for Institutional Shares, 0.10% for Institutional Plus Shares, and 0.15% for FTSE Emerging Markets ETF Shares.

Emerging Markets Stock Index Fund

Performance Summary

Cumulative Performance: October 31, 2004, Through October 31, 2014
Initial Investment of $10,000


		Average Annual Total Returns
		Periods Ended October 31, 2014
					Final Value
		One	Five	Ten	of a $10,000
		Year	Years	Years	Investment
	Emerging Markets Stock Index
	Fund Investor Shares	3.59%	4.92%	10.24%	$26,506
••••••••	Spliced Emerging Markets Index	3.37	4.96	10.58	27,340
– – – –	Emerging Markets Funds Average	1.00	4.61	9.28	24,281
	FTSE Global All Cap ex US Index	0.37	6.55	7.27	20,175
For a benchmark description, see the Glossary. Emerging Markets Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.


			Since	Final Value
	One	Five	Inception	of a $10,000
	Year	Years	(6/23/2006)	Investment
Emerging Markets Stock Index Fund Admiral
Shares	3.79%	5.09%	6.98%	$17,571
Spliced Emerging Markets Index	3.37	4.96	7.15	17,808
FTSE Global All Cap ex US Index	0.37	6.55	4.62	14,588
"Since Inception" performance is calculated from the Admiral Shares’ inception date for both the fund and its comparative standards.

See Financial Highlights for dividend and capital gains information.

Emerging Markets Stock Index Fund


		Average Annual Total Returns
	Periods Ended October 31, 2014

				Final Value
	One	Five	Ten	of a $5,000,000
	Year	Years	Years	Investment
Emerging Markets Stock Index Fund
Institutional Shares	3.85%	5.14%	10.45%	$13,510,941
Spliced Emerging Markets Index	3.37	4.96	10.58	13,670,097

FTSE Global All Cap ex US Index	0.37	6.55	7.27	10,087,747


		Since	Final Value
	One	Inception	of a $100,000,000
	Year	(12/15/2010)	Investment
Emerging Markets Stock Index Fund
Institutional Plus Shares	3.83%	0.43%	$101,670,441
Spliced Emerging Markets Index	3.37	0.42	101,624,224
FTSE Global All Cap ex US Index	0.37	4.36	117,971,047
"Since Inception" performance is calculated from the Institutional Plus Shares’ inception date for both the fund and its comparative standards.


			Since	Final Value
	One	Five	Inception	of a $10,000
	Year	Years	(3/4/2005)	Investment
FTSE Emerging Markets ETF Shares
Net Asset Value	3.77%	5.09%	8.14%	$21,295
Spliced Emerging Markets Index	3.37	4.96	8.32	21,638
FTSE Global All Cap ex US Index	0.37	6.55	5.82	17,269
"Since Inception" performance is calculated from the ETF Shares’ inception date for both the fund and its comparative standards.


Cumulative Returns of ETF Shares: March 4, 2005, Through October 31, 2014
			Since
	One	Five	Inception
	Year	Years	(3/4/2005)
FTSE Emerging Markets ETF Shares Market Price	4.71%	28.87%	112.62%
FTSE Emerging Markets ETF Shares Net Asset
Value	3.77	28.15	112.95
Spliced Emerging Markets Index	3.37	27.36	116.38
"Since Inception" performance is calculated from the ETF Shares’ inception date for both the fund and its comparative standards.

Emerging Markets Stock Index Fund

Fiscal-Year Total Returns (%): October 31, 2004, Through October 31, 2014

For a benchmark description, see the Glossary.

Average Annual Total Returns: Periods Ended September 30, 2014
This table presents 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	One	Five	Ten
	Date	Year	Years	Years
Investor Shares	5/4/1994	5.96%	4.16%	10.24%
Admiral Shares	6/23/2006	6.16	4.32	6.75¹
Institutional Shares	6/22/2000	6.19	4.38	10.45
Institutional Plus Shares	12/15/2010	6.19	—	-0.17¹
FTSE Emerging Markets ETF
Shares	3/4/2005
Market Price		6.91	4.21	7.95¹
Net Asset Value		6.12	4.32	7.95¹
1 Return since inception.

Emerging Markets Stock Index Fund

Financial Statements

Statement of Net Assets—Investments Summary
As of October 31, 2014


		Market	Percentage
		Value	of Net
	Shares	($000)	Assets
Common Stocks
Brazil
Itau Unibanco Holding SA ADR	25,850,571	381,554	0.6%
AMBEV SA	50,959,455	337,372	0.5%
Itau Unibanco Holding SA Preference Shares	22,280,186	330,633	0.5%
BRF SA	12,346,164	321,599	0.5%
Banco Bradesco SA ADR	19,534,892	292,633	0.5%
Banco Bradesco SA Preference Shares	19,414,586	292,442	0.4%
Petroleo Brasileiro SA Preference Shares	46,395,986	285,375	0.4%
Petroleo Brasileiro SA	47,001,197	276,933	0.4%
Petroleo Brasileiro SA ADR	16,496,928	201,757	0.3%
Banco Bradesco SA	9,397,471	138,421	0.2%
Petroleo Brasileiro SA ADR Series A	10,770,574	126,016	0.2%
Itau Unibanco Holding SA	3,627,955	47,852	0.1%
Brazil—Other †		4,748,623	7.3%
		7,781,210	11.9%

Chile †		978,971	1.5%

China
* Tencent Holdings Ltd.	84,827,060	1,350,540	2.1%
China Mobile Ltd.	96,232,067	1,197,101	1.8%
China Construction Bank Corp.	1,342,226,913	999,465	1.5%
Industrial & Commercial Bank of China Ltd.	1,340,666,003	886,092	1.4%
Bank of China Ltd.	1,380,748,177	660,006	1.0%
PetroChina Co. Ltd.	387,087,479	486,526	0.7%
CNOOC Ltd.	295,020,252	461,835	0.7%
China Life Insurance Co. Ltd.	136,515,470	407,510	0.6%
China Petroleum & Chemical Corp.	468,073,372	406,967	0.6%
Ping An Insurance Group Co. of China Ltd.	35,578,488	291,373	0.5%
China Overseas Land & Investment Ltd.	75,961,276	221,054	0.3%
Agricultural Bank of China Ltd.	473,736,065	219,732	0.3%


Emerging Markets Stock Index Fund



			Market	Percentage
			Value	of Net
		Shares	($000)	Assets
	China Telecom Corp. Ltd.	301,325,683	192,160	0.3%
	China Shenhua Energy Co. Ltd.	63,565,925	178,989	0.3%
	CITIC Ltd.	101,749,674	178,052	0.3%
	China Unicom Hong Kong Ltd.	83,650,248	125,431	0.2%
	China Resources Power Holdings Co. Ltd.	35,379,048	104,518	0.2%
	PICC Property & Casualty Co. Ltd.	55,836,601	102,412	0.2%
	China CITIC Bank Corp. Ltd.	141,616,719	92,251	0.1%
	Dongfeng Motor Group Co. Ltd.	55,256,744	85,414	0.1%
	China Resources Land Ltd.	34,871,200	83,172	0.1%
	China Oilfield Services Ltd.	34,163,800	71,323	0.1%
	Sinopharm Group Co. Ltd.	18,116,900	70,742	0.1%
	Kunlun Energy Co. Ltd.	52,193,230	70,144	0.1%
	China Longyuan Power Group Corp. Ltd.	61,839,800	66,058	0.1%
	China Communications Construction Co. Ltd.	84,344,504	65,089	0.1%
	China Resources Enterprise Ltd.	22,526,860	53,522	0.1%
^	China Coal Energy Co. Ltd.	78,066,800	48,333	0.1%
	China Railway Group Ltd.	73,809,408	45,892	0.1%
	China State Construction International Holdings Ltd.	29,250,872	45,824	0.1%
	Zhuzhou CSR Times Electric Co. Ltd.	9,572,000	44,724	0.1%
	China Railway Construction Corp. Ltd.	35,175,765	36,901	0.1%
	CSR Corp. Ltd.	34,687,377	36,055	0.1%
	China Resources Gas Group Ltd.	12,402,100	35,406	0.1%
^{*,^}	Aluminum Corp. of China Ltd.	76,349,220	34,006	0.1%
*	China Taiping Insurance Holdings Co. Ltd.	14,945,707	32,814	0.1%
	AviChina Industry & Technology Co. Ltd.	40,764,000	30,987	0.1%
1	People’s Insurance Co. Group of China Ltd.	68,765,000	29,678	0.1%
*	China Cinda Asset Management Co. Ltd.	58,063,000	27,487	0.1%
	Sinotrans Ltd.	31,184,000	24,739	0.0%
	China Resources Cement Holdings Ltd.	35,766,686	24,287	0.0%
	Huaneng Renewables Corp. Ltd.	62,958,000	22,633	0.0%
	China Communications Services Corp. Ltd.	47,429,973	22,468	0.0%
^{*,^}	China COSCO Holdings Co. Ltd.	49,412,000	22,434	0.0%
^	Sinopec Shanghai Petrochemical Co. Ltd.	68,314,788	21,205	0.0%
	Beijing Capital International Airport Co. Ltd.	28,408,564	20,849	0.0%
	Air China Ltd.	31,756,748	20,549	0.0%
1	Sinopec Engineering Group Co. Ltd.	20,596,272	19,910	0.0%
1	China Galaxy Securities Co. Ltd.	22,064,000	17,561	0.0%
	Franshion Properties China Ltd.	64,294,094	15,160	0.0%
	Metallurgical Corp. of China Ltd.	54,234,937	15,049	0.0%
^	Angang Steel Co. Ltd.	20,382,374	14,989	0.0%
	China Agri-Industries Holdings Ltd.	38,372,961	14,638	0.0%
	China BlueChemical Ltd.	35,255,405	12,598	0.0%
^{*,^}	China Eastern Airlines Corp. Ltd.	30,124,000	11,452	0.0%
	China Southern Airlines Co. Ltd.	31,578,000	11,066	0.0%
^	Dongfang Electric Corp. Ltd.	5,527,630	9,373	0.0%
^	Harbin Electric Co. Ltd.	11,938,000	7,198	0.0%
	China Merchants Property Development Co. Ltd. Class B	4,178,770	6,990	0.0%
^{*,^}	CITIC Resources Holdings Ltd.	50,156,000	6,986	0.0%
^{*,^}	China Foods Ltd.	12,701,506	4,807	0.0%
^	China Machinery Engineering Corp.	8,117,639	4,604	0.0%
^{*,^}	Sinofert Holdings Ltd.	28,510,000	4,426	0.0%
*	China Taiping Insurance Holdings Rights Exp. 11/18/14	3,138,598	1,922	0.0%
1	China—Other †		4,431,952	6.8%
			14,365,430	21.9%


Emerging Markets Stock Index Fund



		Market	Percentage
		Value	of Net
	Shares	($000)	Assets
Colombia †		625,902	1.0%

Czech Republic †		157,668	0.2%

Egypt †		85,161	0.1%

Hungary †		150,822	0.2%

India
Infosys Ltd.	8,702,741	578,408	0.9%
Housing Development Finance Corp.	28,612,618	515,946	0.8%
Reliance Industries Ltd.	29,119,043	474,447	0.7%
Tata Consultancy Services Ltd.	8,622,502	369,823	0.6%
ICICI Bank Ltd.	10,688,564	283,536	0.4%
Oil & Natural Gas Corp. Ltd.	37,691,561	251,514	0.4%
State Bank of India	2,701,276	119,098	0.2%
NTPC Ltd.	37,036,837	90,527	0.1%
Coal India Ltd.	11,983,014	72,801	0.1%
Power Grid Corp. of India Ltd.	28,809,592	68,404	0.1%
GAIL India Ltd.	5,603,206	48,249	0.1%
Bharat Heavy Electricals Ltd.	11,282,235	47,152	0.1%
NMDC Ltd.	14,329,271	40,075	0.1%
Bharat Petroleum Corp. Ltd.	3,288,680	39,252	0.1%
Indian Oil Corp. Ltd.	5,846,258	35,034	0.1%
Rural Electrification Corp. Ltd.	6,564,335	32,278	0.1%
Power Finance Corp. Ltd.	6,004,104	27,660	0.1%
Bank of Baroda	1,598,387	24,237	0.0%
Oil India Ltd.	2,262,455	23,624	0.0%
Steel Authority of India Ltd.	14,949,220	20,227	0.0%
Punjab National Bank	1,275,105	19,327	0.0%
Bharat Electronics Ltd.	383,327	13,006	0.0%
Hindustan Petroleum Corp. Ltd.	1,462,903	12,822	0.0%
Bank of India	2,191,539	10,207	0.0%
NHPC Ltd.	28,298,668	9,516	0.0%
Canara Bank	1,388,928	9,116	0.0%
Union Bank of India	2,030,318	7,477	0.0%
IDBI Bank Ltd.	5,806,899	6,698	0.0%
Oriental Bank of Commerce	1,194,783	5,567	0.0%
* Mangalore Refinery & Petrochemicals Ltd.	3,711,949	3,587	0.0%
State Bank of India GDR	39,524	3,474	0.0%
Corp Bank	482,151	2,658	0.0%
India—Other †		4,223,470	6.4%
		7,489,217	11.4%
Indonesia
Bank Central Asia Tbk PT	229,335,224	248,126	0.4%
Telekomunikasi Indonesia Persero Tbk PT	943,129,805	216,475	0.3%
Bank Rakyat Indonesia Persero Tbk PT	200,665,000	184,437	0.3%
Bank Mandiri Persero Tbk PT	174,486,780	149,747	0.2%
Perusahaan Gas Negara Persero Tbk PT	201,552,604	99,298	0.2%
Semen Indonesia Persero Tbk PT	55,405,404	73,792	0.1%
Bank Negara Indonesia Persero Tbk PT	139,844,461	68,913	0.1%
Jasa Marga Persero Tbk PT	37,870,600	20,118	0.0%
Tambang Batubara Bukit Asam Persero Tbk PT	16,558,825	17,758	0.0%


Emerging Markets Stock Index Fund



		Market	Percentage
		Value	of Net
	Shares	($000)	Assets
Aneka Tambang Persero Tbk PT	61,919,500	4,973	0.0%
Indonesia—Other †		763,362	1.2%
		1,846,999	2.8%
Malaysia
Public Bank Bhd. (Local)	57,052,700	321,970	0.5%
Malayan Banking Bhd.	80,207,588	236,555	0.4%
1 Malaysia—Other †		2,600,114	3.9%
		3,158,639	4.8%
Mexico
America Movil SAB de CV	549,659,191	670,632	1.0%
Fomento Economico Mexicano SAB de CV	39,648,552	381,344	0.6%
Grupo Televisa SAB	48,661,052	351,671	0.5%
* Cemex SAB de CV	220,563,803	271,728	0.4%
Grupo Financiero Banorte SAB de CV	41,728,351	267,700	0.4%
Grupo Mexico SAB de CV Class B	72,941,065	250,625	0.4%
Wal-Mart de Mexico SAB de CV	103,105,530	238,350	0.4%
Mexico—Other †		1,474,876	2.3%
		3,906,926	6.0%

Morocco †		2,275	0.0%

Peru †		202,587	0.3%

Philippines †		1,110,876	1.7%

Poland †		1,242,599	1.9%

Russia
Gazprom OAO ADR	59,342,737	393,852	0.6%
Sberbank of Russia	193,804,608	343,594	0.5%
Magnit PJSC GDR	5,117,582	343,321	0.5%
Lukoil OAO ADR	5,891,020	289,639	0.4%
Gazprom OAO	83,276,983	274,028	0.4%
Rosneft OAO GDR	15,019,095	83,765	0.1%
AK Transneft OAO Preference Shares	28,290	61,832	0.1%
VTB Bank OJSC	58,129,231,072	54,075	0.1%
RusHydro JSC	2,341,602,363	37,730	0.1%
Rosneft OAO	6,628,175	36,976	0.1%
1 VTB Bank OJSC GDR	18,988,746	35,941	0.1%
* Inter RAO JSC	41,677,450,909	9,171	0.0%
Aeroflot - Russian Airlines OJSC	9,430,172	8,378	0.0%
Sberbank of Russia ADR	1,054,192	8,019	0.0%
Federal Grid Co. Unified Energy System JSC	5,323,286,228	6,655	0.0%
* Rosseti JSC	407,033,605	4,894	0.0%
Russia—Other †		1,246,152	1.9%
		3,238,022	4.9%
South Africa
Naspers Ltd.	6,632,456	824,409	1.2%
MTN Group Ltd.	32,214,400	713,106	1.1%
Sasol Ltd.	10,141,282	506,677	0.8%
Standard Bank Group Ltd.	22,468,709	282,881	0.4%
FirstRand Ltd.	60,868,326	260,447	0.4%


Emerging Markets Stock Index Fund


			Market	Percentage
			Value	of Net
		Shares	($000)	Assets
Steinhoff International Holdings Ltd.		46,238,990	236,552	0.4%
South Africa—Other †			3,307,129	5.0%
			6,131,201	9.3%

Spain †			57,537	0.1%

Taiwan
Taiwan Semiconductor Manufacturing Co. Ltd.		248,721,845	1,073,591	1.6%
Taiwan Semiconductor Manufacturing Co. Ltd. ADR		38,585,778	849,659	1.3%
Hon Hai Precision Industry Co. Ltd.		232,014,722	734,263	1.1%
MediaTek Inc.		26,697,192	390,604	0.6%
Cathay Financial Holding Co. Ltd.		147,757,966	244,339	0.4%
Taiwan—Other †			5,722,393	8.7%
			9,014,849	13.7%

Thailand †			1,956,145	3.0%

Turkey †			1,216,870	1.9%

United Arab Emirates †			675,348	1.0%
Total Common Stocks (Cost $61,738,912)			65,395,254	99.6%²

	Coupon
Temporary Cash Investments
Money Market Fund
^3,4Vanguard Market Liquidity Fund	0.114%	1,053,190,170	1,053,190	1.6%

⁵U.S. Government and Agency Obligations †			19,098	0.0%
Total Temporary Cash Investments (Cost $1,072,289)			1,072,288	1.6%²
Total Investments (Cost $62,811,201)			66,467,542	101.2%
Other Assets and Liabilities
Other Assets			228,661	0.3%
Liabilities⁴			(1,007,360)	(1.5%)
			(778,699)	(1.2%)
Net Assets			65,688,843	100.0%


At October 31, 2014, net assets consisted of:
				Amount
				($000)
Paid-in Capital				66,152,076
Undistributed Net Investment Income				52,001
Accumulated Net Realized Losses				(4,166,358)
Unrealized Appreciation (Depreciation)
Investment Securities				3,656,341
Futures Contracts				(4,298)
Foreign Currencies				(919)
Net Assets				65,688,843


Emerging Markets Stock Index Fund



	Amount
	($000)
Investor Shares—Net Assets
Applicable to 76,354,900 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	2,063,020
Net Asset Value Per Share—Investor Shares	$27.02

Admiral Shares—Net Assets
Applicable to 249,956,104 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	8,869,834
Net Asset Value Per Share—Admiral Shares	$35.49

Institutional Shares—Net Assets
Applicable to 148,289,594 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	4,001,633
Net Asset Value Per Share—Institutional Shares	$26.99

Institutional Plus Shares—Net Assets
Applicable to 30,676,113 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	2,753,861
Net Asset Value Per Share—Institutional Plus Shares	$89.77

ETF Shares—Net Assets
Applicable to 1,125,068,862 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)	48,000,495
Net Asset Value Per Share—ETF Shares	$42.66

See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $724,345,000.
† Represents the aggregate value, by category, of securities that are not among the 50 largest holdings and, in total for any issuer, represent 1% or less of net assets.
1 Certain of the fund’s securities are 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, 2014, the aggregate value of these securities was $144,181,000, representing 0.2% of net assets.
2 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 100.0% and 1.2%, respectively, 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 $781,627,000 of collateral received for securities on loan.
5 Securities with a value of $12,999,000 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.

Emerging Markets Stock Index Fund

Statement of Operations


	Year Ended
	October 31, 2014
	($000)
Investment Income
Income
Dividends¹	1,766,752
Interest²	362
Securities Lending	31,944
Total Income	1,799,058
Expenses
The Vanguard Group—Note B
Investment Advisory Services	3,610
Management and Administrative—Investor Shares	4,919
Management and Administrative—Admiral Shares	5,187
Management and Administrative—Signal Shares	568
Management and Administrative—Institutional Shares	1,200
Management and Administrative—Institutional Plus Shares	346
Management and Administrative—ETF Shares	27,775
Marketing and Distribution—Investor Shares	467
Marketing and Distribution—Admiral Shares	1,073
Marketing and Distribution—Signal Shares	305
Marketing and Distribution—Institutional Shares	873
Marketing and Distribution—Institutional Plus Shares	587
Marketing and Distribution—ETF Shares	10,007
Custodian Fees	36,267
Auditing Fees	48
Shareholders’ Reports—Investor Shares	111
Shareholders’ Reports—Admiral Shares	60
Shareholders’ Reports—Signal Shares	15
Shareholders’ Reports—Institutional Shares	19
Shareholders’ Reports—Institutional Plus Shares	—
Shareholders’ Reports—ETF Shares	1,255
Trustees’ Fees and Expenses	45
Total Expenses	94,737
Net Investment Income	1,704,321
Realized Net Gain (Loss)
Investment Securities Sold	(1,386,220)
Futures Contracts	20,153
Foreign Currencies	(5,642)
Realized Net Gain (Loss)	(1,371,709)
Change in Unrealized Appreciation (Depreciation)
Investment Securities	1,478,396
Futures Contracts	(6,164)
Foreign Currencies	(672)
Change in Unrealized Appreciation (Depreciation)	1,471,560
Net Increase (Decrease) in Net Assets Resulting from Operations	1,804,172

1 Dividends are net of foreign withholding taxes of $185,915,000.
2 Interest income from an affiliated company of the fund was $348,000.
See accompanying Notes, which are an integral part of the Financial Statements.

Emerging Markets Stock Index Fund

Statement of Changes in Net Assets


	Year Ended October 31
	2014	2013
	($000)	($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	1,704,321	1,862,694
Realized Net Gain (Loss)	(1,371,709)	3,307,815
Change in Unrealized Appreciation (Depreciation)	1,471,560	(2,315,290)
Net Increase (Decrease) in Net Assets Resulting from Operations	1,804,172	2,855,219
Distributions
Net Investment Income
Investor Shares	(54,715)	(67,382)
Admiral Shares	(211,231)	(223,614)
Signal Shares	(27,666)	(38,274)
Institutional Shares	(107,801)	(104,184)
Institutional Plus Shares	(74,398)	(71,369)
ETF Shares	(1,306,758)	(1,757,080)
Realized Capital Gain
Investor Shares	—	—
Admiral Shares	—	—
Signal Shares	—	—
Institutional Shares	—	—
Institutional Plus Shares	—	—
ETF Shares	—	—
Total Distributions	(1,782,569)	(2,261,903)
Capital Share Transactions
Investor Shares	(135,545)	(181,983)
Admiral Shares	1,834,672	75,340
Signal Shares	(1,387,323)	459,927
Institutional Shares	402,491	1,045,928
Institutional Plus Shares	410,168	710,176
ETF Shares	(2,957,902)	(6,490,426)
Net Increase (Decrease) from Capital Share Transactions	(1,833,439)	(4,381,038)
Total Increase (Decrease)	(1,811,836)	(3,787,722)
Net Assets
Beginning of Period	67,500,679	71,288,401
End of Period¹	65,688,843	67,500,679

1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of $52,001,000 and $130,679,000.

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

Emerging Markets Stock Index Fund

Financial Highlights


Investor Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$26.78	$26.36	$26.39	$29.49	$23.90
Investment Operations
Net Investment Income	. 672	.667	.576	.589	.521¹
Net Realized and Unrealized Gain (Loss)
on Investments ²	.271	.548	.237	(3.255)	5.383
Total from Investment Operations	.943	1.215	.813	(2.666)	5.904
Distributions
Dividends from Net Investment Income	(.703)	(.795)	(.843)	(.434)	(.314)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(.703)	(.795)	(.843)	(.434)	(.314)
Net Asset Value, End of Period	$27.02	$26.78	$26.36	$26.39	$29.49

Total Return³	3.59%	4.78%	3.30%	-9.20%	24.92%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$2,063	$2,181	$2,333	$2,585	$5,597
Ratio of Total Expenses to Average Net Assets	0.33%	0.33%	0.33%	0.33%	0.35%
Ratio of Net Investment Income to
Average Net Assets	2.56%	2.45%	2.38%	2.25%	1.97%
Portfolio Turnover Rate ⁴	9%	26%	8%	10%	12%

1 Calculated based on average shares outstanding.
2 Includes increases from purchase and redemption fees of $.00, $.00, $.00, $.02, and $.04. Purchase and redemption fees were eliminated effective February 29, 2012, and May 23, 2012, respectively.
3 Total returns do not include transaction or account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction and account service fees.
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.


Emerging Markets Stock Index Fund


Financial Highlights


Admiral Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$35.17	$34.65	$34.71	$38.82	$31.45
Investment Operations
Net Investment Income	. 946	. 940	. 816	.820	.696¹
Net Realized and Unrealized Gain (Loss)
on Investments ²	.361	.709	.311	(4.277)	7.119
Total from Investment Operations	1.307	1.649	1.127	(3.457)	7.815
Distributions
Dividends from Net Investment Income	(.987)	(1.129)	(1.187)	(. 653)	(. 445)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(.987)	(1.129)	(1.187)	(. 653)	(. 445)
Net Asset Value, End of Period	$35.49	$35.17	$34.65	$34.71	$38.82

Total Return³	3.79%	4.94%	3.49%	-9.09%	25.08%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$8,870	$6,959	$6,801	$6,486	$4,761
Ratio of Total Expenses to Average Net Assets	0.15%	0.15%	0.18%	0.20%	0.22%
Ratio of Net Investment Income to
Average Net Assets	2.74%	2.63%	2.53%	2.38%	2.10%
Portfolio Turnover Rate ⁴	9%	26%	8%	10%	12%

1 Calculated based on average shares outstanding.
2 Includes increases from redemption fees of $.00, $.00, $.01, $.02, and $.03. Purchase and redemption fees were eliminated effective February 29, 2012, and May 23, 2012, respectively.
3 Total returns do not include transaction or account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction and account service fees.
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.

Emerging Markets Stock Index Fund

Financial Highlights


Signal Shares
	Nov. 1,
	2013 to
For a Share Outstanding	Oct. 24,		Year Ended October 31,
Throughout Each Period	2014¹	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$33.81	$33.31	$33.38	$37.34	$30.26
Investment Operations
Net Investment Income	.896	.906	.788	.813	.690²
Net Realized and Unrealized Gain (Loss)
on Investments ³	(.740)	.685	.285	(4.129)	6.818
Total from Investment Operations	.156	1.591	1.073	(3.316)	7.508
Distributions
Dividends from Net Investment Income	(.946)	(1.091)	(1.143)	(.644)	(.428)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(.946)	(1.091)	(1.143)	(.644)	(.428)
Net Asset Value, End of Period	$33.02¹	$33.81	$33.31	$33.38	$37.34

Total Return ⁴	0.44%	4.96%	3.46%	-9.07%	25.04%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	—	$1,399	$927	$666	$644
Ratio of Total Expenses to Average Net Assets	0.15%⁵	0.15%	0.18%	0.20%	0.22%
Ratio of Net Investment Income to
Average Net Assets	2.62%⁵	2.63%	2.53%	2.38%	2.10%
Portfolio Turnover Rate⁶	9%	26%	8%	10%	12%

1 Net asset value as of October 24, 2014, on which date the Signal Shares were converted to Admiral Shares.
2 Calculated based on average shares outstanding.
3 Includes increases from redemption fees of $.00, $.00, $.00, $.02, and $.03. Purchase and redemption fees were eliminated effective February 29, 2012, and May 23, 2012, respectively.
4 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.

Emerging Markets Stock Index Fund

Financial Highlights


Institutional Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$26.74	$26.36	$26.42	$29.55	$23.94
Investment Operations
Net Investment Income	.726	.725	.643	.657	.571¹
Net Realized and Unrealized Gain (Loss)
on Investments ²	.283	.532	.225	(3.259)	5.388
Total from Investment Operations	1.009	1.257	.868	(2.602)	5.959
Distributions
Dividends from Net Investment Income	(.759)	(.877)	(.928)	(.528)	(.349)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(.759)	(.877)	(.928)	(.528)	(.349)
Net Asset Value, End of Period	$26.99	$26.74	$26.36	$26.42	$29.55

Total Return³	3.85%	4.95%	3.54%	-9.00%	25.13%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$4,002	$3,558	$2,495	$1,305	$3,473
Ratio of Total Expenses to Average Net Assets	0.12%	0.12%	0.12%	0.13%	0.15%
Ratio of Net Investment Income to
Average Net Assets	2.77%	2.66%	2.59%	2.45%	2.17%
Portfolio Turnover Rate ⁴	9%	26%	8%	10%	12%

1 Calculated based on average shares outstanding.
2 Includes increases from purchase and redemption fees of $.00, $.00, $.00, $.02, and $.02. Purchase and redemption fees were eliminated effective February 29, 2012, and May 23, 2012, respectively.
3 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.

Emerging Markets Stock Index Fund

Financial Highlights


Institutional Plus Shares
				Dec. 15,
				2010¹to
	Year Ended October 31,			Oct. 31,
For a Share Outstanding Throughout Each Period	2014	2013	2012	2011
Net Asset Value, Beginning of Period	$88.97	$87.68	$87.90	$99.35
Investment Operations
Net Investment Income	2.436	2.426	2.131	2.215
Net Realized and Unrealized Gain (Loss) on Investments²	.904	1.792	.776	(11.911)
Total from Investment Operations	3.340	4.218	2.907	(9.696)
Distributions
Dividends from Net Investment Income	(2.540)	(2.928)	(3.127)	(1.754)
Distributions from Realized Capital Gains	—	—	—	—
Total Distributions	(2.540)	(2.928)	(3.127)	(1.754)
Net Asset Value, End of Period	$89.77	$88.97	$87.68	$87.90

Total Return³	3.83%	4.99%	3.56%	-9.95%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$2,754	$2,320	$1,607	$1,581
Ratio of Total Expenses to Average Net Assets	0.10%	0.10%	0.10%	0.10%⁴
Ratio of Net Investment Income to Average Net Assets	2.79%	2.68%	2.61%	2.48%⁴
Portfolio Turnover Rate ⁵	9%	26%	8%	10%

1 Inception.
2 Includes increases from purchase and redemption fees of $.00, $.00, $.01, and $.05. Purchase and redemption fees were eliminated effective February 29, 2012, and May 23, 2012, respectively.
3 Total returns do not include transaction fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction fees.
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.


Emerging Markets Stock Index Fund


Financial Highlights


FTSE Emerging Markets ETF Shares

For a Share Outstanding			Year Ended October 31,
Throughout Each Period	2014	2013	2012	2011	2010
Net Asset Value, Beginning of Period	$42.28	$41.65	$41.73	$46.70	$37.84
Investment Operations
Net Investment Income	1.137	1.129	.984	1.019	.870¹
Net Realized and Unrealized Gain (Loss)
on Investments ²	.428	.860	.367	(5.174)	8.535
Total from Investment Operations	1.565	1.989	1.351	(4.155)	9.405
Distributions
Dividends from Net Investment Income	(1.185)	(1.359)	(1.431)	(.815)	(.545)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(1.185)	(1.359)	(1.431)	(.815)	(.545)
Net Asset Value, End of Period	$42.66	$42.28	$41.65	$41.73	$46.70

Total Return	3.77%	4.97%	3.47%	-9.09%	25.07%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$48,000	$51,083	$57,125	$46,289	$40,817
Ratio of Total Expenses to Average Net Assets	0.15%	0.15%	0.18%	0.20%	0.22%
Ratio of Net Investment Income to
Average Net Assets	2.74%	2.63%	2.53%	2.38%	2.10%
Portfolio Turnover Rate ³	9%	26%	8%	10%	12%

1 Calculated based on average shares outstanding.
2 Includes increases from purchase and redemption fees of $.00, $.00, $.01, $.02, and $.03. Purchase and redemption fees were eliminated effective February 29, 2012, and May 23, 2012, respectively.
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.

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, Institutional Shares, Institutional Plus Shares, and ETF Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares, Institutional Shares, and Institutional Plus Shares are designed for investors who meet certain administrative, service, and account-size criteria. ETF Shares, known as Vanguard FTSE Emerging Markets ETF shares, are listed for trading on NYSE Arca; they can be purchased and sold through a broker. Prior to October 24, 2014, the fund offered Signal Shares. Effective at the close of business on October 24, 2014, the Signal Shares were converted to Admiral Shares.

Emerging Markets Stock Index Fund

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. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund’s performance and requires daily settlement of variation margin representing changes in the market value of each contract.

Futures contracts are valued at their quoted daily settlement prices. The aggregate settlement values 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).

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

Emerging Markets Stock Index Fund

The fund had no borrowings outstanding at October 31, 2014, or at any time during the period then ended.

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 based on methods approved by the board of trustees. The fund has committed to invest up to 0.40% of its net assets in Vanguard. At October 31, 2014, the fund had contributed capital of $6,413,000 to Vanguard (included in Other Assets), representing 0.01% of the fund’s net assets and 2.56% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

Emerging Markets Stock Index Fund

The following table summarizes the market value of the fund’s investments as of October 31, 2014, based on the inputs used to value them:


	Level 1	Level 2	Level 3
Investments	($000)	($000)	($000)
Common Stocks—North and South America	6,826,509	6,663,819	5,268
Common Stocks—Other	1,572,174	50,231,878	95,606
Temporary Cash Investments	1,053,190	19,098	—
Futures Contracts—Assets¹	2,262	—	—
Total	9,454,135	56,914,795	100,874
1 Represents variation margin on the last day of the reporting period.

Securities in certain countries may transfer between Level 1 and Level 2 because of differences in stock market closure times that may result from transitions between standard and daylight saving time in those countries and the United States. Based on values on the date of transfer, securities valued at $5,673,059,000 based on Level 1 inputs were transferred from Level 2 during the fiscal year. Additionally, based on values on the date of transfer, securities valued at $6,628,073,000 based on Level 2 inputs were transferred from Level 1 during the fiscal year.

D. At October 31, 2014, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:


				($000)
			Aggregate
		Number of	Settlement	Unrealized
		Long (Short)	Value	Appreciation
Futures Contracts	Expiration	Contracts	Long (Short)	(Depreciation)
MSCI Emerging Markets Index	December 2014	3,242	164,305	(8,014)
E-mini S&P 500 Index	December 2014	1,000	100,570	2,823
MSCI Taiwan Index	November 2014	1,000	33,390	893
				(4,298)

Unrealized appreciation (depreciation) on open MSCI Emerging Markets Index and E-mini S&P 500 Index futures contracts is required to be treated as realized gain (loss) for tax purposes.

Emerging Markets Stock Index Fund

During the year ended October 31, 2014, the fund realized net foreign currency losses of $5,642,000, 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. During the year ended October 31, 2014, the fund realized gains on the sale of passive foreign investment companies of $5,212,000, 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. Passive foreign investment companies held at October 31, 2014, had unrealized appreciation of $39,428,000.

During the year ended October 31, 2014, the fund realized $616,791,000 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, 2014, the fund had $143,136,000 of ordinary income available for distribution. At October 31, 2014, the fund had available capital losses totaling $4,171,549,000 to offset future net capital gains. Of this amount, $2,165,283,000 is subject to expiration dates; $59,682,000 may be used to offset future net capital gains through October 31, 2016, $1,591,794,000 through October 31, 2017, $212,374,000 through October 31, 2018, and $301,433,000 through October 31, 2019. Capital losses of $2,006,266,000 realized beginning in fiscal 2012 may be carried forward indefinitely under the Regulated Investment Company Modernization Act of 2010, but must be used before any expiring loss carryforwards.

At October 31, 2014, the cost of investment securities for tax purposes was $62,850,629,000. Net unrealized appreciation of investment securities for tax purposes was $3,616,913,000, consisting of unrealized gains of $12,617,428,000 on securities that had risen in value since their purchase and $9,000,515,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the year ended October 31, 2014, the fund purchased $8,370,609,000 of investment securities and sold $10,614,498,000 of investment securities, other than temporary cash investments. Purchases and sales include $2,369,766,000 and $5,291,124,000, respectively, in connection with in-kind purchases and redemptions of the fund’s capital shares.


G. Capital share transactions for each class of shares were:
			Year Ended October 31,
		2014		2013
	Amount	Shares	Amount	Shares
	($000)	(000)	($000)	(000)
Investor Shares
Issued	452,183	17,297	467,727	17,369
Issued in Lieu of Cash Distributions	51,321	1,929	63,019	2,459
Redeemed	(639,049)	(24,336)	(712,729)	(26,865)
Net Increase (Decrease)—Investor Shares	(135,545)	(5,110)	(181,983)	(7,037)

Emerging Markets Stock Index Fund


			Year Ended October 31,
		2014		2013
	Amount	Shares	Amount	Shares
	($000)	(000)	($000)	(000)
Admiral Shares
Issued¹	2,886,209	82,926	1,340,995	37,938
Issued in Lieu of Cash Distributions	188,705	5,400	200,948	5,964
Redeemed	(1,240,242)	(36,247)	(1,466,603)	(42,308)
Net Increase (Decrease) —Admiral Shares	1,834,672	52,079	75,340	1,594
Signal Shares
Issued	371,246	11,327	816,165	24,280
Issued in Lieu of Cash Distributions	23,257	699	33,455	1,038
Redeemed¹	(1,781,826)	(53,414)	(389,693)	(11,763)
Net Increase (Decrease)—Signal Shares	(1,387,323)	(41,388)	459,927	13,555
Institutional Shares
Issued	1,415,770	54,296	1,710,001	63,821
Issued in Lieu of Cash Distributions	99,153	3,728	85,408	3,345
Redeemed	(1,112,432)	(42,784)	(749,481)	(28,777)
Net Increase (Decrease) —Institutional Shares	402,491	15,240	1,045,928	38,389
Institutional Plus Shares
Issued	802,266	9,114	1,158,428	12,922
Issued in Lieu of Cash Distributions	66,245	749	64,803	764
Redeemed	(458,343)	(5,261)	(513,055)	(5,942)
Net Increase (Decrease) —Institutional Plus Shares	410,168	4,602	710,176	7,744
ETF Shares
Issued	4,796,082	112,270	3,964,471	94,396
Issued in Lieu of Cash Distributions	—	—	—	—
Redeemed	(7,753,984)	(195,400)	(10,454,897)	(257,600)
Net Increase (Decrease)—ETF Shares	(2,957,902)	(83,130)	(6,490,426)	(163,204)
1 Admiral Shares Issued and Signal Shares Redeemed include $1,127,550,000 from the conversion of Signal Shares to Admiral Shares during the 2014 fiscal year.

H. Management has determined that no material events or transactions occurred subsequent to October 31, 2014, that would require recognition or disclosure in these financial statements.

Report of Independent Registered
Public Accounting Firm

To the Board of 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:

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, 2014 by correspondence with the custodian and brokers, by agreement to the underlying ownership records of the transfer agent and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 11, 2014

Special 2014 tax information (unaudited) for Vanguard European Stock Index Fund

This information for the fiscal year ended October 31, 2014, is included pursuant to provisions of
the Internal Revenue Code.

The fund distributed $740,177,000 of qualified dividend income to shareholders during the fiscal year.

The fund designates to shareholders foreign source income of $798,698,000 and foreign taxes
paid of $35,477,000. Shareholders will receive more detailed information with their Form 1099-DIV
in January 2015 to determine the calendar year amounts to be included on their 2014 tax returns.

Special 2014 tax information (unaudited) for Vanguard Pacific Stock Index Fund

This information for the fiscal year ended October 31, 2014, is included pursuant to provisions of
the Internal Revenue Code.

The fund distributed $107,332,000 of qualified dividend income to shareholders during the fiscal year.

The fund designates to shareholders foreign source income $143,060,000 and foreign taxes paid
of $6,645,000. Shareholders will receive more detailed information with their Form 1099-DIV in
January 2015 to determine the calendar year amounts to be included on their 2014 tax returns.

Special 2014 tax information (unaudited) for Vanguard Emerging Markets Stock Index Fund

This information for the fiscal year ended October 31, 2014, is included pursuant to provisions of
the Internal Revenue Code.

The fund distributed $872,128,000 of qualified dividend income to shareholders during the fiscal year.

The fund designates to shareholders foreign source income $1,814,457,000 and foreign taxes paid
of $191,243,000. Shareholders will receive more detailed information with their Form 1099-DIV in
January 2015 to determine the calendar year amounts to be included on their 2014 tax returns.

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 2014. (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, 2014


	One	Five	Ten
	Year	Years	Years
European Stock Index Fund Investor Shares
Returns Before Taxes	-0.73%	6.91%	6.11%
Returns After Taxes on Distributions	-1.75	6.11	5.41
Returns After Taxes on Distributions and Sale of Fund Shares	0.30	5.54	5.01

	One	Five	Ten
	Year	Years	Years
Pacific Stock Index Fund Investor Shares
Returns Before Taxes	1.21%	7.15%	5.62%
Returns After Taxes on Distributions	0.45	6.47	5.10
Returns After Taxes on Distributions and Sale of Fund Shares	1.06	5.61	4.52

	One	Five	Ten
	Year	Years	Years
Emerging Markets Stock Index Fund Investor Shares
Returns Before Taxes	3.59%	4.92%	10.24%
Returns After Taxes on Distributions	2.71	4.40	9.78
Returns After Taxes on Distributions and Sale of Fund Shares	2.30	3.86	8.51

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 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.

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 any purchase, redemption, or account service fees described in the fund 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.


Six Months Ended October 31, 2014
	Beginning	Ending	Expenses
	Account Value	Account Value	Paid During
	4/30/2014	10/31/2014	Period
Based on Hypothetical 5% Yearly Return
European Stock Index Fund
Investor Shares	$1,000.00	$1,023.89	$1.33
Admiral Shares	1,000.00	1,024.60	0.61
Institutional Shares	1,000.00	1,024.75	0.46
FTSE Europe ETF Shares	1,000.00	1,024.60	0.61
Pacific Stock Index Fund
Investor Shares	$1,000.00	$1,023.89	$1.33
Admiral Shares	1,000.00	1,024.60	0.61
Institutional Shares	1,000.00	1,024.75	0.46
FTSE Pacific ETF Shares	1,000.00	1,024.60	0.61
Emerging Markets Stock Index Fund
Investor Shares	$1,000.00	$1,023.54	$1.68
Admiral Shares	1,000.00	1,024.45	0.77
Institutional Shares	1,000.00	1,024.60	0.61
Institutional Plus Shares	1,000.00	1,024.70	0.51
FTSE Emerging Markets ETF Shares	1,000.00	1,024.45	0.77

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: for the European Stock Index Fund, 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.09% for Institutional Shares, and 0.12% for FTSE Europe ETF Shares; for the Pacific Stock Index Fund, 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.09% for Institutional Shares, and 0.12% for FTSE Pacific ETF Shares; and for the Emerging Markets Stock Index Fund, 0.33% for Investor Shares, 0.15% for Admiral Shares, 0.12% for Institutional Shares, 0.10% for Institutional Plus Shares, and 0.15% for FTSE Emerging Markets 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.

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.

Dividend Yield. Dividend income earned by stocks, expressed as a percentage of the aggregate market value (or of net asset value, for a fund). The yield is determined by dividing the amount of the annual dividends by the aggregate value (or net asset value) at the end of the period. For a fund, the dividend yield is based solely on stock holdings and does not include any income produced by other investments.

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. A fund’s total annual operating expenses expressed as a percentage of the fund’s average net assets. The expense ratio includes management and administrative expenses, but does not include the transaction costs of buying and selling portfolio securities.

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.

Median Market Cap. An indicator of the size of companies in which a fund invests; the midpoint of market capitalization (market price x shares outstanding) of a fund’s stocks, weighted by the proportion of the fund’s assets invested in each stock. Stocks representing half of the fund’s assets have market capitalizations above the median, and the rest are below it.

Price/Book Ratio. The share price of a stock divided by its net worth, or book value, per share. For a fund, the weighted average price/book ratio of the stocks it holds.

Price/Earnings Ratio. The ratio of a stock’s current price to its per-share earnings over the past year. For a fund, the weighted average P/E of the stocks it holds. P/E is an indicator of market expectations about corporate prospects; the higher the P/E, the greater the expectations for a company’s future growth.

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.

Return on Equity. The annual average rate of return generated by a company during the past five years for each dollar of shareholder’s equity (net income divided by shareholder’s equity). For a fund, the weighted average return on equity for the companies whose stocks it holds.

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.

Benchmark Information

Spliced Emerging Markets Index: Select Emerging Markets Index through August 23, 2006; MSCI Emerging Markets Index through January 9, 2013; FTSE Emerging Transition Index through June 27, 2013; and FTSE Emerging Index thereafter. Benchmark returns are adjusted for withholding taxes.

Spliced European Index: MSCI Europe Index through March 26, 2013; FTSE Developed Europe Index thereafter. Benchmark returns are adjusted for withholding taxes.

Spliced Pacific Stock Index: MSCI Pacific Index through March 26, 2013; FTSE Developed Asia Pacific Index thereafter. Benchmark returns are adjusted for withholding taxes.

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 177 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 vanguard.com.


InterestedTrustee1	and Delphi Automotive LLP (automotive components);
	Senior Advisor at New Mountain Capital.
F. William McNabb III
Born 1957. Trustee Since July 2009. Chairman of the	Amy Gutmann
Board. Principal Occupation(s) During the Past Five	Born 1949. Trustee Since June 2006. Principal
Years: Chairman of the Board of The Vanguard Group,	Occupation(s) During the Past Five Years: President of
Inc., and of each of the investment companies served	the University of Pennsylvania; Christopher H. Browne
by The Vanguard Group, since January 2010; Director	Distinguished Professor of Political Science, School of
of The Vanguard Group since 2008; Chief Executive	Arts and Sciences, and Professor of Communication,
Officer and President of The Vanguard Group, and of	Annenberg School for Communication, with secondary
each of the investment companies served by The	faculty appointments in the Department of Philosophy,
Vanguard Group, since 2008; Director of Vanguard	School of Arts and Sciences, and at the Graduate
Marketing Corporation; Managing Director of The	School of Education, University of Pennsylvania;
Vanguard Group (1995–2008).	Trustee of the National Constitution Center; Chair
	of the Presidential Commission for the Study of
IndependentTrustees	Bioethical Issues.

Emerson U. Fullwood	JoAnn Heffernan Heisen
Born 1948. Trustee Since January 2008. Principal	Born 1950. Trustee Since July 1998. Principal
Occupation(s) During the Past Five Years: Executive	Occupation(s) During the Past Five Years: Corporate
Chief Staff and Marketing Officer for North America	Vice President and Chief Global Diversity Officer
and Corporate Vice President (retired 2008) of Xerox	(retired 2008) and Member of the Executive
Corporation (document management products and	Committee (1997–2008) of Johnson & Johnson
services); Executive in Residence and 2009–2010	(pharmaceuticals/medical devices/consumer
Distinguished Minett Professor at the Rochester	products); Director of Skytop Lodge Corporation
Institute of Technology; Director of SPX Corporation	(hotels), the University Medical Center at Princeton,
(multi-industry manufacturing), the United Way of	the Robert Wood Johnson Foundation, and the Center
Rochester, Amerigroup Corporation (managed health	for Talent Innovation; Member of the Advisory Board
care), the University of Rochester Medical Center,	of the Maxwell School of Citizenship and Public Affairs
Monroe Community College Foundation, and North	at Syracuse University.
Carolina A&T University.
	F. Joseph Loughrey
Rajiv L. Gupta	Born 1949. Trustee Since October 2009. Principal
Born 1945. Trustee Since December 2001.²	Occupation(s) During the Past Five Years: President
Principal Occupation(s) During the Past Five Years:	and Chief Operating Officer (retired 2009) of Cummins
Chairman and Chief Executive Officer (retired 2009)	Inc. (industrial machinery); Chairman of the Board
and President (2006–2008) of Rohm and Haas Co.	of Hillenbrand, Inc. (specialized consumer services),
(chemicals); Director of Tyco International, Ltd.	and of Oxfam America; Director of SKF AB (industrial
(diversified manufacturing and services), Hewlett-	machinery), Hyster-Yale Materials Handling, Inc.
Packard Co. (electronic computer manufacturing),	(forklift trucks), the Lumina Foundation for Education,


and the V Foundation for Cancer Research; Member	Executive Officers
of the Advisory Council for the College of Arts and
Letters and of the Advisory Board to the Kellogg	Glenn Booraem
Institute for International Studies, both at the	Born 1967. Controller Since July 2010. Principal
University of Notre Dame.	Occupation(s) During the Past Five Years: Principal
	of The Vanguard Group, Inc.; Controller of each of
Mark Loughridge	the investment companies served by The Vanguard
Born 1953. Trustee Since March 2012. Principal	Group; Assistant Controller of each of the investment
Occupation(s) During the Past Five Years: Senior Vice	companies served by The Vanguard Group (2001–2010).
President and Chief Financial Officer (retired 2013)
at IBM (information technology services); Fiduciary	Thomas J. Higgins
Member of IBM’s Retirement Plan Committee (2004–	Born 1957. Chief Financial Officer Since September
2013); Member of the Council on Chicago Booth.	2008. Principal Occupation(s) During the Past Five
	Years: Principal of The Vanguard Group, Inc.; Chief
Scott C. Malpass	Financial Officer of each of the investment companies
Born 1962. Trustee Since March 2012. Principal	served by The Vanguard Group; Treasurer of each of
Occupation(s) During the Past Five Years: Chief	the investment companies served by The Vanguard
Investment Officer and Vice President at the University	Group (1998–2008).
of Notre Dame; Assistant Professor of Finance at the
Mendoza College of Business at Notre Dame; Member	Kathryn J. Hyatt
of the Notre Dame 403(b) Investment Committee;	Born 1955. Treasurer Since November 2008. Principal
Board Member of TIFF Advisory Services, Inc.	Occupation(s) During the Past Five Years: Principal of
(investment advisor); Member of the Investment	The Vanguard Group, Inc.; Treasurer of each of the
Advisory Committees of the Financial Industry	investment companies served by The Vanguard
Regulatory Authority (FINRA) and of Major League	Group; Assistant Treasurer of each of the investment
Baseball.	companies served by The Vanguard Group (1988–2008).

André F. Perold	Heidi Stam
Born 1952. Trustee Since December 2004. Principal	Born 1956. Secretary Since July 2005. Principal
Occupation(s) During the Past Five Years: George	Occupation(s) During the Past Five Years: Managing
Gund Professor of Finance and Banking, Emeritus	Director of The Vanguard Group, Inc.; General Counsel
at the Harvard Business School (retired 2011);	of The Vanguard Group; Secretary of The Vanguard
Chief Investment Officer and Managing Partner of	Group and of each of the investment companies
HighVista Strategies LLC (private investment firm);	served by The Vanguard Group; Director and Senior
Director of Rand Merchant Bank; Overseer of the	Vice President of Vanguard Marketing Corporation.
Museum of Fine Arts Boston.
	Vanguard Senior ManagementTeam
Alfred M. Rankin, Jr.
Born 1941. Trustee Since January 1993. Principal	Mortimer J. Buckley	Chris D. McIsaac
Occupation(s) During the Past Five Years: Chairman,	Kathleen C. Gubanich	Michael S. Miller
President, and Chief Executive Officer of NACCO	Paul A. Heller	James M. Norris
Industries, Inc. (housewares/lignite), and of Hyster-	Martha G. King	Glenn W. Reed
Yale Materials Handling, Inc. (forklift trucks); Chairman	John T. Marcante
of the Board of University Hospitals of Cleveland.
	Chairman Emeritus and Senior Advisor
Peter F. Volanakis
Born 1955. Trustee Since July 2009. Principal	John J. Brennan
Occupation(s) During the Past Five Years: President	Chairman, 1996–2009
and Chief Operating Officer (retired 2010) of Corning	Chief Executive Officer and President, 1996–2008
Incorporated (communications equipment); Trustee of
Colby-Sawyer College; Member of the Advisory Board	Founder
of the Norris Cotton Cancer Center and of the Advisory
Board of the Parthenon Group (strategy consulting).	John C. Bogle
	Chairman and Chief Executive Officer, 1974–1996

1 Mr. McNabb is considered an “interested person,” as defined in the Investment Company Act of 1940, because he is an officer of the Vanguard funds.
2 December 2002 for Vanguard Equity Income Fund, the Vanguard Municipal Bond Funds, and the Vanguard State Tax-Exempt Funds.


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



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calling Vanguard at 800-662-2739. The guidelines are
also available from the SEC’s website, sec.gov. In
addition, you may obtain a free report on how your fund
voted the proxies for securities it owned during the 12
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You can review and copy information about your fund at
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copies of this information, for a fee, by sending a
request in either of two ways: via e-mail addressed to
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Public Reference Section, Securities and Exchange
Commission, Washington, DC 20549-1520.

	© 2014 The Vanguard Group, Inc.
	All rights reserved.
	Vanguard Marketing Corporation, Distributor.

	Q720 122014

The mission continues

On May 1, 1975, Vanguard began operations, a fledgling company based on the simple but revolutionary idea that a mutual fund company should be managed solely in the interest of its investors.

Four decades later, that revolutionary spirit continues to animate the enterprise. Vanguard remains on a mission to give investors the best chance of investment success.

As we mark our 40th anniversary, we thank you for entrusting your assets to Vanguard and giving us the opportunity to help you reach your financial goals in the decades to come.


Contents
Your Fund’s Total Returns.	1
Chairman’s Letter.	2
Fund Profile.	8
Performance Summary.	10
Financial Statements.	13
Your Fund’s After-Tax Returns.	33
About Your Fund’s Expenses.	34
Glossary.	36

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.
See the Glossary for definitions of investment terms used in this report.
About the cover: Since our founding, Vanguard has drawn inspiration from the enterprise and valor demonstrated by British naval hero Horatio Nelson and his command at the Battle of the Nile in 1798. The photograph displays a replica of a merchant ship from the same era as Nelson’s flagship, the HMS Vanguard.

Your Fund’s Total Returns


Fiscal Year Ended October 31, 2014

	Total
	Returns
Vanguard Total World Stock Index Fund
Investor Shares	8.20%
Institutional Shares	8.34
ETF Shares
Market Price	8.40
Net Asset Value	8.31
FTSE Global All Cap Index	7.91
Global Funds Average	6.42
Global Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

Institutional Shares are available to certain institutional investors who meet specific administrative, service, and account-size criteria. The Vanguard ETF® Shares shown are traded on the NYSE Arca exchange and are available only through brokers. The table provides ETF returns based on both the NYSE Arca market price and the net asset value for a share. U.S. Pat. Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.

For the ETF Shares, the market price is determined by the midpoint of the bid-offer spread as of the closing time of the New York Stock Exchange (generally 4 p.m., Eastern time). The net asset value is also determined as of the NYSE closing time. For more information about how the ETF Shares' market prices have compared with their net asset value, visit vanguard.com, select your ETF, and then select the Price and Performance tab. The ETF premium/discount analysis there shows the percentages of days on which the ETF Shares' market price was above or below the NAV.


Your Fund’s Performance at a Glance
October 31, 2013, Through October 31, 2014
			Distributions Per Share
	Starting	Ending
	Share	Share	Income	Capital
	Price	Price	Dividends	Gains
Vanguard Total World Stock Index Fund
Investor Shares	$23.48	$24.82	$0.571	$0.000
Institutional Shares	117.63	124.35	3.004	0.000
ETF Shares	57.60	60.89	1.460	0.000

Chairman’s Letter

Dear Shareholder,

Global stocks made solid gains over the 12 months ended October 31, 2014. Results by region were uneven, however, and the markets retrenched at times amid concerns about the pace of economic growth, the risk of deflation, and tensions in Eastern Europe and the Middle East.

Vanguard Total World Stock Index Fund returned more than 8% for the 12 months, with much of that performance fueled by double-digit gains for U.S. stocks. Stocks elsewhere were, as a whole, virtually flat—positive returns from some developed markets in the Pacific and emerging markets were offset by negative results for European stocks. The dollar’s strengthening against a number of currencies, including the euro and the yen, contributed to the lackluster performance of international stocks for U.S.-based investors.

The fund’s performance diverged slightly from the 7.91% return of its target index, the FTSE Global All Cap Index, because of temporary price differences arising from fair-value pricing policies (see the accompanying box). The average return for competing global funds was 6.42%.

If you own the fund in a taxable account, you may wish to review the information about after-tax returns presented later in this report.

Their smooth ride turned jagged, but U.S. stocks ended higher
The broad U.S. stock market made strong gains over the 12 months ended October 31, after taking investors on a roller-coaster ride in the period’s final month.

Impressive corporate earnings and various global stimulus measures generally supported stocks against a bleaker backdrop that included tensions in the Middle East and Ukraine and other international economic concerns. But over the first two weeks of October, stocks declined sharply as investors reacted to weakness in the global economy, especially the slowdown in China and the threat of deflation in Europe. Reflecting confidence in the U.S. economy, however, the Federal Reserve announced October 29 that it was ending its stimulative bond-buying program as anticipated.

U.S. stocks staged an impressive rebound in the period’s final two weeks, and several major indexes finished at record highs. International stocks didn’t fare as well. Emerging markets posted a modest advance, while stocks from the developed markets of Europe slipped and the Pacific region was close to zero.

U.S. bonds posted positive returns as already low yields declined
The broad U.S. taxable bond market returned 4.14%. Bond prices, which backtracked at times over the summer, climbed in October as investors sought sanctuary from stock market volatility.


Market Barometer
		Average Annual Total Returns
		Periods Ended October 31, 2014
	One	Three	Five
	Year	Years	Years
Stocks
Russell 1000 Index (Large-caps)	16.78%	19.90%	16.98%
Russell 2000 Index (Small-caps)	8.06	18.18	17.39
Russell 3000 Index (Broad U.S. market)	16.07	19.77	17.01
FTSE All-World ex US Index (International)	0.45	8.07	6.38

Bonds
Barclays U.S. Aggregate Bond Index (Broad taxable market)	4.14%	2.73%	4.22%
Barclays Municipal Bond Index (Broad tax-exempt market)	7.82	4.93	5.26
Citigroup Three-Month U.S. Treasury Bill Index	0.04	0.04	0.06

CPI
Consumer Price Index	1.66%	1.60%	1.89%

Overall, bond returns have been strong despite many analysts’ expectations that already low yields wouldn’t decline further. Prices rose and yields fell even as the Fed began steadily reducing its bond purchases in January. (Bond prices and yields move in opposite directions.) The yield of the 10-year U.S. Treasury note ended October at 2.31%, down from 2.54% a year earlier.

Municipal bonds returned 7.82%, with tax-exempt issues in high demand even at a time of reduced supply.

International bond markets (as measured by the Barclays Global Aggregate Index ex USD) slid in September and October en route to a –2.53% return for the 12 months.

The Fed’s target for short-term interest rates remained at 0%–0.25%, restraining returns for money market funds and savings accounts.

U.S. stocks countered overall weakness abroad
The wide range of returns from the world’s equity markets over the past 12 months illustrates the potential benefits of a balanced and diversified approach to investing.

The lion’s share of the Total World Stock Index Fund’s return came from U.S. stocks, which accounted for roughly half of its assets and produced a return of more than 16%. The continuing recovery in the domestic economy, although marked


Expense Ratios
Your Fund Compared With Its Peer Group

	Investor	Institutional	ETF	Peer Group
	Shares	Shares	Shares	Average
Total World Stock Index Fund	0.30%	0.16%	0.18%	1.44%
The fund expense ratios shown are from the prospectus dated February 27, 2014, and represent estimated costs for the current fiscal year. For the fiscal year ended October 31, 2014, the fund’s expense ratios were 0.27% for Investor Shares, 0.15% for Institutional Shares, and 0.17% for ETF Shares. The peer-group expense ratio is derived from data provided by Lipper, a Thomson Reuters Company, and captures information through year-end 2013.





Peer group: Global Funds.

by stops and starts, was strong enough to lift investor sentiment and drive up prices of large-cap stocks in particular.

All ten market sectors in the United States produced positive results. Health care was among the strongest performers, thanks largely to pharmaceutical and biotech-nology companies with improving product pipelines. Technology came in a close second, driven by big gains in the stock prices of large companies that are benefiting from new consumer product rollouts and the robust pace at which businesses are expanding and upgrading their IT infrastructure.

The environment was less favorable for international stock markets, which faced some significant challenges, including anemic or stalling economic growth, falling commodity prices, and geopolitical tensions.

Developed European stock markets, which made up about one-quarter of the fund’s assets, dipped into negative territory for the 12-month period. Stocks moved higher in the first half of the fiscal year as efforts by the European Central Bank helped to lift the Eurozone out of a recession. In the second half, however, weak global demand contributed to faltering growth in some of the larger economies, including Germany and Italy. The British pound held up better than the euro against the U.S. dollar, which helped keep the United Kingdom’s return in the black. Among European stocks, industrials and oil and gas fared the worst.


Total Returns
Inception Through October 31, 2014
	Average
	Annual Return
Total World Stock Index Fund Investor Shares (Returns since inception: 6/26/2008)	5.43%
Spliced Total World Stock Index	5.30
Global Funds Average	4.70
For a benchmark description, see the Glossary.

Global Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

Developed markets in the Pacific were virtually flat. In Japan, which represented about half of the fund’s assets in this region, the central bank’s aggressive stimulus program helped counterbalance a hike in the consumption tax, which dampened domestic demand. The stock market ended the period higher, but this was offset by the fall in the yen. Among the other stock markets in the region, Australia and Singapore posted slightly negative returns, while Hong Kong was up by more than 8%.

Emerging markets rose by about 2% but with wide differences among individual countries. Indian stocks were up by about 37% thanks to a boost from the election of a prime minister who is seen as pro-business and likely to make structural reforms to the economy. The Chinese market was up about 6% despite concerns about the slowdown in the country’s pace of economic expansion. In contrast, Brazilian stocks returned about –10% amid a slowing economy and high inflation, and Russian stocks returned about –11% as the country dealt with international sanctions and a drop in oil prices.

Six years on, the fund continues to build a solid track record
Since its inception in June 2008, Vanguard Total World Stock Index Fund has fulfilled its primary objective of closely tracking the performance of its target index, which includes stocks of companies across the globe. It hasn’t been a smooth ride, but even with wide swings in the markets, the fund has produced an average annual