N-CSRS 1 valleyforge_final.htm valleyforge_final.htm - Generated by SEC Publisher for SEC Filing

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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number:              811-7023
Name of Registrant:                                         Vanguard Valley Forge Funds
Address of Registrant:                                      P.O. Box 2600
                                                                       Valley Forge, PA 19482
Name and address of agent for service:            Heidi Stam, Esquire
                                                                       P.O. Box 876
                                                                       Valley Forge, PA 19482
Registrant’s telephone number, including area code:      (610) 669-1000
Date of fiscal year end:         December 31
Date of reporting period:      January 1, 2010 – June 30, 2010
Item 1: Reports to Shareholders


Vanguard Balanced Index Fund
Semiannual Report
June 30, 2010


> For the six months ended June 30, 2010, Vanguard Balanced Index Fund

returned about –1%, in line with its target benchmark and ahead of the average

return of its peer funds.

> The broad U.S. stock market returned –5.67% for the period, while the aggregate

U.S. bond market was up 5.33%.

> The fund’s stock portfolio ended the half-year with negative results in all ten

sectors of the market. The fixed income portfolio rose for the period, as bonds

performed generally well across the board.

Contents  
Your Fund’s Total Returns. 1
Chairman’s Letter. 2
Fund Profile. 6
Performance Summary. 8
Financial Statements. 9
About Your Fund’s Expenses. 25
Trustees Approve Advisory Arrangement. 27
Glossary. 28

 Balanced Index Fund

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

See the Glossary for definitions of investment terms used in this report.

Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Six Months Ended June 30, 2010  
  Total
  Returns
Vanguard Balanced Index Fund  
Investor Shares -1.37%
Admiral™ Shares -1.29
Signal® Shares -1.37
Institutional Shares -1.27
Balanced Composite Index -1.33
Mixed-Asset Target Allocation Growth Funds Average -4.18

Balanced Composite Index: Made up of two unmanaged benchmarks, weighted 60% Dow Jones Wilshire 5000 Index and 40% Lehman Brothers U.S. Aggregate Bond Index through May 31, 2005; and 60% MSCI US Broad Market Index and 40% Barclays Capital U.S. Aggregate Bond Index through December 31, 2009, after which the Barclays index was replaced by the Barclays Capital U.S. Aggregate Float Adjusted Index.

Mixed-Asset Target Allocation Growth Funds Average: Derived from data provided by Lipper Inc.

Admiral Shares are a lower-cost class of shares available to many longtime shareholders and to those with significant investments in the fund. Signal Shares and Institutional Shares are available to certain institutional shareholders who meet specific administrative, service, and account-size criteria.

Your Fund’s Performance at a Glance
December 31, 2009 , Through June 30, 2010

      Distributions Per Share
  Starting Ending Income Capital
  Share Price Share Price Dividends Gains
Vanguard Balanced Index Fund        
Investor Shares $19.35 $18.87 $0.224 $0.000
Admiral Shares 19.35 18.87 0.239 0.000
Signal Shares 19.15 18.66 0.237 0.000
Institutional Shares 19.35 18.87 0.243 0.000

1


 

 

 

Chairman’s Letter

Dear Shareholder,

After rebounding strongly during much of the past year from the recent financial crisis, U.S. stocks began to slip again during May and June of 2010, as concerns grew about Europe’s debt problems. Bonds outperformed equities for the period as investors sought shelter from the volatile stock market.

Vanguard Balanced Index Fund was similarly buffeted by the market’s changeability. For the six months ended June 30, the fund returned about –1%. This performance was in line with the fund’s target benchmark, the Balanced Composite Index, and was ahead of the average return of competing mixed-asset target allocation growth funds.

At the end of the period, the 30-day SEC yield of the fund’s Investor Shares had declined to 2.06%, from 2.20% as of December 31, 2009.

Sovereign debt worries pulled down stock returns

After pulling back a bit in January from 2009’s strong gains, stocks rose steadily as winter turned to spring. Rapid growth in corporate earnings and optimism about the strength of the economic recovery were dominant themes. But in May, the scope of Europe’s fiscal challenges became clearer, and stock prices retreated sharply. For the full six months, U.S. stocks returned about –6%. Small-capitalization stocks, representing companies less exposed to global turmoil than large-cap multinationals, lost less ground than larger stocks.

2


International stocks also posted negative six-month returns. For U.S.-based investors, a strengthening U.S. dollar further reduced the returns from non-U.S. stocks, particularly in Europe, where the euro fell noticeably in value.

Bonds continued to show strength as investors looked for safer assets

With the economic recovery appearing to decelerate and inflation remaining dormant, bonds stayed in favor throughout the period. As worries persisted about possible fallout from Europe’s sovereign debt problems, many investors sought safety in U.S. Treasuries. Higher-quality corporate bonds also performed well as earnings reports indicated that company balance sheets remained in good shape.

Municipal bonds, with their history of low default rates, also held their ground despite ongoing concerns about deficits confronting many state and local governments. In this risk-averse environment, lower-rated, higher-risk corporate bonds lagged a bit. For the full six months, the broad taxable market returned more than 5%; tax-exempt municipal securities returned more than 3%

Negative returns across sectors hindered fund performance

Vanguard Balanced Index Fund offers investors broad exposure to U.S. stocks and bonds. On average during the period, stocks accounted for almost 60% of the portfolio, while bonds made up slightly more than 40%. The stock portion of the fund returned –5.6% for the period,

Market Barometer      
 
  Total Returns
  Periods Ended June 30, 2010
  Six One Five Years
  Months Year (Annualized)
Stocks      
Russell 1000 Index (Large-caps) -6.40% 15.24% -0.56%
Russell 2000 Index (Small-caps) -1.95 21.48 0.37
Dow Jones U.S. Total Stock Market Index -5.67 16.20 -0.08
MSCI All Country World Index ex USA (International) -10.80 10.87 3.84
 
Bonds      
Barclays Capital U.S. Aggregate Bond Index (Broad      
taxable market) 5.33% 9.50% 5.54%
Barclays Capital Municipal Bond Index 3.31 9.61 4.40
Citigroup Three-Month U.S. Treasury Bill Index 0.06 0.12 2.63
 
CPI      
Consumer Price Index 0.93% 1.05% 2.30%

3


subtracting about 3 percentage points from the fund’s total return for the period. Although the fund’s bond portion registered positive results—up a little more than 2% for the period—it could not make up for the stock portfolio’s disappointing results.

The fund’s stock portfolio registered negative returns in all ten sectors of the market. The information technology sector—the index’s most heavily weighted grouping—was hit hard during the downturn. Big-name software companies and internet giants took the biggest hits, as financial market volatility and worrisome economic news raised concern about the strength of technology spending.

The energy sector also dragged down fund performance. In particular, big oil and gas stocks endured heavy losses, as consumer demand softened and the oil spill in the Gulf of Mexico continued to spark fear among investors. Health care stocks also weighed on returns. The sector’s losses were led by large pharmaceutical companies, which continued to grapple with a variety of commercial and regulatory challenges.

Despite the stock portfolio’s overall negative sector results, a few industries contributed positive returns for the period. In the consumer discretionary sector, fast food chains and toy companies

Expense Ratios          
Your Fund Compared With Its Peer Group          
  Investor Admiral Signal Institutional Peer Group
  Shares Shares Shares Shares Average
Balanced Index Fund 0.25% 0.14% 0.14% 0.08% 1.05%

The fund expense ratios shown are from the prospectus dated April 28, 2010, and represent estimated costs for the current fiscal year based on the fund’s net assets as of the prospectus date. For the six months ended June 30, 2010, the fund’s annualized expense ratios were 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.12% for Signal Shares, and 0.08% for Institutional Shares. The peer-group expense ratio is derived from data provided by Lipper Inc. and captures information through year-end 2009.

Peer group: Mixed-Asset Target Allocation Growth Funds.

4


performed well, while insurance and real estate companies were bright spots in the financial sector. Some areas of the industrial sector—most notably the construction and railroad industries—were also up for the period.

Investors flock to bonds during turbulent times

The Balanced Index Fund’s fixed income portion successfully tracked the performance of the broad U.S. taxable bond market for the six months. Treasury, agency, and government mortgage-backed securities—which accounted for about 70% of the fund’s bond portfolio, on average—performed strongly for the six months. In the beginning of the period, risk was in favor, which weighed on high-quality government securities. However, as stock market volatility increased during the past couple of months, investors began to shun stocks in favor of less-risky, high-quality bonds.

Regardless of market conditions, diversification is important

The past six months have been a dramatic time in the U.S. stock market. At the beginning of the period, stocks continued to stage an impressive rally that began in March 2009, despite a backdrop of continuing economic uncertainty. In May 2010, stocks retreated swiftly as investor concerns about the European debt crisis and the oil spill in the Gulf of Mexico grew. While the U.S. fixed income market has held up better than stocks during the recent financial turmoil, bonds have had their own fair share of ups and downs over the past few years.

While you can’t control what happens in the financial markets, you can control how you invest your hard-earned money. For this reason, Vanguard encourages investors to create a long-term investment plan that includes a mix of stocks, bonds, and short-term investments that is appropriate for their goals, time horizon, and risk tolerance. A well-diversified portfolio can offer some protection during a down market, while also providing an opportunity for long-term growth.

Vanguard Balanced Index Fund offers investors an opportunity to benefit from the potential long-term growth of the stock market along with the relative stability of high-quality bonds. With its low costs and broad mix of stocks and bonds, the fund can play an important role in such a diversified investment program.

As always, thank you for entrusting your assets to Vanguard.

Sincerely,


F. William McNabb III
Chairman and Chief Executive Officer
July 15, 2010

5


Balanced Index Fund

Fund Profile
As of June 30, 2010

Share-Class Characteristics        
  Investor Admiral Signal Institutional
  Shares Shares Shares Shares
Ticker Symbol VBINX VBIAX VBASX VBAIX
Expense Ratio1 0.25% 0.14% 0.14% 0.08%
30-Day SEC Yield 2.06% 2.20% 2.20% 2.24%

Equity Characteristics    
    MSCI US
    Broad Market
  Fund Index
Number of Stocks 3,260 3,550
Median Market Cap $25.1B $25.1B
Price/Earnings Ratio 17.2x 17.3x
Price/Book Ratio 1.9x 1.9x
Return on Equity 19.2% 19.2%
Earnings Growth Rate 6.8% 6.8%
Dividend Yield 2.0% 2.0%
Foreign Holdings 0.0% 0.0%
Turnover Rate    
(Annualized) 54% —
Short-Term Reserves 2.3% —

Fixed Income Characteristics  
    Barclays
    Aggregate
    Float Adj
  Fund Index
Number of Bonds 3,001 8,211
Yield to Maturity    
(before expenses) 2.7% 2.8%
Average Coupon 4.5% 4.4%
Average Duration 4.4 years 4.4 years
Average Effective    
Maturity 6.5 years 6.5 years

Total Fund Volatility Measures  
  Balanced  
  Composite MSCI US Broad
  Index Market Index
R-Squared 1.00 0.99
Beta 1.00 0.62
These measures show the degree and timing of the fund’s fluctuations compared with the indexes over 36 months.
 
Ten Largest Stocks (% of equity portfolio)  
Exxon Mobil Corp. Integrated Oil &  
  Gas 2.5%
Apple Inc. Computer  
  Hardware 2.0
Microsoft Corp. Systems Software 1.6
Procter & Gamble Co. Household  
  Products 1.5
Johnson & Johnson Pharmaceuticals 1.4
International Business IT Consulting &  
Machines Corp. Other Services 1.4
General Electric Co. Industrial  
  Conglomerates 1.3
JPMorgan Chase & Co. Diversified Financial  
  Services 1.3
Bank of America Corp. Diversified Financial  
  Services 1.3
AT&T Inc. Integrated  
  Telecommunication  
  Services 1.2
Top Ten   15.5%
Top Ten as % of Total Net Assets 9.0%

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

1 The expense ratios shown are from the prospectus dated April 28, 2010, and represent estimated costs for the current fiscal year based on
the fund’s net assets as of the prospectus date. For the six months ended June 30, 2010, the annualized expense ratios were 0.26% for
Investor Shares, 0.12% for Admiral Shares, 0.12% for Signal Shares, and 0.08% for Institutional Shares.

6


Balanced Index Fund

Fund Asset Allocation


Sector Diversification (% of equity exposure)
    MSCI US
    Broad Market
  Fund Index
Consumer    
Discretionary 11.0% 10.9%
Consumer Staples 9.9 10.0
Energy 9.9 10.1
Financials 16.7 16.4
Health Care 12.3 12.3
Industrials 11.2 11.1
Information    
Technology 18.5 18.8
Materials 3.9 3.8
Telecommunication    
Services 2.7 2.8
Utilities 3.9 3.8

Sector Diversification (% of fixed income  
portfolio)  
Asset-Backed 4.3%
Commercial Mortgage-Backed 1.2
Finance 7.0
Foreign 4.3
Government Mortgage-Backed 31.2
Industrial 10.7
Treasury/Agency 38.3
Utilities 2.3
Other 0.7

The agency and mortgage-backed securities sectors may include issues from government-sponsored enterprises; such issues are not
backed by the full faith and credit of the U.S. government.

Distribution by Credit Quality (% of fixed income portfolio)

Aaa 76.3%
Aa 4.5
A 10.2
Baa 9.0

For information about these ratings, see the Glossary entry for Credit Quality.

Equity Investment Focus

 

Fixed Income Investment Focus


Balanced Index Fund

Performance Summary

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

Fiscal-Year Total Returns (%): December 31, 1999, Through June 30, 2010


Balanced Composite Index: Made up of two unmanaged benchmarks, weighted 60% Dow Jones Wilshire 5000 Index and 40% Lehman
Brothers U.S. Aggregate Bond Index through May 31, 2005; and 60% MSCI US Broad Market Index and 40% Barclays Capital U.S. Aggregate
Bond Index through December 31, 2009, after which the Barclays index was replaced by the Barclays Capital U.S. Aggregate Float Adjusted
Index.

Note: For 2010, performance data reflect the six months ended June 30, 2010.

Average Annual Total Returns: Periods Ended June 30, 2010

        Ten Years
  Inception Date One Year Five Years Income Capital Total
Investor Shares 11/9/1992 13.64% 2.39% 2.97% -0.59% 2.38%
Admiral Shares 11/13/2000 13.79 2.50 3.111 -0.221 2.891
Signal Shares 9/1/2006 13.80 — 3.151 -2.081 1.071
Institutional Shares 12/1/2000 13.84 2.53 3.171 -0.031 3.141
1 Return since inception.            

See Financial Highlights for dividend and capital gains information.

8


Balanced Index Fund

Financial Statements (unaudited)

Statement of Net Assets—Investments Summary
As of June 30, 2010

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 (www.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      
Consumer Discretionary      
McDonald’s Corp. 479,526 31,586 0.4%
Walt Disney Co. 821,109 25,865 0.3%
Consumer Discretionary—Other †   501,129 5.7%
    558,580 6.4%
Consumer Staples      
Procter & Gamble Co. 1,294,346 77,635 0.9%
Wal-Mart Stores Inc. 1,018,692 48,969 0.6%
Coca-Cola Co. 924,534 46,338 0.5%
PepsiCo Inc. 725,271 44,205 0.5%
Philip Morris International Inc. 838,240 38,425 0.4%
Consumer Staples—Other †   256,289 2.9%
    511,861 5.8%
Energy      
Exxon Mobil Corp. 2,271,059 129,609 1.5%
Chevron Corp. 894,984 60,734 0.7%
ConocoPhillips 629,430 30,899 0.4%
Schlumberger Ltd. 532,802 29,485 0.3%
Occidental Petroleum Corp. 361,905 27,921 0.3%
Energy—Other †   240,323 2.7%
    518,971 5.9%
Financials      
JPMorgan Chase & Co. 1,770,457 64,816 0.7%
Bank of America Corp. 4,470,403 64,240 0.7%
Wells Fargo & Co. 2,193,151 56,145 0.7%
* Citigroup Inc. 9,517,007 35,784 0.4%
Goldman Sachs Group Inc. 217,678 28,575 0.3%
* Federal National Mortgage Assn. 521,102 178 0.0%
* Federal Home Loan Mortgage Corp. 302,728 125 0.0%
Financials—Other †   586,140 6.7%
    836,003 9.5%

9


Balanced Index Fund

          Market Percentage
          Value• of Net
        Shares ($000) Assets
Health Care          
  Johnson & Johnson     1,229,501 72,614 0.8%
  Pfizer Inc.     3,596,211 51,282 0.6%
  Merck & Co. Inc.     1,361,152 47,599 0.5%
  Abbott Laboratories     691,879 32,366 0.4%
* Amgen Inc.     443,456 23,326 0.3%
  Health Care—Other †       403,021 4.6%
          630,208 7.2%
Industrials          
  General Electric Co.     4,754,520 68,560 0.8%
  United Technologies Corp.     396,855 25,760 0.3%
  3M Co.     301,369 23,805 0.3%
  Industrials—Other †       450,817 5.1%
          568,942 6.5%
Information Technology          
* Apple Inc.     404,069 101,635 1.2%
  Microsoft Corp.     3,517,396 80,935 0.9%
  International Business Machines Corp.     578,855 71,477 0.8%
* Cisco Systems Inc.     2,551,423 54,371 0.6%
* Google Inc. Class A     108,676 48,355 0.6%
  Intel Corp.     2,461,518 47,877 0.5%
  Hewlett-Packard Co.     1,048,999 45,401 0.5%
  Oracle Corp.     1,786,406 38,336 0.4%
  QUALCOMM Inc.     748,944 24,595 0.3%
  Information Technology—Other †       448,422 5.1%
          961,404 10.9%
 
Materials †       193,656 2.2%
 
Telecommunication Services          
  AT&T Inc.     2,630,036 63,621 0.7%
  Verizon Communications Inc.     1,263,641 35,407 0.4%
  Telecommunication Services—Other †       42,927 0.5%
          141,955 1.6%
 
Utilities †       193,939 2.2%
Total Common Stocks (Cost $4,392,844)       5,115,519 58.2%1
 
        Face Market Percentage
      Maturity Amount Value• of Net
  Coupon Date ($000) ($000) Assets
U.S. Government and Agency Obligations        
U.S. Government Securities          
  United States Treasury Note/Bond 1.375% 1/15/13 57,710 58,486 0.7%
  United States Treasury Note/Bond 2.625% 2/29/16 39,650 40,821 0.5%
  United States Treasury Note/Bond 0.750% 5/31/12 37,300 37,405 0.4%
  United States Treasury Note/Bond 1.375% 5/15/13 29,625 29,986 0.3%
  United States Treasury Note/Bond 0.875% 2/29/12 29,650 29,812 0.3%
  United States Treasury Note/Bond 4.500% 8/15/39 25,549 28,207 0.3%
  United States Treasury Note/Bond 7.875% 2/15/21 19,400 27,794 0.3%
  United States Treasury Note/Bond 1.375% 11/15/12 26,077 26,452 0.3%
  United States Treasury Note/Bond 3.500% 5/15/20 24,625 25,799 0.3%
  United States Treasury Note/Bond 1.750% 4/15/13 24,810 25,376 0.3%
  United States Treasury Note/Bond 1.375% 4/15/12 24,825 25,197 0.3%

10


Balanced Index Fund

          Face Market Percentage
        Maturity Amount Value• of Net
      Coupon Date ($000) ($000) Assets
  United States Treasury Note/Bond 3.375% 11/15/19 23,997 24,882 0.3%
  United States Treasury Note/Bond 1.000% 9/30/11 23,000 23,155 0.3%
  United States Treasury            
  Note/Bond 0.625%–11.250% 1/15/11–5/15/40 757,892 827,822 9.4%
            1,231,194 14.0%
Agency Bonds and Notes            
2 Bank of America Corp. 2.100%–3.125% 4/30/12–6/22/12 4,250 4,382 0.1%
2 Bank of America NA   1.700% 12/23/10 650 654 0.0%
3 Federal Home Loan            
  Mortgage Corp. 1.125%–6.750% 3/23/12–9/15/29 51,510 56,160 0.6%
3,4 Federal National            
  Mortgage Assn. 0.875%–7.250% 11/23/11–7/15/37 68,000 73,638 0.8%
2 General Electric            
  Capital Corp. 2.125%–3.000% 12/9/11–12/28/12 7,825 8,058 0.1%
2 JPMorgan Chase & Co. 1.650%–3.125% 2/23/11–12/26/12 5,025 5,152 0.1%
  Agency Bonds and Notes—Other †       106,066 1.2%
            254,110 2.9%
Conventional Mortgage-Backed Securities        
3,4 Fannie Mae Pool 4.000%–10.500% 9/1/10–7/1/40 491,284 488,297 5.5%
3,4 Freddie Mac Gold Pool 4.000%–10.000% 7/1/10–7/1/40 344,788 340,317 3.9%
3,4 Freddie Mac Non Gold Pool   8.500% 12/1/16 1 1 0.0%
4 Ginnie Mae I Pool   5.000% 7/1/40 35,675 38,005 0.4%
4 Ginnie Mae I Pool 4.000%–10.000% 10/15/10–7/1/40 129,803 108,683 1.3%
4 Ginnie Mae II Pool 4.500%–7.000% 3/20/33–7/1/40 59,128 63,439 0.7%
            1,038,742 11.8%
Nonconventional Mortgage-Backed Securities        
3,4 Fannie Mae Pool 2.514%–6.263% 11/1/33–5/1/40 23,440 24,552 0.3%
3,4 Freddie Mac Non Gold Pool 2.665%–6.443% 9/1/34–6/1/40 19,283 20,250 0.2%
            44,802 0.5%
Total U.S. Government and Agency Obligations (Cost $2,452,812)   2,568,848 29.2%
5Asset-Backed/Commercial Mortgage-Backed Securities (Cost $143,897) † 156,021 1.8%
Corporate Bonds            
Finance            
  Banking            
  Bank of America Corp. 4.250%–7.625% 10/1/10–6/1/19 9,650 10,116 0.1%
  Bank of America NA 5.300%–6.100% 3/15/17–10/15/36 1,275 1,271 0.0%
  Bank One Corp. 4.900%–5.900% 11/15/11–4/30/15 1,450 1,541 0.0%
  Bear Stearns Cos. LLC 5.300%–7.250% 2/1/12–2/1/18 5,210 5,764 0.1%
  Countrywide Financial Corp.   5.800% 6/7/12 50 53 0.0%
  FIA Card Services NA   6.625% 6/15/12 350 376 0.0%
  FleetBoston Financial Corp.   6.875% 1/15/28 600 618 0.0%
  JP Morgan Chase Capital XV   5.875% 3/15/35 1,400 1,265 0.0%
  JP Morgan Chase Capital XX   6.550% 9/29/36 600 582 0.0%
  JP Morgan Chase Capital XXII 6.450% 2/2/37 650 615 0.0%
  JP Morgan Chase Capital XXV 6.800% 10/1/37 725 719 0.0%
  JPMorgan Chase & Co. 3.400%–6.625% 1/15/12–5/15/38 7,950 8,539 0.1%
  JPMorgan Chase Bank NA   5.875% 6/13/16 725 791 0.0%
  MBNA Corp. 5.000%–6.125% 3/1/13–6/15/15 900 947 0.0%
  Merrill Lynch & Co. Inc. 5.000%–7.750% 7/25/11–5/14/38 10,625 11,014 0.2%
5 Banking—Other †         123,969 1.4%
  Brokerage †         5,222 0.1%

11


Balanced Index Fund

          Face Market Percentage
        Maturity Amount Value• of Net
      Coupon Date ($000) ($000) Assets
  Finance Companies            
4 General Electric            
  Capital Corp. 2.800%–6.875% 11/15/11–11/15/67  20,500 21,599 0.2%
  Finance Companies—Other †       6,140 0.1%
5 Insurance †         39,580 0.5%
  Other Finance †         2,145 0.0%
5 Real Estate Investment Trusts †       13,125 0.1%
            255,991 2.9%
Industrial            
  Basic Industry †         36,825 0.4%
  Capital Goods            
  General Electric Co. 5.000%–5.250% 2/1/13–12/6/17 3,850 4,162 0.0%
5 Capital Goods—Other †         33,740 0.4%
5 Communication †         84,720 1.0%
  Consumer Cyclical †         40,225 0.4%
5 Consumer Noncyclical †       93,903 1.1%
5 Energy †         51,754 0.6%
  Other Industrial †         260 0.0%
  Technology †         27,273 0.3%
5 Transportation †         14,184 0.2%
            387,046 4.4%
Utilities            
5 Electric †         61,635 0.7%
5 Natural Gas †         20,526 0.2%
  Other Utility †         664 0.0%
            82,825 0.9%
Total Corporate Bonds (Cost $678,265)     725,862 8.2%
5Sovereign Bonds (U.S. Dollar-Denominated) (Cost $150,255) †   157,657 1.8%
Taxable Municipal Bonds (Cost $24,946) †     25,831 0.3%
 
          Shares    
 
Temporary Cash Investments          
Money Market Fund            
6,7 Vanguard Market Liquidity Fund 0.286%   230,770,890 230,771 2.6%
 
          Face    
          Amount    
          ($000)    
U.S. Government and Agency Obligations        
3,8 Fannie Mae Discount Notes 0.300% 9/15/10 300 300 0.0%
3,8 Freddie Mac Discount Notes 0.320%–0.361% 9/7/10–12/16/10 3,200 3,197 0.1%
            3,497 0.1%
Total Temporary Cash Investments (Cost $234,267)   234,268 2.7%1
9Total Investments (Cost $8,077,286)     8,984,006 102.2%
Other Assets and Liabilities          
Other Assets         103,649 1.2%
Liabilities7         (297,976) (3.4%)
            (194,327) (2.2%)
Net Assets         8,789,679 100.0%

12


At June 30, 2010, net assets consisted of:  
  Amount
  ($000)
Paid-in Capital 8,212,193
Overdistributed Net Investment Income (11,449)
Accumulated Net Realized Losses (316,950)
Unrealized Appreciation (Depreciation)  
Investment Securities 906,720
Futures Contracts (835)
Net Assets 8,789,679
 
Investor Shares—Net Assets  
Applicable to 181,573,337 outstanding $.001 par value shares of  
beneficial interest (unlimited authorization) 3,425,469
Net Asset Value Per Share—Investor Shares $18.87
 
Admiral Shares—Net Assets  
Applicable to 100,522,157 outstanding $.001 par value shares of  
beneficial interest (unlimited authorization) 1,896,434
Net Asset Value Per Share—Admiral Shares $18.87
 
Signal Shares—Net Assets  
Applicable to 30,225,549 outstanding $.001 par value shares of  
beneficial interest (unlimited authorization) 564,111
Net Asset Value Per Share—Signal Shares $18.66
 
Institutional Shares—Net Assets  
Applicable to 153,904,310 outstanding $.001 par value shares of  
beneficial interest (unlimited authorization) 2,903,665
Net Asset Value Per Share—Institutional Shares $18.87

• 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 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 58.5% and 2.4%, respectively, of
net assets.
2 Guaranteed by the Federal Deposit Insurance Corporation (FDIC) as part of the Temporary Liquidity Guarantee Program.
3 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
4 The average or expected maturity is shorter than the final maturity shown because of the possibility of interim principal payments and
prepayments or the possibility of the issue being called.
5 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 June 30, 2010, the aggregate value of these securities
was $23,632,000, representing 0.3% of net assets.
6 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the
7-day yield.
7 Includes $11,409,000 of collateral received for securities on loan.
8 Securities with a value of $3,497,000 have been segregated as initial margin for open futures contracts.
9 The total value of securities on loan is $10,635,000.
See accompanying Notes, which are an integral part of the Financial Statements.

13


Balanced Index Fund

Statement of Operations

  Six Months Ended
  June 30, 2010
  ($000)
Investment Income  
Income  
Dividends 51,310
Interest1 69,493
Security Lending 585
Total Income 121,388
Expenses  
The Vanguard Group—Note B  
Investment Advisory Services 325
Management and Administrative—Investor Shares 3,935
Management and Administrative—Admiral Shares 863
Management and Administrative—Signal Shares 290
Management and Administrative—Institutional Shares 668
Marketing and Distribution—Investor Shares 429
Marketing and Distribution—Admiral Shares 174
Marketing and Distribution—Signal Shares 110
Marketing and Distribution—Institutional Shares 393
Custodian Fees 87
Auditing Fees 5
Shareholders’ Reports—Investor Shares 35
Shareholders’ Reports—Admiral Shares 2
Shareholders’ Reports—Signal Shares —
Shareholders’ Reports—Institutional Shares 23
Trustees’ Fees and Expenses 7
Total Expenses 7,346
Net Investment Income 114,042
Realized Net Gain (Loss)  
Investment Securities Sold 204,167
Futures Contracts (31)
Realized Net Gain (Loss) 204,136
Change in Unrealized Appreciation (Depreciation)  
Investment Securities (440,098)
Futures Contracts (987)
Change in Unrealized Appreciation (Depreciation) (441,085)
Net Increase (Decrease) in Net Assets Resulting from Operations (122,907)

1 Interest income from an affiliated company of the fund was $195,000.

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

14


Balanced Index Fund

Statement of Changes in Net Assets

  Six Months Ended Year Ended
  June 30, December 31,
  2010 2009
  ($000) ($000)
Increase (Decrease) in Net Assets    
Operations    
Net Investment Income 114,042 238,755
Realized Net Gain (Loss) 204,136 (301,178)
Change in Unrealized Appreciation (Depreciation) (441,085) 1,572,455
Net Increase (Decrease) in Net Assets Resulting from Operations (122,907) 1,510,032
Distributions    
Net Investment Income    
Investor Shares (40,169) (87,791)
Admiral Shares (23,552) (49,697)
Signal Shares (8,961) (26,464)
Institutional Shares (36,466) (78,708)
Realized Capital Gain    
Investor Shares — —
Admiral Shares — —
Signal Shares — —
Institutional Shares — —
Total Distributions (109,148) (242,660)
Capital Share Transactions    
Investor Shares 86,780 227,289
Admiral Shares 97,809 60,549
Signal Shares (301,937) (130,288)
Institutional Shares 120,251 166,961
Net Increase (Decrease) from Capital Share Transactions 2,903 324,511
Total Increase (Decrease) (229,152) 1,591,883
Net Assets    
Beginning of Period 9,018,831 7,426,948
End of Period1 8,789,679 9,018,831

1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of ($11,449,000) and ($16,343,000).

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

15


Balanced Index Fund

Financial Highlights

Investor Shares            
Six Months          
  Ended          
For a Share Outstanding June 30, Year Ended December 31,
Throughout Each Period 2010 2009 2008 2007 2006 2005
Net Asset Value, Beginning of Period $19.35 $16.59 $22.01 $21.36 $19.81 $19.45
Investment Operations            
Net Investment Income .236 .507 .615 .660 .600 .520
Net Realized and Unrealized Gain (Loss)            
on Investments (.492) 2.767 (5.432) .650 1.550 .370
Total from Investment Operations (.256) 3.274 (4.817) 1.310 2.150 .890
Distributions            
Dividends from Net Investment Income (.224) (.514) (.603) (.660) (.600) (.530)
Distributions from Realized Capital Gains — — — — — —
Total Distributions (.224) (.514) (.603) (.660) (.600) (.530)
Net Asset Value, End of Period $18.87 $19.35 $16.59 $22.01 $21.36 $19.81
 
Total Return1 -1.37% 20.05% -22.21% 6.16% 11.02% 4.65%
 
Ratios/Supplemental Data            
Net Assets, End of Period (Millions) $3,425 $3,431 $2,731 $3,717 $3,926 $4,098
Ratio of Total Expenses to            
Average Net Assets 0.26%2 0.25% 0.20% 0.19% 0.20% 0.20%
Ratio of Net Investment Income to            
Average Net Assets 2.38%2 2.91% 3.11% 2.99% 2.93% 2.69%
Portfolio Turnover Rate 54%2 55% 50% 26% 33% 31%

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

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

16


Balanced Index Fund

Financial Highlights

Admiral Shares            
Six Months          
  Ended          
For a Share Outstanding June 30, Year Ended December 31,
Throughout Each Period 2010 2009 2008 2007 2006 2005
Net Asset Value, Beginning of Period $19.35 $16.60 $22.02 $21.36 $19.82 $19.45
Investment Operations            
Net Investment Income .249 .527 .633 .690 .608 .547
Net Realized and Unrealized Gain (Loss)            
on Investments (.490) 2.757 (5.432) .650 1.550 .370
Total from Investment Operations (.241) 3.284 (4.799) 1.340 2.158 .917
Distributions            
Dividends from Net Investment Income (.239) (.534) (.621) (.680) (.618) (.547)
Distributions from Realized Capital Gains — — — — — —
Total Distributions (.239) (.534) (.621) (.680) (.618) (.547)
Net Asset Value, End of Period $18.87 $19.35 $16.60 $22.02 $21.36 $19.82
 
Total Return -1.29% 20.11% -22.12% 6.31% 11.06% 4.79%
 
Ratios/Supplemental Data            
Net Assets, End of Period (Millions) $1,896 $1,850 $1,536 $2,040 $2,263 $1,860
Ratio of Total Expenses to            
Average Net Assets 0.12%1 0.14% 0.11% 0.10% 0.11% 0.11%
Ratio of Net Investment Income to            
Average Net Assets 2.52%1 3.02% 3.20% 3.08% 3.02% 2.78%
Portfolio Turnover Rate 54%1 55% 50% 26% 33% 31%

1 Annualized.

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

17


Balanced Index Fund

Financial Highlights

Signal Shares          
  Six Months       Sept. 1,
  Ended       2006,1 to
    Year Ended December 31,  
For a Share Outstanding June 30,       Dec. 31,
Throughout Each Period 2010 2009 2008 2007 2006
Net Asset Value, Beginning of Period $19.15 $16.42 $21.78 $21.13 $20.22
Investment Operations          
Net Investment Income .247 .521 .626 .671 .209
Net Realized and Unrealized Gain (Loss)          
on Investments (.500) 2.737 (5.371) .651 1.030
Total from Investment Operations (.253) 3.258 (4.745) 1.322 1.239
Distributions          
Dividends from Net Investment Income (.237) (.528) (.615) (.672) (.329)
Distributions from Realized Capital Gains — — — — —
Total Distributions (.237) (.528) (.615) (.672) (.329)
Net Asset Value, End of Period $18.66 $19.15 $16.42 $21.78 $21.13
 
Total Return -1.37% 20.17% -22.12% 6.29% 6.17%
 
Ratios/Supplemental Data          
Net Assets, End of Period (Millions) $564 $869 $860 $1,175 $429
Ratio of Total Expenses to          
Average Net Assets 0.12%2 0.14% 0.11% 0.10% 0.11%2
Ratio of Net Investment Income to          
Average Net Assets 2.52%2 3.02% 3.20% 3.08% 3.02%2
Portfolio Turnover Rate 54%2 55% 50% 26% 33%

1 Inception.
2 Annualized.

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

18


Balanced Index Fund

Financial Highlights

Institutional Shares            
Six Months          
  Ended          
For a Share Outstanding June 30, Year Ended December 31,
Throughout Each Period 2010 2009 2008 2007 2006 2005
Net Asset Value, Beginning of Period $19.35 $16.60 $22.02 $21.36 $19.82 $19.46
Investment Operations            
Net Investment Income .253 .536 .640 .697 .614 .543
Net Realized and Unrealized Gain (Loss)            
on Investments (.490) 2.758 (5.432) .650 1.550 .370
Total from Investment Operations (.237) 3.294 (4.792) 1.347 2.164 .913
Distributions            
Dividends from Net Investment Income (.243) (.544) (.628) (.687) (.624) (.553)
Distributions from Realized Capital Gains — — — — — —
Total Distributions (.243) (.544) (.628) (.687) (.624) (.553)
Net Asset Value, End of Period $18.87 $19.35 $16.60 $22.02 $21.36 $19.82
 
Total Return -1.27% 20.18% -22.10% 6.34% 11.10% 4.77%
 
Ratios/Supplemental Data            
Net Assets, End of Period (Millions) $2,904 $2,869 $2,299 $2,901 $2,666 $2,014
Ratio of Total Expenses to            
Average Net Assets 0.08%1 0.08% 0.07% 0.07% 0.08% 0.08%
Ratio of Net Investment Income to            
Average Net Assets 2.56%1 3.08% 3.24% 3.11% 3.05% 2.81%
Portfolio Turnover Rate 54%1 55% 50% 26% 33% 31%

1 Annualized.

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

19


Balanced Index Fund

Notes to Financial Statements

Vanguard Balanced Index Fund is registered under the Investment Company Act of 1940 as an openend investment company, or mutual fund. Certain of the fund’s investments are in corporate debt instruments; the issuers’ abilities to meet their obligations may be affected by economic developments in their respective industries. The fund offers four classes of shares: Investor Shares, Admiral Shares, Signal Shares, and Institutional Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, tenure, and account-size criteria. Signal Shares and Institutional Shares are designed for institutional investors who meet certain administrative, service, and account-size criteria.

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

1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Bonds, and temporary cash investments acquired over 60 days to maturity, are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Other temporary cash investments are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available, or whose values have been materially affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued by methods deemed by the board of trustees to represent fair value.

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

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

20


Balanced Index Fund

3. Mortgage Dollar Rolls: The fund has entered into mortgage-dollar-roll transactions, in which the fund sells mortgage-backed securities to a dealer and simultaneously agrees to purchase similar securities in the future at a predetermined price. The proceeds of the securities sold in mortgage-dollar-roll trans-actions are invested in high-quality short-term fixed income securities. The fund forgoes principal and interest paid on the securities, and is compensated by interest earned on the proceeds of the initial sale and by a lower price on the securities to be repurchased. The fund accounts for mortgage-dollar-roll transactions as purchases and sales; as such, these transactions may increase the fund’s portfolio turnover rate. Amounts to be received or paid in connection with open mortgage dollar rolls are included in Receivables for Investment Securities Sold (Other Assets) or Payables for Investment Securities Purchased (Liabilities) in the Statement of Net Assets. The primary risk associated with mortgage dollar rolls is that a counterparty will default on its obligations to deliver purchased securities.

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 (December 31, 2006–2009), and for the period ended June 30, 2010, and has concluded that no provision for federal income tax is required in the fund’s financial statements.

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

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

7. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distri-butions 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 under methods approved by the board of trustees. The fund has committed to provide up to 0.40% of its net assets in capital contributions to Vanguard. At June 30, 2010, the fund had contributed capital of $1,779,000 to

Vanguard (included in Other Assets), representing 0.02% of the fund’s net assets and 0.71% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and officers of Vanguard.

21


Balanced Index Fund

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

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

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

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

The following table summarizes the fund’s investments as of June 30, 2010, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments ($000) ($000) ($000)
Common Stocks 5,115,503 — 16
U.S. Government and Agency Obligations — 2,568,848 —
Asset-Backed/Commercial Mortgage-Backed Securities — 156,021 —
Corporate Bonds — 725,857 5
Sovereign Bonds — 157,657 —
Taxable Municipal Bonds — 25,831 —
Temporary Cash Investments 230,771 3,497 —
Futures Contracts—Liabilities1 (163) — —
Total 5,346,111 3,637,711 21
1 Represents variation margin on the last day of the reporting period.

The following table summarizes changes in investments valued based on Level 3 inputs during the six months ended June 30, 2010:

  Investments in Investments in
  Common Stocks Corporate Bonds
Amount Valued Based on Level 3 Inputs ($000) ($000)
Balance as of December 31, 2009 17 5
Total Sales (1) —
Net Realized Gain(Loss) (192) —
Change in Unrealized Appreciation(Depreciation) 192 —
Balance as of June 30, 2010 16 5

22


Balanced Index Fund

D. At June 30, 2010, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

      ($000)
    Number of Aggregate Unrealized
    Long (Short) Settlement Appreciation
Futures Contracts Expiration Contracts Value (Depreciation)
S&P 500 Index September 2010 33 8,469 (234)
E-mini S&P 500 Index September 2010 130 6,673 (387)
S&P MidCap 400 Index September 2010 5 1,775 (114)
E-mini S&P MidCap Index September 2010 20 1,420 (18)
E-mini Russell 2000 Index September 2010 35 2,128 (82)

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

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.

The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at December 31, 2009, the fund had available capital loss carryforwards totaling $511,069,000 to offset future net capital gains of $25,260,000 through December 31, 2011, $61,005,000 through December 31, 2013, $46,470,000 through December 31, 2014, $38,903,000 through December 31, 2016, and $339,431,000 through December 31, 2017. In addition, the fund realized losses of $403,000 during the period from November 1, 2009, through December 31, 2009, which are deferred and will be treated as realized for tax purposes in fiscal 2010. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending December 31, 2010; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.

At June 30, 2010, the cost of investment securities for tax purposes was $8,077,286,000. Net unrealized appreciation of investment securities for tax purposes was $906,720,000, consisting of unrealized gains of $1,485,614,000 on securities that had risen in value since their purchase and $578,894,000 in unreal-ized losses on securities that had fallen in value since their purchase.

F. During the six months ended June 30, 2010, the fund purchased $409,958,000 of investment securities and sold $389,490,000 of investment securities, other than U.S. government securities and temporary cash investments. Purchases and sales of U.S. government securities were $2,029,095,000 and $2,052,923,000, respectively.

23


Balanced Index Fund

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

  Six Months Ended Year Ended
  June 30, 2010 December 31, 2009
  Amount Shares Amount Shares
  ($000) (000) ($000) (000)
Investor Shares        
Issued 420,086 21,172 674,357 38,857
Issued in Lieu of Cash Distributions 39,036 1,982 85,149 4,785
Redeemed (372,342) (18,871) (532,217) (30,904)
Net Increase (Decrease)—Investor Shares 86,780 4,283 227,289 12,738
Admiral Shares        
Issued 214,320 10,825 262,114 14,970
Issued in Lieu of Cash Distributions 21,114 1,072 44,222 2,485
Redeemed (137,625) (6,970) (245,787) (14,443)
Net Increase (Decrease)—Admiral Shares 97,809 4,927 60,549 3,012
Signal Shares        
Issued 84,732 4,380 224,153 12,792
Issued in Lieu of Cash Distributions 8,677 443 25,770 1,471
Redeemed (395,346) (19,978) (380,211) (21,285)
Net Increase (Decrease)—Signal Shares (301,937) (15,155) (130,288) (7,022)
Institutional Shares        
Issued 551,306 27,533 617,456 35,651
Issued in Lieu of Cash Distributions 36,243 1,840 78,250 4,395
Redeemed (467,298) (23,714) (528,745) (30,352)
Net Increase (Decrease)—        
Institutional Shares 120,251 5,659 166,961 9,694

H. In preparing the financial statements as of June 30, 2010, management considered the impact of subsequent events for potential recognition or disclosure in these financial statements.

24


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 the account service fee described in the prospectus. If such a fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.” The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

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

25


Six Months Ended June 30, 2010      
  Beginning Ending Expenses
  Account Value Account Value Paid During
Balanced Index Fund 12/31/2009 6/30/2010 Period
Based on Actual Fund Return      
Investor Shares $1,000.00 $986.32 $1.28
Admiral Shares 1,000.00 987.06 0.59
Signal Shares 1,000.00 986.30 0.59
Institutional Shares 1,000.00 987.26 0.39
Based on Hypothetical 5% Yearly Return      
Investor Shares $1,000.00 $1,023.51 $1.30
Admiral Shares 1,000.00 1,024.20 0.60
Signal Shares 1,000.00 1,024.20 0.60
Institutional Shares 1,000.00 1,024.40 0.40

The calculations are based on expenses incurred in the most recent six-month period. The fund’s annualized six-month expense ratios for that period are 0.26% for Investor Shares, 0.12% for Admiral Shares, 0.12% for Signal Shares, and 0.08% for Institutional 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.

26


Trustees Approve Advisory Arrangement

The board of trustees of Vanguard Balanced Index Fund has renewed the fund’s investment advisory arrangement with The Vanguard Group, Inc. Vanguard—through its Quantitative Equity and Fixed Income Groups—serves as the investment advisor for the fund. The board determined that continuing the fund’s internalized management structure was in the best interests of the fund and its shareholders.

The board based its decision upon an evaluation of the advisor’s investment staff, portfolio manage-ment process, and performance. The trustees considered the factors discussed below, among others. However, no single factor determined whether the board approved the arrangement. Rather, it was the totality of the circumstances that drove the board’s decision.

Nature, extent, and quality of services

The board considered the quality of the fund’s investment management over both the short and long term, and took into account the organizational depth and stability of the advisor. The board noted that Vanguard has been managing investments for more than three decades. Both the Quantitative Equity Group and the Fixed Income Group adhere to sound, disciplined investment management processes; each group’s management team has considerable experience, stability, and depth.

The board concluded that Vanguard’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangement.

Investment performance

The board considered the short- and long-term performance of the fund, including any periods of outperformance or underperformance of its target index and peer group. The board concluded that the fund has performed in line with expectations, and that its results have been consistent with its investment strategies. Information about the fund’s most recent performance can be found in the Performance Summary section of this report.

Cost

The board concluded that the fund’s expense ratio was well below the average expense ratio charged by funds in its peer group. The board noted that the fund’s advisory expense ratio was also well below its peer-group average. Information about the fund’s expense ratio appears in the About Your Fund’s Expenses section of this report as well as in the Financial Statements section.

The board does not conduct a profitability analysis of Vanguard, because of Vanguard’s unique “at-cost” structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees, and produces “profits” only in the form of reduced expenses for fund shareholders.

The benefit of economies of scale

The board concluded that the fund’s low-cost arrangement with Vanguard ensures that the fund will realize economies of scale as it grows, with the cost to shareholders declining as fund assets increase.

The board will consider whether to renew the advisory arrangement again after a one-year period.

27


Glossary

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

Average Coupon. The average interest rate paid on the fixed income securities held by a fund. It is expressed as a percentage of face value.

Average Duration. An estimate of how much the value of the bonds held by a fund will fluctuate in response to a change in interest rates. To see how the value could change, multiply the average duration by the change in rates. If interest rates rise by 1 percentage point, the value of the bonds in a fund with an average duration of five years would decline by about 5%. If rates decrease by a percentage point, the value would rise by 5%.

Average Effective Maturity. The average length of time until fixed income securities held by a fund reach maturity and are repaid, taking into consideration the possibility that the issuer may call the bond before its maturity date. The figure reflects the proportion of fund assets represented by each security; it also reflects any futures contracts held. In general, the longer the average effective maturity, the more a fund’s share price will fluctuate in response to changes in market interest rates.

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.

Credit Quality. The credit ratings assigned to fixed income securities are an indicator of risk. They represent a rating agency’s assessment of the issuer’s ability to meet its obligations. For this report, credit-quality ratings for each issue are obtained from Barclays Capital using ratings derived from Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s. When ratings from all three agencies are available, the median rating is used; when ratings are available from two of the agencies, the lower rating is used; and when one rating is available, that rating is used.

Dividend Yield. The current, annualized rate of dividends paid on a share of stock, divided by its current share price. For a fund, the weighted average yield for stocks it holds. The index yield is based on the current annualized rate of dividends paid on stocks in the index.

Earnings Growth Rate. The average annual rate of growth in earnings over the past five years for the stocks now in a fund.

28


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

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

Foreign Holdings. The percentage of a fund represented by stocks or depositary receipts of companies based outside the United States.

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.

Yield to Maturity. The rate of return an investor would receive if the fixed income securities held by a fund were held to their maturity dates.

29


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The People Who Govern Your Fund

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

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 162 Vanguard funds.

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

Interested Trustee1 Rajiv L. Gupta
  Born 1945. Trustee Since December 2001.2
F. William McNabb III Principal Occupation(s) During the Past Five Years:
Born 1957. Trustee Since July 2009. Chairman of the Chairman and Chief Executive Officer (retired 2009)
Board. Principal Occupation(s) During the Past Five and President (2006–2008) of Rohm and Haas Co.
Years: Chairman of the Board of The Vanguard Group, (chemicals); Director of Tyco International, Ltd.
Inc., and of each of the investment companies served (diversified manufacturing and services) and Hewlett-
by The Vanguard Group, since January 2010; Director Packard Co. (electronic computer manufacturing);
of The Vanguard Group since 2008; Chief Executive Trustee of The Conference Board; Member of the
Officer and President of The Vanguard Group and of Board of Managers of Delphi Automotive LLP
each of the investment companies served by The (automotive components).
Vanguard Group since 2008; Director of Vanguard  
Marketing Corporation; Managing Director of The Amy Gutmann
Vanguard Group (1995–2008). Born 1949. Trustee Since June 2006. Principal
  Occupation(s) During the Past Five Years: President
  of the University of Pennsylvania; Christopher H.
Independent Trustees Browne Distinguished Professor of Political Science
  in the School of Arts and Sciences with secondary
Emerson U. Fullwood appointments at the Annenberg School for Commu-
Born 1948. Trustee Since January 2008. Principal nication and the Graduate School of Education of
Occupation(s) During the Past Five Years: Executive the University of Pennsylvania; Director of Carnegie
Chief Staff and Marketing Officer for North America Corporation of New York, Schuylkill River Development
and Corporate Vice President (retired 2008) of Xerox Corporation, and Greater Philadelphia Chamber of
Corporation (document management products and Commerce; Trustee of the National Constitution Center;
services); Director of SPX Corporation (multi-industry Chair of the Presidential Commission for the Study of
manufacturing), the United Way of Rochester, Bioethical Issues.
Amerigroup Corporation (managed health care),  
the University of Rochester Medical Center, and  
Monroe Community College Foundation.  


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

1 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, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


 

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

Connect with Vanguard® > Vanguard.com  
 
 
 
Fund Information > 800-662-7447 The funds or securities referred to herein are not
Direct Investor Account Services > 800-662-2739 sponsored, endorsed, or promoted by MSCI, and MSCI
  bears no liability with respect to any such funds or
Institutional Investor Services > 800-523-1036 securities. For any such funds or securities, the
Text Telephone for People prospectus or the Statement of Additional Information
With Hearing Impairment > 800-749-7273 contains a more detailed description of the limited
  relationship MSCI has with The Vanguard Group and
This material may be used in conjunction any related funds.
with the offering of shares of any Vanguard  
fund only if preceded or accompanied by  
the fund’s current prospectus.  
 
All comparative mutual fund data are from Lipper Inc. or  
Morningstar, Inc., unless otherwise noted.  
 
You can obtain a free copy of Vanguard’s proxy voting  
guidelines by visiting our website, Vanguard.com, and  
searching for “proxy voting guidelines,” or by 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 months  
ended June 30. To get the report, visit either  
Vanguard.com or sec.gov.  
 
You can review and copy information about your fund at  
the SEC’s Public Reference Room in Washington, D.C. To  
find out more about this public service, call the SEC at  
202-551-8090. Information about your fund is also  
available on the SEC’s website, and you can receive  
copies of this information, for a fee, by sending a  
request in either of two ways: via e-mail addressed to  
publicinfo@sec.gov or via regular mail addressed to the  
Public Reference Section, Securities and Exchange  
Commission, Washington, DC 20549-1520.  
 
  © 2010 The Vanguard Group, Inc.
  All rights reserved.
  Vanguard Marketing Corporation, Distributor.
 
  Q022 082010


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
 
Common Stocks (58.2%)1    
Consumer Discretionary (6.4%)    
McDonald's Corp. 479,526 31,586
Walt Disney Co. 821,109 25,865
Home Depot Inc. 757,801 21,271
Comcast Corp. Class A 1,112,200 19,319
* Amazon.com Inc. 158,560 17,324
Target Corp. 315,270 15,502
Time Warner Inc. 512,607 14,819
* DIRECTV Class A 407,055 13,807
* Ford Motor Co. 1,322,472 13,331
Lowe's Cos. Inc. 650,159 13,276
News Corp. Class A 1,007,095 12,045
NIKE Inc. Class B 168,305 11,369
Time Warner Cable Inc. 157,115 8,183
Yum! Brands Inc. 209,116 8,164
Starbucks Corp. 331,308 8,051
Johnson Controls Inc. 299,345 8,043
TJX Cos. Inc. 187,061 7,847
Viacom Inc. Class B 247,378 7,760
Carnival Corp. 207,222 6,266
* Kohl's Corp. 129,815 6,166
Staples Inc. 322,654 6,147
Best Buy Co. Inc. 158,390 5,363
Coach Inc. 140,069 5,120
Omnicom Group Inc. 138,354 4,746
* Bed Bath & Beyond Inc. 116,784 4,330
Gap Inc. 215,290 4,190
McGraw-Hill Cos. Inc. 140,683 3,959
Marriott International Inc. Class A 127,831 3,827
CBS Corp. Class B 278,742 3,604
* priceline.com Inc. 20,322 3,588
Starwood Hotels & Resorts Worldwide Inc. 83,266 3,450
Mattel Inc. 162,115 3,430
Stanley Black & Decker Inc. 67,426 3,406
Macy's Inc. 188,051 3,366
* Las Vegas Sands Corp. 147,200 3,259
Ross Stores Inc. 55,215 2,942
Whirlpool Corp. 33,431 2,936
* O'Reilly Automotive Inc. 61,355 2,918
VF Corp. 39,585 2,818
Genuine Parts Co. 70,874 2,796
Wynn Resorts Ltd. 35,754 2,727
Ltd Brands Inc. 122,254 2,698
* Liberty Media Corp. - Interactive 253,229 2,659
Fortune Brands Inc. 67,841 2,658
Cablevision Systems Corp. Class A 110,501 2,653
* Apollo Group Inc. Class A 62,003 2,633
* AutoZone Inc. 13,335 2,577
Nordstrom Inc. 77,758 2,503
* Dollar Tree Inc. 59,139 2,462
Comcast Corp. 148,093 2,433
H&R Block Inc. 149,902 2,352
Virgin Media Inc. 139,785 2,333
Harley-Davidson Inc. 104,606 2,325
Darden Restaurants Inc. 59,425 2,309
Hasbro Inc. 54,853 2,254
Family Dollar Stores Inc. 58,797 2,216
* Discovery Communications Inc. Class A 60,496 2,160
* NetFlix Inc. 19,838 2,155
Advance Auto Parts Inc. 42,285 2,122
Tiffany & Co. 55,643 2,109
International Game Technology 132,698 2,083


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  Polo Ralph Lauren Corp. Class A 28,448 2,076
* Urban Outfitters Inc. 60,300 2,074
  JC Penney Co. Inc. 94,987 2,040
* CarMax Inc. 99,737 1,985
* Discovery Communications Inc. 63,396 1,961
* BorgWarner Inc. 52,332 1,954
* Chipotle Mexican Grill Inc. Class A 14,091 1,928
* Autoliv Inc. 38,134 1,825
  Newell Rubbermaid Inc. 124,325 1,820
  Expedia Inc. 94,614 1,777
* NVR Inc. 2,608 1,708
  DISH Network Corp. Class A 93,359 1,694
  PetSmart Inc. 55,403 1,672
* Sirius XM Radio Inc. 1,741,526 1,654
  Scripps Networks Interactive Inc. Class A 40,558 1,636
  Wyndham Worldwide Corp. 80,186 1,615
* Liberty Media Corp. - Capital 38,261 1,604
* Liberty Global Inc. Class A 60,602 1,575
  Garmin Ltd. 53,900 1,573
* Interpublic Group of Cos. Inc. 217,966 1,554
  DeVry Inc. 28,718 1,507
  Gannett Co. Inc. 107,344 1,445
* Royal Caribbean Cruises Ltd. 62,559 1,424
* Liberty Global Inc. 53,595 1,393
* GameStop Corp. Class A 71,348 1,341
*,^ Sears Holdings Corp. 20,726 1,340
  Leggett & Platt Inc. 66,658 1,337
* ITT Educational Services Inc. 15,923 1,322
* Lear Corp. 19,726 1,306
  Strayer Education Inc. 6,275 1,305
* Aeropostale Inc. 44,625 1,278
  DR Horton Inc. 129,898 1,277
* Pulte Group Inc. 152,336 1,261
  Abercrombie & Fitch Co. 39,863 1,223
* Big Lots Inc. 37,242 1,195
* Mohawk Industries Inc. 25,767 1,179
* LKQ Corp. 60,920 1,175
  Phillips-Van Heusen Corp. 25,300 1,171
* Liberty Media Corp. - Starz 22,211 1,151
  Gentex Corp. 63,095 1,134
* MGM Resorts International 117,245 1,130
  Tupperware Brands Corp. 28,340 1,129
  Jarden Corp. 41,922 1,126
  RadioShack Corp. 57,037 1,113
  Washington Post Co. Class B 2,644 1,085
* Dollar General Corp. 39,000 1,074
  Williams-Sonoma Inc. 42,317 1,050
* Hanesbrands Inc. 43,407 1,044
* Toll Brothers Inc. 63,626 1,041
* Signet Jewelers Ltd. 37,827 1,040
* Panera Bread Co. Class A 13,800 1,039
* TRW Automotive Holdings Corp. 37,616 1,037
  American Eagle Outfitters Inc. 87,415 1,027
* WMS Industries Inc. 25,875 1,016
* Goodyear Tire & Rubber Co. 101,857 1,012
* J Crew Group Inc. 27,422 1,009
* Dick's Sporting Goods Inc. 40,526 1,009
  Tractor Supply Co. 16,349 997
* Tempur-Pedic International Inc. 31,736 976
* DreamWorks Animation SKG Inc. Class A 33,165 947
* Harman International Industries Inc. 30,726 918
  Foot Locker Inc. 71,532 903
  Service Corp. International 116,859 865
* Career Education Corp. 37,233 857


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Deckers Outdoor Corp. 5,900 843
* Fossil Inc. 24,104 836
  Guess? Inc. 26,555 830
* Bally Technologies Inc. 24,935 808
  Chico's FAS Inc. 81,501 805
  John Wiley & Sons Inc. Class A 20,098 777
  Polaris Industries Inc. 14,090 770
* Hyatt Hotels Corp. Class A 20,358 755
*,^ Lululemon Athletica Inc. 20,167 751
  Lennar Corp. Class A 53,960 751
* Warnaco Group Inc. 20,600 745
  Burger King Holdings Inc. 43,519 733
* Penn National Gaming Inc. 30,751 710
* Carter's Inc. 26,888 706
  Sotheby's 30,624 700
* Valassis Communications Inc. 21,858 693
  Brinker International Inc. 47,100 681
  Wendy's/Arby's Group Inc. Class A 164,036 656
* Live Nation Entertainment Inc. 62,139 649
* Lamar Advertising Co. Class A 26,424 648
* Dana Holding Corp. 63,600 636
* Dress Barn Inc. 26,425 629
  Jones Apparel Group Inc. 39,540 627
* Rent-A-Center Inc. 30,570 619
*,^ AutoNation Inc. 31,760 619
  Hillenbrand Inc. 28,713 614
* Gymboree Corp. 14,000 598
* Cheesecake Factory Inc. 26,092 581
  Interactive Data Corp. 17,333 579
* Skechers U.S.A. Inc. Class A 15,700 573
  Wolverine World Wide Inc. 22,675 572
* Tenneco Inc. 26,960 568
* Coinstar Inc. 13,092 563
* Madison Square Garden Inc. Class A 28,575 562
* Capella Education Co. 6,820 555
* Life Time Fitness Inc. 17,283 549
  Aaron's Inc. 31,912 545
*,^ Under Armour Inc. Class A 16,282 539
* Eastman Kodak Co. 122,271 531
  Meredith Corp. 16,672 519
* OfficeMax Inc. 39,557 517
  Regal Entertainment Group Class A 39,450 514
* Office Depot Inc. 127,147 514
  Brunswick Corp. 40,808 507
  Dillard's Inc. Class A 23,195 499
* New York Times Co. Class A 57,608 498
* Childrens Place Retail Stores Inc. 11,300 497
  Pool Corp. 22,678 497
  Cracker Barrel Old Country Store Inc. 10,423 485
* Saks Inc. 63,387 481
* Jack in the Box Inc. 24,380 474
* Iconix Brand Group Inc. 32,768 471
* Collective Brands Inc. 29,750 470
  Cooper Tire & Rubber Co. 24,093 470
* JOS A Bank Clothiers Inc. 8,625 466
  MDC Holdings Inc. 17,250 465
* Vail Resorts Inc. 13,100 457
* AnnTaylor Stores Corp. 27,028 440
  Men's Wearhouse Inc. 22,992 422
* Jo-Ann Stores Inc. 11,235 421
* Morningstar Inc. 9,864 419
  Matthews International Corp. Class A 14,314 419
  Buckle Inc. 12,925 419
* HSN Inc. 17,454 419


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Thor Industries Inc. 17,582 418
Weight Watchers International Inc. 16,218 417
PF Chang's China Bistro Inc. 10,400 412
Regis Corp. 26,112 407
* CROCS Inc. 37,900 401
KB Home 36,318 400
Choice Hotels International Inc. 13,100 396
* Corinthian Colleges Inc. 39,791 392
* CEC Entertainment Inc. 10,994 388
* Steven Madden Ltd. 12,130 382
* Lions Gate Entertainment Corp. 54,728 382
* American Public Education Inc. 8,500 371
* Sally Beauty Holdings Inc. 45,155 370
* 99 Cents Only Stores 24,129 357
* Timberland Co. Class A 21,668 350
American Greetings Corp. Class A 18,644 350
International Speedway Corp. Class A 13,555 349
National CineMedia Inc. 20,958 349
CTC Media Inc. 24,024 347
* Hibbett Sports Inc. 14,418 345
Cinemark Holdings Inc. 26,100 343
Arbitron Inc. 13,378 343
Bob Evans Farms Inc. 13,738 338
Scholastic Corp. 13,940 336
* Pier 1 Imports Inc. 52,084 334
* Texas Roadhouse Inc. Class A 25,800 326
* Gaylord Entertainment Co. 14,540 321
* Blue Nile Inc. 6,807 320
Ryland Group Inc. 20,249 320
Finish Line Inc. Class A 22,894 319
* Orient-Express Hotels Ltd. Class A 41,800 309
* Cabela's Inc. 21,400 303
* Talbots Inc. 29,178 301
* Scientific Games Corp. Class A 32,444 299
* Education Management Corp. 19,350 295
Monro Muffler Brake Inc. 7,320 289
* Buffalo Wild Wings Inc. 7,900 289
NutriSystem Inc. 12,590 289
* Genesco Inc. 10,945 288
* Ulta Salon Cosmetics & Fragrance Inc. 12,076 286
Brown Shoe Co. Inc. 18,675 284
* Pinnacle Entertainment Inc. 29,200 276
* Citi Trends Inc. 8,300 273
* Interval Leisure Group Inc. 21,501 268
* Universal Technical Institute Inc. 11,278 267
* Quiksilver Inc. 69,640 258
Stewart Enterprises Inc. Class A 46,900 254
* Papa John's International Inc. 10,900 252
* Helen of Troy Ltd. 11,400 252
Columbia Sportswear Co. 5,384 251
* BJ's Restaurants Inc. 10,556 249
* Shuffle Master Inc. 30,413 244
Unifirst Corp. 5,500 242
Barnes & Noble Inc. 18,693 241
Cato Corp. Class A 10,798 238
* DineEquity Inc. 8,451 236
* Boyd Gaming Corp. 27,756 236
CKE Restaurants Inc. 18,751 235
* True Religion Apparel Inc. 10,581 234
* Charming Shoppes Inc. 61,156 229
* Domino's Pizza Inc. 20,200 228
* Group 1 Automotive Inc. 9,451 222
* Penske Automotive Group Inc. 19,200 218
* Sonic Corp. 28,091 218


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Exide Technologies 40,786 212
* Steiner Leisure Ltd. 5,485 211
  Harte-Hanks Inc. 19,399 203
* Knology Inc. 18,307 200
* Belo Corp. Class A 35,150 200
* California Pizza Kitchen Inc. 13,150 199
  Fred's Inc. Class A 17,750 196
* Standard Pacific Corp. 58,701 196
* Meritage Homes Corp. 12,000 195
* Biglari Holdings Inc. 679 195
* Shutterfly Inc. 8,100 194
* Peet's Coffee & Tea Inc. 4,934 194
* Liz Claiborne Inc. 45,629 193
* DSW Inc. Class A 8,551 192
  Lennar Corp. Class B 16,664 189
  Ethan Allen Interiors Inc. 13,359 187
  Stage Stores Inc. 17,343 185
  Callaway Golf Co. 30,604 185
* Lumber Liquidators Holdings Inc. 7,900 184
* Ruby Tuesday Inc. 21,633 184
  Churchill Downs Inc. 5,457 179
  World Wrestling Entertainment Inc. Class A 11,400 177
* Pre-Paid Legal Services Inc. 3,880 177
  PEP Boys-Manny Moe & Jack 19,740 175
* Volcom Inc. 9,414 175
* K12 Inc. 7,800 173
* RCN Corp. 11,635 172
  Sturm Ruger & Co. Inc. 11,976 172
* Rentrak Corp. 7,000 170
* Drew Industries Inc. 8,382 169
  National Presto Industries Inc. 1,820 169
* Sinclair Broadcast Group Inc. Class A 28,900 169
* Grand Canyon Education Inc. 7,100 166
* Select Comfort Corp. 18,937 166
* Mediacom Communications Corp. Class A 24,580 165
* American Axle & Manufacturing Holdings Inc. 22,336 164
  Ameristar Casinos Inc. 10,854 163
  Big 5 Sporting Goods Corp. 12,400 163
  PetMed Express Inc. 9,100 162
* Maidenform Brands Inc. 7,800 159
* Wet Seal Inc. Class A 42,175 154
* hhgregg Inc. 6,600 154
* Drugstore.Com Inc. 48,241 149
* Landry's Restaurants Inc. 5,784 142
*,^ Fuel Systems Solutions Inc. 5,442 141
* Jakks Pacific Inc. 9,761 140
* La-Z-Boy Inc. 18,747 139
  Christopher & Banks Corp. 22,302 138
  HOT Topic Inc. 26,969 137
  Superior Industries International Inc. 10,179 137
* Warner Music Group Corp. 28,012 136
* RC2 Corp. 8,400 135
* Federal-Mogul Corp. 10,138 132
* Pacific Sunwear Of California 41,048 131
* Ascent Media Corp. Class A 5,200 131
* K-Swiss Inc. Class A 11,600 130
* Rue21 Inc. 4,274 130
* iRobot Corp. 6,845 129
* Entercom Communications Corp. Class A 14,494 128
  Oxford Industries Inc. 6,100 128
* Unifi Inc. 32,870 126
* Lincoln Educational Services Corp. 5,959 123
* Winnebago Industries Inc. 12,342 123
* Modine Manufacturing Co. 15,538 119


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Coldwater Creek Inc. 35,018 118
* Asbury Automotive Group Inc. 11,100 117
* G-III Apparel Group Ltd. 5,100 117
* Sonic Automotive Inc. Class A 13,599 116
* Vitamin Shoppe Inc. 4,512 116
  Ambassadors Group Inc. 10,100 114
* America's Car-Mart Inc. 5,000 113
* Perry Ellis International Inc. 5,491 111
* Krispy Kreme Doughnuts Inc. 32,697 110
* Clear Channel Outdoor Holdings Inc. Class A 12,694 110
* Amerigon Inc. 14,900 110
* Red Robin Gourmet Burgers Inc. 6,300 108
* Kirkland's Inc. 6,400 108
* Universal Electronics Inc. 6,389 106
* West Marine Inc. 9,762 106
* Destination Maternity Corp. 4,134 105
*,^ McClatchy Co. Class A 28,497 104
* Stein Mart Inc. 16,189 101
* Zumiez Inc. 6,156 99
  Systemax Inc. 6,500 98
  Haverty Furniture Cos. Inc. 7,948 98
* Alloy Inc. 10,275 96
* Bridgepoint Education Inc. 6,069 96
  Marcus Corp. 10,100 96
* Cavco Industries Inc. 2,610 92
* Overstock.com Inc. 4,862 88
* Furniture Brands International Inc. 16,573 87
* Hovnanian Enterprises Inc. Class A 23,476 86
  Speedway Motorsports Inc. 6,285 85
* Movado Group Inc. 7,876 84
* EW Scripps Co. Class A 11,219 84
  Standard Motor Products Inc. 10,290 83
* Beazer Homes USA Inc. 22,822 83
* CKX Inc. 16,273 81
  CPI Corp. 3,600 81
* Leapfrog Enterprises Inc. 19,980 80
  Blyth Inc. 2,331 79
* Core-Mark Holding Co. Inc. 2,800 77
  Gaiam Inc. Class A 12,241 74
* Retail Ventures Inc. 9,500 74
* SuperMedia Inc. 3,986 73
* Midas Inc. 9,448 72
* Dorman Products Inc. 3,554 72
* Casual Male Retail Group Inc. 20,575 70
* Daily Journal Corp. 1,028 70
* Media General Inc. Class A 7,157 70
* Journal Communications Inc. Class A 17,539 70
* AFC Enterprises Inc. 7,585 69
* Denny's Corp. 26,312 68
  Cherokee Inc. 3,938 67
* Learning Tree International Inc. 5,981 65
* Smith & Wesson Holding Corp. 15,460 63
  Skyline Corp. 3,500 63
  Mac-Gray Corp. 5,300 59
* Audiovox Corp. Class A 7,998 59
  Spartan Motors Inc. 13,989 59
* Orbitz Worldwide Inc. 15,400 59
* Lee Enterprises Inc. 22,798 59
* Stoneridge Inc. 7,700 58
* ChinaCast Education Corp. 9,200 55
* Isle of Capri Casinos Inc. 5,797 54
* LIN TV Corp. Class A 9,878 53
* Famous Dave's Of America Inc. 6,350 53
* Shoe Carnival Inc. 2,550 52


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Morgans Hotel Group Co. 8,300 51
* Arctic Cat Inc. 5,600 51
* Playboy Enterprises Inc. Class B 12,000 50
* Tuesday Morning Corp. 12,473 50
* American Apparel Inc. 26,992 49
* Kenneth Cole Productions Inc. Class A 4,462 49
* Saga Communications Inc. Class A 2,050 49
* M/I Homes Inc. 5,000 48
* Fisher Communications Inc. 2,860 48
  Bebe Stores Inc. 7,350 47
* Lifetime Brands Inc. 3,200 47
* AH Belo Corp. Class A 6,710 45
* 1-800-Flowers.com Inc. Class A 21,537 44
  Weyco Group Inc. 1,942 44
* Morton's Restaurant Group Inc. 8,400 44
* Reading International Inc. Class A 10,600 42
* Carriage Services Inc. Class A 8,900 41
* Cumulus Media Inc. Class A 15,330 41
  Courier Corp. 3,348 41
* Monarch Casino & Resort Inc. 4,000 41
* Borders Group Inc. 30,217 40
* MarineMax Inc. 5,700 40
* Steinway Musical Instruments Inc. 2,200 39
  Books-A-Million Inc. 6,500 39
* Entravision Communications Corp. Class A 18,529 39
  Kid Brands Inc. 5,538 39
* Multimedia Games Inc. 8,500 38
* Strattec Security Corp. 1,725 38
*,^ Fuqi International Inc. 5,600 38
* O'Charleys Inc. 7,039 37
* Conn's Inc. 6,300 37
* Nexstar Broadcasting Group Inc. Class A 8,317 36
  Lithia Motors Inc. Class A 5,600 35
* Quantum Fuel Systems Technologies Worldwide Inc. 63,300 34
* Sealy Corp. 12,647 34
  CSS Industries Inc. 2,010 33
* Rubio's Restaurants Inc. 3,622 31
* Brookfield Homes Corp. 4,479 30
* Martha Stewart Living Omnimedia Class A 6,130 30
* dELiA*s Inc. 20,058 30
* Luby's Inc. 7,600 29
* Marine Products Corp. 5,136 29
* Harris Interactive Inc. 27,000 29
* Ruth's Hospitality Group Inc. 6,635 28
* Gray Television Inc. 11,200 27
* Build-A-Bear Workshop Inc. 3,900 26
*,^ Blockbuster Inc. Class A 107,754 26
* Bluegreen Corp. 8,500 26
* Cost Plus Inc. 7,100 25
* LodgeNet Interactive Corp. 6,600 25
  PRIMEDIA Inc. 8,292 24
* Zale Corp. 14,898 24
* Benihana Inc. Class A 3,860 23
* Emmis Communications Corp. Class A 10,365 23
* Stanley Furniture Co. Inc. 5,600 23
* Cache Inc. 3,950 22
  Koss Corp. 4,202 22
* New York & Co. Inc. 9,500 22
* Bon-Ton Stores Inc. 2,200 21
* McCormick & Schmick's Seafood Restaurants Inc. 2,860 21
* Valuevision Media Inc. Class A 11,940 21
* Radio One Inc. 16,291 21
* Empire Resorts Inc. 12,697 21
* Beasley Broadcasting Group Inc. Class A 4,235 21


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Jamba Inc. 9,207 20
* Radio One Inc. Class A 14,000 20
* MTR Gaming Group Inc. 12,037 20
Dover Downs Gaming & Entertainment Inc. 6,583 19
* Bassett Furniture Industries Inc. 4,200 18
* Navarre Corp. 8,214 18
* Great Wolf Resorts Inc. 8,318 17
Hooker Furniture Corp. 1,600 17
* Nautilus Inc. 10,993 17
Emerson Radio Corp. 9,600 16
* Carmike Cinemas Inc. 2,600 16
* Cosi Inc. 21,135 15
* Salem Communications Corp. Class A 3,960 15
* Vitacost.com Inc. 1,600 14
* Jackson Hewitt Tax Service Inc. 12,400 14
* Heelys Inc. 5,550 14
* Spanish Broadcasting System Inc. 11,100 13
* Benihana Inc. Class A 1,930 12
* Trans World Entertainment Corp. 7,150 12
* Lazare Kaplan International Inc. 4,741 12
* Premier Exhibitions Inc. 8,900 11
* Wonder Auto Technology Inc. 1,521 11
* Palm Harbor Homes Inc. 6,200 11
* AC Moore Arts & Crafts Inc. 4,858 11
* Century Casinos Inc. 5,100 11
* Dover Motorsports Inc. 5,900 11
* Princeton Review Inc. 4,500 10
* Escalade Inc. 1,686 8
* Joe's Jeans Inc. 4,000 8
Flexsteel Industries 701 8
* Atrinsic Inc. 8,417 8
* Shiloh Industries Inc. 900 8
Collectors Universe 550 7
* Hollywood Media Corp. 6,000 7
* Lakes Entertainment Inc. 4,613 7
* Rocky Brands Inc. 1,000 6
News Corp. Class B 400 6
Sport Supply Group Inc. 400 5
* Outdoor Channel Holdings Inc. 1,100 5
* Culp Inc. 400 4
* Carrols Restaurant Group Inc. 844 4
* Blockbuster Inc. Class B 15,384 4
* Dixie Group Inc. 1,011 4
* Nobel Learning Communities Inc. 609 4
* Red Lion Hotels Corp. 500 3
* Town Sports International Holdings Inc. 1,000 2
* SPAR Group Inc. 300 —
* Krispy Kreme Doughnuts Inc. Warrants Exp. 3/2/2012 591 —
    558,580
Consumer Staples (5.8%)    
Procter & Gamble Co. 1,294,346 77,635
Wal-Mart Stores Inc. 1,018,692 48,969
Coca-Cola Co. 924,534 46,338
PepsiCo Inc. 725,271 44,205
Philip Morris International Inc. 838,240 38,425
Kraft Foods Inc. 777,256 21,763
Altria Group Inc. 927,149 18,580
CVS Caremark Corp. 619,694 18,169
Colgate-Palmolive Co. 220,043 17,331
Walgreen Co. 439,049 11,723
Kimberly-Clark Corp. 185,602 11,253
Costco Wholesale Corp. 195,806 10,736
General Mills Inc. 293,736 10,434
Sysco Corp. 264,123 7,546


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Archer-Daniels-Midland Co. 257,708 6,654
HJ Heinz Co. 140,926 6,091
Kellogg Co. 118,735 5,972
Kroger Co. 275,148 5,418
Avon Products Inc. 190,506 5,048
Lorillard Inc. 69,056 4,971
ConAgra Foods Inc. 197,622 4,609
Mead Johnson Nutrition Co. 91,130 4,567
Dr Pepper Snapple Group Inc. 113,252 4,235
Sara Lee Corp. 295,223 4,163
Reynolds American Inc. 77,998 4,065
Clorox Co. 62,518 3,886
Safeway Inc. 173,126 3,404
Coca-Cola Enterprises Inc. 131,450 3,399
Hershey Co. 70,880 3,397
Campbell Soup Co. 91,775 3,288
JM Smucker Co. 53,113 3,198
Molson Coors Brewing Co. Class B 72,133 3,056
Bunge Ltd. 60,935 2,997
Estee Lauder Cos. Inc. Class A 50,366 2,807
* Whole Foods Market Inc. 64,672 2,330
Tyson Foods Inc. Class A 130,205 2,134
Brown-Forman Corp. Class B 37,029 2,119
McCormick & Co. Inc. 53,617 2,035
Church & Dwight Co. Inc. 31,655 1,985
* Energizer Holdings Inc. 29,731 1,495
* Constellation Brands Inc. Class A 89,040 1,391
* Ralcorp Holdings Inc. 24,557 1,346
Hormel Foods Corp. 32,997 1,336
* Hansen Natural Corp. 33,745 1,320
Del Monte Foods Co. 89,103 1,282
* Green Mountain Coffee Roasters Inc. 49,365 1,269
Herbalife Ltd. 27,108 1,248
Alberto-Culver Co. Class B 40,505 1,097
Corn Products International Inc. 34,250 1,038
SUPERVALU Inc. 93,838 1,017
* Smithfield Foods Inc. 68,159 1,016
Flowers Foods Inc. 38,184 933
* BJ's Wholesale Club Inc. 25,166 931
* NBTY Inc. 25,694 874
* Dean Foods Co. 83,199 838
Casey's General Stores Inc. 23,425 818
* TreeHouse Foods Inc. 15,911 727
Nu Skin Enterprises Inc. Class A 25,601 638
* Central European Distribution Corp. 29,750 636
Ruddick Corp. 19,209 595
* United Natural Foods Inc. 18,900 565
Sanderson Farms Inc. 10,119 513
* American Italian Pasta Co. 9,400 497
Lancaster Colony Corp. 9,151 488
Universal Corp. 11,400 452
* Fresh Del Monte Produce Inc. 20,160 408
* Hain Celestial Group Inc. 18,935 382
Vector Group Ltd. 21,102 355
Diamond Foods Inc. 8,195 337
J&J Snack Foods Corp. 7,800 328
* Darling International Inc. 43,407 326
Andersons Inc. 9,500 310
* Rite Aid Corp. 275,738 270
Tootsie Roll Industries Inc. 11,299 267
* Chiquita Brands International Inc. 21,536 262
* Winn-Dixie Stores Inc. 26,566 256
* Boston Beer Co. Inc. Class A 3,600 243
B&G Foods Inc. Class A 22,400 241


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Central Garden and Pet Co. Class A 25,750 231
  Nash Finch Co. 6,656 227
  Lance Inc. 13,200 218
  WD-40 Co. 6,412 214
* Elizabeth Arden Inc. 12,138 176
* Heckmann Corp. 37,500 174
* Alliance One International Inc. 48,788 174
* Medifast Inc. 6,400 166
* USANA Health Sciences Inc. 4,350 159
  Cal-Maine Foods Inc. 4,600 147
  Weis Markets Inc. 4,452 147
* Smart Balance Inc. 34,100 139
  Spartan Stores Inc. 9,800 134
  Pricesmart Inc. 5,785 134
* Pantry Inc. 8,400 119
* Pilgrim's Pride Corp. 17,253 113
* Nutraceutical International Corp. 7,300 111
* Dole Food Co. Inc. 9,950 104
* Prestige Brands Holdings Inc. 14,146 100
* Zhongpin Inc. 8,100 95
* American Oriental Bioengineering Inc. 37,100 94
  Inter Parfums Inc. 6,225 89
  Coca-Cola Bottling Co. Consolidated 1,700 81
* Great Atlantic & Pacific Tea Co. 20,426 80
  Ingles Markets Inc. Class A 5,000 75
* Revlon Inc. Class A 6,406 72
  National Beverage Corp. 5,760 71
  Arden Group Inc. 790 69
* Harbinger Group Inc. 10,300 65
* Central Garden and Pet Co. 6,775 64
* John B. Sanfilippo & Son Inc. 4,200 61
* Lifeway Foods Inc. 6,122 60
  Oil-Dri Corp. of America 2,500 57
  Griffin Land & Nurseries Inc. 2,257 57
* Seneca Foods Corp. Class A 1,400 45
* American Dairy Inc. 2,753 44
* Susser Holdings Corp. 3,592 42
  Calavo Growers Inc. 2,287 41
  Farmer Bros Co. 2,598 39
  Alico Inc. 1,667 38
*,^ Star Scientific Inc. 20,762 34
* Omega Protein Corp. 7,900 32
  Village Super Market Inc. Class A 826 22
* Reddy Ice Holdings Inc. 6,613 21
* China Sky One Medical Inc. 1,774 20
  Schiff Nutrition International Inc. 2,700 19
* China-Biotics Inc. 1,300 17
* Parlux Fragrances Inc. 9,354 17
* MGP Ingredients Inc. 2,300 15
  Female Health Co. 2,700 14
* Mannatech Inc. 6,650 13
  Imperial Sugar Co. 1,200 12
* Jones Soda Co. 6,300 7
*,^ AgFeed Industries Inc. 2,361 7
* Physicians Formula Holdings Inc. 900 3
* Orchids Paper Products Co. 100 1
* Crystal Rock Holdings Inc. 800 1
      511,861
Energy (5.9%)    
  Exxon Mobil Corp. 2,271,059 129,609
  Chevron Corp. 894,984 60,734
  ConocoPhillips 629,430 30,899
  Schlumberger Ltd. 532,802 29,485
  Occidental Petroleum Corp. 361,905 27,921


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Apache Corp. 150,020 12,630
Devon Energy Corp. 189,141 11,522
EOG Resources Inc. 112,550 11,072
Halliburton Co. 403,312 9,901
Marathon Oil Corp. 315,518 9,809
Baker Hughes Inc. 191,406 7,957
Anadarko Petroleum Corp. 219,520 7,922
* Transocean Ltd. 143,341 6,641
Hess Corp. 131,257 6,607
National Oilwell Varco Inc. 186,541 6,169
Chesapeake Energy Corp. 288,813 6,051
* Southwestern Energy Co. 154,293 5,962
Spectra Energy Corp. 288,540 5,791
Williams Cos. Inc. 260,087 4,754
Noble Energy Inc. 77,769 4,692
Peabody Energy Corp. 119,816 4,688
Valero Energy Corp. 251,777 4,527
* Weatherford International Ltd. 328,832 4,321
Smith International Inc. 110,724 4,169
Murphy Oil Corp. 80,932 4,010
Noble Corp. 114,776 3,548
* Cameron International Corp. 108,941 3,543
El Paso Corp. 312,541 3,472
Consol Energy Inc. 97,939 3,306
Pioneer Natural Resources Co. 51,509 3,062
* Ultra Petroleum Corp. 67,807 3,000
* Newfield Exploration Co. 59,352 2,900
* FMC Technologies Inc. 54,468 2,868
Range Resources Corp. 70,948 2,849
Cimarex Energy Co. 37,457 2,681
* Denbury Resources Inc. 168,493 2,467
* Petrohawk Energy Corp. 134,612 2,284
* Nabors Industries Ltd. 127,266 2,242
* Kinder Morgan Management LLC 35,070 1,985
^ Diamond Offshore Drilling Inc. 31,111 1,935
* Concho Resources Inc. 34,692 1,919
* Alpha Natural Resources Inc. 53,834 1,823
Sunoco Inc. 52,358 1,820
* Whiting Petroleum Corp. 22,724 1,782
* Pride International Inc. 78,766 1,760
Helmerich & Payne Inc. 47,370 1,730
Core Laboratories NV 10,000 1,476
Cabot Oil & Gas Corp. 46,670 1,462
Arch Coal Inc. 72,976 1,446
* Forest Oil Corp. 47,975 1,313
* Plains Exploration & Production Co. 61,724 1,272
Massey Energy Co. 43,079 1,178
EXCO Resources Inc. 79,745 1,165
* Dresser-Rand Group Inc. 36,522 1,152
SM Energy Co. 28,507 1,145
* Rowan Cos. Inc. 51,770 1,136
* Oceaneering International Inc. 25,105 1,127
Southern Union Co. 49,397 1,080
* Mariner Energy Inc. 45,080 968
* Atlas Energy Inc. 34,573 936
Tidewater Inc. 23,711 918
* Oil States International Inc. 22,915 907
Patterson-UTI Energy Inc. 68,018 875
* Brigham Exploration Co. 51,979 799
* Unit Corp. 18,650 757
Tesoro Corp. 64,000 747
* Continental Resources Inc. 15,765 703
* Exterran Holdings Inc. 27,050 698
* SEACOR Holdings Inc. 9,726 687


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Atwood Oceanics Inc. 26,764 683
* Superior Energy Services Inc. 36,095 674
World Fuel Services Corp. 25,790 669
Frontier Oil Corp. 48,664 655
* Dril-Quip Inc. 14,600 643
CARBO Ceramics Inc. 8,900 642
* Quicksilver Resources Inc. 55,050 606
* Comstock Resources Inc. 21,710 602
Berry Petroleum Co. Class A 22,300 574
* Arena Resources Inc. 17,600 561
Holly Corp. 20,686 550
Lufkin Industries Inc. 13,800 538
* Key Energy Services Inc. 57,820 531
* Bill Barrett Corp. 17,092 526
* Gran Tierra Energy Inc. 103,170 512
Overseas Shipholding Group Inc. 13,388 496
* Helix Energy Solutions Group Inc. 45,972 495
* Rosetta Resources Inc. 24,700 489
* Swift Energy Co. 17,300 466
* Bristow Group Inc. 15,800 465
* SandRidge Energy Inc. 73,000 426
Penn Virginia Corp. 20,950 421
* Patriot Coal Corp. 34,118 401
* Complete Production Services Inc. 27,607 395
* McMoRan Exploration Co. 34,622 385
* Energy XXI Bermuda Ltd. 22,297 352
* Tetra Technologies Inc. 33,350 303
* Newpark Resources Inc. 47,421 287
* Enbridge Energy Management LLC 5,554 283
* International Coal Group Inc. 71,263 274
* Contango Oil & Gas Co. 6,102 273
* USEC Inc. 55,330 263
* Gulfmark Offshore Inc. 10,000 262
* Cal Dive International Inc. 42,955 251
* Parker Drilling Co. 61,600 243
* Carrizo Oil & Gas Inc. 14,607 227
* Venoco Inc. 13,766 227
* Cobalt International Energy Inc. 30,100 224
* ATP Oil & Gas Corp. 20,854 221
* Clean Energy Fuels Corp. 14,700 220
* Global Industries Ltd. 48,274 217
* Northern Oil and Gas Inc. 16,472 211
* Stone Energy Corp. 18,466 206
RPC Inc. 14,825 202
* ION Geophysical Corp. 57,925 202
General Maritime Corp. 32,204 195
* James River Coal Co. 12,188 194
* Gulfport Energy Corp. 14,900 177
* Resolute Energy Corp. 13,375 164
* Hornbeck Offshore Services Inc. 11,200 164
* Petroleum Development Corp. 6,191 159
* Petroquest Energy Inc. 23,400 158
* Willbros Group Inc. 21,275 157
* Harvest Natural Resources Inc. 19,600 144
* Goodrich Petroleum Corp. 11,414 137
* Energy Partners Ltd. 11,183 137
* Cloud Peak Energy Inc. 10,253 136
* Pioneer Drilling Co. 23,008 130
* BPZ Resources Inc. 31,293 130
* Tesco Corp. 10,462 128
Vaalco Energy Inc. 22,800 128
* CVR Energy Inc. 16,800 126
* T-3 Energy Services Inc. 4,500 126
* Superior Well Services Inc. 7,236 121


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  Gulf Island Fabrication Inc. 7,714 120
* Kodiak Oil & Gas Corp. 36,814 117
* Matrix Service Co. 12,500 116
  W&T Offshore Inc. 12,297 116
* Rex Energy Corp. 10,636 107
* Crosstex Energy Inc. 16,708 107
* Warren Resources Inc. 36,220 105
* Hercules Offshore Inc. 42,324 103
* Clayton Williams Energy Inc. 2,388 101
* Western Refining Inc. 18,000 91
* Rentech Inc. 91,400 90
* PHI Inc. 6,324 89
* OYO Geospace Corp. 1,824 88
* Cheniere Energy Inc. 29,695 84
* Oilsands Quest Inc. 127,488 78
* REX American Resources Corp. 4,300 69
* American Oil & Gas Inc. 10,917 69
* Endeavour International Corp. 64,000 68
* GMX Resources Inc. 10,100 66
* Toreador Resources Corp. 11,152 61
* Natural Gas Services Group Inc. 4,000 61
* Abraxas Petroleum Corp. 21,518 60
* Boots & Coots Inc. 18,000 53
* Basic Energy Services Inc. 6,881 53
* Seahawk Drilling Inc. 5,444 53
  Panhandle Oil and Gas Inc. Class A 1,900 50
* Delta Petroleum Corp. 56,963 49
* FX Energy Inc. 13,100 47
* Allis-Chalmers Energy Inc. 22,772 47
* Callon Petroleum Co. 7,361 46
* Syntroleum Corp. 26,257 43
* Dawson Geophysical Co. 2,000 43
* RAM Energy Resources Inc. 20,039 41
* CREDO Petroleum Corp. 5,050 37
* Bronco Drilling Co. Inc. 10,270 34
* Vantage Drilling Co. 24,000 32
* Gastar Exploration Ltd. 8,806 32
* Double Eagle Petroleum Co. 6,523 28
* ENGlobal Corp. 12,800 26
* CAMAC Energy Inc. 6,900 26
* Gasco Energy Inc. 71,046 25
  Houston American Energy Corp. 2,400 24
* Green Plains Renewable Energy Inc. 2,300 23
* HKN Inc. 7,047 22
* Union Drilling Inc. 4,000 22
* Uranium Energy Corp. 9,279 22
* Georesources Inc. 1,500 21
  Alon USA Energy Inc. 2,797 18
  Delek US Holdings Inc. 2,400 18
*,^ GeoGlobal Resources Inc. 15,000 16
* Pacific Ethanol Inc. 22,380 14
* Tri-Valley Corp. 13,900 14
* Magnum Hunter Resources Corp. 2,900 13
* Isramco Inc. 245 12
*,^ Sulphco Inc. 31,693 9
* Approach Resources Inc. 1,200 8
* Westmoreland Coal Co. 1,000 8
* Bolt Technology Corp. 900 8
* Cano Petroleum Inc. 9,900 8
*,^ Evergreen Energy Inc. 52,194 6
* Verenium Corp. 1,938 5
* Uranium Resources Inc. 8,100 3
* Trico Marine Services Inc. 5,968 3
* Barnwell Industries Inc. 1,000 3


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* NGAS Resources Inc. 2,400 3
* Geokinetics Inc. 600 2
* Mitcham Industries Inc. 300 2
* PostRock Energy Corp. 351 2
* BMB Munai Inc. 1,500 1
    518,971
Financials (9.5%)    
JPMorgan Chase & Co. 1,770,457 64,816
Bank of America Corp. 4,470,403 64,240
Wells Fargo & Co. 2,193,151 56,145
* Citigroup Inc. 9,517,007 35,784
Goldman Sachs Group Inc. 217,678 28,575
US Bancorp 852,670 19,057
American Express Co. 479,984 19,055
MetLife Inc. 365,094 13,786
Bank of New York Mellon Corp. 538,379 13,293
PNC Financial Services Group Inc. 230,441 13,020
Morgan Stanley 560,774 13,016
Travelers Cos. Inc. 228,907 11,274
Prudential Financial Inc. 206,353 11,073
* Berkshire Hathaway Inc. Class A 89 10,680
Simon Property Group Inc. 129,291 10,440
* Berkshire Hathaway Inc. Class B 122,050 9,726
Aflac Inc. 209,110 8,923
CME Group Inc. 29,698 8,361
Capital One Financial Corp. 202,975 8,180
BB&T Corp. 307,848 8,099
ACE Ltd. 150,065 7,725
State Street Corp. 220,759 7,466
Chubb Corp. 146,444 7,324
Allstate Corp. 227,155 6,526
Charles Schwab Corp. 451,641 6,404
Franklin Resources Inc. 71,268 6,143
Public Storage 64,285 5,651
Marsh & McLennan Cos. Inc. 237,237 5,350
Progressive Corp. 284,346 5,323
Vornado Realty Trust 72,769 5,309
Equity Residential 125,669 5,233
SunTrust Banks Inc. 222,556 5,186
T Rowe Price Group Inc. 115,435 5,124
Loews Corp. 150,672 5,019
Northern Trust Corp. 97,031 4,531
Boston Properties Inc. 61,981 4,422
Fifth Third Bancorp 354,362 4,355
Annaly Capital Management Inc. 246,500 4,227
HCP Inc. 130,953 4,223
Ameriprise Financial Inc. 113,881 4,115
Hartford Financial Services Group Inc. 184,730 4,088
AON Corp. 107,034 3,973
Host Hotels & Resorts Inc. 281,244 3,791
Regions Financial Corp. 531,539 3,498
AvalonBay Communities Inc. 36,391 3,398
Discover Financial Services 242,307 3,387
Principal Financial Group Inc. 142,413 3,338
Ventas Inc. 69,895 3,282
Lincoln National Corp. 134,757 3,273
Invesco Ltd. 192,380 3,238
Unum Group 148,212 3,216
NYSE Euronext 115,932 3,203
* IntercontinentalExchange Inc. 27,940 3,158
M&T Bank Corp. 37,103 3,152
KeyCorp 391,741 3,013
* CIT Group Inc. 84,712 2,868
Comerica Inc. 77,659 2,860


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Genworth Financial Inc. Class A 218,232 2,852
New York Community Bancorp Inc. 183,682 2,805
Hudson City Bancorp Inc. 211,637 2,590
Plum Creek Timber Co. Inc. 72,669 2,509
XL Capital Ltd. Class A 152,801 2,446
Kimco Realty Corp. 181,067 2,434
Health Care REIT Inc. 55,286 2,329
Willis Group Holdings PLC 75,497 2,269
People's United Financial Inc. 167,437 2,260
* SLM Corp. 216,649 2,251
BlackRock Inc. 15,491 2,221
Digital Realty Trust Inc. 37,950 2,189
Macerich Co. 57,551 2,148
ProLogis 211,948 2,147
PartnerRe Ltd. 29,476 2,067
Legg Mason Inc. 72,137 2,022
Federal Realty Investment Trust 27,348 1,922
SL Green Realty Corp. 34,845 1,918
Everest Re Group Ltd. 27,000 1,909
Nationwide Health Properties Inc. 52,607 1,882
* American International Group Inc. 54,296 1,870
Torchmark Corp. 37,063 1,835
Assurant Inc. 52,133 1,809
Moody's Corp. 90,163 1,796
Cincinnati Financial Corp. 69,352 1,794
Huntington Bancshares Inc. 320,920 1,778
* Arch Capital Group Ltd. 23,657 1,762
AMB Property Corp. 74,246 1,760
* Leucadia National Corp. 87,228 1,702
Axis Capital Holdings Ltd. 56,200 1,670
WR Berkley Corp. 61,654 1,631
* TD Ameritrade Holding Corp. 105,801 1,619
Marshall & Ilsley Corp. 223,772 1,607
Rayonier Inc. 36,105 1,589
* CB Richard Ellis Group Inc. Class A 111,681 1,520
RenaissanceRe Holdings Ltd. 27,000 1,519
Reinsurance Group of America Inc. Class A 32,811 1,500
Liberty Property Trust 51,039 1,472
Zions Bancorporation 67,607 1,458
Eaton Vance Corp. 52,603 1,452
* Markel Corp. 4,230 1,438
Realty Income Corp. 46,881 1,422
Transatlantic Holdings Inc. 28,970 1,389
* MSCI Inc. Class A 50,228 1,376
UDR Inc. 70,762 1,354
Chimera Investment Corp. 365,393 1,319
Essex Property Trust Inc. 13,388 1,306
Fidelity National Financial Inc. Class A 99,417 1,291
Duke Realty Corp. 112,127 1,273
Regency Centers Corp. 36,705 1,263
Cullen/Frost Bankers Inc. 24,486 1,259
Alexandria Real Estate Equities Inc. 19,728 1,250
Old Republic International Corp. 102,903 1,248
Jones Lang LaSalle Inc. 18,911 1,241
HCC Insurance Holdings Inc. 49,799 1,233
SEI Investments Co. 59,808 1,218
* First Horizon National Corp. 104,117 1,192
Camden Property Trust 29,180 1,192
Hospitality Properties Trust 55,862 1,179
* Affiliated Managers Group Inc. 19,163 1,165
White Mountains Insurance Group Ltd. 3,591 1,164
First Niagara Financial Group Inc. 92,525 1,159
Commerce Bancshares Inc. 31,865 1,147
Senior Housing Properties Trust 56,354 1,133


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Arthur J Gallagher & Co. 46,201 1,126
Raymond James Financial Inc. 45,005 1,111
* AmeriCredit Corp. 60,802 1,108
Ares Capital Corp. 86,918 1,089
* NASDAQ OMX Group Inc. 60,801 1,081
Mack-Cali Realty Corp. 36,089 1,073
Bank of Hawaii Corp. 21,973 1,062
Brown & Brown Inc. 55,241 1,057
City National Corp. 20,510 1,051
Jefferies Group Inc. 49,328 1,040
* E*Trade Financial Corp. 87,500 1,034
BRE Properties Inc. 27,715 1,024
Apartment Investment & Management Co. 51,832 1,004
Corporate Office Properties Trust SBI 26,392 997
Weingarten Realty Investors 52,234 995
* St. Joe Co. 42,509 985
American Financial Group Inc. 35,440 968
TCF Financial Corp. 57,918 962
Developers Diversified Realty Corp. 96,236 953
MFA Financial Inc. 128,700 952
Assured Guaranty Ltd. 71,385 947
Taubman Centers Inc. 24,700 929
Valley National Bancorp 67,596 921
Hanover Insurance Group Inc. 20,943 911
Associated Banc-Corp 72,638 891
Federated Investors Inc. Class B 42,674 884
Allied World Assurance Co. Holdings Ltd. 19,375 879
Highwoods Properties Inc. 31,449 873
Fulton Financial Corp. 90,047 869
Endurance Specialty Holdings Ltd. 22,900 859
Waddell & Reed Financial Inc. 39,187 857
StanCorp Financial Group Inc. 20,898 847
FirstMerit Corp. 48,922 838
* Alleghany Corp. 2,856 838
Omega Healthcare Investors Inc. 41,866 834
Washington Federal Inc. 51,290 830
Protective Life Corp. 38,714 828
Apollo Investment Corp. 88,033 821
Synovus Financial Corp. 321,133 816
National Retail Properties Inc. 38,009 815
BioMed Realty Trust Inc. 50,620 814
Entertainment Properties Trust 21,134 805
* ProAssurance Corp. 14,010 795
* Popular Inc. 295,343 792
Aspen Insurance Holdings Ltd. 31,892 789
* SVB Financial Group 19,034 785
Validus Holdings Ltd. 32,093 784
East West Bancorp Inc. 51,148 780
Washington Real Estate Investment Trust 27,653 763
Tanger Factory Outlet Centers 18,378 760
Janus Capital Group Inc. 84,139 747
CBL & Associates Properties Inc. 59,404 739
Platinum Underwriters Holdings Ltd. 20,200 733
CommonWealth REIT 116,360 723
Douglas Emmett Inc. 50,659 720
Home Properties Inc. 15,789 712
Westamerica Bancorporation 13,518 710
* Signature Bank 18,451 701
Greenhill & Co. Inc. 11,427 699
Kilroy Realty Corp. 23,400 696
Prosperity Bancshares Inc. 19,970 694
Mid-America Apartment Communities Inc. 13,368 688
Potlatch Corp. 18,488 661
LaSalle Hotel Properties 31,760 653


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
American Campus Communities Inc. 23,786 649
Erie Indemnity Co. Class A 14,266 649
DuPont Fabros Technology Inc. 26,287 646
Brandywine Realty Trust 59,937 644
Equity Lifestyle Properties Inc. 13,150 634
* Forest City Enterprises Inc. Class A 55,918 633
BancorpSouth Inc. 34,821 623
Webster Financial Corp. 34,580 620
Iberiabank Corp. 12,000 618
Healthcare Realty Trust Inc. 28,055 616
American Capital Ltd. 127,371 614
BOK Financial Corp. 12,612 599
Northwest Bancshares Inc. 51,004 585
Unitrin Inc. 22,851 585
Trustmark Corp. 27,974 582
DiamondRock Hospitality Co. 70,634 581
CapitalSource Inc. 119,602 569
* Knight Capital Group Inc. Class A 41,168 568
* Stifel Financial Corp. 13,000 564
Astoria Financial Corp. 39,895 549
First American Financial Corp. 42,832 543
* CNO Financial Group Inc. 109,666 543
* MGIC Investment Corp. 78,517 541
TFS Financial Corp. 43,304 537
Delphi Financial Group Inc. 22,014 537
Extra Space Storage Inc. 37,679 524
Mercury General Corp. 12,555 520
UMB Financial Corp. 14,621 520
* Portfolio Recovery Associates Inc. 7,600 508
Post Properties Inc. 22,127 503
Umpqua Holdings Corp. 43,727 502
NewAlliance Bancshares Inc. 44,581 500
PS Business Parks Inc. 8,902 497
Redwood Trust Inc. 33,576 492
Glacier Bancorp Inc. 32,928 483
* PHH Corp. 25,247 481
Susquehanna Bancshares Inc. 57,618 480
Hatteras Financial Corp. 17,192 478
Medical Properties Trust Inc. 49,716 469
Cash America International Inc. 13,687 469
Montpelier Re Holdings Ltd. 31,308 467
Wintrust Financial Corp. 14,002 467
* Sunstone Hotel Investors Inc. 46,050 457
Hancock Holding Co. 13,655 456
United Bankshares Inc. 19,025 455
Wilmington Trust Corp. 40,991 455
First Citizens BancShares Inc. 2,319 446
National Health Investors Inc. 11,500 443
Radian Group Inc. 61,053 442
Argo Group International Holdings Ltd. 14,417 441
EastGroup Properties Inc. 12,300 438
* MBIA Inc. 77,856 437
Sovran Self Storage Inc. 12,480 430
DCT Industrial Trust Inc. 94,537 427
Colonial Properties Trust 29,311 426
Tower Group Inc. 19,701 424
Old National Bancorp 40,824 423
Alterra Capital Holdings Ltd. 22,500 423
Whitney Holding Corp. 45,333 419
FNB Corp. 51,775 416
MB Financial Inc. 22,562 415
International Bancshares Corp. 24,820 414
First Midwest Bancorp Inc. 33,254 404
First Financial Bancorp 26,682 399


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
RLI Corp. 7,430 390
Franklin Street Properties Corp. 32,687 386
CVB Financial Corp. 37,875 360
First Financial Bankshares Inc. 7,410 356
* MF Global Holdings Ltd. 61,855 353
Community Bank System Inc. 16,000 352
Selective Insurance Group Inc. 23,700 352
Capitol Federal Financial 10,444 346
Park National Corp. 5,324 346
American National Insurance Co. 4,267 346
NBT Bancorp Inc. 16,653 340
Anworth Mortgage Asset Corp. 47,646 339
* optionsXpress Holdings Inc. 21,367 336
Employers Holdings Inc. 22,739 335
National Penn Bancshares Inc. 55,694 335
Infinity Property & Casualty Corp. 7,241 334
Equity One Inc. 21,403 334
Cathay General Bancorp 32,283 334
Capstead Mortgage Corp. 29,992 332
* Ocwen Financial Corp. 32,350 330
* Interactive Brokers Group Inc. 19,825 329
Provident Financial Services Inc. 27,926 326
* KBW Inc. 14,836 318
* Investment Technology Group Inc. 19,537 314
American Capital Agency Corp. 11,841 313
Starwood Property Trust Inc. 18,322 311
* Investors Bancorp Inc. 23,646 310
Nelnet Inc. Class A 16,000 308
* Ezcorp Inc. Class A 16,538 307
* Texas Capital Bancshares Inc. 18,394 302
Alexander's Inc. 989 300
* Piper Jaffray Cos. 9,220 297
Horace Mann Educators Corp. 19,085 292
* Navigators Group Inc. 6,993 288
American Equity Investment Life Holding Co. 27,800 287
* Forestar Group Inc. 15,641 281
* Greenlight Capital Re Ltd. Class A 11,069 279
Saul Centers Inc. 6,643 270
Bank of the Ozarks Inc. 7,608 270
PacWest Bancorp 14,691 269
* World Acceptance Corp. 6,937 266
Columbia Banking System Inc. 14,434 264
Acadia Realty Trust 15,578 262
Chemical Financial Corp. 11,969 261
Lexington Realty Trust 43,108 259
PrivateBancorp Inc. Class A 23,241 258
Investors Real Estate Trust 29,024 256
Brookline Bancorp Inc. 28,689 255
* Pico Holdings Inc. 7,896 237
Pennsylvania Real Estate Investment Trust 19,349 236
S&T Bancorp Inc. 11,876 235
Inland Real Estate Corp. 29,454 233
Prospect Capital Corp. 23,984 231
Getty Realty Corp. 10,327 231
* iStar Financial Inc. 51,882 231
* First Cash Financial Services Inc. 10,600 231
U-Store-It Trust 30,695 229
* Hilltop Holdings Inc. 22,838 229
Cousins Properties Inc. 33,724 227
* Strategic Hotels & Resorts Inc. 51,427 226
* National Financial Partners Corp. 22,725 222
City Holding Co. 7,927 221
LTC Properties Inc. 9,000 218
* GLG Partners Inc. 49,590 217


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
GFI Group Inc. 38,668 216
Fifth Street Finance Corp. 19,511 215
Trustco Bank Corp. NY 38,059 213
Boston Private Financial Holdings Inc. 32,663 210
Home Bancshares Inc. 9,197 210
BlackRock Kelso Capital Corp. 20,741 205
* Ashford Hospitality Trust Inc. 27,906 205
Hersha Hospitality Trust 45,100 204
Government Properties Income Trust 7,844 200
United Fire & Casualty Co. 10,001 198
MCG Capital Corp. 41,015 198
Meadowbrook Insurance Group Inc. 22,801 197
* PMI Group Inc. 67,800 196
Amtrust Financial Services Inc. 16,045 193
Flagstone Reinsurance Holdings SA 17,809 193
First Commonwealth Financial Corp. 36,633 192
Provident New York Bancorp 21,730 192
Safety Insurance Group Inc. 5,189 192
WesBanco Inc. 11,385 192
Sun Communities Inc. 7,326 190
* AMERISAFE Inc. 10,800 190
* Encore Capital Group Inc. 9,023 186
* Enstar Group Ltd. 2,793 186
* Beneficial Mutual Bancorp Inc. 18,732 185
Sterling Bancshares Inc. 38,850 183
* Credit Acceptance Corp. 3,700 180
First Potomac Realty Trust 12,495 180
Dime Community Bancshares 14,512 179
* Federal National Mortgage Assn. 521,102 178
Invesco Mortgage Capital Inc. 8,900 178
* Altisource Portfolio Solutions SA 7,166 177
Simmons First National Corp. Class A 6,737 177
Artio Global Investors Inc. Class A 11,130 175
* Citizens Inc. 26,169 174
Independent Bank Corp. 7,000 173
Harleysville Group Inc. 5,517 171
* Dollar Financial Corp. 8,600 170
* CNA Surety Corp. 10,410 167
Compass Diversified Holdings 12,170 163
Northfield Bancorp Inc. 12,400 161
American Physicians Capital Inc. 5,200 160
Cardinal Financial Corp. 17,314 160
* FelCor Lodging Trust Inc. 31,968 160
Walter Investment Management Corp. 9,756 160
Hercules Technology Growth Capital Inc. 17,107 158
TowneBank 10,600 154
MarketAxess Holdings Inc. 11,113 153
Westfield Financial Inc. 18,333 153
Southside Bancshares Inc. 7,735 152
Bank Mutual Corp. 26,271 149
SCBT Financial Corp. 4,229 149
* Western Alliance Bancorp 20,740 149
StellarOne Corp. 11,315 145
First Financial Corp. 5,581 144
First Bancorp 9,817 142
Cedar Shopping Centers Inc. 23,600 142
Community Trust Bancorp Inc. 5,623 141
* Pinnacle Financial Partners Inc. 10,768 138
* Nara Bancorp Inc. 16,402 138
Republic Bancorp Inc. 6,160 138
Trico Bancshares 8,078 137
Suffolk Bancorp 4,300 133
Glimcher Realty Trust 22,134 132
National Western Life Insurance Co. Class A 857 131


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Cohen & Steers Inc. 6,300 131
* Emdeon Inc. Class A 10,393 130
1st Source Corp. 7,693 130
* TradeStation Group Inc. 19,117 129
Oriental Financial Group Inc. 10,181 129
Retail Opportunity Investments Corp. 13,175 127
* FPIC Insurance Group Inc. 4,950 127
* Federal Home Loan Mortgage Corp. 302,728 125
Universal Health Realty Income Trust 3,852 124
FBL Financial Group Inc. Class A 5,883 124
* First Marblehead Corp. 51,051 120
SY Bancorp Inc. 5,189 119
Evercore Partners Inc. Class A 5,100 119
* United Community Banks Inc. 29,861 118
MVC Capital Inc. 9,000 116
OneBeacon Insurance Group Ltd. Class A 8,107 116
Associated Estates Realty Corp. 8,908 115
BankFinancial Corp. 13,840 115
Lakeland Financial Corp. 5,698 114
* Safeguard Scientifics Inc. 10,753 114
Flushing Financial Corp. 9,252 113
* LaBranche & Co. Inc. 26,299 113
* Tejon Ranch Co. 4,846 112
Parkway Properties Inc. 7,669 112
Ramco-Gershenson Properties Trust 11,010 111
* Pebblebrook Hotel Trust 5,847 110
ViewPoint Financial Group 7,847 109
Lakeland Bancorp Inc. 12,674 108
* MPG Office Trust Inc. 36,800 108
Danvers Bancorp Inc. 7,461 108
* Green Bankshares Inc. 8,402 107
* Virginia Commerce Bancorp Inc. 17,165 107
Wainwright Bank & Trust Co. 5,682 106
Cypress Sharpridge Investments Inc. 8,341 106
* Phoenix Cos. Inc. 49,630 105
* Citizens Republic Bancorp Inc. 122,457 104
German American Bancorp Inc. 6,797 104
Urstadt Biddle Properties Inc. Class A 6,391 103
Maiden Holdings Ltd. 15,630 103
Advance America Cash Advance Centers Inc. 24,859 103
Univest Corp. of Pennsylvania 5,905 102
* PMA Capital Corp. Class A 15,612 102
* Bancorp Inc. 13,058 102
ESSA Bancorp Inc. 8,266 102
Renasant Corp. 7,089 102
Education Realty Trust Inc. 16,821 101
Tompkins Financial Corp. 2,629 99
Wilshire Bancorp Inc. 11,250 98
SWS Group Inc. 10,221 97
WSFS Financial Corp. 2,700 97
* eHealth Inc. 8,500 97
NGP Capital Resources Co. 13,425 96
NorthStar Realty Finance Corp. 35,998 96
Sandy Spring Bancorp Inc. 6,832 96
Arrow Financial Corp. 4,142 96
* Ladenburg Thalmann Financial Services Inc. 76,300 95
* United America Indemnity Ltd. Class A 12,928 95
Cogdell Spencer Inc. 13,900 94
* First Industrial Realty Trust Inc. 19,264 93
* Cardtronics Inc. 7,081 92
Gladstone Capital Corp. 8,419 91
Agree Realty Corp. 3,900 91
* Taylor Capital Group Inc. 7,000 91
First Merchants Corp. 10,627 90


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
*,^ Ambac Financial Group Inc. 134,271 90
  Presidential Life Corp. 9,800 89
* International Assets Holding Corp. 5,546 89
  Duff & Phelps Corp. Class A 7,000 88
  MainSource Financial Group Inc. 12,281 88
  Gladstone Commercial Corp. 5,300 87
  SeaBright Holdings Inc. 9,100 86
  EMC Insurance Group Inc. 3,895 85
  Berkshire Hills Bancorp Inc. 4,378 85
  Calamos Asset Management Inc. Class A 9,004 84
* Thomas Weisel Partners Group Inc. 13,900 82
  Merchants Bancshares Inc. 3,611 80
* RAIT Financial Trust 42,555 80
* Primus Guaranty Ltd. 21,467 79
  Capital Southwest Corp. 901 79
  TICC Capital Corp. 9,386 79
  Resource Capital Corp. 13,800 78
  PennantPark Investment Corp. 8,200 78
  GAMCO Investors Inc. 2,093 78
  Life Partners Holdings Inc. 3,750 77
  Bancfirst Corp. 2,100 77
  Washington Trust Bancorp Inc. 4,493 77
* CBOE Holdings Inc. 2,307 75
  Great Southern Bancorp Inc. 3,677 75
  Abington Bancorp Inc. 8,563 75
  CoBiz Financial Inc. 11,273 74
  Westwood Holdings Group Inc. 2,100 74
  Southwest Bancorp Inc. 5,544 74
  State Auto Financial Corp. 4,617 72
  One Liberty Properties Inc. 4,703 70
  Gladstone Investment Corp. 11,924 70
  Mission West Properties Inc. 10,188 69
  Peoples Bancorp Inc. 4,782 69
  Heartland Financial USA Inc. 3,955 68
  First Mercury Financial Corp. 6,441 68
  First Busey Corp. 14,811 67
  Kite Realty Group Trust 16,023 67
* Pennymac Mortgage Investment Trust 4,200 67
  Financial Institutions Inc. 3,651 65
  CFS Bancorp Inc. 13,200 64
  Colony Financial Inc. 3,700 63
  UMH Properties Inc. 6,159 62
  Penns Woods Bancorp Inc. 2,008 61
  Roma Financial Corp. 5,600 61
  Donegal Group Inc. Class A 4,931 61
* FBR Capital Markets Corp. 17,632 59
  Union First Market Bankshares Corp. 4,750 58
  Center Bancorp Inc. 7,678 58
* Penson Worldwide Inc. 10,262 58
  CapLease Inc. 12,500 58
  Bryn Mawr Bank Corp. 3,402 57
  Oppenheimer Holdings Inc. Class A 2,377 57
  Centerstate Banks Inc. 5,542 56
  First Community Bancshares Inc. 3,779 56
  Northrim BanCorp Inc. 3,584 55
* Sun Bancorp Inc. 14,652 55
  Camden National Corp. 1,992 55
* Hanmi Financial Corp. 43,069 54
  Eastern Insurance Holdings Inc. 5,100 54
  Baldwin & Lyons Inc. 2,573 54
  First Financial Northwest Inc. 13,637 54
  Medallion Financial Corp. 8,180 54
* United Community Financial Corp. 32,272 54
  Sanders Morris Harris Group Inc. 9,701 54


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Heritage Financial Corp. 3,576 54
* Newcastle Investment Corp. 19,931 53
Arlington Asset Investment Corp. Class A 2,834 53
National Bankshares Inc. 2,192 53
Stewart Information Services Corp. 5,820 53
LSB Corp. 4,028 52
Asta Funding Inc. 5,300 52
Sterling Bancorp 5,785 52
* Guaranty Bancorp 49,037 52
* Gleacher & Co. Inc. 20,361 52
Ames National Corp. 2,615 51
West Coast Bancorp 19,943 51
State Bancorp Inc. 5,343 51
Peapack Gladstone Financial Corp. 4,266 50
American National Bankshares Inc. 2,283 49
Consolidated-Tomoka Land Co. 1,700 48
Territorial Bancorp Inc. 2,528 48
Capital City Bank Group Inc. 3,850 48
United Financial Bancorp Inc. 3,474 47
Ameris Bancorp 4,898 47
* Virtus Investment Partners Inc. 2,481 46
* Waterstone Financial Inc. 13,579 46
NYMAGIC Inc. 2,400 46
First Financial Holdings Inc. 4,035 46
First South Bancorp Inc. 4,352 46
Pulaski Financial Corp. 7,046 45
Winthrop Realty Trust 3,459 44
* NewStar Financial Inc. 6,812 43
Federal Agricultural Mortgage Corp. Class A 3,500 42
* Center Financial Corp. 8,115 42
OceanFirst Financial Corp. 3,436 41
K-Fed Bancorp 4,436 40
* Avatar Holdings Inc. 1,994 38
* Pacific Mercantile Bancorp 10,891 38
Home Federal Bancorp Inc. 2,952 37
* Arbor Realty Trust Inc. 7,200 37
* American Safety Insurance Holdings Ltd. 2,300 36
Washington Banking Co. 2,800 36
* Stratus Properties Inc. 3,604 36
HF Financial Corp. 3,644 36
Kansas City Life Insurance Co. 1,200 36
PMC Commercial Trust 4,300 35
* Eagle Bancorp Inc. 2,936 35
Student Loan Corp. 1,350 33
Century Bancorp Inc. Class A 1,440 32
* West Bancorporation Inc. 4,621 31
* Asset Acceptance Capital Corp. 7,559 31
Citizens & Northern Corp. 2,898 31
* 1st United Bancorp Inc. 4,100 30
* AmeriServ Financial Inc. 18,587 30
* NewBridge Bancorp 8,369 29
* Intervest Bancshares Corp. Class A 5,348 29
Eastern Virginia Bankshares Inc. 4,460 29
Pacific Continental Corp. 3,050 29
* Crawford & Co. Class B 9,050 29
* Meridian Interstate Bancorp Inc. 2,492 27
* Unity Bancorp Inc. 5,069 27
American Physicians Service Group Inc. 1,090 27
* Marlin Business Services Corp. 2,196 27
Apollo Commercial Real Estate Finance Inc. 1,600 26
MBT Financial Corp. 11,530 26
BancTrust Financial Group Inc. 7,033 26
* Flagstar Bancorp Inc. 8,199 26
US Global Investors Inc. Class A 4,600 26


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  Investors Title Co. 812 25
* Harris & Harris Group Inc. 6,200 25
  TF Financial Corp. 1,161 25
*,^ Central Pacific Financial Corp. 16,703 25
* Heritage Commerce Corp. 7,000 25
* First BanCorp 46,200 25
  Shore Bancshares Inc. 2,050 24
  Rewards Network Inc. 1,733 24
* BankAtlantic Bancorp Inc. Class A 16,689 23
  Provident Financial Holdings Inc. 4,832 23
  Monmouth Real Estate Investment Corp. Class A 3,100 23
* First Acceptance Corp. 13,145 22
  CreXus Investment Corp. 1,800 22
* United Security Bancshares 6,104 22
  Orrstown Financial Services Inc. 1,000 22
* Gramercy Capital Corp. 17,524 22
* Encore Bancshares Inc. 2,207 22
* Cowen Group Inc. Class A 5,200 21
  Main Street Capital Corp. 1,400 21
  Jefferson Bancshares Inc. 5,200 21
  First of Long Island Corp. 800 21
  First Security Group Inc. 10,668 20
  Resource America Inc. Class A 5,286 20
  Colony Bankcorp Inc. 3,062 20
  First Bancorp Inc. 1,500 20
  MutualFirst Financial Inc. 2,926 20
* Consumer Portfolio Services Inc. 14,200 20
*,^ Pacific Capital Bancorp NA 27,202 20
* Republic First Bancorp Inc. 10,019 20
*,^ Sterling Financial Corp. 34,860 19
  Bank of Marin Bancorp 600 19
  Hawthorn Bancshares Inc. 1,579 19
* Bank of Granite Corp. 16,417 19
*,^ Premierwest Bancorp 47,106 19
* Tree.com Inc. 2,950 19
^ Princeton National Bancorp Inc. 2,999 18
  Epoch Holding Corp. 1,500 18
  Thomas Properties Group Inc. 5,320 18
  First Place Financial Corp. 5,836 18
  CompuCredit Holdings Corp. 4,388 17
  Bridge Bancorp Inc. 700 17
* Camco Financial Corp. 6,536 16
  HopFed Bancorp Inc. 1,815 16
  Enterprise Financial Services Corp. 1,685 16
  Meta Financial Group Inc. 554 16
  Wayne Savings Bancshares Inc. 2,079 16
* BCSB Bancorp Inc. 1,582 16
  First M&F Corp. 3,952 16
  Independence Holding Co. 2,602 16
  Codorus Valley Bancorp Inc. 2,097 15
  Comm Bancorp Inc. 843 15
  South Financial Group Inc. 53,734 15
  Capital Bank Corp. 4,502 15
  Kohlberg Capital Corp. 2,881 14
* Cohen & Co. Inc. 2,883 14
  First Defiance Financial Corp. 1,600 14
  Atlantic Coast Federal Corp. 4,745 14
  Landmark Bancorp Inc. 825 14
  Sierra Bancorp 1,200 14
  Mercantile Bank Corp. 2,546 14
  ESB Financial Corp. 1,000 13
  Care Investment Trust Inc. 1,500 13
  Dynex Capital Inc. 1,400 13
  Triangle Capital Corp. 900 13


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* First Keystone Financial Inc. 958 13
  Citizens South Banking Corp. 2,237 13
  Federal Agricultural Mortgage Corp. 900 13
* Macatawa Bank Corp. 10,455 13
* Metro Bancorp Inc. 1,000 12
^ Old Second Bancorp Inc. 6,115 12
* Royal Bancshares of Pennsylvania Inc. 4,060 12
* HMN Financial Inc. 2,621 12
  JMP Group Inc. 1,900 12
  United Security Bancshares 1,292 12
* North Valley Bancorp 4,618 10
* Deerfield Capital Corp. 1,764 10
  Banner Corp. 4,700 9
* American Independence Corp. 1,770 9
* Cadence Financial Corp. 7,800 9
  National Interstate Corp. 445 9
* Capital Trust Inc. Class A 5,099 8
  Alliance Financial Corp. 300 8
  Ameriana Bancorp 1,926 8
* Superior Bancorp 4,089 8
  First Federal Bancshares of Arkansas Inc. 2,933 8
  QC Holdings Inc. 2,008 7
  Smithtown Bancorp Inc. 2,454 7
  Farmers Capital Bank Corp. 1,430 7
  Rockville Financial Inc. 600 7
  Yadkin Valley Financial Corp. 2,100 7
* HFF Inc. Class A 1,000 7
  BRT Realty Trust 1,187 7
  Tower Bancorp Inc. 300 7
* Seacoast Banking Corp. of Florida 4,564 6
^ Integra Bank Corp. 7,550 6
  Diamond Hill Investment Group Inc. 100 6
  CNB Financial Corp. 500 6
* Cascade Bancorp 10,816 5
  Independent Bank Corp. 13,405 5
* Capitol Bancorp Ltd. 3,990 5
* Preferred Bank 2,123 4
  FNB United Corp. 4,656 4
* TIB Financial Corp. 7,640 4
* First State Bancorporation 10,265 3
  NASB Financial Inc. 200 3
* Anchor Bancorp Wisconsin Inc. 6,479 3
*,^ Hampton Roads Bankshares Inc. 3,592 3
* Hanmi Financial Corp. Rights Exp. 7/12/2010 43,069 3
* ZipRealty Inc. 900 2
* Valley National Bancorp Warrants 570 2
*,^ PAB Bankshares Inc. 2,196 2
* Fidelity Southern Corp. 307 2
* Affirmative Insurance Holdings Inc. 500 2
* Vestin Realty Mortgage II Inc. 1,269 2
* Community Capital Corp. 299 1
* Hallmark Financial Services 100 1
* Southern Community Financial Corp. 400 1
  First United Corp. 200 1
* Grubb & Ellis Co. 600 1
* EBS Litigation L.L.C. 6,856 —
* Cascade Financial Corp. 375 —
      836,003
Health Care (7.2%)    
  Johnson & Johnson 1,229,501 72,614
  Pfizer Inc. 3,596,211 51,282
  Merck & Co. Inc. 1,361,152 47,599
  Abbott Laboratories 691,879 32,366
* Amgen Inc. 443,456 23,326


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Bristol-Myers Squibb Co. 763,913 19,052
Medtronic Inc. 492,316 17,856
Eli Lilly & Co. 462,508 15,494
UnitedHealth Group Inc. 515,875 14,651
* Gilead Sciences Inc. 401,103 13,750
* Medco Health Solutions Inc. 206,863 11,394
* Express Scripts Inc. 233,102 10,960
Baxter International Inc. 268,626 10,917
* Celgene Corp. 204,954 10,416
* WellPoint Inc. 197,877 9,682
Covidien PLC 222,946 8,958
* Thermo Fisher Scientific Inc. 182,523 8,953
McKesson Corp. 120,091 8,065
Allergan Inc. 135,501 7,894
Becton Dickinson and Co. 105,100 7,107
Stryker Corp. 133,115 6,664
* Genzyme Corp. 118,324 6,007
* Biogen Idec Inc. 120,148 5,701
* Intuitive Surgical Inc. 17,163 5,417
Cardinal Health Inc. 161,087 5,414
* St. Jude Medical Inc. 148,962 5,376
Aetna Inc. 192,075 5,067
* Zimmer Holdings Inc. 90,373 4,885
* Hospira Inc. 73,033 4,196
AmerisourceBergen Corp. Class A 125,892 3,997
* Boston Scientific Corp. 673,518 3,906
* Life Technologies Corp. 80,674 3,812
CIGNA Corp. 122,615 3,808
* Forest Laboratories Inc. 134,835 3,699
* Laboratory Corp. of America Holdings 46,677 3,517
* Humana Inc. 75,943 3,468
Quest Diagnostics Inc. 67,800 3,374
CR Bard Inc. 42,647 3,306
* Vertex Pharmaceuticals Inc. 89,450 2,943
* Varian Medical Systems Inc. 55,290 2,891
* DaVita Inc. 46,036 2,874
* Edwards Lifesciences Corp. 50,486 2,828
* Waters Corp. 41,809 2,705
* Millipore Corp. 24,986 2,665
* Cerner Corp. 31,124 2,362
* Illumina Inc. 53,728 2,339
* Mylan Inc. 137,027 2,335
* Henry Schein Inc. 40,552 2,226
Perrigo Co. 36,655 2,165
* ResMed Inc. 33,654 2,046
* Alexion Pharmaceuticals Inc. 39,842 2,040
* Dendreon Corp. 59,933 1,938
* CareFusion Corp. 84,293 1,913
* Watson Pharmaceuticals Inc. 46,975 1,906
* Cephalon Inc. 33,527 1,903
* Human Genome Sciences Inc. 83,815 1,899
Beckman Coulter Inc. 31,276 1,886
DENTSPLY International Inc. 62,557 1,871
* Valeant Pharmaceuticals International 35,248 1,843
* Mettler-Toledo International Inc. 15,137 1,690
* Hologic Inc. 115,965 1,615
* IDEXX Laboratories Inc. 26,070 1,588
Universal Health Services Inc. Class B 40,294 1,537
* Covance Inc. 28,739 1,475
* Lincare Holdings Inc. 44,264 1,439
* Community Health Systems Inc. 41,771 1,412
Omnicare Inc. 54,544 1,293
Pharmaceutical Product Development Inc. 50,578 1,285
* Amylin Pharmaceuticals Inc. 64,690 1,216


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  Patterson Cos. Inc. 41,856 1,194
* Mednax Inc. 21,414 1,191
* Coventry Health Care Inc. 66,674 1,179
* Warner Chilcott PLC Class A 50,101 1,145
* United Therapeutics Corp. 23,380 1,141
* Endo Pharmaceuticals Holdings Inc. 51,889 1,132
* Health Net Inc. 44,324 1,080
  PerkinElmer Inc. 51,640 1,067
* Kinetic Concepts Inc. 29,122 1,063
* Thoratec Corp. 24,462 1,045
* Charles River Laboratories International Inc. 29,875 1,022
* Gen-Probe Inc. 22,320 1,014
  Teleflex Inc. 18,014 978
* Inverness Medical Innovations Inc. 36,277 967
* Salix Pharmaceuticals Ltd. 24,546 958
* Tenet Healthcare Corp. 219,989 955
  Techne Corp. 16,074 923
* VCA Antech Inc. 36,000 891
* Health Management Associates Inc. Class A 113,204 880
* BioMarin Pharmaceutical Inc. 46,105 874
* King Pharmaceuticals Inc. 114,039 866
  Hill-Rom Holdings Inc. 27,813 846
  STERIS Corp. 26,937 837
  Cooper Cos. Inc. 20,898 832
  Owens & Minor Inc. 28,705 815
* Psychiatric Solutions Inc. 24,466 801
* Healthsouth Corp. 42,448 794
* LifePoint Hospitals Inc. 24,771 778
* Bio-Rad Laboratories Inc. Class A 8,805 762
* American Medical Systems Holdings Inc. 34,192 756
* AMERIGROUP Corp. 23,226 754
* ev3 Inc. 33,037 740
* HMS Holdings Corp. 12,433 674
* Sirona Dental Systems Inc. 19,176 668
* Myriad Genetics Inc. 44,074 659
* Emergency Medical Services Corp. Class A 13,411 658
* Immucor Inc. 32,780 624
* NuVasive Inc. 17,550 622
* Onyx Pharmaceuticals Inc. 28,358 612
* Dionex Corp. 8,200 611
* Incyte Corp. Ltd. 55,082 610
* Talecris Biotherapeutics Holdings Corp. 28,620 604
* Catalyst Health Solutions Inc. 17,250 595
  Medicis Pharmaceutical Corp. Class A 27,192 595
* Haemonetics Corp. 11,062 592
* Regeneron Pharmaceuticals Inc. 26,384 589
*,^ Amedisys Inc. 13,234 582
* Magellan Health Services Inc. 16,015 582
* PSS World Medical Inc. 27,350 578
* Parexel International Corp. 26,600 577
* Brookdale Senior Living Inc. 38,186 573
  Masimo Corp. 23,892 569
  Chemed Corp. 10,400 568
  West Pharmaceutical Services Inc. 15,175 554
* Cubist Pharmaceuticals Inc. 26,706 550
* Acorda Therapeutics Inc. 17,540 546
* Alkermes Inc. 43,814 545
  Quality Systems Inc. 9,100 528
* Nektar Therapeutics 43,276 524
* Auxilium Pharmaceuticals Inc. 21,700 510
* Centene Corp. 23,500 505
* Allscripts-Misys Healthcare Solutions Inc. 30,100 485
* Eclipsys Corp. 26,300 469
* WellCare Health Plans Inc. 19,759 469


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Seattle Genetics Inc. 38,886 466
* Impax Laboratories Inc. 24,333 464
* MedAssets Inc. 20,000 462
* Volcano Corp. 20,309 443
* Cepheid Inc. 26,922 431
* Align Technology Inc. 28,861 429
* Par Pharmaceutical Cos. Inc. 16,427 426
* Isis Pharmaceuticals Inc. 43,725 418
* inVentiv Health Inc. 15,915 407
* Pharmasset Inc. 14,800 405
* Viropharma Inc. 36,031 404
* Odyssey HealthCare Inc. 15,000 401
* Theravance Inc. 31,738 399
* Martek Biosciences Corp. 15,984 379
* Savient Pharmaceuticals Inc. 29,961 377
* Integra LifeSciences Holdings Corp. 10,001 370
* Cyberonics Inc. 15,400 365
* Bruker Corp. 29,664 361
* Gentiva Health Services Inc. 13,331 360
* Vivus Inc. 37,314 358
* Phase Forward Inc. 20,914 349
* Healthspring Inc. 22,000 341
* Wright Medical Group Inc. 20,400 339
* Abraxis Bioscience Inc. 4,441 330
* AMAG Pharmaceuticals Inc. 9,333 321
* athenahealth Inc. 12,200 319
  PDL BioPharma Inc. 56,495 317
  Invacare Corp. 15,207 315
  Meridian Bioscience Inc. 18,208 310
* Luminex Corp. 18,616 302
  Landauer Inc. 4,900 298
* Bio-Reference Labs Inc. 13,288 295
* Amsurg Corp. Class A 16,300 290
* Halozyme Therapeutics Inc. 41,200 290
* Conmed Corp. 15,440 288
* Greatbatch Inc. 12,541 280
* Hanger Orthopedic Group Inc. 15,235 274
* Enzon Pharmaceuticals Inc. 25,691 274
  Analogic Corp. 5,900 269
* Natus Medical Inc. 16,200 264
* Celera Corp. 39,557 259
* Universal American Corp. 17,857 257
* Questcor Pharmaceuticals Inc. 24,622 251
* Alnylam Pharmaceuticals Inc. 16,500 248
* Conceptus Inc. 15,600 243
* Globe Specialty Metals Inc. 23,224 240
* NxStage Medical Inc. 16,100 239
* PharMerica Corp. 16,254 238
* Momenta Pharmaceuticals Inc. 19,200 235
* Abaxis Inc. 10,700 229
  Computer Programs & Systems Inc. 5,600 229
* Immunogen Inc. 24,400 226
* Healthways Inc. 18,313 218
* Affymetrix Inc. 36,894 218
* Zoll Medical Corp. 8,000 217
*,^ MannKind Corp. 33,595 215
* Merit Medical Systems Inc. 12,839 206
* MWI Veterinary Supply Inc. 4,100 206
* Somanetics Corp. 8,183 204
* Geron Corp. 40,580 204
* RehabCare Group Inc. 9,232 201
* Omnicell Inc. 17,100 200
* Metabolix Inc. 13,884 199
* Medicines Co. 26,016 198


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Kindred Healthcare Inc. 15,232 196
* ICU Medical Inc. 6,000 193
* Neogen Corp. 7,403 193
* ABIOMED Inc. 19,700 191
* Quidel Corp. 15,000 190
* Orthofix International NV 5,901 189
* NPS Pharmaceuticals Inc. 28,946 186
* Emeritus Corp. 11,336 185
* DexCom Inc. 15,900 184
* Assisted Living Concepts Inc. Class A 6,044 179
* Nabi Biopharmaceuticals 32,571 177
* Allos Therapeutics Inc. 28,177 173
* Accuray Inc. 25,957 172
* InterMune Inc. 18,200 170
* Exelixis Inc. 48,305 168
* Corvel Corp. 4,956 167
* Sequenom Inc. 28,330 167
* Insulet Corp. 10,900 164
* LHC Group Inc. 5,900 164
* Symmetry Medical Inc. 15,100 159
* Cross Country Healthcare Inc. 17,700 159
* eResearchTechnology Inc. 19,350 152
* AMN Healthcare Services Inc. 20,205 151
* Inspire Pharmaceuticals Inc. 29,885 149
* Air Methods Corp. 5,000 149
* HealthTronics Inc. 30,756 149
* Endologix Inc. 32,493 147
* Sun Healthcare Group Inc. 17,929 145
* OraSure Technologies Inc. 30,890 143
* Immunomedics Inc. 45,675 141
* Pharmacyclics Inc. 21,128 141
* Pain Therapeutics Inc. 24,800 138
* Akorn Inc. 45,244 134
* IPC The Hospitalist Co. Inc. 5,350 134
* Molina Healthcare Inc. 4,618 133
* American Dental Partners Inc. 10,709 130
* US Physical Therapy Inc. 7,600 128
* Ardea Biosciences Inc. 6,170 127
* Neurocrine Biosciences Inc. 22,534 126
* SonoSite Inc. 4,608 125
* Select Medical Holdings Corp. 18,410 125
* Medical Action Industries Inc. 10,350 124
* Triple-S Management Corp. Class B 6,635 123
* Targacept Inc. 6,282 121
* Rural/Metro Corp. 14,870 121
* Spectranetics Corp. 22,996 119
* Micromet Inc. 19,030 119
* Res-Care Inc. 12,200 118
* Rigel Pharmaceuticals Inc. 16,289 117
* Medivation Inc. 13,215 117
* XenoPort Inc. 11,900 117
  America Service Group Inc. 6,643 114
* Accelrys Inc. 17,107 110
* Palomar Medical Technologies Inc. 9,700 109
* IRIS International Inc. 10,700 108
* Maxygen Inc. 19,491 108
* Angiodynamics Inc. 7,293 108
* Alphatec Holdings Inc. 23,100 107
* BioScrip Inc. 20,408 107
* Arena Pharmaceuticals Inc. 34,008 104
* Genoptix Inc. 6,000 103
* Kensey Nash Corp. 4,291 102
*,^ Novavax Inc. 45,222 98
* SurModics Inc. 5,945 98


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* TomoTherapy Inc. 30,606 97
* Clinical Data Inc. 7,800 97
* Progenics Pharmaceuticals Inc. 17,436 96
* Optimer Pharmaceuticals Inc. 10,200 95
* Ligand Pharmaceuticals Inc. Class B 64,280 94
* Arqule Inc. 21,301 92
* Array Biopharma Inc. 29,985 91
* Emergent Biosolutions Inc. 5,500 90
* Orthovita Inc. 43,416 88
* Sangamo Biosciences Inc. 23,683 88
* Pozen Inc. 12,462 87
* Lexicon Pharmaceuticals Inc. 67,009 86
* Idenix Pharmaceuticals Inc. 17,134 86
* Ariad Pharmaceuticals Inc. 29,712 84
  National Healthcare Corp. 2,400 83
* BioMimetic Therapeutics Inc. 7,381 82
* Hi-Tech Pharmacal Co. Inc. 3,513 80
* Zymogenetics Inc. 18,875 80
* Continucare Corp. 23,735 80
* Capital Senior Living Corp. 15,700 78
* Protalix BioTherapeutics Inc. 12,700 78
* Durect Corp. 31,841 77
* Almost Family Inc. 2,200 77
* CryoLife Inc. 14,000 75
  Cantel Medical Corp. 4,500 75
* Caliper Life Sciences Inc. 17,380 74
*,^ Delcath Systems Inc. 11,598 74
* Vital Images Inc. 5,700 73
* Micrus Endovascular Corp. 3,400 71
* BioCryst Pharmaceuticals Inc. 11,700 69
* SuperGen Inc. 33,900 68
* ATS Medical Inc. 17,226 68
*,^ Cell Therapeutics Inc. 179,910 67
* Rochester Medical Corp. 7,086 67
* Sciclone Pharmaceuticals Inc. 25,157 67
* National Dentex Corp. 3,896 66
* RTI Biologics Inc. 21,863 64
* SIGA Technologies Inc. 8,033 62
* Albany Molecular Research Inc. 11,811 61
* Merge Healthcare Inc. 20,581 60
* Sunrise Senior Living Inc. 21,300 59
  Young Innovations Inc. 2,100 59
* Medidata Solutions Inc. 3,800 59
* Cerus Corp. 18,474 58
* Dyax Corp. 25,397 58
* Genomic Health Inc. 4,300 56
* Cypress Bioscience Inc. 24,077 55
  Atrion Corp. 400 54
* Five Star Quality Care Inc. 17,293 52
* MAKO Surgical Corp. 4,100 51
* Peregrine Pharmaceuticals Inc. 23,676 51
* Cadence Pharmaceuticals Inc. 7,068 50
* Depomed Inc. 17,306 48
* Javelin Pharmaceuticals Inc. 21,776 48
*,^ Keryx Biopharmaceuticals Inc. 13,000 48
* AVI BioPharma Inc. 29,300 47
* Anika Therapeutics Inc. 8,000 47
* BioSphere Medical Inc. 10,860 47
* Stereotaxis Inc. 14,107 47
* Medcath Corp. 5,899 46
* Kendle International Inc. 4,000 46
* Clarient Inc. 14,890 46
* Synovis Life Technologies Inc. 2,995 46
* LCA-Vision Inc. 8,112 45


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* StemCells Inc. 46,900 44
* Alliance HealthCare Services Inc. 10,800 44
* Providence Service Corp. 3,100 43
* Furiex Pharmaceuticals Inc. 4,223 43
* PDI Inc. 5,100 42
* Anadys Pharmaceuticals Inc. 21,879 42
* Myrexis Inc. 11,168 42
* Corcept Therapeutics Inc. 13,426 42
* Opko Health Inc. 18,460 42
* Spectrum Pharmaceuticals Inc. 10,500 41
* Icad Inc. 21,400 41
* Skilled Healthcare Group Inc. 6,000 41
  Psychemedics Corp. 4,980 41
* CytRx Corp. 51,700 40
* Enzo Biochem Inc. 9,435 38
* MAP Pharmaceuticals Inc. 2,900 38
  Ensign Group Inc. 2,292 38
* Vical Inc. 12,115 38
* AGA Medical Holdings Inc. 2,900 37
* Affymax Inc. 6,154 37
* Hooper Holmes Inc. 63,605 36
* BMP Sunstone Corp. 6,943 36
* Vanda Pharmaceuticals Inc. 5,400 36
* Obagi Medical Products Inc. 3,000 35
* Penwest Pharmaceuticals Co. 10,450 34
* Celldex Therapeutics Inc. 7,537 34
* Cambrex Corp. 10,772 34
* Hansen Medical Inc. 15,321 33
* Columbia Laboratories Inc. 30,465 32
* Adolor Corp. 29,428 32
* Exact Sciences Corp. 7,166 32
* Telik Inc. 39,883 31
* AVANIR Pharmaceuticals Inc. 12,100 31
* Allied Healthcare International Inc. 13,317 31
* Osiris Therapeutics Inc. 5,258 31
* Chindex International Inc. 2,400 30
* Exactech Inc. 1,758 30
* Orexigen Therapeutics Inc. 7,000 29
* NovaMed Inc. 3,533 29
* Matrixx Initiatives Inc. 6,300 29
* ZIOPHARM Oncology Inc. 8,900 28
* Santarus Inc. 11,122 28
* XOMA Ltd. 65,000 27
* GTx Inc. 8,800 27
* Harvard Bioscience Inc. 7,434 26
* Cutera Inc. 2,800 26
* Caraco Pharmaceutical Laboratories Ltd. 5,444 26
* CPEX Pharmaceuticals Inc. 940 25
* Cytori Therapeutics Inc. 7,100 25
* MELA Sciences Inc. 3,204 24
* Curis Inc. 16,670 23
* CardioNet Inc. 4,200 23
* Osteotech Inc. 7,187 23
* Biolase Technology Inc. 15,314 23
*,^ Generex Biotechnology Corp. 66,500 22
* GenVec Inc. 47,497 22
* Entremed Inc. 53,110 21
* Nighthawk Radiology Holdings Inc. 7,985 21
* Insmed Inc. 30,050 20
* Staar Surgical Co. 3,500 20
* Cytokinetics Inc. 7,525 18
* Strategic Diagnostics Inc. 9,612 17
* Jazz Pharmaceuticals Inc. 2,200 17
* Acadia Pharmaceuticals Inc. 15,540 17


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* ThermoGenesis Corp. 33,937 17
*,^ Hemispherx Biopharma Inc. 35,200 16
* Vascular Solutions Inc. 1,300 16
* Transcend Services Inc. 1,200 16
* Aastrom Biosciences Inc. 10,475 16
* Health Grades Inc. 2,600 16
* Idera Pharmaceuticals Inc. 4,300 15
* Animal Health International Inc. 5,800 14
* Cynosure Inc. Class A 1,300 14
* KV Pharmaceutical Co. Class A 16,333 14
* Theragenics Corp. 11,916 14
* Cardiac Science Corp. 13,656 13
* Capstone Therapeutics Corp. 20,010 13
* RadNet Inc. 5,579 13
* Orchid Cellmark Inc. 7,589 13
* ISTA Pharmaceuticals Inc. 5,337 12
* OTIX Global Inc. 2,786 11
* Discovery Laboratories Inc. 56,046 11
* Biosante Pharmaceuticals Inc. 5,715 10
* Alexza Pharmaceuticals Inc. 3,696 10
* Cel-Sci Corp. 19,362 9
* Repligen Corp. 2,900 9
* Infinity Pharmaceuticals Inc. 1,525 9
* OncoGenex Pharmaceutical Inc. 636 9
* Dynavax Technologies Corp. 4,363 8
* RXi Pharmaceuticals Corp. 2,936 8
* Biodel Inc. 2,000 8
* Synta Pharmaceuticals Corp. 2,800 8
* Antigenics Inc. 8,912 7
* Arrowhead Research Corp. 5,498 6
* AspenBio Pharma Inc. 6,000 6
* Dusa Pharmaceuticals Inc. 2,300 5
* Inovio Pharmaceuticals Inc. 4,600 5
* IVAX Diagnostics Inc. 8,700 5
* Mediware Information Systems 500 4
* Combinatorx Inc. 2,700 4
* Inhibitex Inc. 1,400 4
* Biospecifics Technologies Corp. 166 3
* Poniard Pharmaceuticals Inc. 4,773 3
* SCOLR Pharma Inc. 6,600 3
* OXiGENE Inc. 6,748 3
* Digirad Corp. 1,200 2
* ADVENTRX Pharmaceuticals Inc. 1,416 2
* NMT Medical Inc. 3,531 2
* Chelsea Therapeutics International Inc. 400 1
* SenoRx Inc. 100 1
* Metropolitan Health Networks Inc. 200 1
* EpiCept Corp. 637 1
* Bovie Medical Corp. 100 —
* Palatin Technologies Inc. 1,600 —
* Repros Therapeutics Inc. 700 —
      630,208
Industrials (6.5%)    
  General Electric Co. 4,754,520 68,560
  United Technologies Corp. 396,855 25,760
  3M Co. 301,369 23,805
  Boeing Co. 303,625 19,052
  United Parcel Service Inc. Class B 318,156 18,100
  Caterpillar Inc. 278,425 16,725
  Union Pacific Corp. 225,232 15,656
  Emerson Electric Co. 335,355 14,652
  Honeywell International Inc. 323,667 12,633
  Lockheed Martin Corp. 142,297 10,601
  Deere & Co. 188,328 10,486


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
FedEx Corp. 132,530 9,292
Danaher Corp. 245,058 9,097
Norfolk Southern Corp. 164,724 8,739
CSX Corp. 173,861 8,629
General Dynamics Corp. 146,191 8,561
Raytheon Co. 167,922 8,126
Tyco International Ltd. 229,253 8,077
Illinois Tool Works Inc. 190,362 7,858
Northrop Grumman Corp. 128,213 6,980
Precision Castparts Corp. 63,177 6,502
Waste Management Inc. 205,316 6,424
PACCAR Inc. 146,155 5,827
Cummins Inc. 85,320 5,557
Republic Services Inc. Class A 169,804 5,048
Ingersoll-Rand PLC 143,145 4,937
Eaton Corp. 70,499 4,613
CH Robinson Worldwide Inc. 74,367 4,139
* Delta Air Lines Inc. 350,068 4,113
Parker Hannifin Corp. 71,684 3,976
Rockwell Collins Inc. 70,109 3,725
Goodrich Corp. 55,825 3,698
Southwest Airlines Co. 331,254 3,680
L-3 Communications Holdings Inc. 51,521 3,650
Dover Corp. 83,522 3,490
ITT Corp. 77,382 3,476
Fluor Corp. 79,690 3,387
Cooper Industries PLC 74,558 3,281
Expeditors International of Washington Inc. 94,562 3,263
Rockwell Automation Inc. 63,723 3,128
Fastenal Co. 59,146 2,969
WW Grainger Inc. 27,443 2,729
* Stericycle Inc. 36,062 2,365
Roper Industries Inc. 41,847 2,342
Joy Global Inc. 45,875 2,298
* McDermott International Inc. 102,880 2,228
Flowserve Corp. 24,920 2,113
Textron Inc. 121,888 2,068
Pitney Bowes Inc. 92,841 2,039
* Jacobs Engineering Group Inc. 55,700 2,030
AMETEK Inc. 48,289 1,939
* Quanta Services Inc. 93,602 1,933
Iron Mountain Inc. 82,059 1,843
Pall Corp. 52,500 1,804
Masco Corp. 161,183 1,734
* Kansas City Southern 45,650 1,659
Bucyrus International Inc. Class A 34,550 1,639
Manpower Inc. 37,945 1,638
Equifax Inc. 56,687 1,591
* UAL Corp. 75,222 1,547
* Owens Corning 51,597 1,543
Dun & Bradstreet Corp. 22,826 1,532
RR Donnelley & Sons Co. 92,906 1,521
Robert Half International Inc. 63,435 1,494
Cintas Corp. 62,312 1,494
* URS Corp. 37,731 1,485
KBR Inc. 72,000 1,465
Avery Dennison Corp. 45,299 1,455
Pentair Inc. 44,360 1,428
* Navistar International Corp. 28,879 1,421
Donaldson Co. Inc. 33,257 1,418
JB Hunt Transport Services Inc. 42,890 1,401
* Verisk Analytics Inc. Class A 45,700 1,366
* Continental Airlines Inc. Class B 61,589 1,355
* Shaw Group Inc. 37,606 1,287


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Oshkosh Corp. 40,308 1,256
* Foster Wheeler AG 57,402 1,209
SPX Corp. 22,443 1,185
* Waste Connections Inc. 33,650 1,174
* Copart Inc. 32,624 1,168
* BE Aerospace Inc. 43,957 1,118
* AGCO Corp. 40,903 1,103
* IHS Inc. Class A 18,797 1,098
TransDigm Group Inc. 21,200 1,082
Snap-On Inc. 26,435 1,081
Gardner Denver Inc. 23,792 1,061
IDEX Corp. 36,953 1,056
* AMR Corp. 150,876 1,023
MSC Industrial Direct Co. Class A 20,154 1,021
* Corrections Corp. of America 52,922 1,010
Lincoln Electric Holdings Inc. 19,425 991
* Hertz Global Holdings Inc. 103,600 980
Timken Co. 37,195 967
* Covanta Holding Corp. 58,253 966
* Aecom Technology Corp. 41,764 963
Carlisle Cos. Inc. 26,612 962
Ryder System Inc. 23,650 951
Hubbell Inc. Class B 23,949 951
* Alliant Techsystems Inc. 15,120 938
* FTI Consulting Inc. 21,380 932
Regal-Beloit Corp. 16,700 932
* WABCO Holdings Inc. 29,270 921
Kennametal Inc. 36,082 918
* Spirit Aerosystems Holdings Inc. Class A 47,510 906
* Kirby Corp. 23,600 903
Lennox International Inc. 21,705 902
* Terex Corp. 47,900 898
Landstar System Inc. 22,770 888
Harsco Corp. 36,946 868
Wabtec Corp. 21,514 858
Towers Watson & Co. Class A 21,190 823
CLARCOR Inc. 22,870 812
* GrafTech International Ltd. 55,498 811
* Thomas & Betts Corp. 23,232 806
Nordson Corp. 14,059 788
Graco Inc. 27,591 778
Toro Co. 15,600 766
Con-way Inc. 24,526 736
Baldor Electric Co. 20,219 730
* Clean Harbors Inc. 10,965 728
Acuity Brands Inc. 19,612 714
* Alaska Air Group Inc. 15,778 709
* EMCOR Group Inc. 30,500 707
* Hexcel Corp. 44,800 695
Valmont Industries Inc. 9,557 694
Crane Co. 22,497 680
* WESCO International Inc. 19,725 664
* Genesee & Wyoming Inc. Class A 17,619 657
Woodward Governor Co. 25,700 656
* Esterline Technologies Corp. 13,700 650
Trinity Industries Inc. 36,388 645
Watsco Inc. 11,100 643
* General Cable Corp. 24,052 641
* US Airways Group Inc. 73,822 636
* Teledyne Technologies Inc. 16,421 634
* JetBlue Airways Corp. 115,111 632
Curtiss-Wright Corp. 20,768 603
* United Stationers Inc. 11,019 600
Actuant Corp. Class A 31,360 591


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  Knight Transportation Inc. 28,965 586
  HNI Corp. 21,135 583
  Alexander & Baldwin Inc. 19,129 570
  GATX Corp. 21,336 569
  UTi Worldwide Inc. 45,328 561
* Moog Inc. Class A 17,300 558
  AO Smith Corp. 11,545 556
  Brady Corp. Class A 22,262 555
* Atlas Air Worldwide Holdings Inc. 11,600 551
* Tetra Tech Inc. 27,938 548
  Manitowoc Co. Inc. 59,748 546
* ArvinMeritor Inc. 40,481 530
*,^ American Superconductor Corp. 19,308 515
* HUB Group Inc. Class A 17,107 513
  Kaydon Corp. 15,488 509
  Triumph Group Inc. 7,606 507
* Geo Group Inc. 24,000 498
* Dollar Thrifty Automotive Group Inc. 11,600 494
  Belden Inc. 21,825 480
  Werner Enterprises Inc. 21,577 472
* Avis Budget Group Inc. 47,793 469
* Old Dominion Freight Line Inc. 13,150 462
* EnerSys 21,080 451
  Simpson Manufacturing Co. Inc. 18,100 444
  Herman Miller Inc. 23,487 443
  Deluxe Corp. 23,637 443
  Applied Industrial Technologies Inc. 17,489 443
* Middleby Corp. 8,253 439
  Rollins Inc. 20,850 431
  Mueller Industries Inc. 17,429 429
  ABM Industries Inc. 20,350 426
  Brink's Co. 21,956 418
  Corporate Executive Board Co. 15,845 416
* Orbital Sciences Corp. 26,000 410
  Watts Water Technologies Inc. Class A 13,911 399
  Heartland Express Inc. 27,418 398
  Forward Air Corp. 14,553 397
  Mine Safety Appliances Co. 16,002 397
* USG Corp. 32,400 391
  Briggs & Stratton Corp. 22,996 391
  Granite Construction Inc. 16,177 381
* Beacon Roofing Supply Inc. 20,975 378
* II-VI Inc. 12,700 376
* CoStar Group Inc. 9,317 362
  American Science & Engineering Inc. 4,700 358
  Healthcare Services Group Inc. 18,642 353
* Insituform Technologies Inc. Class A 17,200 352
  Barnes Group Inc. 20,864 342
  Robbins & Myers Inc. 14,700 320
* Korn/Ferry International 22,900 318
* Mobile Mini Inc. 19,500 317
  Skywest Inc. 25,900 317
  Otter Tail Corp. 16,268 314
* Griffon Corp. 28,390 314
* GeoEye Inc. 10,068 314
* Advisory Board Co. 7,291 313
  Administaff Inc. 12,700 307
  ESCO Technologies Inc. 11,800 304
* AAR Corp. 18,100 303
* EnPro Industries Inc. 10,719 302
  Knoll Inc. 22,700 302
  Steelcase Inc. Class A 37,426 290
  Cubic Corp. 7,900 287
* Polypore International Inc. 12,400 282


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Quanex Building Products Corp. 15,990 276
* Armstrong World Industries Inc. 9,156 276
Allegiant Travel Co. Class A 6,346 271
Seaboard Corp. 177 267
* AirTran Holdings Inc. 54,940 266
* DigitalGlobe Inc. 10,060 265
* Argon ST Inc. 7,695 264
Kaman Corp. 11,851 262
* Ceradyne Inc. 12,246 262
* Resources Connection Inc. 19,200 261
* SYKES Enterprises Inc. 18,316 261
Ameron International Corp. 4,300 259
* Blount International Inc. 25,237 259
Franklin Electric Co. Inc. 8,900 257
Mueller Water Products Inc. Class A 69,074 256
* DynCorp International Inc. Class A 14,549 255
* Acacia Research - Acacia Technologies 17,831 254
* Navigant Consulting Inc. 24,078 250
Arkansas Best Corp. 11,800 245
* Macquarie Infrastructure Co. LLC 18,800 240
Raven Industries Inc. 7,100 239
* Kforce Inc. 18,707 239
Tennant Co. 6,900 233
* Interline Brands Inc. 13,304 230
* MasTec Inc. 24,375 229
* Astec Industries Inc. 8,243 229
* RBC Bearings Inc. 7,777 225
Universal Forest Products Inc. 7,421 225
Aircastle Ltd. 28,426 223
* Waste Services Inc. 18,632 217
* Chart Industries Inc. 13,917 217
* Stanley Inc. 5,800 217
* TrueBlue Inc. 19,304 216
Badger Meter Inc. 5,482 212
* Tutor Perini Corp. 12,800 211
* United Rentals Inc. 22,480 210
* Genco Shipping & Trading Ltd. 13,908 209
* EnerNOC Inc. 6,500 204
* Altra Holdings Inc. 15,600 203
HEICO Corp. 5,625 202
* Sensata Technologies Holding NV 12,300 197
Interface Inc. Class A 17,743 191
* Celadon Group Inc. 13,425 190
AAON Inc. 8,130 190
* Amerco Inc. 3,428 189
McGrath Rentcorp 8,200 187
Heidrick & Struggles International Inc. 8,100 185
* Layne Christensen Co. 7,508 182
* Exponent Inc. 5,516 181
* A123 Systems Inc. 19,139 181
EnergySolutions Inc. 35,200 179
* Consolidated Graphics Inc. 4,100 177
Comfort Systems USA Inc. 18,300 177
Apogee Enterprises Inc. 16,300 177
Albany International Corp. 10,722 174
Diamond Management & Technology Consultants Inc. Class A 16,775 173
* Huron Consulting Group Inc. 8,890 173
CIRCOR International Inc. 6,700 171
AZZ Inc. 4,614 170
NACCO Industries Inc. Class A 1,891 168
Cascade Corp. 4,700 167
Great Lakes Dredge & Dock Corp. 27,781 167
* Cenveo Inc. 30,001 165
Tredegar Corp. 10,055 164


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Dycom Industries Inc. 19,090 163
  Gorman-Rupp Co. 6,452 162
* SFN Group Inc. 29,599 162
* CBIZ Inc. 25,023 159
* Wabash National Corp. 21,450 153
* Vicor Corp. 12,179 152
* Force Protection Inc. 37,036 152
  John Bean Technologies Corp. 9,900 151
* Cornell Cos. Inc. 5,600 150
  Ennis Inc. 10,009 150
  FreightCar America Inc. 6,515 147
  Bowne & Co. Inc. 13,114 147
  Encore Wire Corp. 8,050 146
  HEICO Corp. Class A 5,380 145
  CDI Corp. 9,300 144
  G&K Services Inc. Class A 6,939 143
* Kelly Services Inc. Class A 9,400 140
* Orion Marine Group Inc. 9,800 139
* M&F Worldwide Corp. 5,100 138
  Lindsay Corp. 4,350 138
* Columbus McKinnon Corp. 9,837 137
* ATC Technology Corp. 8,429 136
  Viad Corp. 7,547 133
* Taser International Inc. 34,000 133
* Kadant Inc. 7,610 133
* School Specialty Inc. 7,299 132
* ICF International Inc. 5,500 132
* American Reprographics Co. 15,057 131
* Colfax Corp. 12,600 131
  Titan International Inc. 13,125 131
* Marten Transport Ltd. 6,150 128
  Standex International Corp. 4,900 124
* Innerworkings Inc. 18,129 124
* American Commercial Lines Inc. 5,280 119
* GenCorp Inc. 27,100 119
* Rush Enterprises Inc. Class A 8,750 117
* LB Foster Co. Class A 4,500 117
* RSC Holdings Inc. 18,900 117
* Aerovironment Inc. 5,300 115
  Federal Signal Corp. 18,853 114
  Alamo Group Inc. 5,242 114
  US Ecology Inc. 7,800 114
* Titan Machinery Inc. 8,200 108
* H&E Equipment Services Inc. 14,293 107
* MYR Group Inc. 6,400 107
* Republic Airways Holdings Inc. 17,114 105
* Ladish Co. Inc. 4,600 105
* Furmanite Corp. 26,197 104
  TAL International Group Inc. 4,590 103
* KAR Auction Services Inc. 8,315 103
*,^ Capstone Turbine Corp. 104,276 102
  Ampco-Pittsburgh Corp. 4,900 102
* 3D Systems Corp. 8,104 102
*,^ Harbin Electric Inc. 6,100 102
  Houston Wire & Cable Co. 9,300 101
  Ducommun Inc. 5,800 99
* Trex Co. Inc. 4,900 98
* ACCO Brands Corp. 19,708 98
* Eagle Bulk Shipping Inc. 22,733 96
* Dolan Co. 8,600 96
* Pacer International Inc. 13,300 93
* Michael Baker Corp. 2,659 93
  American Woodmark Corp. 5,385 92
* Herley Industries Inc. 6,452 92


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Sterling Construction Co. Inc. 6,900 89
* Hawaiian Holdings Inc. 17,000 88
  Miller Industries Inc. 6,446 87
  Sun Hydraulics Corp. 3,700 87
* Team Inc. 6,636 87
* Energy Recovery Inc. 21,262 85
* Trimas Corp. 7,500 85
  Applied Signal Technology Inc. 4,300 85
* Gibraltar Industries Inc. 8,200 83
  Kimball International Inc. Class B 14,764 82
* Fuel Tech Inc. 12,400 78
  Met-Pro Corp. 7,266 78
  Graham Corp. 5,200 78
* Powell Industries Inc. 2,832 77
* GP Strategies Corp. 10,600 77
* Flow International Corp. 32,500 77
* Lydall Inc. 9,942 76
* Saia Inc. 5,051 76
* PMFG Inc. 5,000 76
* Metalico Inc. 18,800 75
* Sauer-Danfoss Inc. 6,000 73
* Perma-Fix Environmental Services 44,758 72
* PowerSecure International Inc. 7,800 71
* CRA International Inc. 3,678 69
* LECG Corp. 26,474 69
* Builders FirstSource Inc. 28,380 68
  Insteel Industries Inc. 5,800 67
* Pike Electric Corp. 6,910 65
  Aceto Corp. 11,107 64
* Park-Ohio Holdings Corp. 4,400 63
* Air Transport Services Group Inc. 13,274 63
*,^ China BAK Battery Inc. 35,800 62
* Commercial Vehicle Group Inc. 6,012 61
  Schawk Inc. Class A 4,100 61
* Northwest Pipe Co. 3,150 60
* RailAmerica Inc. 6,000 60
  Dynamic Materials Corp. 3,700 59
* Greenbrier Cos. Inc. 5,100 57
* Willis Lease Finance Corp. 6,189 57
* DXP Enterprises Inc. 3,600 56
* PAM Transportation Services Inc. 3,663 55
* Tecumseh Products Co. Class A 4,923 55
  Todd Shipyards Corp. 3,676 54
* Hudson Highland Group Inc. 12,330 54
* Volt Information Sciences Inc. 6,300 53
* United Capital Corp. 2,064 50
* Standard Parking Corp. 3,100 49
*,^ Ener1 Inc. 14,326 48
* Fushi Copperweld Inc. 5,900 48
* Advanced Battery Technologies Inc. 14,700 48
* Dynamex Inc. 3,900 48
* APAC Customer Services Inc. 8,134 46
* Astronics Corp. 2,800 46
* FuelCell Energy Inc. 37,418 44
* On Assignment Inc. 8,700 44
* WCA Waste Corp. 9,763 44
* Broadwind Energy Inc. 14,980 42
* USA Truck Inc. 2,600 42
  Multi-Color Corp. 4,087 42
* Casella Waste Systems Inc. Class A 10,781 41
* Pinnacle Airlines Corp. 7,373 40
  Horizon Lines Inc. Class A 9,400 40
* Ultralife Corp. 9,200 40
* YRC Worldwide Inc. 261,802 39


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* LMI Aerospace Inc. 2,400 38
* NN Inc. 7,480 37
* UQM Technologies Inc. 10,950 37
  Lawson Products Inc. 2,138 36
* Hill International Inc. 8,700 35
* Applied Energetics Inc. 34,281 35
* Odyssey Marine Exploration Inc. 34,066 34
*,^ Valence Technology Inc. 46,165 33
* Quality Distribution Inc. 6,326 33
* Intersections Inc. 7,870 33
* Plug Power Inc. 70,838 33
* Covenant Transportation Group Inc. Class A 4,806 32
  International Shipholding Corp. 1,442 32
* BlueLinx Holdings Inc. 11,400 30
  LSI Industries Inc. 6,007 29
*,^ SmartHeat Inc. 4,900 28
* TBS International PLC Class A 4,500 28
* LaBarge Inc. 2,400 27
* NCI Building Systems Inc. 3,260 27
* TRC Cos. Inc. 8,800 27
  American Railcar Industries Inc. 2,200 27
* Satcon Technology Corp. 9,000 26
* Integrated Electrical Services Inc. 7,350 26
* Innovative Solutions & Support Inc. 5,724 25
* Active Power Inc. 31,013 24
  Barrett Business Services Inc. 1,900 24
  Virco Manufacturing 7,736 23
  Preformed Line Products Co. 823 23
  VSE Corp. 700 22
* Patriot Transportation Holding Inc. 261 21
  LS Starrett Co. Class A 2,200 21
* SL Industries Inc. 1,700 20
  Superior Uniform Group Inc. 2,008 20
  Twin Disc Inc. 1,600 18
  Standard Register Co. 5,676 18
* Magnetek Inc. 19,000 18
  Hardinge Inc. 2,000 17
* Frozen Food Express Industries 4,700 16
*,^ C&D Technologies Inc. 16,400 14
* Rush Enterprises Inc. Class B 1,149 13
* Raytheon Co. Warrants Exp. 06/16/2011 1,046 13
  Omega Flex Inc. 810 12
* Tecumseh Products Co. Class B 1,000 11
* Hurco Cos. Inc. 700 10
* Hoku Corp. 2,800 9
* Mistras Group Inc. 800 9
* Sypris Solutions Inc. 2,100 8
* Universal Truckload Services Inc. 600 8
* Innotrac Corp. 5,748 7
* Arotech Corp. 4,507 7
* Allied Defense Group Inc. 1,100 4
* ExpressJet Holdings Inc. 1,305 3
* Amrep Corp. 200 3
* Lihua International Inc. 200 2
* CAI International Inc. 100 1
      568,942
Information Technology (10.9%)    
* Apple Inc. 404,069 101,635
  Microsoft Corp. 3,517,396 80,935
  International Business Machines Corp. 578,855 71,477
* Cisco Systems Inc. 2,551,423 54,371
* Google Inc. Class A 108,676 48,355
  Intel Corp. 2,461,518 47,877
  Hewlett-Packard Co. 1,048,999 45,401


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  Oracle Corp. 1,786,406 38,336
  QUALCOMM Inc. 748,944 24,595
* EMC Corp. 914,732 16,740
  Visa Inc. Class A 209,145 14,797
  Texas Instruments Inc. 553,452 12,884
  Corning Inc. 694,707 11,220
  Accenture PLC Class A 281,838 10,893
* eBay Inc. 520,957 10,216
* Dell Inc. 784,721 9,464
  Automatic Data Processing Inc. 224,998 9,058
  Mastercard Inc. Class A 44,298 8,839
* Yahoo! Inc. 592,752 8,198
  Applied Materials Inc. 598,512 7,194
* Motorola Inc. 1,030,702 6,720
* Cognizant Technology Solutions Corp. Class A 132,688 6,642
  Broadcom Corp. Class A 195,487 6,445
* Adobe Systems Inc. 233,596 6,174
* NetApp Inc. 151,063 5,636
* Juniper Networks Inc. 232,245 5,300
  Tyco Electronics Ltd. 204,612 5,193
* Symantec Corp. 359,308 4,987
  Xerox Corp. 588,289 4,730
* Intuit Inc. 134,157 4,665
  Western Union Co. 304,253 4,536
* Agilent Technologies Inc. 155,512 4,421
* Salesforce.com Inc. 50,179 4,306
* SanDisk Corp. 101,958 4,289
  Fidelity National Information Services Inc. 142,063 3,810
  Paychex Inc. 145,014 3,766
* Marvell Technology Group Ltd. 236,740 3,731
  Analog Devices Inc. 132,681 3,697
* Citrix Systems Inc. 81,940 3,460
  CA Inc. 185,458 3,412
  Altera Corp. 132,585 3,289
* Micron Technology Inc. 379,147 3,219
  Xilinx Inc. 123,283 3,114
* Fiserv Inc. 67,929 3,102
* Akamai Technologies Inc. 76,412 3,100
  Computer Sciences Corp. 68,488 3,099
* Western Digital Corp. 101,905 3,073
  Amphenol Corp. Class A 77,218 3,033
* SAIC Inc. 176,519 2,955
* Seagate Technology 222,489 2,901
* BMC Software Inc. 81,471 2,821
*,^ First Solar Inc. 24,689 2,810
  Linear Technology Corp. 99,719 2,773
* Cree Inc. 45,066 2,705
  Activision Blizzard Inc. 254,614 2,671
* NVIDIA Corp. 247,717 2,529
* Autodesk Inc. 102,607 2,500
* Red Hat Inc. 84,227 2,438
* F5 Networks Inc. 35,491 2,434
  Harris Corp. 58,396 2,432
* Sybase Inc. 36,792 2,379
* Teradata Corp. 75,331 2,296
  Microchip Technology Inc. 82,307 2,283
  Maxim Integrated Products Inc. 136,100 2,277
* McAfee Inc. 70,922 2,179
* Lam Research Corp. 57,231 2,178
* VeriSign Inc. 81,984 2,177
  KLA-Tencor Corp. 76,952 2,145
* Electronic Arts Inc. 146,080 2,104
* Flextronics International Ltd. 363,626 2,036
* FLIR Systems Inc. 68,381 1,989


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* VMware Inc. Class A 29,935 1,874
* Advanced Micro Devices Inc. 255,731 1,872
* Rovi Corp. 46,735 1,772
* ANSYS Inc. 40,635 1,649
* Avnet Inc. 68,076 1,641
* Equinix Inc. 19,649 1,596
* Nuance Communications Inc. 101,905 1,523
* Trimble Navigation Ltd. 54,238 1,519
* Dolby Laboratories Inc. Class A 24,136 1,513
National Semiconductor Corp. 106,715 1,436
* Alliance Data Systems Corp. 23,496 1,398
* Hewitt Associates Inc. Class A 40,104 1,382
* Synopsys Inc. 65,896 1,375
Global Payments Inc. 36,943 1,350
Factset Research Systems Inc. 20,124 1,348
Lender Processing Services Inc. 42,939 1,344
* Skyworks Solutions Inc. 79,882 1,341
* LSI Corp. 290,812 1,338
* Arrow Electronics Inc. 54,272 1,213
* ON Semiconductor Corp. 189,440 1,209
* Lexmark International Inc. Class A 35,140 1,161
Jabil Circuit Inc. 86,466 1,150
* Polycom Inc. 38,439 1,145
* MICROS Systems Inc. 35,900 1,144
Solera Holdings Inc. 31,467 1,139
Broadridge Financial Solutions Inc. 59,673 1,137
* Itron Inc. 18,103 1,119
* Ingram Micro Inc. 72,462 1,101
* Novellus Systems Inc. 42,422 1,076
Tellabs Inc. 167,969 1,073
* WebMD Health Corp. 22,963 1,066
Total System Services Inc. 76,780 1,044
* CommScope Inc. 42,998 1,022
* Brocade Communications Systems Inc. 196,611 1,015
* IAC/InterActiveCorp 45,954 1,010
* Informatica Corp. 40,962 978
* MEMC Electronic Materials Inc. 98,982 978
* AOL Inc. 46,809 973
* Atmel Corp. 200,897 964
* Varian Semiconductor Equipment Associates Inc. 33,565 962
* JDS Uniphase Corp. 97,083 955
* VistaPrint NV 19,649 933
* Rambus Inc. 53,003 929
* Novell Inc. 157,187 893
* TIBCO Software Inc. 73,684 889
* NCR Corp. 73,071 886
Molex Inc. 48,516 885
Jack Henry & Associates Inc. 36,496 872
* QLogic Corp. 52,060 865
* Atheros Communications Inc. 31,320 863
National Instruments Corp. 26,878 854
* Compuware Corp. 105,115 839
* Parametric Technology Corp. 53,368 836
Diebold Inc. 30,052 819
* Silicon Laboratories Inc. 20,092 815
* Concur Technologies Inc. 19,000 811
* Gartner Inc. 34,653 806
* Avago Technologies Ltd. 38,099 802
* Tech Data Corp. 22,459 800
* PMC - Sierra Inc. 105,200 791
* Cybersource Corp. 30,901 789
* Teradyne Inc. 79,819 778
* Rackspace Hosting Inc. 41,110 754
CoreLogic Inc. 42,432 749


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* VeriFone Systems Inc. 39,356 745
* Riverbed Technology Inc. 26,917 743
* GSI Commerce Inc. 25,127 724
* Cadence Design Systems Inc. 124,933 723
* NeuStar Inc. Class A 34,530 712
* Genpact Ltd. 45,219 702
* Netlogic Microsystems Inc. 25,000 680
Intersil Corp. Class A 55,878 677
* Cypress Semiconductor Corp. 67,003 673
ADTRAN Inc. 24,591 671
* Ariba Inc. 40,834 651
* Zebra Technologies Corp. 25,626 650
* Monster Worldwide Inc. 55,303 644
Plantronics Inc. 22,472 643
* MercadoLibre Inc. 11,969 629
DST Systems Inc. 16,908 611
* Vishay Intertechnology Inc. 78,663 609
* International Rectifier Corp. 32,614 607
* Veeco Instruments Inc. 17,600 603
* CACI International Inc. Class A 13,800 586
* Arris Group Inc. 57,518 586
* Progress Software Corp. 19,200 577
* Anixter International Inc. 13,242 564
* Convergys Corp. 56,969 559
* Sohu.com Inc. 13,346 548
* Microsemi Corp. 37,429 548
* Blackboard Inc. 14,598 545
* Viasat Inc. 16,375 533
* Ciena Corp. 42,044 533
* Quest Software Inc. 28,968 523
* Omnivision Technologies Inc. 24,200 519
* InterDigital Inc. 20,545 507
* Acxiom Corp. 34,467 506
Sapient Corp. 49,913 506
* Hittite Microwave Corp. 11,206 501
* Sanmina-SCI Corp. 36,437 496
* Wright Express Corp. 16,674 495
* Plexus Corp. 18,444 493
* Fairchild Semiconductor International Inc. Class A 56,886 478
Fair Isaac Corp. 21,947 478
* Benchmark Electronics Inc. 29,615 469
MAXIMUS Inc. 8,100 469
* Finisar Corp. 31,247 466
* Semtech Corp. 28,378 465
* RF Micro Devices Inc. 117,166 458
* Aruba Networks Inc. 32,152 458
* Lawson Software Inc. 62,361 455
* j2 Global Communications Inc. 20,708 452
* SuccessFactors Inc. 21,346 444
Blackbaud Inc. 20,181 439
* TriQuint Semiconductor Inc. 71,889 439
* Mantech International Corp. Class A 10,300 438
* Cirrus Logic Inc. 27,461 434
* Digital River Inc. 17,808 426
* Synaptics Inc. 15,440 425
* ValueClick Inc. 39,090 418
* Palm Inc. 73,002 415
* Advent Software Inc. 8,819 414
* CommVault Systems Inc. 18,400 414
* MKS Instruments Inc. 21,853 409
Power Integrations Inc. 12,525 403
* Cavium Networks Inc. 15,395 403
* Cymer Inc. 13,241 398
* JDA Software Group Inc. 18,059 397


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  Earthlink Inc. 49,853 397
* Mentor Graphics Corp. 44,755 396
* Comtech Telecommunications Corp. 13,150 394
* SRA International Inc. Class A 20,000 393
* Blue Coat Systems Inc. 19,234 393
  Syntel Inc. 11,425 388
* Websense Inc. 20,400 386
* DG FastChannel Inc. 11,767 383
* Integrated Device Technology Inc. 77,116 382
* Tessera Technologies Inc. 23,781 382
* Cabot Microelectronics Corp. 10,907 377
* Coherent Inc. 10,991 377
* TiVo Inc. 51,050 377
* Taleo Corp. Class A 15,453 375
* Unisys Corp. 20,070 371
* Tekelec 27,811 368
* Applied Micro Circuits Corp. 34,765 364
* Take-Two Interactive Software Inc. 39,900 359
* SonicWALL Inc. 30,556 359
* Checkpoint Systems Inc. 20,400 354
  Cognex Corp. 19,742 347
* Emulex Corp. 37,759 347
* EchoStar Corp. Class A 17,831 340
* ADC Telecommunications Inc. 45,625 338
* CSG Systems International Inc. 18,349 336
  AVX Corp. 26,114 335
* ACI Worldwide Inc. 17,100 333
* FEI Co. 16,800 331
* L-1 Identity Solutions Inc. 39,586 324
* Universal Display Corp. 18,000 324
* Scansource Inc. 12,900 322
* MicroStrategy Inc. Class A 4,201 315
* Sonus Networks Inc. 115,949 314
* DTS Inc. 9,500 312
* Amkor Technology Inc. 55,586 306
*,^ SunPower Corp. Class A 24,700 299
* Acme Packet Inc. 11,100 298
* Manhattan Associates Inc. 10,800 298
* Ultimate Software Group Inc. 8,910 293
* Rofin-Sinar Technologies Inc. 14,028 292
* DealerTrack Holdings Inc. 17,726 292
* AsiaInfo Holdings Inc. 13,307 291
* Netgear Inc. 16,200 289
* Insight Enterprises Inc. 21,798 287
* Lattice Semiconductor Corp. 63,653 276
* Littelfuse Inc. 8,600 272
* Infinera Corp. 42,040 270
* Power-One Inc. 39,757 268
* Brooks Automation Inc. 34,638 268
* Entegris Inc. 66,392 264
* Forrester Research Inc. 8,691 263
* Euronet Worldwide Inc. 20,400 261
* Tyler Technologies Inc. 16,800 261
  Black Box Corp. 9,300 259
* Stratasys Inc. 10,500 258
* Harmonic Inc. 47,272 257
* Zoran Corp. 26,922 257
  Micrel Inc. 24,635 251
* ATMI Inc. 17,116 251
* OSI Systems Inc. 9,008 250
* FormFactor Inc. 23,000 248
* Netezza Corp. 17,700 242
* Verigy Ltd. 27,812 242
* Rogers Corp. 8,700 242


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Monolithic Power Systems Inc. 13,515 241
* Art Technology Group Inc. 70,374 241
* Oclaro Inc. 21,545 239
* Standard Microsystems Corp. 10,200 237
* Intermec Inc. 23,024 236
* Avid Technology Inc. 18,206 232
* TeleTech Holdings Inc. 17,747 229
* Synchronoss Technologies Inc. 12,000 228
* LTX-Credence Corp. 79,536 225
* STEC Inc. 17,447 219
* Electro Scientific Industries Inc. 16,383 219
* Quantum Corp. 115,200 217
* Brightpoint Inc. 30,603 214
iGate Corp. 16,693 214
Molex Inc. Class A 13,800 213
* SAVVIS Inc. 14,444 213
* Cogent Inc. 23,500 212
* Electronics for Imaging Inc. 21,386 209
* Terremark Worldwide Inc. 26,660 208
* SYNNEX Corp. 8,100 208
* Diodes Inc. 13,000 206
* Constant Contact Inc. 9,631 205
* Volterra Semiconductor Corp. 8,900 205
* SunPower Corp. Class B 18,694 202
Heartland Payment Systems Inc. 13,436 199
* TTM Technologies Inc. 20,800 198
* OpenTable Inc. 4,708 195
* Net 1 UEPS Technologies Inc. 14,420 193
* EPIQ Systems Inc. 14,753 191
Pegasystems Inc. 5,900 189
CTS Corp. 20,500 189
* Rubicon Technology Inc. 6,300 188
United Online Inc. 32,438 187
* ArcSight Inc. 8,272 185
* TNS Inc. 10,600 185
* Epicor Software Corp. 23,082 184
* Ixia 21,449 184
* Loral Space & Communications Inc. 4,300 184
MTS Systems Corp. 6,320 183
* Global Cash Access Holdings Inc. 25,250 182
* Netscout Systems Inc. 12,800 182
* Ebix Inc. 11,500 180
* Advanced Energy Industries Inc. 14,600 179
* Move Inc. 86,901 178
* Internet Capital Group Inc. 23,148 176
* ADPT Corp. 60,826 176
* SolarWinds Inc. 10,700 172
* infoGROUP Inc. 21,384 171
* S1 Corp. 28,062 169
Park Electrochemical Corp. 6,832 167
* Kulicke & Soffa Industries Inc. 23,434 165
* Lionbridge Technologies Inc. 35,784 164
* LivePerson Inc. 23,600 162
* Sourcefire Inc. 8,500 162
Methode Electronics Inc. 16,549 161
* RealNetworks Inc. 48,479 160
* Exar Corp. 22,971 159
* Infospace Inc. 21,148 159
* ModusLink Global Solutions Inc. 26,004 157
* Extreme Networks 57,859 156
BGC Partners Inc. Class A 30,530 156
* Oplink Communications Inc. 10,783 155
Sycamore Networks Inc. 9,251 154
* Smith Micro Software Inc. 16,018 152


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* FARO Technologies Inc. 7,900 148
* Imation Corp. 15,978 147
  Electro Rent Corp. 11,391 146
* IPG Photonics Corp. 9,500 145
* Mercury Computer Systems Inc. 12,300 144
* STR Holdings Inc. 7,655 144
  Opnet Technologies Inc. 9,548 140
* Mattson Technology Inc. 36,402 138
* Anadigics Inc. 31,576 138
* Echelon Corp. 18,300 134
* THQ Inc. 30,882 133
* Newport Corp. 14,660 133
* IXYS Corp. 14,993 133
* Silicon Graphics International Corp. 18,700 132
* UTStarcom Inc. 71,921 132
* Bottomline Technologies Inc. 10,100 132
* Radiant Systems Inc. 9,050 131
* Silicon Image Inc. 37,171 130
* Hypercom Corp. 27,100 126
  Cohu Inc. 10,313 125
  Daktronics Inc. 16,518 124
* Perficient Inc. 13,822 123
* Multi-Fineline Electronix Inc. 4,900 122
* Limelight Networks Inc. 27,249 120
* Isilon Systems Inc. 9,300 119
* SMART Modular Technologies WWH Inc. 20,058 117
* Ultratech Inc. 7,200 117
* Cogo Group Inc. 18,600 116
* support.com Inc. 27,817 116
* Rimage Corp. 7,300 116
* Actel Corp. 9,000 115
* Integrated Silicon Solution Inc. 15,300 115
* Kenexa Corp. 9,473 114
* RightNow Technologies Inc. 7,200 113
* Sigma Designs Inc. 11,200 112
* Symyx Technologies Inc. 22,358 112
* Super Micro Computer Inc. 8,100 109
* GT Solar International Inc. 19,300 108
  NIC Inc. 16,700 107
*,^ Sonic Solutions Inc. 12,700 106
* Novatel Wireless Inc. 18,427 106
* Gerber Scientific Inc. 19,600 105
* Aviat Networks Inc. 28,777 104
* Double-Take Software Inc. 9,900 104
* Ceva Inc. 8,185 103
* LogMeIn Inc. 3,900 102
* comScore Inc. 6,100 100
* Anaren Inc. 6,685 100
* Mindspeed Technologies Inc. 13,249 99
* LoopNet Inc. 8,037 99
* Comverge Inc. 10,900 98
* Internap Network Services Corp. 23,192 97
* Seachange International Inc. 11,679 96
* KVH Industries Inc. 7,735 96
* VASCO Data Security International Inc. 15,200 94
* Vocus Inc. 6,132 94
* Energy Conversion Devices Inc. 22,606 93
* Ultra Clean Holdings 10,800 92
  DDi Corp. 12,046 91
* Interactive Intelligence Inc. 5,461 90
* Compellent Technologies Inc. 7,300 88
* Kopin Corp. 25,500 86
* Symmetricom Inc. 16,836 86
* Supertex Inc. 3,456 85


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Maxwell Technologies Inc. 7,400 84
* Conexant Systems Inc. 37,447 84
* DivX Inc. 10,900 84
* Entropic Communications Inc. 13,100 83
* Nanometrics Inc. 8,204 83
* Knot Inc. 10,481 82
* Powerwave Technologies Inc. 52,792 81
* PROS Holdings Inc. 12,500 81
* Online Resources Corp. 19,307 80
* EMS Technologies Inc. 5,331 80
* Openwave Systems Inc. 39,175 80
* Pericom Semiconductor Corp. 8,250 79
* MoneyGram International Inc. 32,290 79
*,^ Evergreen Solar Inc. 115,307 79
* Radisys Corp. 8,178 78
* Microtune Inc. 35,924 77
* Globecomm Systems Inc. 9,266 76
* Intevac Inc. 7,100 76
* Hackett Group Inc. 26,903 76
* X-Rite Inc. 20,406 75
* Trident Microsystems Inc. 52,100 74
  Cass Information Systems Inc. 2,160 74
* 3PAR Inc. 7,800 73
* Magma Design Automation Inc. 25,500 72
* Digi International Inc. 8,700 72
* MIPS Technologies Inc. Class A 13,946 71
* FalconStor Software Inc. 26,858 71
* China Security & Surveillance Technology Inc. 15,344 71
* Cray Inc. 12,370 69
* PDF Solutions Inc. 14,369 69
*,^ Microvision Inc. 23,195 69
  Keynote Systems Inc. 7,516 68
* Advanced Analogic Technologies Inc. 21,248 68
* Immersion Corp. 13,159 67
* Rosetta Stone Inc. 2,900 67
  Bel Fuse Inc. Class A 4,000 66
* Saba Software Inc. 12,878 66
* Hughes Communications Inc. 2,693 66
* Geeknet Inc. 52,405 65
* Network Equipment Technologies Inc. 18,500 65
  Renaissance Learning Inc. 4,366 64
* Westell Technologies Inc. Class A 41,100 64
* Internet Brands Inc. Class A 6,200 64
* Zygo Corp. 7,521 61
* Stamps.com Inc. 5,950 61
* ShoreTel Inc. 13,014 60
* Photronics Inc. 13,300 60
  Agilysys Inc. 8,900 60
* ExlService Holdings Inc. 3,449 59
* Dynamics Research Corp. 5,857 59
* PC-Tel Inc. 11,702 59
* DSP Group Inc. 9,200 59
* Integral Systems Inc. 9,196 58
* NetSuite Inc. 4,600 58
  Keithley Instruments Inc. 6,403 57
* PC Connection Inc. 9,314 56
* Measurement Specialties Inc. 4,100 56
* Virage Logic Corp. 4,700 56
* Ciber Inc. 20,126 56
* Monotype Imaging Holdings Inc. 6,100 55
* TeleCommunication Systems Inc. Class A 13,167 55
* Liquidity Services Inc. 4,200 54
* Rudolph Technologies Inc. 7,192 54
* Ramtron International Corp. 20,730 54


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* PLX Technology Inc. 12,809 54
* NVE Corp. 1,200 52
* Axcelis Technologies Inc. 32,683 51
  Technitrol Inc. 15,969 50
* MoSys Inc. 11,414 50
  Ipass Inc. 46,609 50
* QuickLogic Corp. 17,008 50
* Zix Corp. 21,700 49
*,^ Wave Systems Corp. Class A 15,026 49
* Actuate Corp. 10,776 48
* DemandTec Inc. 6,892 47
* Ness Technologies Inc. 10,314 44
* Fortinet Inc. 2,658 44
* Opnext Inc. 26,100 43
* Computer Task Group Inc. 6,500 42
* Emcore Corp. 46,977 42
* FSI International Inc. 9,808 41
* Phoenix Technologies Ltd. 13,797 40
* NCI Inc. Class A 1,700 38
  QAD Inc. 9,221 38
* ORBCOMM Inc. 20,565 37
* Hutchinson Technology Inc. 8,600 37
* Presstek Inc. 10,531 37
* Dot Hill Systems Corp. 31,231 37
  Marchex Inc. Class B 9,581 37
* Superconductor Technologies Inc. 13,815 33
* TechTeam Global Inc. 5,490 33
  American Software Inc. Class A 6,941 32
* PC Mall Inc. 7,800 31
  TheStreet.com Inc. 10,767 31
* Autobytel Inc. 27,010 31
* StarTek Inc. 7,800 30
  Newtek Business Services Inc. 22,635 30
* LoJack Corp. 7,969 29
  Imergent Inc. 8,000 29
* KIT Digital Inc. 3,200 28
* GTSI Corp. 5,149 28
* Zhone Technologies Inc. 18,837 28
* BigBand Networks Inc. 9,130 28
* Tollgrade Communications Inc. 4,300 27
* Network Engines Inc. 9,800 27
* Transwitch Corp. 11,898 26
*,^ China Information Security Technology Inc. 4,900 25
* LRAD Corp. 19,570 24
* iGO Inc. 15,927 24
* ActivIdentity Corp. 12,400 24
* Aware Inc. 10,000 23
* NU Horizons Electronics Corp. 7,522 23
* Edgewater Technology Inc. 7,915 23
* Transact Technologies Inc. 3,076 22
* Telular Corp. 7,232 22
* Research Frontiers Inc. 4,700 21
* LaserCard Corp. 4,456 20
  Bel Fuse Inc. Class B 1,156 19
* CalAmp Corp. 8,700 19
* Spectrum Control Inc. 1,300 18
* GSE Systems Inc. 4,126 17
* Viasystems Group Inc. 1,108 16
* Reis Inc. 2,356 15
* Comarco Inc. 6,400 15
* ID Systems Inc. 5,700 15
* Lantronix Inc. 3,500 14
* Pixelworks Inc. 4,533 14
* Planar Systems Inc. 7,423 13


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Ikanos Communications Inc. 7,741 12
* Concurrent Computer Corp. 2,620 12
* Web.com Group Inc. 3,285 12
* Virtusa Corp. 1,200 11
Richardson Electronics Ltd. 1,200 11
Evolving Systems Inc. 1,477 11
* EF Johnson Technologies Inc. 7,200 10
* Echo Global Logistics Inc. 800 10
* Tier Technologies Inc. Class B 1,600 10
* Datalink Corp. 2,405 10
* Authentidate Holding Corp. 14,539 9
* Dice Holdings Inc. 1,300 9
* LeCroy Corp. 1,800 9
* Ditech Networks Inc. 6,780 9
* Management Network Group Inc. 3,023 8
* Looksmart Ltd. 6,700 8
* AuthenTec Inc. 3,100 8
* Identive Group Inc. 4,700 8
* Performance Technologies Inc. 2,900 7
VirnetX Holding Corp. 1,200 7
* PRGX Global Inc. 1,681 7
* EndWave Corp. 2,100 7
* RAE Systems Inc. 8,200 7
* Market Leader Inc. 3,100 6
* Callidus Software Inc. 1,800 6
* Deltek Inc. 700 6
* Parkervision Inc. 4,500 6
* Selectica Inc. 1,020 6
* Bsquare Corp. 2,425 6
* WebMediaBrands Inc. 6,017 5
* Nextwave Wireless Inc. 4,957 5
* Unica Corp. 500 5
Qualstar Corp. 2,400 5
* Wireless Telecom Group Inc. 5,909 4
* Allen Organ Co. Escrow Shares 1,400 4
* Digital Angel Corp. 8,108 4
* Analysts International Corp. 1,635 4
* AXT Inc. 800 4
* Vertro Inc. 5,400 3
* Rainmaker Systems Inc. 2,180 3
* Cinedigm Digital Cinema Corp. Class A 1,600 2
* Intellicheck Mobilisa Inc. 1,297 2
    961,404
Materials (2.2%)    
EI du Pont de Nemours & Co. 402,769 13,932
Newmont Mining Corp. 215,259 13,290
Dow Chemical Co. 512,641 12,160
Freeport-McMoRan Copper & Gold Inc. 191,907 11,347
Monsanto Co. 243,156 11,239
Praxair Inc. 136,546 10,376
Air Products & Chemicals Inc. 94,596 6,131
Nucor Corp. 140,345 5,372
Ecolab Inc. 105,283 4,728
Alcoa Inc. 454,675 4,574
PPG Industries Inc. 73,965 4,468
International Paper Co. 184,724 4,180
Weyerhaeuser Co. 94,312 3,320
Sherwin-Williams Co. 41,579 2,877
Cliffs Natural Resources Inc. 60,338 2,846
Mosaic Co. 69,573 2,712
Sigma-Aldrich Corp. 54,292 2,705
Vulcan Materials Co. 56,389 2,472
United States Steel Corp. 64,049 2,469
Lubrizol Corp. 30,543 2,453


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
Airgas Inc. 35,184 2,188
Ball Corp. 39,977 2,112
* Owens-Illinois Inc. 75,439 1,995
CF Industries Holdings Inc. 30,570 1,940
* Crown Holdings Inc. 72,972 1,827
FMC Corp. 30,818 1,770
Allegheny Technologies Inc. 39,628 1,751
Eastman Chemical Co. 32,434 1,731
Martin Marietta Materials Inc. 20,334 1,725
MeadWestvaco Corp. 76,672 1,702
* Pactiv Corp. 59,405 1,654
Celanese Corp. Class A 65,368 1,628
Ashland Inc. 33,252 1,544
International Flavors & Fragrances Inc. 35,558 1,508
Walter Energy Inc. 24,215 1,474
Albemarle Corp. 36,890 1,465
Sealed Air Corp. 71,992 1,420
Sonoco Products Co. 45,018 1,372
Bemis Co. Inc. 48,710 1,315
Valspar Corp. 42,476 1,279
Nalco Holding Co. 62,200 1,273
Steel Dynamics Inc. 90,969 1,200
Aptargroup Inc. 30,040 1,136
Reliance Steel & Aluminum Co. 31,040 1,122
Royal Gold Inc. 22,239 1,067
RPM International Inc. 58,802 1,049
Packaging Corp. of America 47,000 1,035
Compass Minerals International Inc. 14,680 1,032
Domtar Corp. 19,700 968
Temple-Inland Inc. 46,624 964
Scotts Miracle-Gro Co. Class A 21,164 940
Cytec Industries Inc. 21,536 861
Rock-Tenn Co. Class A 16,683 829
Huntsman Corp. 87,740 761
* Solutia Inc. 55,052 721
Silgan Holdings Inc. 24,708 701
* WR Grace & Co. 33,300 701
* Titanium Metals Corp. 39,801 700
Commercial Metals Co. 52,000 687
Carpenter Technology Corp. 20,400 670
Cabot Corp. 27,412 661
Olin Corp. 35,858 649
Greif Inc. Class A 11,200 622
AK Steel Holding Corp. 50,617 603
* Coeur d'Alene Mines Corp. 37,980 599
Sensient Technologies Corp. 22,717 589
* Hecla Mining Co. 110,288 576
* Allied Nevada Gold Corp. 29,000 571
* Rockwood Holdings Inc. 23,478 533
NewMarket Corp. 5,919 517
Eagle Materials Inc. 19,124 496
HB Fuller Co. 22,600 429
Minerals Technologies Inc. 8,800 418
* Intrepid Potash Inc. 20,934 410
Schnitzer Steel Industries Inc. 10,300 404
Schweitzer-Mauduit International Inc. 7,953 401
* Louisiana-Pacific Corp. 58,756 393
Worthington Industries Inc. 29,500 379
Balchem Corp. 14,837 371
Arch Chemicals Inc. 11,550 355
* PolyOne Corp. 40,770 343
* OM Group Inc. 14,189 339
* Calgon Carbon Corp. 25,074 332
Texas Industries Inc. 10,600 313


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
* Stillwater Mining Co. 26,095 303
* Clearwater Paper Corp. 5,225 286
  AMCOL International Corp. 11,700 275
* RTI International Metals Inc. 11,239 271
  A Schulman Inc. 13,990 265
  PH Glatfelter Co. 24,200 263
* Ferro Corp. 30,276 223
  Zep Inc. 11,856 207
* Century Aluminum Co. 22,900 202
  Innophos Holdings Inc. 7,600 198
  Kaiser Aluminum Corp. 5,628 195
  Stepan Co. 2,823 193
  Deltic Timber Corp. 4,500 188
* Spartech Corp. 18,106 186
* Brush Engineered Materials Inc. 9,100 182
* Omnova Solutions Inc. 22,741 178
  Koppers Holdings Inc. 7,900 178
* Buckeye Technologies Inc. 17,100 170
  Haynes International Inc. 5,495 169
* Wausau Paper Corp. 23,926 162
* Horsehead Holding Corp. 21,057 159
* Georgia Gulf Corp. 11,904 159
* Graphic Packaging Holding Co. 49,359 155
* Zoltek Cos. Inc. 18,234 154
* AM Castle & Co. 10,173 141
  Westlake Chemical Corp. 7,142 133
  Neenah Paper Inc. 7,004 128
* US Gold Corp. 25,100 126
* KapStone Paper and Packaging Corp. 10,146 113
* Boise Inc. 16,977 93
* General Moly Inc. 29,329 90
  Olympic Steel Inc. 3,900 90
* Innospec Inc. 8,800 83
  Quaker Chemical Corp. 3,000 81
  Myers Industries Inc. 9,661 78
* Landec Corp. 12,600 74
* US Energy Corp. Wyoming 14,923 71
* LSB Industries Inc. 4,778 64
* Senomyx Inc. 15,083 57
  American Vanguard Corp. 7,166 57
* Yongye International Inc. 7,859 54
* Kraton Performance Polymers Inc. 2,800 53
*,^ Mercer International Inc. 12,482 50
* Headwaters Inc. 17,200 49
  Hawkins Inc. 1,900 46
* Ampal American Israel Class A 24,444 38
* Penford Corp. 5,215 34
* Gulf Resources Inc. 3,300 28
* AEP Industries Inc. 1,000 24
* ShengdaTech Inc. 4,715 22
* China Green Agriculture Inc. 2,053 18
* Universal Stainless & Alloy 1,000 16
* Flotek Industries Inc. 12,600 15
* Altair Nanotechnologies Inc. 33,400 11
* Nanophase Technologies Corp. 9,100 11
* United States Lime & Minerals Inc. 162 6
* Rock of Ages Corp. 1,410 6
* Paramount Gold and Silver Corp. 3,300 4
      193,656
Telecommunication Services (1.6%)    
  AT&T Inc. 2,630,036 63,621
  Verizon Communications Inc. 1,263,641 35,407
* American Tower Corp. Class A 178,733 7,954
* Sprint Nextel Corp. 1,311,207 5,560


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* Crown Castle International Corp. 130,567 4,865
CenturyLink Inc. 132,627 4,418
Qwest Communications International Inc. 693,908 3,643
* NII Holdings Inc. 74,518 2,423
Windstream Corp. 215,871 2,280
* SBA Communications Corp. Class A 49,700 1,690
* tw telecom inc Class A 63,154 1,053
^ Frontier Communications Corp. 138,244 983
* MetroPCS Communications Inc. 113,251 928
* Level 3 Communications Inc. 748,471 816
Telephone & Data Systems Inc. 24,662 749
* Syniverse Holdings Inc. 31,331 641
Telephone & Data Systems Inc. - Special Common Shares 17,799 472
* United States Cellular Corp. 9,149 376
* Leap Wireless International Inc. 28,924 375
* Cincinnati Bell Inc. 107,540 324
* AboveNet Inc. 5,760 272
NTELOS Holdings Corp. 15,531 267
* Clearwire Corp. Class A 31,396 229
Atlantic Tele-Network Inc. 5,185 214
Shenandoah Telecommunications Co. 11,140 198
* PAETEC Holding Corp. 53,124 181
* Premiere Global Services Inc. 27,209 172
* General Communication Inc. Class A 21,846 166
Consolidated Communications Holdings Inc. 9,436 161
Alaska Communications Systems Group Inc. 17,100 145
* Cogent Communications Group Inc. 17,360 132
* Vonage Holdings Corp. 57,100 131
* Neutral Tandem Inc. 10,900 123
* Cbeyond Inc. 9,473 118
* Global Crossing Ltd. 10,900 115
* Iridium Communications Inc. 11,100 111
USA Mobility Inc. 8,600 111
* IDT Corp. Class B 7,600 97
* ICO Global Communications Holdings Ltd. 55,650 90
HickoryTech Corp. 10,322 70
* Kratos Defense & Security Solutions Inc. 5,043 53
* FiberTower Corp. 9,204 43
* SureWest Communications 6,700 42
* Arbinet Corp. 5,275 42
* Globalstar Inc. 24,500 38
* 8x8 Inc. 27,550 34
* TerreStar Corp. 37,411 19
* IDT Corp. 266 3
    141,955
Utilities (2.2%)    
Southern Co. 365,600 12,167
Exelon Corp. 294,072 11,166
Dominion Resources Inc. 267,445 10,361
Duke Energy Corp. 583,452 9,335
NextEra Energy Inc. 175,161 8,541
Public Service Enterprise Group Inc. 225,509 7,065
American Electric Power Co. Inc. 213,050 6,882
PG&E Corp. 165,556 6,804
Entergy Corp. 84,313 6,039
Consolidated Edison Inc. 125,374 5,404
PPL Corp. 204,754 5,109
Progress Energy Inc. 126,914 4,978
Sempra Energy 104,595 4,894
FirstEnergy Corp. 135,856 4,786
Edison International 138,010 4,378
Xcel Energy Inc. 204,252 4,210
Questar Corp. 77,908 3,544
DTE Energy Co. 73,841 3,368


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

    Market
    Value
  Shares ($000)
* AES Corp. 301,616 2,787
Constellation Energy Group Inc. 85,254 2,749
Wisconsin Energy Corp. 52,137 2,645
Ameren Corp. 106,071 2,521
* NRG Energy Inc. 117,001 2,482
CenterPoint Energy Inc. 177,174 2,332
EQT Corp. 61,032 2,206
* Calpine Corp. 158,513 2,016
Northeast Utilities 78,594 2,003
Oneok Inc. 45,094 1,950
SCANA Corp. 52,399 1,874
NiSource Inc. 123,979 1,798
Pinnacle West Capital Corp. 48,177 1,752
NSTAR 47,898 1,676
American Water Works Co. Inc. 78,260 1,612
OGE Energy Corp. 43,580 1,593
Alliant Energy Corp. 50,038 1,588
Allegheny Energy Inc. 76,059 1,573
Pepco Holdings Inc. 99,764 1,564
CMS Energy Corp. 103,051 1,510
Integrys Energy Group Inc. 34,371 1,503
MDU Resources Group Inc. 80,221 1,446
National Fuel Gas Co. 31,043 1,424
TECO Energy Inc. 91,373 1,377
Energen Corp. 30,662 1,359
DPL Inc. 52,726 1,260
UGI Corp. 49,500 1,259
AGL Resources Inc. 34,879 1,249
NV Energy Inc. 103,969 1,228
ITC Holdings Corp. 22,562 1,194
Atmos Energy Corp. 41,136 1,112
Aqua America Inc. 62,199 1,100
Westar Energy Inc. 49,914 1,079
Great Plains Energy Inc. 59,864 1,019
Hawaiian Electric Industries Inc. 42,069 958
Piedmont Natural Gas Co. Inc. 33,800 855
Nicor Inc. 20,844 844
Vectren Corp. 35,484 840
WGL Holdings Inc. 23,124 787
Cleco Corp. 27,591 729
IDACORP Inc. 21,750 724
* Mirant Corp. 66,618 704
New Jersey Resources Corp. 18,300 644
Portland General Electric Co. 34,900 640
* RRI Energy Inc. 162,316 615
Southwest Gas Corp. 20,827 614
South Jersey Industries Inc. 13,900 597
Northwest Natural Gas Co. 12,350 538
Unisource Energy Corp. 16,700 504
Allete Inc. 14,575 499
Avista Corp. 25,186 492
Black Hills Corp. 16,315 465
PNM Resources Inc. 39,923 446
NorthWestern Corp. 16,783 440
* El Paso Electric Co. 20,121 389
MGE Energy Inc. 10,300 371
California Water Service Group 9,613 343
Laclede Group Inc. 10,100 335
UIL Holdings Corp. 13,133 329
Empire District Electric Co. 16,900 317
American States Water Co. 9,057 300
CH Energy Group Inc. 7,600 298
Ormat Technologies Inc. 9,113 258
* Dynegy Inc. Class A 46,560 179


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Market
      Value
    Shares ($000)
  SJW Corp. 6,500 152
  Middlesex Water Co. 7,966 126
  Southwest Water Co. 11,127 117
  Connecticut Water Service Inc. 5,347 112
  Maine & Maritimes Corp. 1,900 84
  Central Vermont Public Service Corp. 4,130 82
  Chesapeake Utilities Corp. 2,275 71
* Cadiz Inc. 5,495 66
  York Water Co. 4,641 66
  Unitil Corp. 2,700 57
  Consolidated Water Co. Ltd. 3,754 43
*,^ Raser Technologies Inc. 31,400 18
  Artesian Resources Corp. Class A 500 9
* Synthesis Energy Systems Inc. 4,797 5
  RGC Resources Inc. 99 3
* China Natural Gas Inc. 331 3
      193,939
 
Total Common Stocks (Cost $4,392,844)   5,115,519

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
 
U.S. Government and Agency Obligations (29.2%)        
U.S. Government Securities (14.0%)        
United States Treasury Note/Bond 4.250% 1/15/11 125 128
United States Treasury Note/Bond 0.875% 2/28/11 13,550 13,601
United States Treasury Note/Bond 4.500% 2/28/11 10,725 11,023
United States Treasury Note/Bond 0.875% 4/30/11 975 979
United States Treasury Note/Bond 0.875% 5/31/11 225 226
United States Treasury Note/Bond 4.875% 5/31/11 400 416
United States Treasury Note/Bond 1.125% 6/30/11 2,450 2,468
United States Treasury Note/Bond 1.000% 7/31/11 10,300 10,364
United States Treasury Note/Bond 4.875% 7/31/11 2,350 2,463
United States Treasury Note/Bond 1.000% 8/31/11 6,347 6,388
United States Treasury Note/Bond 4.625% 8/31/11 2,425 2,542
United States Treasury Note/Bond 1.000% 9/30/11 23,000 23,155
United States Treasury Note/Bond 4.500% 9/30/11 3,725 3,914
United States Treasury Note/Bond 1.000% 10/31/11 2,225 2,241
United States Treasury Note/Bond 1.750% 11/15/11 6,850 6,971
United States Treasury Note/Bond 0.750% 11/30/11 20,675 20,753
United States Treasury Note/Bond 4.500% 11/30/11 500 529
United States Treasury Note/Bond 4.625% 12/31/11 225 239
United States Treasury Note/Bond 0.875% 1/31/12 100 101
United States Treasury Note/Bond 4.750% 1/31/12 825 881
United States Treasury Note/Bond 1.375% 2/15/12 17,150 17,386
United States Treasury Note/Bond 4.875% 2/15/12 1,025 1,098
United States Treasury Note/Bond 0.875% 2/29/12 29,650 29,812
United States Treasury Note/Bond 4.625% 2/29/12 500 534
United States Treasury Note/Bond 1.000% 3/31/12 11,325 11,410
United States Treasury Note/Bond 4.500% 3/31/12 8,475 9,066
United States Treasury Note/Bond 1.375% 4/15/12 24,825 25,197
United States Treasury Note/Bond 1.000% 4/30/12 1,350 1,360
United States Treasury Note/Bond 4.500% 4/30/12 14,775 15,846
United States Treasury Note/Bond 1.375% 5/15/12 16,075 16,311
United States Treasury Note/Bond 0.750% 5/31/12 37,300 37,405
United States Treasury Note/Bond 4.750% 5/31/12 100 108
United States Treasury Note/Bond 1.875% 6/15/12 10,225 10,479
United States Treasury Note/Bond 0.625% 6/30/12 1,300 1,300
United States Treasury Note/Bond 4.875% 6/30/12 1,409 1,530
United States Treasury Note/Bond 1.750% 8/15/12 1,865 1,909
United States Treasury Note/Bond 4.250% 9/30/12 425 460


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
United States Treasury Note/Bond 1.375% 10/15/12 25 25
United States Treasury Note/Bond 1.375% 11/15/12 26,077 26,452
United States Treasury Note/Bond 4.000% 11/15/12 725 781
United States Treasury Note/Bond 1.125% 12/15/12 16,195 16,329
United States Treasury Note/Bond 1.375% 1/15/13 57,710 58,486
United States Treasury Note/Bond 1.375% 2/15/13 8,300 8,410
United States Treasury Note/Bond 2.750% 2/28/13 2,800 2,941
United States Treasury Note/Bond 1.375% 3/15/13 13,675 13,855
United States Treasury Note/Bond 1.750% 4/15/13 24,810 25,376
United States Treasury Note/Bond 1.375% 5/15/13 29,625 29,986
United States Treasury Note/Bond 3.625% 5/15/13 5,150 5,547
United States Treasury Note/Bond 3.500% 5/31/13 10,650 11,439
United States Treasury Note/Bond 1.125% 6/15/13 300 301
United States Treasury Note/Bond 3.375% 6/30/13 475 509
United States Treasury Note/Bond 4.250% 8/15/13 9,425 10,357
United States Treasury Note/Bond 3.125% 8/31/13 1,650 1,756
United States Treasury Note/Bond 3.125% 9/30/13 10,685 11,376
United States Treasury Note/Bond 2.750% 10/31/13 1,283 1,349
United States Treasury Note/Bond 4.250% 11/15/13 1,735 1,913
United States Treasury Note/Bond 2.000% 11/30/13 1,675 1,719
United States Treasury Note/Bond 1.500% 12/31/13 700 706
United States Treasury Note/Bond 1.750% 1/31/14 6,000 6,097
United States Treasury Note/Bond 4.000% 2/15/14 5 5
United States Treasury Note/Bond 1.875% 2/28/14 11,475 11,697
United States Treasury Note/Bond 1.750% 3/31/14 17,475 17,721
United States Treasury Note/Bond 1.875% 4/30/14 11,150 11,354
United States Treasury Note/Bond 4.750% 5/15/14 850 959
United States Treasury Note/Bond 2.250% 5/31/14 400 413
United States Treasury Note/Bond 2.625% 6/30/14 7,900 8,260
United States Treasury Note/Bond 2.625% 7/31/14 6,900 7,214
United States Treasury Note/Bond 2.375% 8/31/14 1,250 1,293
United States Treasury Note/Bond 2.375% 9/30/14 5,350 5,527
United States Treasury Note/Bond 2.375% 10/31/14 7,855 8,109
United States Treasury Note/Bond 2.125% 11/30/14 15,500 15,837
United States Treasury Note/Bond 2.625% 12/31/14 6,835 7,122
United States Treasury Note/Bond 4.000% 2/15/15 5,150 5,687
United States Treasury Note/Bond 11.250% 2/15/15 5,475 7,818
United States Treasury Note/Bond 2.375% 2/28/15 4,675 4,820
United States Treasury Note/Bond 2.500% 3/31/15 25 26
United States Treasury Note/Bond 4.125% 5/15/15 1,900 2,112
United States Treasury Note/Bond 2.125% 5/31/15 13,850 14,097
United States Treasury Note/Bond 1.875% 6/30/15 3,675 3,690
United States Treasury Note/Bond 4.250% 8/15/15 2,650 2,964
United States Treasury Note/Bond 10.625% 8/15/15 1,215 1,739
United States Treasury Note/Bond 4.500% 11/15/15 300 341
United States Treasury Note/Bond 9.875% 11/15/15 400 563
United States Treasury Note/Bond 4.500% 2/15/16 6,400 7,247
United States Treasury Note/Bond 2.625% 2/29/16 39,650 40,821
United States Treasury Note/Bond 2.375% 3/31/16 14,700 14,927
United States Treasury Note/Bond 2.625% 4/30/16 4,875 5,012
United States Treasury Note/Bond 5.125% 5/15/16 18,025 21,041
United States Treasury Note/Bond 7.250% 5/15/16 9,065 11,651
United States Treasury Note/Bond 3.250% 5/31/16 15,000 15,945
United States Treasury Note/Bond 3.250% 6/30/16 2,475 2,627
United States Treasury Note/Bond 3.000% 8/31/16 13,750 14,358
United States Treasury Note/Bond 3.000% 9/30/16 16,525 17,240
United States Treasury Note/Bond 3.125% 10/31/16 75 79
United States Treasury Note/Bond 7.500% 11/15/16 4,725 6,195
United States Treasury Note/Bond 2.750% 11/30/16 13,972 14,334
United States Treasury Note/Bond 3.125% 1/31/17 15,570 16,297
United States Treasury Note/Bond 4.625% 2/15/17 200 229
United States Treasury Note/Bond 3.000% 2/28/17 850 883
United States Treasury Note/Bond 3.250% 3/31/17 14,950 15,761
United States Treasury Note/Bond 8.750% 5/15/17 16,050 22,600


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
United States Treasury Note/Bond 2.500% 6/30/17 21,850 21,963
United States Treasury Note/Bond 8.875% 8/15/17 7,000 9,976
United States Treasury Note/Bond 4.250% 11/15/17 575 646
United States Treasury Note/Bond 3.500% 2/15/18 750 802
United States Treasury Note/Bond 4.000% 8/15/18 20,675 22,765
United States Treasury Note/Bond 3.750% 11/15/18 1,380 1,488
United States Treasury Note/Bond 2.750% 2/15/19 800 798
United States Treasury Note/Bond 8.875% 2/15/19 4,350 6,416
United States Treasury Note/Bond 3.125% 5/15/19 4,550 4,649
United States Treasury Note/Bond 3.625% 8/15/19 9,925 10,503
United States Treasury Note/Bond 3.375% 11/15/19 23,997 24,882
United States Treasury Note/Bond 3.625% 2/15/20 5,770 6,103
United States Treasury Note/Bond 3.500% 5/15/20 24,625 25,799
United States Treasury Note/Bond 8.750% 8/15/20 8,150 12,230
United States Treasury Note/Bond 7.875% 2/15/21 19,400 27,794
United States Treasury Note/Bond 8.125% 5/15/21 490 715
United States Treasury Note/Bond 8.125% 8/15/21 4,200 6,149
United States Treasury Note/Bond 8.000% 11/15/21 770 1,121
United States Treasury Note/Bond 7.125% 2/15/23 3,600 4,988
United States Treasury Note/Bond 6.250% 8/15/23 17,750 23,028
United States Treasury Note/Bond 6.875% 8/15/25 7,625 10,588
United States Treasury Note/Bond 6.750% 8/15/26 320 445
United States Treasury Note/Bond 6.625% 2/15/27 1,045 1,440
United States Treasury Note/Bond 6.375% 8/15/27 670 903
United States Treasury Note/Bond 5.500% 8/15/28 1,510 1,869
United States Treasury Note/Bond 5.250% 11/15/28 75 90
United States Treasury Note/Bond 5.250% 2/15/29 550 663
United States Treasury Note/Bond 6.125% 8/15/29 3,170 4,216
United States Treasury Note/Bond 6.250% 5/15/30 6,530 8,845
United States Treasury Note/Bond 5.375% 2/15/31 1,550 1,910
United States Treasury Note/Bond 4.500% 2/15/36 820 908
United States Treasury Note/Bond 4.750% 2/15/37 4,975 5,724
United States Treasury Note/Bond 5.000% 5/15/37 875 1,045
United States Treasury Note/Bond 4.375% 2/15/38 16,535 17,917
United States Treasury Note/Bond 3.500% 2/15/39 750 698
United States Treasury Note/Bond 4.250% 5/15/39 8,350 8,850
United States Treasury Note/Bond 4.500% 8/15/39 25,549 28,207
United States Treasury Note/Bond 4.375% 11/15/39 9,411 10,183
United States Treasury Note/Bond 4.625% 2/15/40 17,710 19,957
United States Treasury Note/Bond 4.375% 5/15/40 925 1,003
        1,231,194
Agency Bonds and Notes (2.9%)        
2 Ally Financial Inc. 1.750% 10/30/12 700 712
2 Ally Financial Inc. 2.200% 12/19/12 850 874
2 American Express Bank FSB 3.150% 12/9/11 850 881
2 Bank of America Corp. 2.100% 4/30/12 2,650 2,713
2 Bank of America Corp. 3.125% 6/15/12 1,375 1,437
2 Bank of America Corp. 2.375% 6/22/12 225 232
2 Bank of America NA 1.700% 12/23/10 650 654
2 Bank of the West 2.150% 3/27/12 575 589
2 Citibank NA 1.625% 3/30/11 225 227
2 Citibank NA 1.500% 7/12/11 400 404
2 Citibank NA 1.375% 8/10/11 500 505
2 Citibank NA 1.250% 9/22/11 300 302
2 Citibank NA 1.875% 5/7/12 950 969
2 Citibank NA 1.750% 12/28/12 1,100 1,120
2 Citigroup Funding Inc. 2.000% 3/30/12 225 230
2 Citigroup Funding Inc. 2.125% 7/12/12 600 615
2 Citigroup Funding Inc. 1.875% 10/22/12 931 950
2 Citigroup Funding Inc. 2.250% 12/10/12 250 257
2 Citigroup Inc. 2.875% 12/9/11 1,050 1,084
2 Citigroup Inc. 2.125% 4/30/12 2,400 2,460
Egypt Government AID Bonds 4.450% 9/15/15 1,400 1,547
3 Federal Farm Credit Bank 5.375% 7/18/11 3,050 3,209


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
3 Federal Farm Credit Bank 3.875% 8/25/11 875 910
3 Federal Farm Credit Bank 2.125% 6/18/12 750 770
3 Federal Farm Credit Bank 4.500% 10/17/12 700 757
3 Federal Farm Credit Bank 1.875% 12/7/12 475 485
3 Federal Farm Credit Bank 1.750% 2/21/13 450 459
3 Federal Farm Credit Bank 1.375% 6/25/13 390 392
3 Federal Farm Credit Bank 2.625% 4/17/14 1,000 1,038
3 Federal Farm Credit Bank 3.000% 9/22/14 600 630
3 Federal Farm Credit Bank 5.125% 8/25/16 925 1,060
3 Federal Farm Credit Bank 4.875% 1/17/17 850 960
3 Federal Home Loan Bank of Chicago 5.625% 6/13/16 300 323
3 Federal Home Loan Banks 1.625% 7/27/11 6,275 6,357
3 Federal Home Loan Banks 5.375% 8/19/11 3,775 3,987
3 Federal Home Loan Banks 3.750% 9/9/11 325 338
3 Federal Home Loan Banks 3.625% 9/16/11 675 700
3 Federal Home Loan Banks 4.875% 11/18/11 1,650 1,748
3 Federal Home Loan Banks 1.000% 12/28/11 2,350 2,365
3 Federal Home Loan Banks 1.125% 5/18/12 5,900 5,946
3 Federal Home Loan Banks 1.375% 6/8/12 3,950 3,995
3 Federal Home Loan Banks 1.875% 6/20/12 800 818
3 Federal Home Loan Banks 1.750% 8/22/12 575 587
3 Federal Home Loan Banks 1.625% 9/26/12 2,500 2,543
3,4 Federal Home Loan Banks 2.000% 10/5/12 830 833
3 Federal Home Loan Banks 1.500% 1/16/13 600 608
3 Federal Home Loan Banks 3.375% 2/27/13 850 903
3 Federal Home Loan Banks 1.625% 3/20/13 400 406
3 Federal Home Loan Banks 5.375% 6/14/13 250 280
3 Federal Home Loan Banks 1.875% 6/21/13 2,400 2,452
3 Federal Home Loan Banks 5.125% 8/14/13 1,525 1,707
3 Federal Home Loan Banks 4.000% 9/6/13 1,000 1,085
3 Federal Home Loan Banks 5.250% 9/13/13 1,800 2,020
3 Federal Home Loan Banks 4.500% 9/16/13 5,000 5,509
3 Federal Home Loan Banks 3.625% 10/18/13 4,200 4,511
3 Federal Home Loan Banks 3.125% 12/13/13 2,250 2,376
3 Federal Home Loan Banks 5.500% 8/13/14 800 922
3 Federal Home Loan Banks 2.750% 12/12/14 125 129
3 Federal Home Loan Banks 5.125% 10/19/16 1,225 1,406
3 Federal Home Loan Banks 4.750% 12/16/16 1,475 1,662
3 Federal Home Loan Banks 4.875% 5/17/17 900 1,022
3 Federal Home Loan Banks 5.000% 11/17/17 900 1,030
3 Federal Home Loan Banks 4.125% 3/13/20 450 477
3 Federal Home Loan Banks 5.250% 12/11/20 1,000 1,138
3 Federal Home Loan Banks 5.625% 6/11/21 1,100 1,293
3 Federal Home Loan Banks 5.500% 7/15/36 250 285
3 Federal Home Loan Mortgage Corp. 2.125% 3/23/12 1,525 1,563
3 Federal Home Loan Mortgage Corp. 1.750% 6/15/12 1,700 1,734
3 Federal Home Loan Mortgage Corp. 1.125% 7/27/12 900 907
3 Federal Home Loan Mortgage Corp. 5.500% 8/20/12 8,000 8,797
3 Federal Home Loan Mortgage Corp. 2.125% 9/21/12 500 514
3 Federal Home Loan Mortgage Corp. 4.625% 10/25/12 5,425 5,889
3 Federal Home Loan Mortgage Corp. 4.125% 12/21/12 1,325 1,427
3 Federal Home Loan Mortgage Corp. 1.375% 1/9/13 2,825 2,856
3 Federal Home Loan Mortgage Corp. 3.750% 6/28/13 2,585 2,784
3 Federal Home Loan Mortgage Corp. 4.500% 7/15/13 1,200 1,320
3 Federal Home Loan Mortgage Corp. 4.125% 9/27/13 1,875 2,043
3 Federal Home Loan Mortgage Corp. 4.500% 1/15/14 2,600 2,872
3 Federal Home Loan Mortgage Corp. 2.500% 4/23/14 1,250 1,293
3 Federal Home Loan Mortgage Corp. 5.000% 7/15/14 1,600 1,807
3 Federal Home Loan Mortgage Corp. 3.000% 7/28/14 2,275 2,393
3 Federal Home Loan Mortgage Corp. 4.375% 7/17/15 4,000 4,434
3 Federal Home Loan Mortgage Corp. 4.750% 1/19/16 650 732
3 Federal Home Loan Mortgage Corp. 5.250% 4/18/16 3,000 3,459
3 Federal Home Loan Mortgage Corp. 5.500% 7/18/16 1,100 1,286
3 Federal Home Loan Mortgage Corp. 5.125% 10/18/16 300 344


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
3 Federal Home Loan Mortgage Corp. 5.500% 8/23/17 1,300 1,527
3 Federal Home Loan Mortgage Corp. 4.875% 6/13/18 1,500 1,699
3 Federal Home Loan Mortgage Corp. 3.750% 3/27/19 3,225 3,372
3 Federal Home Loan Mortgage Corp. 6.750% 9/15/29 850 1,108
3 Federal National Mortgage Assn. 1.000% 11/23/11 95 96
3 Federal National Mortgage Assn. 2.000% 1/9/12 8,000 8,174
3 Federal National Mortgage Assn. 0.875% 1/12/12 1,300 1,306
3 Federal National Mortgage Assn. 6.125% 3/15/12 1,450 1,585
3 Federal National Mortgage Assn. 1.000% 4/4/12 425 427
3 Federal National Mortgage Assn. 1.875% 4/20/12 6,100 6,234
3 Federal National Mortgage Assn. 4.875% 5/18/12 2,225 2,399
3 Federal National Mortgage Assn. 1.250% 6/22/12 130 131
3 Federal National Mortgage Assn. 1.750% 8/10/12 1,000 1,021
3 Federal National Mortgage Assn. 4.375% 9/15/12 1,300 1,400
3,4 Federal National Mortgage Assn. 1.600% 10/1/12 1,800 1,806
3 Federal National Mortgage Assn. 3.625% 2/12/13 3,550 3,792
3 Federal National Mortgage Assn. 4.750% 2/21/13 1,275 1,396
3 Federal National Mortgage Assn. 0.850% 4/8/13 1,500 1,502
3 Federal National Mortgage Assn. 4.625% 5/1/13 700 757
3 Federal National Mortgage Assn. 1.750% 5/7/13 1,200 1,223
3,4 Federal National Mortgage Assn. 2.000% 5/24/13 1,000 1,009
3 Federal National Mortgage Assn. 5.125% 1/2/14 975 1,076
3 Federal National Mortgage Assn. 2.750% 2/5/14 1,100 1,149
3 Federal National Mortgage Assn. 2.750% 3/13/14 1,125 1,175
3 Federal National Mortgage Assn. 4.125% 4/15/14 3,700 4,048
3 Federal National Mortgage Assn. 2.500% 5/15/14 3,575 3,697
3 Federal National Mortgage Assn. 3.000% 9/16/14 800 841
3 Federal National Mortgage Assn. 4.625% 10/15/14 4,000 4,470
3 Federal National Mortgage Assn. 2.625% 11/20/14 800 827
3,4 Federal National Mortgage Assn. 3.000% 3/9/15 2,900 2,914
3 Federal National Mortgage Assn. 5.375% 7/15/16 3,000 3,484
3 Federal National Mortgage Assn. 5.250% 9/15/16 4,825 5,574
3 Federal National Mortgage Assn. 4.875% 12/15/16 525 595
3 Federal National Mortgage Assn. 5.000% 2/13/17 1,975 2,252
3 Federal National Mortgage Assn. 7.125% 1/15/30 1,000 1,367
3 Federal National Mortgage Assn. 7.250% 5/15/30 1,700 2,352
3 Federal National Mortgage Assn. 6.625% 11/15/30 915 1,195
3 Federal National Mortgage Assn. 5.625% 7/15/37 2,035 2,364
3 Financing Corp. Fico 9.800% 4/6/18 500 720
3 Financing Corp. Fico 9.650% 11/2/18 475 692
2 General Electric Capital Corp. 3.000% 12/9/11 2,325 2,405
2 General Electric Capital Corp. 2.250% 3/12/12 2,225 2,283
2 General Electric Capital Corp. 2.200% 6/8/12 1,775 1,822
2 General Electric Capital Corp. 2.125% 12/21/12 825 847
2 General Electric Capital Corp. 2.625% 12/28/12 675 701
2 Goldman Sachs Group Inc. 1.700% 3/15/11 125 126
2 Goldman Sachs Group Inc. 1.625% 7/15/11 500 506
2 Goldman Sachs Group Inc. 2.150% 3/15/12 375 385
2 Goldman Sachs Group Inc. 3.250% 6/15/12 1,350 1,414
2 HSBC USA Inc. 3.125% 12/16/11 750 777
  Israel Government AID Bond 5.500% 9/18/23 500 582
  Israel Government AID Bond 5.500% 12/4/23 375 437
  Israel Government AID Bond 5.500% 4/26/24 925 1,079
2 JPMorgan Chase & Co. 1.650% 2/23/11 900 907
2 JPMorgan Chase & Co. 3.125% 12/1/11 1,025 1,061
2 JPMorgan Chase & Co. 2.200% 6/15/12 1,000 1,028
2 JPMorgan Chase & Co. 2.125% 6/22/12 700 718
2 JPMorgan Chase & Co. 2.125% 12/26/12 1,400 1,438
2 Morgan Stanley 2.900% 12/1/10 650 657
2 Morgan Stanley 3.250% 12/1/11 1,475 1,530
2 Morgan Stanley 1.950% 6/20/12 1,375 1,406
2 PNC Funding Corp. 2.300% 6/22/12 875 902
  Private Export Funding Corp. 3.050% 10/15/14 150 155
  Private Export Funding Corp. 4.375% 3/15/19 350 374


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
  Private Export Funding Corp. 4.300% 12/15/21 125 132
2 Regions Bank 3.250% 12/9/11 1,000 1,040
2 Sovereign Bank 2.750% 1/17/12 350 361
3 Tennessee Valley Authority 4.500% 4/1/18 450 493
3 Tennessee Valley Authority 6.750% 11/1/25 100 129
3 Tennessee Valley Authority 7.125% 5/1/30 1,500 2,009
3 Tennessee Valley Authority 5.500% 6/15/38 225 255
3 Tennessee Valley Authority 5.250% 9/15/39 425 469
3 Tennessee Valley Authority 5.375% 4/1/56 375 423
2 US Central Federal Credit Union 1.900% 10/19/12 475 484
2 Wells Fargo & Co. 3.000% 12/9/11 1,625 1,681
2 Wells Fargo & Co. 2.125% 6/15/12 425 437
2 Western Corporate Federal Credit Union 1.750% 11/2/12 250 254
          254,110
Conventional Mortgage-Backed Securities (11.8%)        
3,4 Fannie Mae Pool 4.000% 9/1/10–7/1/39 34,635 35,860
3,4 Fannie Mae Pool 4.500% 7/1/11–7/1/40 83,135 76,847
3,4 Fannie Mae Pool 5.000% 1/1/12–7/1/40 113,861 118,406
3,4 Fannie Mae Pool 5.500% 12/1/14–7/1/40 142,789 130,438
3,4 Fannie Mae Pool 6.000% 3/1/11–7/1/40 83,894 90,251
3,4 Fannie Mae Pool 6.500% 9/1/10–1/1/39 25,154 27,779
3,4 Fannie Mae Pool 7.000% 9/1/10–11/1/37 6,444 7,184
3,4 Fannie Mae Pool 7.500% 1/1/11–12/1/32 1,063 1,180
3,4 Fannie Mae Pool 8.000% 11/1/11–11/1/30 148 169
3,4 Fannie Mae Pool 8.500% 11/1/18–9/1/30 114 130
3,4 Fannie Mae Pool 9.000% 1/1/21–8/1/26 36 42
3,4 Fannie Mae Pool 9.500% 5/1/16–2/1/25 9 9
3,4 Fannie Mae Pool 10.000% 1/1/20–8/1/21 1 1
3,4 Fannie Mae Pool 10.500% 8/1/20 1 1
3,4 Freddie Mac Gold Pool 4.000% 2/1/12–4/1/40 36,127 22,843
3,4 Freddie Mac Gold Pool 4.500% 8/1/10–7/1/40 68,059 59,385
3,4 Freddie Mac Gold Pool 5.000% 10/1/11–7/1/40 79,873 85,183
3,4 Freddie Mac Gold Pool 5.500% 11/1/13–7/1/40 85,321 90,322
3,4 Freddie Mac Gold Pool 6.000% 8/1/10–5/1/40 54,651 59,652
3,4 Freddie Mac Gold Pool 6.500% 9/1/10–1/1/39 16,210 17,869
3,4 Freddie Mac Gold Pool 7.000% 10/1/10–2/1/37 3,470 3,856
3,4 Freddie Mac Gold Pool 7.500% 7/1/10–1/1/32 460 513
3,4 Freddie Mac Gold Pool 8.000% 6/1/12–10/1/31 492 549
3,4 Freddie Mac Gold Pool 8.500% 4/1/20–5/1/30 65 75
3,4 Freddie Mac Gold Pool 9.000% 10/1/21–4/1/30 44 50
3,4 Freddie Mac Gold Pool 9.500% 4/1/16–4/1/25 8 11
3,4 Freddie Mac Gold Pool 10.000% 3/1/17–4/1/25 8 9
3,4 Freddie Mac Non Gold Pool 8.500% 12/1/16 1 1
4 Ginnie Mae I Pool 4.000% 8/15/39 3,655 3,719
4 Ginnie Mae I Pool 4.500% 8/15/18–7/1/40 42,318 35,801
4 Ginnie Mae I Pool 5.000% 1/15/18–7/1/40 68,582 51,583
4 Ginnie Mae I Pool 5.500% 3/15/15–7/1/40 31,522 34,185
4 Ginnie Mae I Pool 6.000% 12/15/13–6/15/40 12,509 13,723
4 Ginnie Mae I Pool 6.500% 6/15/11–8/15/34 3,611 4,036
4 Ginnie Mae I Pool 7.000% 11/15/11–8/15/32 2,145 2,377
4 Ginnie Mae I Pool 7.500% 10/15/10–3/15/32 581 647
4 Ginnie Mae I Pool 8.000% 3/15/22–3/15/32 411 455
4 Ginnie Mae I Pool 8.500% 3/15/17–7/15/30 43 49
4 Ginnie Mae I Pool 9.000% 6/15/16–2/15/30 80 90
4 Ginnie Mae I Pool 9.500% 10/15/19–1/15/25 20 22
4 Ginnie Mae I Pool 10.000% 3/15/19 1 1
4 Ginnie Mae II Pool 4.500% 11/20/35–7/1/40 10,851 11,284
4 Ginnie Mae II Pool 5.000% 1/20/35–7/1/40 17,374 18,502
4 Ginnie Mae II Pool 5.500% 4/20/36–7/1/40 12,975 14,031
4 Ginnie Mae II Pool 6.000% 3/20/33–10/20/38 13,575 14,826
4 Ginnie Mae II Pool 6.500% 12/20/35–11/20/37 4,251 4,684


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
4 Ginnie Mae II Pool 7.000% 4/20/38 102 112
          1,038,742
Nonconventional Mortgage-Backed Securities (0.5%)        
3,4 Fannie Mae Pool 2.514% 12/1/34 910 936
3,4 Fannie Mae Pool 2.690% 1/1/35 576 598
3,4 Fannie Mae Pool 2.801% 10/1/34 516 528
3,4 Fannie Mae Pool 2.814% 11/1/34 354 363
3,4 Fannie Mae Pool 3.138% 9/1/34 157 162
3,4 Fannie Mae Pool 3.304% 1/1/40 1,666 1,712
3,4 Fannie Mae Pool 3.390% 5/1/40 488 502
3,4 Fannie Mae Pool 3.446% 5/1/37 627 649
3,4 Fannie Mae Pool 3.647% 4/1/37 554 577
3,4 Fannie Mae Pool 4.118% 5/1/34 184 190
3,4 Fannie Mae Pool 4.161% 8/1/35 559 574
3,4 Fannie Mae Pool 4.537% 11/1/34 1,056 1,111
3,4 Fannie Mae Pool 4.583% 12/1/35 1,110 1,208
3,4 Fannie Mae Pool 4.607% 8/1/35 836 878
3,4 Fannie Mae Pool 4.609% 9/1/34 437 465
3,4 Fannie Mae Pool 4.628% 11/1/33 178 186
3,4 Fannie Mae Pool 4.722% 8/1/35 644 686
3,4 Fannie Mae Pool 4.788% 6/1/34 404 426
3,4 Fannie Mae Pool 4.933% 9/1/35 510 521
3,4 Fannie Mae Pool 4.982% 10/1/35 1,003 1,032
3,4 Fannie Mae Pool 5.017% 11/1/35 158 166
3,4 Fannie Mae Pool 5.020% 2/1/36 381 392
3,4 Fannie Mae Pool 5.026% 12/1/33 252 267
3,4 Fannie Mae Pool 5.096% 12/1/35 576 595
3,4 Fannie Mae Pool 5.124% 3/1/37 655 692
3,4 Fannie Mae Pool 5.415% 2/1/36 270 278
3,4 Fannie Mae Pool 5.479% 1/1/37 677 715
3,4 Fannie Mae Pool 5.619% 6/1/36 623 648
3,4 Fannie Mae Pool 5.630% 7/1/36 165 177
3,4 Fannie Mae Pool 5.645% 3/1/37 688 729
3,4 Fannie Mae Pool 5.648% 3/1/37 501 531
3,4 Fannie Mae Pool 5.649% 2/1/37 539 571
3,4 Fannie Mae Pool 5.668% 1/1/36 217 229
3,4 Fannie Mae Pool 5.682% 4/1/37 201 213
3,4 Fannie Mae Pool 5.719% 4/1/37 939 1,002
3,4 Fannie Mae Pool 5.743% 4/1/36 797 830
3,4 Fannie Mae Pool 5.809% 9/1/36 565 591
3,4 Fannie Mae Pool 5.838% 11/1/36 1,467 1,560
3,4 Fannie Mae Pool 5.858% 8/1/37 443 467
3,4 Fannie Mae Pool 5.999% 6/1/36 106 114
3,4 Fannie Mae Pool 6.263% 9/1/37 451 481
3,4 Freddie Mac Non Gold Pool 2.665% 12/1/34 615 640
3,4 Freddie Mac Non Gold Pool 2.945% 1/1/35 37 38
3,4 Freddie Mac Non Gold Pool 2.993% 9/1/34 329 345
3,4 Freddie Mac Non Gold Pool 3.061% 3/1/37 543 563
3,4 Freddie Mac Non Gold Pool 3.088% 12/1/34 303 320
3,4 Freddie Mac Non Gold Pool 3.291% 6/1/40 1,175 1,199
3,4 Freddie Mac Non Gold Pool 3.316% 4/1/40 592 608
3,4 Freddie Mac Non Gold Pool 3.361% 5/1/40 698 717
3,4 Freddie Mac Non Gold Pool 3.423% 5/1/40 697 717
3,4 Freddie Mac Non Gold Pool 3.627% 1/1/40 602 623
3,4 Freddie Mac Non Gold Pool 3.993% 3/1/36 568 592
3,4 Freddie Mac Non Gold Pool 4.027% 1/1/37 401 419
3,4 Freddie Mac Non Gold Pool 4.588% 7/1/35 521 550
3,4 Freddie Mac Non Gold Pool 4.604% 11/1/34 702 738
3,4 Freddie Mac Non Gold Pool 5.005% 5/1/35 886 939
3,4 Freddie Mac Non Gold Pool 5.296% 3/1/36 920 949
3,4 Freddie Mac Non Gold Pool 5.337% 12/1/35 496 525
3,4 Freddie Mac Non Gold Pool 5.433% 4/1/37 1,202 1,270
3,4 Freddie Mac Non Gold Pool 5.435% 3/1/37 644 680
3,4 Freddie Mac Non Gold Pool 5.504% 2/1/36 755 803


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
3,4 Freddie Mac Non Gold Pool 5.554% 5/1/36 354 367
3,4 Freddie Mac Non Gold Pool 5.556% 4/1/37 788 839
3,4 Freddie Mac Non Gold Pool 5.632% 4/1/37 497 524
3,4 Freddie Mac Non Gold Pool 5.644% 12/1/36 308 324
3,4 Freddie Mac Non Gold Pool 5.702% 6/1/37 838 889
3,4 Freddie Mac Non Gold Pool 5.716% 9/1/36 700 745
3,4 Freddie Mac Non Gold Pool 5.769% 5/1/36 369 400
3,4 Freddie Mac Non Gold Pool 5.826% 12/1/36 360 383
3,4 Freddie Mac Non Gold Pool 5.866% 8/1/37 534 568
3,4 Freddie Mac Non Gold Pool 5.867% 5/1/37 1,265 1,351
3,4 Freddie Mac Non Gold Pool 5.952% 10/1/37 212 226
3,4 Freddie Mac Non Gold Pool 6.443% 2/1/37 372 399
          44,802
 
Total U.S. Government and Agency Obligations (Cost $2,452,812)       2,568,848
 
Asset-Backed/Commercial Mortgage-Backed Securities (1.8%)        
4 Banc of America Commercial Mortgage Inc. 4.050% 11/10/38 320 322
4 Banc of America Commercial Mortgage Inc. 4.153% 11/10/38 150 156
4 Banc of America Commercial Mortgage Inc. 4.877% 7/10/42 1,700 1,746
4,5 Banc of America Commercial Mortgage Inc. 5.217% 11/10/42 125 131
4 Banc of America Commercial Mortgage Inc. 4.727% 7/10/43 235 211
4 Banc of America Commercial Mortgage Inc. 5.118% 7/11/43 1,560 1,624
4,5 Banc of America Commercial Mortgage Inc. 5.963% 5/10/45 160 147
4 Banc of America Commercial Mortgage Inc. 5.372% 9/10/45 1,200 1,260
4,5 Banc of America Commercial Mortgage Inc. 5.421% 9/10/45 10 9
4 Banc of America Commercial Mortgage Inc. 5.115% 10/10/45 1,150 1,212
4,5 Banc of America Commercial Mortgage Inc. 5.176% 10/10/45 20 19
4 Banc of America Commercial Mortgage Inc. 5.634% 7/10/46 1,300 1,378
4,5 Banc of America Commercial Mortgage Inc. 5.350% 9/10/47 100 95
4,5 Banc of America Commercial Mortgage Inc. 5.350% 9/10/47 170 154
4 Banc of America Commercial Mortgage Inc. 5.414% 9/10/47 825 847
4 Banc of America Commercial Mortgage Inc. 5.448% 9/10/47 125 109
4,5 Banc of America Commercial Mortgage Inc. 5.523% 1/15/49 125 88
4,5 Banc of America Commercial Mortgage Inc. 6.373% 2/10/51 1,400 1,464
6 Bank of Scotland PLC 5.250% 2/21/17 1,350 1,434
4 Bear Stearns Commercial Mortgage Securities 5.610% 11/15/33 2,000 2,083
4 Bear Stearns Commercial Mortgage Securities 5.628% 4/12/38 250 267
4,5 Bear Stearns Commercial Mortgage Securities 5.628% 4/12/38 250 232
4,5 Bear Stearns Commercial Mortgage Securities 5.946% 9/11/38 275 254
4,5 Bear Stearns Commercial Mortgage Securities 5.946% 9/11/38 125 100
4 Bear Stearns Commercial Mortgage Securities 5.623% 3/11/39 125 133
4 Bear Stearns Commercial Mortgage Securities 4.680% 8/13/39 450 470
4 Bear Stearns Commercial Mortgage Securities 5.854% 6/11/40 2,125 2,212
4,5 Bear Stearns Commercial Mortgage Securities 5.907% 6/11/40 125 83
4 Bear Stearns Commercial Mortgage Securities 4.750% 6/11/41 200 176
4 Bear Stearns Commercial Mortgage Securities 5.582% 9/11/41 160 143
4,5 Bear Stearns Commercial Mortgage Securities 5.568% 10/12/41 140 132
4 Bear Stearns Commercial Mortgage Securities 4.521% 11/11/41 250 250
4 Bear Stearns Commercial Mortgage Securities 5.742% 9/11/42 1,575 1,643
4 Bear Stearns Commercial Mortgage Securities 5.127% 10/12/42 496 498
4,5 Bear Stearns Commercial Mortgage Securities 5.513% 1/12/45 335 293
4,5 Bear Stearns Commercial Mortgage Securities 5.566% 1/12/45 200 144
4 Bear Stearns Commercial Mortgage Securities 5.613% 6/11/50 850 882
4 Bear Stearns Commercial Mortgage Securities 5.694% 6/11/50 800 810
4 Bear Stearns Commercial Mortgage Securities 5.700% 6/11/50 400 407
4,5 Bear Stearns Commercial Mortgage Securities 5.915% 6/11/50 400 346
4 Capital Auto Receivables Asset Trust 4.680% 10/15/12 1,093 1,118
4 Capital One Multi-Asset Execution Trust 5.300% 2/18/14 450 467
4 Capital One Multi-Asset Execution Trust 5.050% 12/17/18 3,500 3,934
4 Capital One Multi-Asset Execution Trust 5.750% 7/15/20 225 263
4 CDC Commercial Mortgage Trust 5.676% 11/15/30 1,205 1,243
4 Chase Issuance Trust 4.650% 12/17/12 3,300 3,336
4 Chase Issuance Trust 5.400% 7/15/15 400 443


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
6 Cie de Financement Foncier 2.125% 4/22/13 375 377
4 Citibank Credit Card Issuance Trust 5.450% 5/10/13 195 203
4 Citibank Credit Card Issuance Trust 4.900% 6/23/16 1,075 1,189
4 Citibank Credit Card Issuance Trust 4.150% 7/7/17 250 269
4 Citibank Credit Card Issuance Trust 5.650% 9/20/19 175 202
4 Citigroup Commercial Mortgage Trust 4.623% 10/15/41 198 203
4 Citigroup Commercial Mortgage Trust 4.830% 5/15/43 50 46
4,5 Citigroup Commercial Mortgage Trust 5.920% 3/15/49 550 588
4 Citigroup Commercial Mortgage Trust 5.462% 10/15/49 325 297
4,5 Citigroup Commercial Mortgage Trust 5.888% 12/10/49 600 621
4,5 Citigroup Commercial Mortgage Trust 5.888% 12/10/49 275 236
4,5 Citigroup Commercial Mortgage Trust 6.297% 12/10/49 175 152
4,5 Citigroup Commercial Mortgage Trust 6.297% 12/10/49 650 671
4 Citigroup/Deutsche Bank Commercial Mortgage Trust 5.397% 7/15/44 1,100 1,175
4,5 Citigroup/Deutsche Bank Commercial Mortgage Trust 5.397% 7/15/44 300 285
4 Citigroup/Deutsche Bank Commercial Mortgage Trust 5.886% 11/15/44 1,650 1,672
4 Citigroup/Deutsche Bank Commercial Mortgage Trust 5.648% 10/15/48 425 381
4 Citigroup/Deutsche Bank Commercial Mortgage Trust 5.205% 12/11/49 1,400 1,438
4 Citigroup/Deutsche Bank Commercial Mortgage Trust 5.322% 12/11/49 950 930
4,6 Commercial Mortgage Lease-Backed Certificates 6.746% 6/20/31 341 380
4 Commercial Mortgage Pass Through Certificates 4.084% 6/10/38 875 906
4 Commercial Mortgage Pass Through Certificates 4.715% 3/10/39 800 824
4 Commercial Mortgage Pass Through Certificates 5.116% 6/10/44 250 258
4 Commercial Mortgage Pass Through Certificates 5.960% 6/10/46 1,255 1,327
4,5 Commercial Mortgage Pass Through Certificates 5.986% 6/10/46 200 175
4 Commercial Mortgage Pass Through Certificates 5.248% 12/10/46 200 205
4,5 Commercial Mortgage Pass Through Certificates 6.010% 12/10/49 900 928
4,5 Countrywide Home Loan Mortgage Pass Through Trust 2.931% 5/25/33 304 262
4,5 Credit Suisse First Boston Mortgage Securities Corp. 4.750% 1/15/37 1,500 1,552
4 Credit Suisse First Boston Mortgage Securities Corp. 4.877% 4/15/37 50 38
4,5 Credit Suisse First Boston Mortgage Securities Corp. 5.014% 2/15/38 1,000 1,041
4 Credit Suisse First Boston Mortgage Securities Corp. 3.936% 5/15/38 575 596
4,5 Credit Suisse First Boston Mortgage Securities Corp. 5.100% 8/15/38 80 75
4 Credit Suisse First Boston Mortgage Securities Corp. 5.100% 8/15/38 1,800 1,907
4,5 Credit Suisse First Boston Mortgage Securities Corp. 5.230% 12/15/40 160 130
4 Credit Suisse Mortgage Capital Certificates 6.019% 6/15/38 1,475 1,546
4 Credit Suisse Mortgage Capital Certificates 6.019% 6/15/38 52 47
4 Credit Suisse Mortgage Capital Certificates 5.609% 2/15/39 1,225 1,279
4,5 Credit Suisse Mortgage Capital Certificates 5.729% 2/15/39 400 370
4,5 Credit Suisse Mortgage Capital Certificates 5.729% 2/15/39 175 146
4,5 Credit Suisse Mortgage Capital Certificates 5.912% 6/15/39 1,750 1,647
4 Credit Suisse Mortgage Capital Certificates 5.509% 9/15/39 75 62
4 Credit Suisse Mortgage Capital Certificates 5.311% 12/15/39 800 786
4 Credit Suisse Mortgage Capital Certificates 5.343% 12/15/39 110 89
4 Credit Suisse Mortgage Capital Certificates 5.383% 2/15/40 525 496
4,5 CW Capital Cobalt Ltd. 6.015% 5/15/46 1,400 1,346
4 Discover Card Master Trust 5.650% 12/15/15 1,650 1,833
4 Discover Card Master Trust 5.650% 3/16/20 375 435
4,5 First Union Commercial Mortgage Trust 6.768% 10/15/35 548 554
4 First Union National Bank Commercial Mortgage 6.223% 12/12/33 537 559
4 Ford Credit Auto Owner Trust 2.420% 11/15/14 225 231
4 Ford Credit Auto Owner Trust 2.150% 6/15/15 825 839
4 GE Capital Commercial Mortgage Corp. 5.994% 12/10/35 18 18
4 GE Capital Commercial Mortgage Corp. 4.996% 12/10/37 1,000 1,055
4,5 GE Capital Commercial Mortgage Corp. 5.514% 3/10/44 1,350 1,438
4,5 GE Capital Commercial Mortgage Corp. 5.514% 3/10/44 325 313
4 GMAC Commercial Mortgage Securities Inc. 6.700% 4/15/34 602 617
4 GMAC Commercial Mortgage Securities Inc. 4.079% 5/10/36 150 156
4 GMAC Commercial Mortgage Securities Inc. 4.908% 3/10/38 75 77
4 GMAC Commercial Mortgage Securities Inc. 4.646% 4/10/40 493 502
4 GMAC Commercial Mortgage Securities Inc. 4.864% 12/10/41 300 312
4 GMAC Commercial Mortgage Securities Inc. 4.754% 5/10/43 75 72
4 Greenwich Capital Commercial Funding Corp. 4.948% 1/11/35 500 529
4 Greenwich Capital Commercial Funding Corp. 5.317% 6/10/36 1,230 1,318


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
4 Greenwich Capital Commercial Funding Corp. 5.117% 4/10/37 201 203
4 Greenwich Capital Commercial Funding Corp. 5.224% 4/10/37 1,400 1,436
4,5 Greenwich Capital Commercial Funding Corp. 5.277% 4/10/37 275 258
4,5 Greenwich Capital Commercial Funding Corp. 6.085% 7/10/38 225 189
4 Greenwich Capital Commercial Funding Corp. 5.475% 3/10/39 75 61
4 Greenwich Capital Commercial Funding Corp. 4.799% 8/10/42 1,950 2,006
4,5 Greenwich Capital Commercial Funding Corp. 4.859% 8/10/42 100 93
4 GS Mortgage Securities Corp. II 5.506% 4/10/38 872 884
4,5 GS Mortgage Securities Corp. II 5.553% 4/10/38 700 720
4,5 GS Mortgage Securities Corp. II 5.622% 4/10/38 250 211
4 GS Mortgage Securities Corp. II 5.396% 8/10/38 1,825 1,943
4 Honda Auto Receivables Owner Trust 4.880% 9/18/14 600 623
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 6.260% 3/15/33 175 177
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.050% 12/12/34 350 372
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 4.654% 1/12/37 150 154
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.526% 8/12/37 100 88
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 4.824% 9/12/37 600 605
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 4.879% 1/12/38 1,750 1,838
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 4.404% 1/12/39 110 114
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.540% 6/12/41 560 592
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 4.780% 7/15/42 135 126
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.498% 1/12/43 10 10
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.160% 4/15/43 33 33
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.475% 4/15/43 350 370
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.627% 12/12/44 150 126
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.676% 12/12/44 75 53
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.402% 12/15/44 175 166
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.481% 12/15/44 70 60
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 6.064% 4/15/45 1,050 1,112
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 6.064% 4/15/45 155 118
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 6.064% 4/15/45 80 70
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.593% 5/12/45 375 330
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.440% 5/15/45 225 204
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.440% 6/12/47 500 507
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.968% 6/15/49 700 728
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.794% 2/12/51 1,105 1,123
4 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.855% 2/12/51 650 665
4,5 JP Morgan Chase Commercial Mortgage Securities        
  Corp. 5.882% 2/15/51 1,655 1,666


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
4 LB-UBS Commercial Mortgage Trust 4.786% 10/15/29 1,242 1,283
4 LB-UBS Commercial Mortgage Trust 4.742% 2/15/30 575 599
4 LB-UBS Commercial Mortgage Trust 4.553% 7/15/30 48 49
4 LB-UBS Commercial Mortgage Trust 5.197% 11/15/30 1,250 1,332
4 LB-UBS Commercial Mortgage Trust 5.217% 2/15/31 125 117
4 LB-UBS Commercial Mortgage Trust 4.853% 9/15/31 1,300 1,368
4 LB-UBS Commercial Mortgage Trust 4.960% 12/15/31 250 265
4 LB-UBS Commercial Mortgage Trust 4.166% 5/15/32 825 850
4,5 LB-UBS Commercial Mortgage Trust 5.124% 11/15/32 400 427
4 LB-UBS Commercial Mortgage Trust 4.931% 9/15/35 1,500 1,593
4,5 LB-UBS Commercial Mortgage Trust 5.661% 3/15/39 1,000 1,042
4 LB-UBS Commercial Mortgage Trust 5.413% 9/15/39 100 94
4 LB-UBS Commercial Mortgage Trust 5.424% 2/15/40 179 180
4 LB-UBS Commercial Mortgage Trust 5.430% 2/15/40 600 595
4 LB-UBS Commercial Mortgage Trust 5.455% 2/15/40 250 215
4,5 LB-UBS Commercial Mortgage Trust 5.057% 9/15/40 75 69
4,5 LB-UBS Commercial Mortgage Trust 6.324% 4/15/41 260 221
4 LB-UBS Commercial Mortgage Trust 5.866% 9/15/45 925 921
4 Merrill Lynch Mortgage Trust 5.236% 11/12/35 750 792
4 Merrill Lynch Mortgage Trust 5.107% 7/12/38 40 37
4 Merrill Lynch Mortgage Trust 5.838% 5/12/39 350 370
4,5 Merrill Lynch Mortgage Trust 5.838% 5/12/39 100 90
4 Merrill Lynch Mortgage Trust 5.782% 8/12/43 245 216
4,5 Merrill Lynch Mortgage Trust 5.802% 8/12/43 150 125
4,5 Merrill Lynch Mortgage Trust 5.291% 1/12/44 1,650 1,776
4,5 Merrill Lynch Mortgage Trust 6.020% 6/12/50 1,450 1,472
4,5 Merrill Lynch Mortgage Trust 6.020% 6/12/50 165 146
4 Merrill Lynch Mortgage Trust 5.425% 2/12/51 250 258
4 Merrill Lynch Mortgage Trust 5.690% 2/12/51 650 661
4,5 Merrill Lynch/Countrywide Commercial Mortgage Trust 5.693% 2/12/39 25 19
4 Merrill Lynch/Countrywide Commercial Mortgage Trust 6.103% 6/12/46 1,250 1,370
4 Merrill Lynch/Countrywide Commercial Mortgage Trust 5.456% 7/12/46 160 135
4 Merrill Lynch/Countrywide Commercial Mortgage Trust 5.378% 8/12/48 1,575 1,483
4 Merrill Lynch/Countrywide Commercial Mortgage Trust 5.590% 9/12/49 725 752
4 Merrill Lynch/Countrywide Commercial Mortgage Trust 5.700% 9/12/49 750 742
4 Morgan Stanley Capital I 4.970% 4/14/40 450 464
4,5 Morgan Stanley Capital I 5.110% 6/15/40 950 1,009
4 Morgan Stanley Capital I 5.270% 6/13/41 400 420
4,5 Morgan Stanley Capital I 5.983% 8/12/41 110 102
4 Morgan Stanley Capital I 5.328% 11/12/41 250 257
4 Morgan Stanley Capital I 5.360% 11/12/41 375 320
4,5 Morgan Stanley Capital I 4.840% 12/13/41 65 57
4 Morgan Stanley Capital I 4.970% 12/15/41 675 717
4 Morgan Stanley Capital I 5.168% 1/14/42 425 454
4,5 Morgan Stanley Capital I 5.802% 6/11/42 850 886
4,5 Morgan Stanley Capital I 5.802% 6/11/42 75 68
4 Morgan Stanley Capital I 4.989% 8/13/42 1,350 1,404
4,5 Morgan Stanley Capital I 5.073% 8/13/42 180 160
4 Morgan Stanley Capital I 5.230% 9/15/42 1,200 1,260
4 Morgan Stanley Capital I 5.940% 10/15/42 550 591
4,5 Morgan Stanley Capital I 5.944% 10/15/42 30 26
4,5 Morgan Stanley Capital I 5.944% 10/15/42 200 163
4,5 Morgan Stanley Capital I 5.376% 11/14/42 650 682
4,5 Morgan Stanley Capital I 5.376% 11/14/42 35 33
4 Morgan Stanley Capital I 5.332% 12/15/43 350 355
4,5 Morgan Stanley Capital I 5.557% 3/12/44 500 530
4,5 Morgan Stanley Capital I 5.773% 7/12/44 250 233
4,5 Morgan Stanley Capital I 5.793% 7/12/44 75 64
4 Morgan Stanley Capital I 4.660% 9/13/45 250 257
4,5 Morgan Stanley Capital I 5.692% 4/15/49 550 533
4,5 Morgan Stanley Capital I 5.876% 4/15/49 250 177
4,5 Morgan Stanley Capital I 5.544% 11/12/49 425 366
4 Morgan Stanley Capital I 5.809% 12/12/49 590 596
4,5 Morgan Stanley Capital I 6.316% 12/12/49 225 197


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
4 Morgan Stanley Capital I 5.090% 10/12/52 500 505
4,5 Morgan Stanley Capital I 5.204% 10/12/52 260 239
4 Morgan Stanley Capital I 4.770% 7/15/56 170 142
4 Morgan Stanley Dean Witter Capital I 4.920% 3/12/35 1,375 1,453
4 Morgan Stanley Dean Witter Capital I 6.390% 10/15/35 439 458
4 Morgan Stanley Dean Witter Capital I 4.740% 11/13/36 850 878
6 Nationwide Building Society 5.500% 7/18/12 2,000 2,134
4 Nissan Auto Receivables Owner Trust 5.050% 11/17/14 475 502
6 Northern Rock Asset Management PLC 5.625% 6/22/17 2,500 2,600
4 PG&E Energy Recovery Funding LLC 4.140% 9/25/12 91 92
4 PSE&G Transition Funding LLC 6.890% 12/15/17 2,000 2,425
6 Royal Bank of Canada 3.125% 4/14/15 425 444
4,5 TIAA Seasoned Commercial Mortgage Trust 6.071% 8/15/39 160 145
4 USAA Auto Owner Trust 4.710% 2/18/14 925 965
4,5 Wachovia Bank Commercial Mortgage Trust 5.125% 8/15/35 150 159
4,5 Wachovia Bank Commercial Mortgage Trust 4.964% 11/15/35 550 577
4 Wachovia Bank Commercial Mortgage Trust 4.719% 1/15/41 250 251
4 Wachovia Bank Commercial Mortgage Trust 4.748% 2/15/41 500 520
4 Wachovia Bank Commercial Mortgage Trust 5.001% 7/15/41 201 202
4,5 Wachovia Bank Commercial Mortgage Trust 5.484% 7/15/41 1,250 1,307
4 Wachovia Bank Commercial Mortgage Trust 4.803% 10/15/41 1,150 1,185
4,5 Wachovia Bank Commercial Mortgage Trust 5.083% 3/15/42 400 426
4,5 Wachovia Bank Commercial Mortgage Trust 5.224% 3/15/42 75 66
4 Wachovia Bank Commercial Mortgage Trust 5.118% 7/15/42 350 370
4,5 Wachovia Bank Commercial Mortgage Trust 5.924% 5/15/43 900 954
4,5 Wachovia Bank Commercial Mortgage Trust 5.924% 5/15/43 240 213
4 Wachovia Bank Commercial Mortgage Trust 4.699% 5/15/44 1,050 1,111
4 Wachovia Bank Commercial Mortgage Trust 4.793% 5/15/44 150 127
4,5 Wachovia Bank Commercial Mortgage Trust 5.382% 10/15/44 950 1,028
4,5 Wachovia Bank Commercial Mortgage Trust 5.445% 12/15/44 1,600 1,701
4,5 Wachovia Bank Commercial Mortgage Trust 5.495% 12/15/44 10 9
4,5 Wachovia Bank Commercial Mortgage Trust 6.158% 6/15/45 67 64
4,5 Wachovia Bank Commercial Mortgage Trust 5.765% 7/15/45 950 1,008
4 Wachovia Bank Commercial Mortgage Trust 5.313% 11/15/48 1,500 1,557
4 Wachovia Bank Commercial Mortgage Trust 5.339% 11/15/48 600 513
4,5 Wachovia Bank Commercial Mortgage Trust 5.368% 11/15/48 160 125
4 World Omni Auto Receivables Trust 3.940% 10/15/12 503 508
 
Total Asset-Backed/Commercial Mortgage-Backed Securities (Cost $143,897)     156,021
 
Corporate Bonds (8.2%)        
Finance (2.9%)        
  Banking (1.9%)        
  American Express Bank FSB 5.550% 10/17/12 375 401
  American Express Bank FSB 6.000% 9/13/17 225 249
  American Express Centurion Bank 5.550% 10/17/12 250 269
  American Express Centurion Bank 5.950% 6/12/17 75 82
  American Express Centurion Bank 6.000% 9/13/17 1,750 1,927
  American Express Co. 7.250% 5/20/14 425 484
  American Express Co. 5.500% 9/12/16 350 380
  American Express Co. 6.150% 8/28/17 225 248
  American Express Co. 7.000% 3/19/18 1,000 1,151
4 American Express Co. 6.800% 9/1/66 450 425
  American Express Credit Corp. 7.300% 8/20/13 450 510
  American Express Credit Corp. 5.125% 8/25/14 275 296
6 American Express Travel Related Services Co. Inc. 5.250% 11/21/11 125 130
  Banco Santander Chile 2.875% 11/13/12 250 247
  Bank of America Corp. 4.250% 10/1/10 300 302
  Bank of America Corp. 5.375% 9/11/12 1,025 1,078
  Bank of America Corp. 4.875% 9/15/12 75 78
  Bank of America Corp. 4.875% 1/15/13 750 787
  Bank of America Corp. 7.375% 5/15/14 1,025 1,150
  Bank of America Corp. 5.375% 6/15/14 175 184
  Bank of America Corp. 5.125% 11/15/14 950 992


Vanguard® Balanced Index Fund        
Schedule of Investments        
June 30, 2010        
 
        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
  Bank of America Corp. 4.500% 4/1/15 1,250 1,265
  Bank of America Corp. 5.250% 12/1/15 275 281
  Bank of America Corp. 6.500% 8/1/16 750 812
  Bank of America Corp. 5.750% 8/15/16 275 286
  Bank of America Corp. 5.625% 10/14/16 75 79
  Bank of America Corp. 5.420% 3/15/17 775 774
  Bank of America Corp. 5.650% 5/1/18 1,550 1,589
  Bank of America Corp. 7.625% 6/1/19 400 459
  Bank of America NA 5.300% 3/15/17 325 328
  Bank of America NA 6.100% 6/15/17 350 364
  Bank of America NA 6.000% 10/15/36 600 579
  Bank of Montreal 2.125% 6/28/13 275 278
  Bank of New York Mellon Corp. 4.950% 1/14/11 500 511
  Bank of New York Mellon Corp. 4.950% 11/1/12 425 460
  Bank of New York Mellon Corp. 4.300% 5/15/14 250 269
  Bank of New York Mellon Corp. 4.950% 3/15/15 1,150 1,255
  Bank of New York Mellon Corp. 5.450% 5/15/19 350 393
  Bank of Nova Scotia 2.250% 1/22/13 375 381
  Bank of Nova Scotia 2.375% 12/17/13 375 382
  Bank One Corp. 5.900% 11/15/11 50 53
  Bank One Corp. 5.250% 1/30/13 925 981
  Bank One Corp. 4.900% 4/30/15 475 507
  Barclays Bank PLC 2.500% 1/23/13 425 423
  Barclays Bank PLC 5.000% 9/22/16 200 205
  Barclays Bank PLC 6.750% 5/22/19 1,200 1,336
  Barclays Bank PLC 5.125% 1/8/20 1,300 1,299
  BB&T Corp. 6.500% 8/1/11 375 394
  BB&T Corp. 3.850% 7/27/12 225 235
  BB&T Corp. 5.700% 4/30/14 275 303
  BB&T Corp. 6.850% 4/30/19 275 324
  Bear Stearns Cos. LLC 5.350% 2/1/12 400 423
  Bear Stearns Cos. LLC 5.700% 11/15/14 2,525 2,797
  Bear Stearns Cos. LLC 5.300% 10/30/15 985 1,070
  Bear Stearns Cos. LLC 6.400% 10/2/17 925 1,038
  Bear Stearns Cos. LLC 7.250% 2/1/18 375 436
  BNP Paribas 3.250% 3/11/15 75 74
  BNP Paribas / BNP Paribas US Medium-Term Note        
  Program LLC 2.125% 12/21/12 800 796
  Branch Banking & Trust Co. 5.625% 9/15/16 100 112
  Capital One Bank USA NA 8.800% 7/15/19 1,275 1,585
  Capital One Capital III 7.686% 8/15/36 525 492
  Capital One Capital IV 6.745% 2/17/37 300 251
  Capital One Financial Corp. 5.700% 9/15/11 375 390
  Capital One Financial Corp. 4.800% 2/21/12 50 52
  Capital One Financial Corp. 5.500% 6/1/15 225 241
  Capital One Financial Corp. 6.150% 9/1/16 50 53
  Capital One Financial Corp. 5.250% 2/21/17 50 52
  Capital One Financial Corp. 6.750% 9/15/17 100 114
4,6 Citicorp Lease Pass-Through Trust 1999-1 8.040% 12/15/19 1,700 1,985
  Citigroup Inc. 5.100% 9/29/11 675 695
  Citigroup Inc. 5.300% 10/17/12 1,475 1,532
  Citigroup Inc. 5.500% 4/11/13 75 78
  Citigroup Inc. 6.500% 8/19/13 500 534
  Citigroup Inc. 6.000% 12/13/13 400 419
  Citigroup Inc. 5.125% 5/5/14 100 103
  Citigroup Inc. 6.375% 8/12/14 1,500 1,592
  Citigroup Inc. 5.000% 9/15/14 3,325 3,324
  Citigroup Inc. 5.500% 10/15/14 875 909
  Citigroup Inc. 5.300% 1/7/16 275 278
  Citigroup Inc. 5.500% 2/15/17 100 99
  Citigroup Inc. 6.125% 11/21/17 1,075 1,128
  Citigroup Inc. 6.125% 5/15/18 1,250 1,312
  Citigroup Inc. 6.000% 10/31/33 525 473
  Citigroup Inc. 5.850% 12/11/34 50 47


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Citigroup Inc. 5.875% 5/29/37 225 213
Citigroup Inc. 6.875% 3/5/38 1,375 1,463
Citigroup Inc. 8.125% 7/15/39 1,000 1,199
Comerica Bank 5.200% 8/22/17 300 307
Compass Bank 6.400% 10/1/17 150 151
Compass Bank 5.900% 4/1/26 225 209
6 Corestates Capital I 8.000% 12/15/26 1,200 1,191
Countrywide Financial Corp. 5.800% 6/7/12 50 53
Credit Suisse 5.000% 5/15/13 425 453
Credit Suisse 5.500% 5/1/14 700 764
Credit Suisse 3.500% 3/23/15 1,925 1,955
Credit Suisse 6.000% 2/15/18 1,025 1,068
Credit Suisse 5.300% 8/13/19 475 505
4 Credit Suisse 5.860% 5/15/49 450 397
Credit Suisse AG 5.400% 1/14/20 200 200
Credit Suisse USA Inc. 4.875% 8/15/10 225 226
Credit Suisse USA Inc. 6.125% 11/15/11 250 266
Credit Suisse USA Inc. 6.500% 1/15/12 1,000 1,072
Credit Suisse USA Inc. 5.125% 1/15/14 50 54
Credit Suisse USA Inc. 4.875% 1/15/15 235 252
Credit Suisse USA Inc. 5.125% 8/15/15 315 342
Credit Suisse USA Inc. 5.850% 8/16/16 750 830
Credit Suisse USA Inc. 7.125% 7/15/32 200 251
Deutsche Bank AG 5.375% 10/12/12 1,400 1,502
Deutsche Bank AG 4.875% 5/20/13 875 936
Deutsche Bank AG 6.000% 9/1/17 600 663
Deutsche Bank Financial LLC 5.375% 3/2/15 900 968
Discover Bank 7.000% 4/15/20 250 252
FIA Card Services NA 6.625% 6/15/12 350 376
Fifth Third Bancorp 6.250% 5/1/13 675 732
Fifth Third Bancorp 8.250% 3/1/38 200 225
Fifth Third Bank 4.750% 2/1/15 325 336
First Niagara Financial Group Inc. 6.750% 3/19/20 75 79
First Tennessee Bank NA 5.050% 1/15/15 200 192
FleetBoston Financial Corp. 6.875% 1/15/28 600 618
Golden West Financial Corp. 4.750% 10/1/12 375 391
Goldman Sachs Capital I 6.345% 2/15/34 1,125 1,011
4 Goldman Sachs Capital II 5.793% 12/29/49 550 414
Goldman Sachs Group Inc. 6.600% 1/15/12 1,300 1,376
Goldman Sachs Group Inc. 5.300% 2/14/12 50 52
Goldman Sachs Group Inc. 3.625% 8/1/12 300 307
Goldman Sachs Group Inc. 5.700% 9/1/12 25 26
Goldman Sachs Group Inc. 5.450% 11/1/12 900 952
Goldman Sachs Group Inc. 5.250% 4/1/13 875 923
Goldman Sachs Group Inc. 4.750% 7/15/13 525 549
Goldman Sachs Group Inc. 5.250% 10/15/13 125 132
Goldman Sachs Group Inc. 5.150% 1/15/14 700 735
Goldman Sachs Group Inc. 6.000% 5/1/14 1,000 1,078
Goldman Sachs Group Inc. 5.000% 10/1/14 2,475 2,591
Goldman Sachs Group Inc. 5.125% 1/15/15 400 420
Goldman Sachs Group Inc. 5.350% 1/15/16 875 911
Goldman Sachs Group Inc. 5.750% 10/1/16 500 530
Goldman Sachs Group Inc. 5.625% 1/15/17 625 633
Goldman Sachs Group Inc. 6.250% 9/1/17 400 426
Goldman Sachs Group Inc. 5.950% 1/18/18 1,175 1,220
Goldman Sachs Group Inc. 6.150% 4/1/18 100 105
Goldman Sachs Group Inc. 7.500% 2/15/19 125 140
Goldman Sachs Group Inc. 5.375% 3/15/20 200 198
Goldman Sachs Group Inc. 5.950% 1/15/27 1,375 1,315
Goldman Sachs Group Inc. 6.450% 5/1/36 450 430
Goldman Sachs Group Inc. 6.750% 10/1/37 1,475 1,450
6 HBOS PLC 6.750% 5/21/18 425 402
HSBC Bank USA NA 4.625% 4/1/14 250 265
HSBC Bank USA NA 5.875% 11/1/34 300 297


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
HSBC Bank USA NA 5.625% 8/15/35 625 600
HSBC Holdings PLC 7.625% 5/17/32 400 447
HSBC Holdings PLC 7.350% 11/27/32 400 442
HSBC Holdings PLC 6.500% 5/2/36 600 648
HSBC Holdings PLC 6.500% 9/15/37 575 600
HSBC Holdings PLC 6.800% 6/1/38 75 81
6 ICICI Bank Ltd. 6.625% 10/3/12 25 26
JP Morgan Chase Capital XV 5.875% 3/15/35 1,400 1,265
JP Morgan Chase Capital XX 6.550% 9/29/36 600 582
JP Morgan Chase Capital XXII 6.450% 2/2/37 650 615
JP Morgan Chase Capital XXV 6.800% 10/1/37 725 719
JPMorgan Chase & Co. 4.500% 1/15/12 450 469
JPMorgan Chase & Co. 6.625% 3/15/12 425 455
JPMorgan Chase & Co. 5.375% 10/1/12 650 698
JPMorgan Chase & Co. 5.750% 1/2/13 350 377
JPMorgan Chase & Co. 4.750% 5/1/13 225 240
JPMorgan Chase & Co. 5.375% 1/15/14 100 109
JPMorgan Chase & Co. 5.125% 9/15/14 2,375 2,533
JPMorgan Chase & Co. 3.700% 1/20/15 225 230
JPMorgan Chase & Co. 3.400% 6/24/15 775 776
JPMorgan Chase & Co. 5.150% 10/1/15 675 720
JPMorgan Chase & Co. 6.000% 1/15/18 200 221
JPMorgan Chase & Co. 6.300% 4/23/19 825 932
JPMorgan Chase & Co. 6.400% 5/15/38 675 779
JPMorgan Chase Bank NA 5.875% 6/13/16 725 791
KeyBank NA 5.800% 7/1/14 150 160
KeyBank NA 4.950% 9/15/15 725 741
KeyBank NA 5.450% 3/3/16 300 309
KeyCorp 6.500% 5/14/13 50 54
M&I Marshall & Ilsley Bank 4.850% 6/16/15 375 351
Manufacturers & Traders Trust Co. 6.625% 12/4/17 600 663
MBNA Corp. 6.125% 3/1/13 500 535
MBNA Corp. 5.000% 6/15/15 400 412
Mellon Funding Corp. 5.000% 12/1/14 250 276
Merrill Lynch & Co. Inc. 5.770% 7/25/11 100 104
Merrill Lynch & Co. Inc. 6.050% 8/15/12 175 186
Merrill Lynch & Co. Inc. 5.450% 2/5/13 475 495
Merrill Lynch & Co. Inc. 6.150% 4/25/13 950 1,015
Merrill Lynch & Co. Inc. 5.000% 2/3/14 1,075 1,112
Merrill Lynch & Co. Inc. 5.450% 7/15/14 125 132
Merrill Lynch & Co. Inc. 5.000% 1/15/15 1,250 1,288
Merrill Lynch & Co. Inc. 6.050% 5/16/16 600 619
Merrill Lynch & Co. Inc. 5.700% 5/2/17 1,375 1,378
Merrill Lynch & Co. Inc. 6.400% 8/28/17 1,000 1,048
Merrill Lynch & Co. Inc. 6.875% 4/25/18 1,250 1,337
Merrill Lynch & Co. Inc. 6.220% 9/15/26 750 722
Merrill Lynch & Co. Inc. 6.110% 1/29/37 225 206
Merrill Lynch & Co. Inc. 7.750% 5/14/38 1,275 1,372
Morgan Stanley 5.625% 1/9/12 650 678
Morgan Stanley 5.750% 8/31/12 100 105
Morgan Stanley 4.750% 4/1/14 1,200 1,203
Morgan Stanley 6.000% 5/13/14 1,050 1,107
Morgan Stanley 4.200% 11/20/14 1,100 1,087
Morgan Stanley 4.100% 1/26/15 975 951
Morgan Stanley 6.000% 4/28/15 1,025 1,073
Morgan Stanley 5.375% 10/15/15 650 660
Morgan Stanley 5.750% 10/18/16 425 434
Morgan Stanley 5.450% 1/9/17 975 965
Morgan Stanley 5.550% 4/27/17 250 248
Morgan Stanley 5.950% 12/28/17 700 709
Morgan Stanley 6.625% 4/1/18 1,325 1,383
Morgan Stanley 7.300% 5/13/19 1,125 1,210
Morgan Stanley 5.625% 9/23/19 1,725 1,668
Morgan Stanley 6.250% 8/9/26 300 302


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
  National City Corp. 4.900% 1/15/15 500 538
4 National City Preferred Capital Trust I 12.000% 12/31/49 500 545
  North American Development Bank 4.375% 2/11/20 125 131
  Northern Trust Co. 6.500% 8/15/18 75 88
  Northern Trust Corp. 5.500% 8/15/13 100 111
  Northern Trust Corp. 4.625% 5/1/14 125 136
  PNC Bank NA 4.875% 9/21/17 525 533
  PNC Bank NA 6.000% 12/7/17 350 377
  PNC Funding Corp. 3.625% 2/8/15 500 513
  PNC Funding Corp. 5.250% 11/15/15 250 268
  PNC Funding Corp. 6.700% 6/10/19 50 57
  PNC Funding Corp. 5.125% 2/8/20 325 339
  Regions Financial Corp. 4.875% 4/26/13 400 397
  Regions Financial Corp. 5.750% 6/15/15 375 370
  Royal Bank of Canada 2.100% 7/29/13 750 762
  Royal Bank of Scotland Group PLC 6.400% 10/21/19 1,250 1,266
6 Royal Bank of Scotland PLC 4.875% 8/25/14 700 698
  Royal Bank of Scotland PLC 4.875% 3/16/15 1,075 1,070
  SouthTrust Corp. 5.800% 6/15/14 300 323
  Sovereign Bank 5.125% 3/15/13 250 253
4,6 Standard Chartered PLC 6.409% 12/31/49 300 252
  State Street Bank and Trust Co. 5.300% 1/15/16 300 323
  Sumitomo Mitsui Banking Corp. 8.000% 6/15/12 600 667
  SunTrust Bank 5.200% 1/17/17 750 746
  SunTrust Bank 5.450% 12/1/17 100 100
  SunTrust Bank 7.250% 3/15/18 75 81
  SunTrust Capital VIII 6.100% 12/15/36 115 88
  UBS AG 7.000% 10/15/15 750 830
  UBS AG 5.875% 12/20/17 1,225 1,298
  UBS AG 5.750% 4/25/18 50 52
  UFJ Finance Aruba AEC 6.750% 7/15/13 500 560
  Union Bank NA 5.950% 5/11/16 450 479
  UnionBanCal Corp. 5.250% 12/16/13 150 162
  US Bancorp 4.200% 5/15/14 600 644
  US Bancorp 3.150% 3/4/15 100 102
  US Bank NA 6.375% 8/1/11 250 264
  US Bank NA 6.300% 2/4/14 250 283
  US Bank NA 4.950% 10/30/14 175 191
  USB Capital XIII Trust 6.625% 12/15/39 125 132
  Wachovia Bank NA 4.800% 11/1/14 500 524
  Wachovia Bank NA 4.875% 2/1/15 1,030 1,085
  Wachovia Bank NA 5.850% 2/1/37 425 421
  Wachovia Bank NA 6.600% 1/15/38 350 385
  Wachovia Corp. 5.300% 10/15/11 175 183
  Wachovia Corp. 5.500% 5/1/13 600 647
  Wachovia Corp. 4.875% 2/15/14 345 361
  Wachovia Corp. 5.250% 8/1/14 100 106
  Wachovia Corp. 5.625% 10/15/16 500 536
  Wachovia Corp. 5.750% 6/15/17 300 329
  Wachovia Corp. 5.750% 2/1/18 100 110
  Wachovia Corp. 7.500% 4/15/35 150 174
  Wachovia Corp. 5.500% 8/1/35 200 185
  Wachovia Corp. 6.550% 10/15/35 100 105
  Wells Fargo & Co. 4.875% 1/12/11 625 638
  Wells Fargo & Co. 5.300% 8/26/11 575 601
  Wells Fargo & Co. 5.250% 10/23/12 1,100 1,181
  Wells Fargo & Co. 4.375% 1/31/13 275 291
  Wells Fargo & Co. 4.950% 10/16/13 375 398
  Wells Fargo & Co. 3.750% 10/1/14 700 721
  Wells Fargo & Co. 3.625% 4/15/15 400 407
  Wells Fargo & Co. 5.625% 12/11/17 550 602
  Wells Fargo Bank NA 4.750% 2/9/15 2,175 2,285
  Wells Fargo Bank NA 5.750% 5/16/16 250 272
  Wells Fargo Bank NA 5.950% 8/26/36 500 509


Vanguard® Balanced Index Fund Schedule of Investments June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Wells Fargo Capital X 5.950% 12/15/36 425 376
4 Wells Fargo Capital XIII 7.700% 5/15/37 450 447
4 Wells Fargo Capital XV 9.750% 12/29/49 100 107
Westpac Banking Corp. 2.250% 11/19/12 475 480
Westpac Banking Corp. 4.200% 2/27/15 1,250 1,307
Westpac Banking Corp. 4.875% 11/19/19 475 487
Brokerage (0.1%)        
Ameriprise Financial Inc. 5.650% 11/15/15 525 589
BlackRock Inc. 2.250% 12/10/12 200 205
BlackRock Inc. 3.500% 12/10/14 175 182
BlackRock Inc. 6.250% 9/15/17 300 346
Charles Schwab Corp. 4.950% 6/1/14 625 676
Franklin Resources Inc. 2.000% 5/20/13 325 327
Franklin Resources Inc. 3.125% 5/20/15 200 205
Franklin Resources Inc. 4.625% 5/20/20 100 105
Jefferies Group Inc. 8.500% 7/15/19 550 620
Jefferies Group Inc. 6.875% 4/15/21 200 201
Jefferies Group Inc. 6.450% 6/8/27 475 445
Lazard Group LLC 6.850% 6/15/17 450 455
Nomura Holdings Inc. 5.000% 3/4/15 375 397
Nomura Holdings Inc. 6.700% 3/4/20 100 106
TD Ameritrade Holding Corp. 2.950% 12/1/12 100 102
TD Ameritrade Holding Corp. 4.150% 12/1/14 150 156
TD Ameritrade Holding Corp. 5.600% 12/1/19 100 105
Finance Companies (0.3%)        
Block Financial LLC 7.875% 1/15/13 125 139
GATX Corp. 4.750% 10/1/12 150 158
General Electric Capital Corp. 5.000% 11/15/11 350 367
General Electric Capital Corp. 4.375% 11/21/11 75 78
General Electric Capital Corp. 5.875% 2/15/12 150 159
General Electric Capital Corp. 4.375% 3/3/12 1,275 1,327
General Electric Capital Corp. 5.000% 4/10/12 250 263
General Electric Capital Corp. 6.000% 6/15/12 1,000 1,076
General Electric Capital Corp. 3.500% 8/13/12 400 413
General Electric Capital Corp. 5.250% 10/19/12 3,525 3,765
General Electric Capital Corp. 2.800% 1/8/13 525 533
General Electric Capital Corp. 5.450% 1/15/13 325 351
General Electric Capital Corp. 4.800% 5/1/13 225 240
General Electric Capital Corp. 5.900% 5/13/14 425 470
General Electric Capital Corp. 5.500% 6/4/14 1,450 1,583
General Electric Capital Corp. 5.650% 6/9/14 150 165
General Electric Capital Corp. 3.750% 11/14/14 1,725 1,757
General Electric Capital Corp. 5.625% 9/15/17 325 347
General Electric Capital Corp. 5.625% 5/1/18 1,000 1,064
General Electric Capital Corp. 6.000% 8/7/19 625 678
General Electric Capital Corp. 5.500% 1/8/20 175 185
General Electric Capital Corp. 6.750% 3/15/32 3,075 3,275
General Electric Capital Corp. 6.150% 8/7/37 400 408
General Electric Capital Corp. 5.875% 1/14/38 975 952
General Electric Capital Corp. 6.875% 1/10/39 1,275 1,399
4 General Electric Capital Corp. 6.375% 11/15/67 800 744
4 HSBC Finance Capital Trust IX 5.911% 11/30/35 200 170
HSBC Finance Corp. 6.375% 10/15/11 375 394
HSBC Finance Corp. 5.900% 6/19/12 275 292
HSBC Finance Corp. 4.750% 7/15/13 300 313
HSBC Finance Corp. 5.250% 1/15/14 650 693
HSBC Finance Corp. 5.000% 6/30/15 1,275 1,327
SLM Corp. 5.400% 10/25/11 325 326
SLM Corp. 5.375% 1/15/13 350 339
SLM Corp. 5.000% 10/1/13 300 283
SLM Corp. 8.450% 6/15/18 800 743
SLM Corp. 8.000% 3/25/20 525 464
SLM Corp. 5.625% 8/1/33 700 499


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Insurance (0.5%)        
ACE Capital Trust II 9.700% 4/1/30 75 89
ACE INA Holdings Inc. 5.600% 5/15/15 125 138
ACE INA Holdings Inc. 5.900% 6/15/19 550 607
AEGON Funding Co. LLC 5.750% 12/15/20 50 52
Aegon NV 4.750% 6/1/13 75 78
Aetna Inc. 6.500% 9/15/18 175 203
Aetna Inc. 6.625% 6/15/36 100 112
Aetna Inc. 6.750% 12/15/37 250 284
Aflac Inc. 6.900% 12/17/39 75 77
Allied World Assurance Co. Holdings Ltd. 7.500% 8/1/16 875 960
Allstate Corp. 6.125% 2/15/12 100 107
Allstate Corp. 5.000% 8/15/14 350 383
Allstate Corp. 6.125% 12/15/32 250 265
Allstate Corp. 5.550% 5/9/35 100 99
4 Allstate Corp. 6.125% 5/15/37 200 176
4 Allstate Corp. 6.500% 5/15/57 200 180
American Financial Group Inc. 9.875% 6/15/19 100 121
American International Group Inc. 5.375% 10/18/11 400 402
American International Group Inc. 4.950% 3/20/12 700 704
American International Group Inc. 4.250% 5/15/13 1,775 1,724
American International Group Inc. 5.600% 10/18/16 125 114
American International Group Inc. 6.250% 5/1/36 700 554
AON Corp. 8.205% 1/1/27 100 105
Arch Capital Group Ltd. 7.350% 5/1/34 375 384
Assurant Inc. 5.625% 2/15/14 200 212
Assurant Inc. 6.750% 2/15/34 400 398
AXA SA 8.600% 12/15/30 425 478
Axis Capital Holdings Ltd. 5.750% 12/1/14 275 288
Axis Specialty Finance LLC 5.875% 6/1/20 575 551
Berkshire Hathaway Finance Corp. 4.000% 4/15/12 350 368
Berkshire Hathaway Finance Corp. 5.000% 8/15/13 125 137
Berkshire Hathaway Finance Corp. 5.400% 5/15/18 500 557
Berkshire Hathaway Finance Corp. 5.750% 1/15/40 475 503
Berkshire Hathaway Inc. 1.400% 2/10/12 500 502
Berkshire Hathaway Inc. 2.125% 2/11/13 500 511
Berkshire Hathaway Inc. 3.200% 2/11/15 475 488
Chubb Corp. 5.750% 5/15/18 175 195
Chubb Corp. 6.000% 5/11/37 375 410
Chubb Corp. 6.500% 5/15/38 125 142
4 Chubb Corp. 6.375% 3/29/67 250 242
CIGNA Corp. 6.150% 11/15/36 500 520
Cincinnati Financial Corp. 6.125% 11/1/34 325 312
CNA Financial Corp. 6.500% 8/15/16 475 496
CNA Financial Corp. 7.350% 11/15/19 325 348
Coventry Health Care Inc. 6.300% 8/15/14 575 605
Endurance Specialty Holdings Ltd. 7.000% 7/15/34 150 141
Genworth Financial Inc. 4.950% 10/1/15 125 123
Genworth Financial Inc. 8.625% 12/15/16 400 426
Genworth Financial Inc. 6.500% 6/15/34 425 378
Hartford Financial Services Group Inc. 5.500% 10/15/16 475 497
Hartford Financial Services Group Inc. 5.375% 3/15/17 150 149
Hartford Financial Services Group Inc. 6.000% 1/15/19 100 101
Hartford Financial Services Group Inc. 5.950% 10/15/36 25 22
HCC Insurance Holdings Inc. 6.300% 11/15/19 225 236
Humana Inc. 6.450% 6/1/16 275 299
Humana Inc. 8.150% 6/15/38 325 354
Lincoln National Corp. 8.750% 7/1/19 175 215
Lincoln National Corp. 6.150% 4/7/36 350 335
Lincoln National Corp. 7.000% 6/15/40 150 159
Loews Corp. 6.000% 2/1/35 200 195
Markel Corp. 7.125% 9/30/19 125 138
Marsh & McLennan Cos. Inc. 5.875% 8/1/33 100 93


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
MetLife Inc. 5.000% 6/15/15 1,000 1,070
MetLife Inc. 6.500% 12/15/32 75 79
MetLife Inc. 6.375% 6/15/34 375 396
MetLife Inc. 5.700% 6/15/35 125 123
MetLife Inc. 6.400% 12/15/36 400 355
6 Metropolitan Life Global Funding I 2.875% 9/17/12 75 77
6 Metropolitan Life Global Funding I 5.125% 6/10/14 450 488
OneBeacon US Holdings Inc. 5.875% 5/15/13 125 131
PartnerRe Finance B LLC 5.500% 6/1/20 200 193
Principal Financial Group Inc. 7.875% 5/15/14 225 260
Principal Financial Group Inc. 6.050% 10/15/36 250 236
Principal Life Income Funding Trusts 5.300% 12/14/12 100 108
Principal Life Income Funding Trusts 5.100% 4/15/14 475 504
Progressive Corp. 6.625% 3/1/29 150 167
4 Progressive Corp. 6.700% 6/15/37 425 408
Protective Life Corp. 7.375% 10/15/19 100 109
Protective Life Corp. 8.450% 10/15/39 175 185
Prudential Financial Inc. 3.625% 9/17/12 500 515
Prudential Financial Inc. 5.150% 1/15/13 75 79
Prudential Financial Inc. 4.750% 4/1/14 425 447
Prudential Financial Inc. 5.100% 9/20/14 550 583
Prudential Financial Inc. 6.200% 1/15/15 100 110
Prudential Financial Inc. 5.500% 3/15/16 50 53
Prudential Financial Inc. 6.100% 6/15/17 100 108
Prudential Financial Inc. 7.375% 6/15/19 250 287
Prudential Financial Inc. 5.375% 6/21/20 225 227
Prudential Financial Inc. 5.750% 7/15/33 200 191
Prudential Financial Inc. 5.400% 6/13/35 150 135
Prudential Financial Inc. 5.900% 3/17/36 325 311
Prudential Financial Inc. 5.700% 12/14/36 550 508
Prudential Financial Inc. 6.625% 6/21/40 125 129
Swiss Re Solutions Holding Corp. 6.450% 3/1/19 500 538
Swiss Re Solutions Holding Corp. 7.000% 2/15/26 175 185
Swiss Re Solutions Holding Corp. 7.750% 6/15/30 300 336
Torchmark Corp. 6.375% 6/15/16 425 445
Transatlantic Holdings Inc. 8.000% 11/30/39 625 632
Travelers Cos. Inc. 5.500% 12/1/15 600 671
Travelers Cos. Inc. 6.250% 6/20/16 100 116
Travelers Cos. Inc. 5.800% 5/15/18 775 852
4 Travelers Cos. Inc. 6.250% 3/15/37 250 235
UnitedHealth Group Inc. 5.000% 8/15/14 650 704
UnitedHealth Group Inc. 4.875% 3/15/15 250 269
UnitedHealth Group Inc. 6.000% 6/15/17 875 981
UnitedHealth Group Inc. 6.000% 2/15/18 425 476
UnitedHealth Group Inc. 6.500% 6/15/37 200 216
UnitedHealth Group Inc. 6.625% 11/15/37 325 355
UnitedHealth Group Inc. 6.875% 2/15/38 250 281
Unum Group 7.125% 9/30/16 175 190
Validus Holdings Ltd. 8.875% 1/26/40 150 157
WellPoint Health Networks Inc. 6.375% 1/15/12 200 213
WellPoint Inc. 6.800% 8/1/12 550 606
WellPoint Inc. 6.000% 2/15/14 525 586
WellPoint Inc. 5.250% 1/15/16 125 137
WellPoint Inc. 5.850% 1/15/36 150 150
Willis North America Inc. 6.200% 3/28/17 300 311
Willis North America Inc. 7.000% 9/29/19 700 747
XL Capital Ltd. 6.375% 11/15/24 100 104
XL Capital Ltd. 6.250% 5/15/27 500 473
Other Finance (0.0%)        
CME Group Inc. 5.400% 8/1/13 550 607
CME Group Inc. 5.750% 2/15/14 200 222
NASDAQ OMX Group Inc. 4.000% 1/15/15 150 152
NASDAQ OMX Group Inc. 5.550% 1/15/20 175 179


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
ORIX Corp. 5.480% 11/22/11 350 362
XTRA Finance Corp. 5.150% 4/1/17 575 623
Real Estate Investment Trusts (0.1%)        
AMB Property LP 6.625% 12/1/19 100 108
AvalonBay Communities Inc. 5.500% 1/15/12 119 125
AvalonBay Communities Inc. 5.750% 9/15/16 100 109
Boston Properties LP 6.250% 1/15/13 500 545
Boston Properties LP 5.625% 11/15/20 325 339
Brandywine Operating Partnership LP 5.400% 11/1/14 225 229
Brandywine Operating Partnership LP 7.500% 5/15/15 125 138
Camden Property Trust 5.700% 5/15/17 25 26
6 Digital Realty Trust LP 4.500% 7/15/15 75 75
Duke Realty LP 6.250% 5/15/13 350 374
Duke Realty LP 5.950% 2/15/17 200 207
Duke Realty LP 8.250% 8/15/19 125 146
Duke Realty LP 6.750% 3/15/20 250 269
ERP Operating LP 6.625% 3/15/12 400 429
ERP Operating LP 5.250% 9/15/14 350 377
ERP Operating LP 5.375% 8/1/16 275 296
HCP Inc. 6.450% 6/25/12 525 560
HCP Inc. 6.300% 9/15/16 300 312
HCP Inc. 5.625% 5/1/17 25 25
HCP Inc. 6.700% 1/30/18 200 212
Health Care REIT Inc. 6.200% 6/1/16 325 350
Health Care REIT Inc. 6.125% 4/15/20 100 103
Healthcare Realty Trust Inc. 6.500% 1/17/17 225 237
Hospitality Properties Trust 5.125% 2/15/15 500 500
HRPT Properties Trust 6.250% 8/15/16 700 713
Kimco Realty Corp. 5.783% 3/15/16 125 133
Kimco Realty Corp. 6.875% 10/1/19 50 56
Liberty Property LP 5.125% 3/2/15 375 388
Liberty Property LP 5.500% 12/15/16 100 103
Mack-Cali Realty LP 7.750% 8/15/19 100 116
National Retail Properties Inc. 6.875% 10/15/17 25 27
Nationwide Health Properties Inc. 6.250% 2/1/13 375 403
ProLogis 5.625% 11/15/15 350 334
ProLogis 5.750% 4/1/16 400 379
ProLogis 7.375% 10/30/19 50 49
ProLogis 6.875% 3/15/20 300 282
Realty Income Corp. 6.750% 8/15/19 525 580
Regency Centers LP 6.750% 1/15/12 150 157
Regency Centers LP 5.250% 8/1/15 75 78
Simon Property Group LP 4.875% 8/15/10 125 126
Simon Property Group LP 5.300% 5/30/13 350 377
Simon Property Group LP 6.750% 5/15/14 425 474
Simon Property Group LP 5.750% 12/1/15 325 355
Simon Property Group LP 5.250% 12/1/16 200 214
Simon Property Group LP 5.875% 3/1/17 650 710
Simon Property Group LP 6.125% 5/30/18 325 357
Simon Property Group LP 5.650% 2/1/20 125 132
Simon Property Group LP 6.750% 2/1/40 50 55
Tanger Properties LP 6.150% 11/15/15 400 436
        255,991
Industrial (4.4%)        
Basic Industry (0.4%)        
Airgas Inc. 4.500% 9/15/14 100 105
Alcoa Inc. 5.720% 2/23/19 405 386
Alcoa Inc. 5.900% 2/1/27 275 240
Alcoa Inc. 6.750% 1/15/28 500 471
Allegheny Technologies Inc. 9.375% 6/1/19 450 526
AngloGold Ashanti Holdings PLC 5.375% 4/15/20 75 75
AngloGold Ashanti Holdings PLC 6.500% 4/15/40 100 103
ArcelorMittal 5.375% 6/1/13 925 973


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
ArcelorMittal 9.000% 2/15/15 50 59
ArcelorMittal 6.125% 6/1/18 425 444
ArcelorMittal 9.850% 6/1/19 25 31
ArcelorMittal 7.000% 10/15/39 1,300 1,367
Barrick Gold Finance Co. 4.875% 11/15/14 825 897
Barrick North America Finance LLC 6.800% 9/15/18 25 30
Barrick North America Finance LLC 7.500% 9/15/38 25 31
BHP Billiton Finance USA Ltd. 8.500% 12/1/12 500 580
BHP Billiton Finance USA Ltd. 5.500% 4/1/14 275 307
BHP Billiton Finance USA Ltd. 5.400% 3/29/17 350 393
BHP Billiton Finance USA Ltd. 6.500% 4/1/19 550 661
Celulosa Arauco y Constitucion SA 5.625% 4/20/15 775 829
Cliffs Natural Resources Inc. 5.900% 3/15/20 50 53
Commercial Metals Co. 6.500% 7/15/17 175 177
Cytec Industries Inc. 8.950% 7/1/17 75 91
Dow Chemical Co. 4.850% 8/15/12 425 447
Dow Chemical Co. 6.000% 10/1/12 50 54
Dow Chemical Co. 7.600% 5/15/14 650 748
Dow Chemical Co. 5.900% 2/15/15 750 818
Dow Chemical Co. 5.700% 5/15/18 100 105
Dow Chemical Co. 8.550% 5/15/19 950 1,163
Dow Chemical Co. 7.375% 11/1/29 100 111
Dow Chemical Co. 9.400% 5/15/39 100 138
Eastman Chemical Co. 7.250% 1/15/24 550 662
EI du Pont de Nemours & Co. 4.750% 11/15/12 125 135
EI du Pont de Nemours & Co. 5.875% 1/15/14 1,025 1,164
EI du Pont de Nemours & Co. 6.000% 7/15/18 275 321
EI du Pont de Nemours & Co. 4.625% 1/15/20 300 321
EI du Pont de Nemours & Co. 6.500% 1/15/28 500 588
Freeport-McMoRan Copper & Gold Inc. 8.250% 4/1/15 700 756
Freeport-McMoRan Copper & Gold Inc. 8.375% 4/1/17 875 962
International Paper Co. 5.300% 4/1/15 525 560
International Paper Co. 9.375% 5/15/19 1,100 1,408
International Paper Co. 7.300% 11/15/39 600 663
Lubrizol Corp. 5.500% 10/1/14 525 565
Lubrizol Corp. 6.500% 10/1/34 800 815
Monsanto Co. 7.375% 8/15/12 350 392
Newmont Mining Corp. 5.875% 4/1/35 325 337
Newmont Mining Corp. 6.250% 10/1/39 200 219
Nucor Corp. 5.750% 12/1/17 100 114
Nucor Corp. 6.400% 12/1/37 250 288
Placer Dome Inc. 6.450% 10/15/35 375 427
Plum Creek Timberlands LP 5.875% 11/15/15 400 439
Potash Corp. of Saskatchewan Inc. 3.750% 9/30/15 300 313
Potash Corp. of Saskatchewan Inc. 4.875% 3/30/20 625 664
PPG Industries Inc. 6.650% 3/15/18 600 707
Praxair Inc. 1.750% 11/15/12 100 101
Praxair Inc. 4.375% 3/31/14 450 487
Praxair Inc. 5.250% 11/15/14 150 169
Praxair Inc. 5.200% 3/15/17 25 28
Praxair Inc. 4.500% 8/15/19 175 186
Rio Tinto Alcan Inc. 4.875% 9/15/12 325 345
Rio Tinto Alcan Inc. 4.500% 5/15/13 125 132
Rio Tinto Alcan Inc. 5.000% 6/1/15 250 271
Rio Tinto Alcan Inc. 6.125% 12/15/33 325 349
Rio Tinto Alcan Inc. 5.750% 6/1/35 250 257
Rio Tinto Finance USA Ltd. 5.875% 7/15/13 400 437
Rio Tinto Finance USA Ltd. 8.950% 5/1/14 750 910
Rio Tinto Finance USA Ltd. 6.500% 7/15/18 400 455
Rio Tinto Finance USA Ltd. 9.000% 5/1/19 575 752
Rio Tinto Finance USA Ltd. 7.125% 7/15/28 225 266
Sherwin-Williams Co. 3.125% 12/15/14 175 182
Southern Copper Corp. 5.375% 4/16/20 200 201
Southern Copper Corp. 7.500% 7/27/35 250 273


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Southern Copper Corp. 6.750% 4/16/40 250 250
Teck Resources Ltd. 9.750% 5/15/14 500 591
Teck Resources Ltd. 10.250% 5/15/16 500 589
Teck Resources Ltd. 10.750% 5/15/19 500 610
Vale Inco Ltd. 5.700% 10/15/15 450 490
Vale Inco Ltd. 7.200% 9/15/32 100 110
Vale Overseas Ltd. 6.250% 1/11/16 100 110
Vale Overseas Ltd. 6.250% 1/23/17 350 380
Vale Overseas Ltd. 8.250% 1/17/34 375 440
Vale Overseas Ltd. 6.875% 11/21/36 375 389
Vale Overseas Ltd. 6.875% 11/10/39 375 393
Valspar Corp. 7.250% 6/15/19 50 59
WMC Finance USA Ltd. 5.125% 5/15/13 400 437
Xstrata Canada Corp. 7.350% 6/5/12 375 406
Xstrata Canada Corp. 7.250% 7/15/12 250 273
Xstrata Canada Corp. 5.500% 6/15/17 250 264
Capital Goods (0.4%)        
3M Co. 6.375% 2/15/28 450 537
6 Acuity Brands Lighting Inc. 6.000% 12/15/19 100 108
Allied Waste North America Inc. 7.125% 5/15/16 1,050 1,126
Bemis Co. Inc. 4.875% 4/1/12 700 727
Black & Decker Corp. 5.750% 11/15/16 75 85
Boeing Capital Corp. 6.500% 2/15/12 200 217
Boeing Capital Corp. 5.800% 1/15/13 925 1,021
Boeing Co. 1.875% 11/20/12 50 51
Boeing Co. 3.500% 2/15/15 450 476
Boeing Co. 6.000% 3/15/19 150 177
Boeing Co. 4.875% 2/15/20 150 166
Boeing Co. 5.875% 2/15/40 150 169
Caterpillar Financial Services Corp. 2.000% 4/5/13 175 177
Caterpillar Financial Services Corp. 6.125% 2/17/14 325 369
Caterpillar Financial Services Corp. 4.750% 2/17/15 175 193
Caterpillar Financial Services Corp. 4.625% 6/1/15 1,600 1,698
Caterpillar Financial Services Corp. 7.150% 2/15/19 925 1,140
Caterpillar Inc. 7.375% 3/1/97 400 498
Cooper US Inc. 5.250% 11/15/12 425 458
CRH America Inc. 5.625% 9/30/11 400 418
CRH America Inc. 6.950% 3/15/12 150 162
CRH America Inc. 5.300% 10/15/13 100 107
CRH America Inc. 6.000% 9/30/16 750 828
Deere & Co. 6.950% 4/25/14 825 973
Deere & Co. 4.375% 10/16/19 625 667
Deere & Co. 5.375% 10/16/29 850 928
Deere & Co. 7.125% 3/3/31 300 384
Eaton Corp. 5.600% 5/15/18 125 142
Embraer Overseas Ltd. 6.375% 1/24/17 100 103
Embraer Overseas Ltd. 6.375% 1/15/20 175 179
Emerson Electric Co. 4.625% 10/15/12 1,075 1,155
Emerson Electric Co. 4.875% 10/15/19 125 139
Emerson Electric Co. 4.250% 11/15/20 25 26
Emerson Electric Co. 5.250% 11/15/39 25 27
General Dynamics Corp. 4.250% 5/15/13 650 701
General Electric Co. 5.000% 2/1/13 2,000 2,145
General Electric Co. 5.250% 12/6/17 1,850 2,017
Goodrich Corp. 6.125% 3/1/19 525 608
Goodrich Corp. 4.875% 3/1/20 625 669
Harsco Corp. 5.750% 5/15/18 350 391
Honeywell International Inc. 6.125% 11/1/11 200 214
Honeywell International Inc. 4.250% 3/1/13 175 188
Honeywell International Inc. 5.300% 3/15/17 275 311
Honeywell International Inc. 5.300% 3/1/18 150 171
Illinois Tool Works Inc. 5.150% 4/1/14 325 363
Illinois Tool Works Inc. 6.250% 4/1/19 450 535


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
  Ingersoll-Rand Global Holding Co. Ltd. 6.000% 8/15/13 225 250
  Ingersoll-Rand Global Holding Co. Ltd. 9.500% 4/15/14 650 802
  Ingersoll-Rand Global Holding Co. Ltd. 6.875% 8/15/18 225 265
  John Deere Capital Corp. 5.250% 10/1/12 375 407
  John Deere Capital Corp. 4.950% 12/17/12 50 54
  John Deere Capital Corp. 4.900% 9/9/13 525 578
  John Deere Capital Corp. 2.950% 3/9/15 125 129
  Joy Global Inc. 6.000% 11/15/16 250 272
  L-3 Communications Corp. 5.200% 10/15/19 200 208
  L-3 Communications Corp. 4.750% 7/15/20 150 151
  Lafarge SA 6.150% 7/15/11 50 51
  Lafarge SA 7.125% 7/15/36 525 511
  Lockheed Martin Corp. 7.650% 5/1/16 250 313
  Lockheed Martin Corp. 6.150% 9/1/36 450 520
  Lockheed Martin Corp. 5.500% 11/15/39 25 27
6 Lockheed Martin Corp. 5.720% 6/1/40 316 346
  Martin Marietta Materials Inc. 6.600% 4/15/18 400 442
  Owens Corning 6.500% 12/1/16 600 632
  Parker Hannifin Corp. 5.500% 5/15/18 125 142
  Parker Hannifin Corp. 6.250% 5/15/38 75 89
  Raytheon Co. 5.500% 11/15/12 75 82
  Raytheon Co. 7.200% 8/15/27 75 95
  Republic Services Inc. 6.750% 8/15/11 275 291
6 Republic Services Inc. 5.250% 11/15/21 425 449
6 Republic Services Inc. 6.200% 3/1/40 75 80
  Rockwell Automation Inc. 5.650% 12/1/17 25 29
  Rockwell Automation Inc. 6.700% 1/15/28 200 237
  Rockwell Automation Inc. 6.250% 12/1/37 325 380
  Rockwell Collins Inc. 5.250% 7/15/19 50 56
  Roper Industries Inc. 6.250% 9/1/19 650 722
4,6 Systems 2001 AT LLC 7.156% 12/15/11 127 132
  Tyco International Finance SA 8.500% 1/15/19 175 226
  Tyco International Ltd. / Tyco International Finance SA 7.000% 12/15/19 400 489
  United Technologies Corp. 6.125% 2/1/19 925 1,103
  United Technologies Corp. 4.500% 4/15/20 325 352
  United Technologies Corp. 7.500% 9/15/29 100 133
  United Technologies Corp. 5.400% 5/1/35 400 429
  United Technologies Corp. 5.700% 4/15/40 350 390
  Vulcan Materials Co. 6.300% 6/15/13 175 193
  Vulcan Materials Co. 7.000% 6/15/18 325 363
  Waste Management Inc. 5.000% 3/15/14 675 731
  Waste Management Inc. 7.100% 8/1/26 325 374
  Waste Management Inc. 6.125% 11/30/39 400 433
  Communication (1.0%)        
6 America Movil SAB de CV 5.000% 10/16/19 400 413
6 America Movil SAB de CV 5.000% 3/30/20 400 412
  America Movil SAB de CV 6.375% 3/1/35 200 213
  America Movil SAB de CV 6.125% 11/15/37 300 310
6 America Movil SAB de CV 6.125% 3/30/40 475 491
  American Tower Corp. 4.625% 4/1/15 75 78
  AT&T Corp. 7.300% 11/15/11 925 1,001
  AT&T Corp. 8.000% 11/15/31 695 891
  AT&T Inc. 5.875% 2/1/12 345 369
  AT&T Inc. 5.875% 8/15/12 155 169
  AT&T Inc. 6.700% 11/15/13 300 349
  AT&T Inc. 4.850% 2/15/14 450 492
  AT&T Inc. 5.100% 9/15/14 1,575 1,748
  AT&T Inc. 5.625% 6/15/16 600 678
  AT&T Inc. 5.500% 2/1/18 300 332
  AT&T Inc. 5.800% 2/15/19 75 84
  AT&T Inc. 6.450% 6/15/34 1,000 1,095
  AT&T Inc. 6.500% 9/1/37 425 474
  AT&T Inc. 6.300% 1/15/38 175 190


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
AT&T Inc. 6.400% 5/15/38 675 744
AT&T Mobility LLC 6.500% 12/15/11 350 377
AT&T Mobility LLC 7.125% 12/15/31 1,000 1,196
Bellsouth Capital Funding Corp. 7.875% 2/15/30 150 184
BellSouth Corp. 5.200% 12/15/16 250 279
BellSouth Corp. 6.875% 10/15/31 325 370
BellSouth Corp. 6.550% 6/15/34 700 772
BellSouth Corp. 6.000% 11/15/34 290 299
BellSouth Telecommunications Inc. 6.375% 6/1/28 1,565 1,683
British Telecommunications PLC 9.875% 12/15/30 1,125 1,380
CBS Corp. 5.625% 8/15/12 615 654
CBS Corp. 5.750% 4/15/20 75 80
CBS Corp. 7.875% 7/30/30 400 464
CBS Corp. 5.500% 5/15/33 200 183
Cellco Partnership / Verizon Wireless Capital LLC 5.250% 2/1/12 450 477
Cellco Partnership / Verizon Wireless Capital LLC 7.375% 11/15/13 1,375 1,627
Cellco Partnership / Verizon Wireless Capital LLC 5.550% 2/1/14 525 589
Cellco Partnership / Verizon Wireless Capital LLC 8.500% 11/15/18 525 687
CenturyLink Inc. 5.000% 2/15/15 150 151
CenturyLink Inc. 6.875% 1/15/28 150 140
CenturyLink Inc. 7.600% 9/15/39 250 239
Comcast Cable Communications Holdings Inc. 9.455% 11/15/22 1,108 1,529
Comcast Cable Communications LLC 8.875% 5/1/17 850 1,067
Comcast Corp. 6.500% 1/15/15 700 803
Comcast Corp. 5.900% 3/15/16 650 732
Comcast Corp. 5.700% 7/1/19 750 819
Comcast Corp. 6.500% 11/15/35 1,025 1,105
Comcast Corp. 6.450% 3/15/37 100 107
Comcast Corp. 6.950% 8/15/37 250 283
Comcast Corp. 6.400% 5/15/38 600 641
COX Communications Inc. 4.625% 6/1/13 200 213
COX Communications Inc. 5.450% 12/15/14 150 165
COX Communications Inc. 5.500% 10/1/15 600 654
Deutsche Telekom International Finance BV 5.875% 8/20/13 325 355
Deutsche Telekom International Finance BV 4.875% 7/8/14 25 27
Deutsche Telekom International Finance BV 5.750% 3/23/16 425 465
Deutsche Telekom International Finance BV 6.000% 7/8/19 25 28
Deutsche Telekom International Finance BV 8.750% 6/15/30 1,200 1,546
6 DIRECTV Holdings LLC 3.550% 3/15/15 225 227
DIRECTV Holdings LLC 3.550% 3/15/15 150 151
DirecTV Holdings LLC / DirecTV Financing Co. Inc. 4.750% 10/1/14 325 346
DirecTV Holdings LLC / DirecTV Financing Co. Inc. 7.625% 5/15/16 100 109
DirecTV Holdings LLC / DirecTV Financing Co. Inc. 5.875% 10/1/19 1,450 1,583
Embarq Corp. 7.082% 6/1/16 875 931
Embarq Corp. 7.995% 6/1/36 200 198
France Telecom SA 4.375% 7/8/14 525 567
France Telecom SA 5.375% 7/8/19 525 571
France Telecom SA 8.500% 3/1/31 575 794
Grupo Televisa SA 6.625% 3/18/25 450 475
GTE Corp. 6.940% 4/15/28 325 358
McGraw-Hill Cos. Inc. 6.550% 11/15/37 350 396
6 NBC Universal Inc. 3.650% 4/30/15 425 435
6 NBC Universal Inc. 5.150% 4/30/20 175 183
6 NBC Universal Inc. 6.400% 4/30/40 100 109
New Cingular Wireless Services Inc. 8.125% 5/1/12 600 671
News America Holdings Inc. 8.150% 10/17/36 385 473
News America Inc. 6.550% 3/15/33 600 652
News America Inc. 6.200% 12/15/34 725 758
News America Inc. 6.400% 12/15/35 1,300 1,394
News America Inc. 6.900% 8/15/39 50 57
Omnicom Group Inc. 5.900% 4/15/16 50 57
Pacific Bell Telephone Co. 7.125% 3/15/26 200 231
Qwest Corp. 7.875% 9/1/11 450 469
Qwest Corp. 8.875% 3/15/12 425 457


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Qwest Corp. 8.375% 5/1/16 325 355
Qwest Corp. 6.500% 6/1/17 275 276
Qwest Corp. 7.500% 6/15/23 350 335
Qwest Corp. 7.250% 9/15/25 175 168
Qwest Corp. 6.875% 9/15/33 375 348
Qwest Corp. 7.125% 11/15/43 550 485
Reed Elsevier Capital Inc. 4.625% 6/15/12 100 106
Reed Elsevier Capital Inc. 7.750% 1/15/14 175 205
Reed Elsevier Capital Inc. 8.625% 1/15/19 200 254
Rogers Communications Inc. 6.375% 3/1/14 1,000 1,131
Rogers Communications Inc. 5.500% 3/15/14 250 275
Rogers Communications Inc. 6.800% 8/15/18 950 1,126
RR Donnelley & Sons Co. 8.600% 8/15/16 400 437
RR Donnelley & Sons Co. 7.625% 6/15/20 250 247
Telecom Italia Capital SA 4.875% 10/1/10 400 402
Telecom Italia Capital SA 6.200% 7/18/11 550 568
Telecom Italia Capital SA 5.250% 11/15/13 325 337
Telecom Italia Capital SA 4.950% 9/30/14 1,000 1,005
Telecom Italia Capital SA 5.250% 10/1/15 1,300 1,322
Telecom Italia Capital SA 7.175% 6/18/19 50 54
Telecom Italia Capital SA 6.375% 11/15/33 205 185
Telecom Italia Capital SA 7.200% 7/18/36 475 470
Telecom Italia Capital SA 7.721% 6/4/38 500 513
Telefonica Emisiones SAU 2.582% 4/26/13 275 274
Telefonica Emisiones SAU 4.949% 1/15/15 625 657
Telefonica Emisiones SAU 3.729% 4/27/15 300 299
Telefonica Emisiones SAU 6.421% 6/20/16 475 522
Telefonica Emisiones SAU 5.877% 7/15/19 300 320
Telefonica Emisiones SAU 5.134% 4/27/20 500 504
Telefonica Europe BV 8.250% 9/15/30 750 926
Telefonos de Mexico SAB de CV 5.500% 1/27/15 850 926
Thomson Reuters Corp. 5.950% 7/15/13 75 84
Thomson Reuters Corp. 5.700% 10/1/14 850 950
Thomson Reuters Corp. 6.500% 7/15/18 50 59
Thomson Reuters Corp. 4.700% 10/15/19 125 132
Thomson Reuters Corp. 5.500% 8/15/35 50 51
Thomson Reuters Corp. 5.850% 4/15/40 275 291
Time Warner Cable Inc. 5.400% 7/2/12 400 428
Time Warner Cable Inc. 6.200% 7/1/13 300 334
Time Warner Cable Inc. 7.500% 4/1/14 650 757
Time Warner Cable Inc. 3.500% 2/1/15 300 306
Time Warner Cable Inc. 5.850% 5/1/17 825 903
Time Warner Cable Inc. 6.750% 7/1/18 900 1,030
Time Warner Cable Inc. 8.250% 4/1/19 200 246
Time Warner Cable Inc. 5.000% 2/1/20 825 841
Time Warner Cable Inc. 6.550% 5/1/37 550 590
Time Warner Cable Inc. 6.750% 6/15/39 675 744
Time Warner Entertainment Co. LP 10.150% 5/1/12 200 228
Time Warner Entertainment Co. LP 8.375% 3/15/23 800 1,022
Time Warner Entertainment Co. LP 8.375% 7/15/33 100 122
United States Cellular Corp. 6.700% 12/15/33 350 358
Verizon Communications Inc. 5.250% 4/15/13 650 714
Verizon Communications Inc. 5.550% 2/15/16 500 562
Verizon Communications Inc. 5.500% 2/15/18 500 552
Verizon Communications Inc. 6.100% 4/15/18 100 114
Verizon Communications Inc. 8.750% 11/1/18 275 360
Verizon Communications Inc. 6.350% 4/1/19 525 611
Verizon Communications Inc. 5.850% 9/15/35 500 513
Verizon Communications Inc. 6.900% 4/15/38 25 29
Verizon Communications Inc. 8.950% 3/1/39 1,250 1,802
Verizon Communications Inc. 7.350% 4/1/39 725 890
Verizon Global Funding Corp. 6.875% 6/15/12 2,000 2,208
Verizon Global Funding Corp. 7.750% 12/1/30 425 532
Verizon Maryland Inc. 6.125% 3/1/12 500 535


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Verizon New England Inc. 6.500% 9/15/11 300 317
Verizon New England Inc. 7.875% 11/15/29 250 292
Verizon New York Inc. 6.875% 4/1/12 300 325
Verizon Virginia Inc. 4.625% 3/15/13 450 475
Vodafone Group PLC 5.350% 2/27/12 200 211
Vodafone Group PLC 5.000% 12/16/13 600 650
Vodafone Group PLC 5.750% 3/15/16 300 332
Vodafone Group PLC 5.625% 2/27/17 550 606
Vodafone Group PLC 4.625% 7/15/18 125 127
Vodafone Group PLC 5.450% 6/10/19 275 295
Vodafone Group PLC 7.875% 2/15/30 425 516
Vodafone Group PLC 6.250% 11/30/32 350 372
Vodafone Group PLC 6.150% 2/27/37 75 78
Washington Post Co. 7.250% 2/1/19 150 179
WPP Finance UK 5.875% 6/15/14 425 460
Consumer Cyclical (0.4%)        
AutoZone Inc. 6.500% 1/15/14 300 336
AutoZone Inc. 5.750% 1/15/15 325 360
Best Buy Co. Inc. 6.750% 7/15/13 125 140
Costco Wholesale Corp. 5.500% 3/15/17 475 545
CVS Caremark Corp. 5.750% 8/15/11 75 79
CVS Caremark Corp. 4.875% 9/15/14 175 190
CVS Caremark Corp. 3.250% 5/18/15 100 102
CVS Caremark Corp. 5.750% 6/1/17 175 195
CVS Caremark Corp. 6.600% 3/15/19 1,575 1,830
CVS Caremark Corp. 6.250% 6/1/27 125 136
4 CVS Caremark Corp. 6.302% 6/1/37 425 381
Daimler Finance North America LLC 7.300% 1/15/12 1,175 1,264
Daimler Finance North America LLC 6.500% 11/15/13 875 976
Daimler Finance North America LLC 8.500% 1/18/31 450 572
Darden Restaurants Inc. 5.625% 10/15/12 225 244
Darden Restaurants Inc. 6.200% 10/15/17 150 170
Darden Restaurants Inc. 6.800% 10/15/37 275 312
Historic TW Inc. 9.150% 2/1/23 1,475 1,985
Historic TW Inc. 6.625% 5/15/29 200 219
Home Depot Inc. 5.250% 12/16/13 775 851
Home Depot Inc. 5.400% 3/1/16 1,100 1,219
Johnson Controls Inc. 5.000% 3/30/20 200 212
Johnson Controls Inc. 6.000% 1/15/36 125 134
Kohl's Corp. 6.250% 12/15/17 200 233
Kohl's Corp. 6.000% 1/15/33 225 238
Kohl's Corp. 6.875% 12/15/37 100 120
Lowe's Cos. Inc. 5.000% 10/15/15 75 85
Lowe's Cos. Inc. 6.100% 9/15/17 200 236
Lowe's Cos. Inc. 4.625% 4/15/20 200 216
Lowe's Cos. Inc. 6.875% 2/15/28 367 442
Lowe's Cos. Inc. 5.800% 10/15/36 475 519
Lowe's Cos. Inc. 5.800% 4/15/40 100 110
Marriott International Inc. 4.625% 6/15/12 400 412
Marriott International Inc. 5.625% 2/15/13 200 211
Marriott International Inc. 6.200% 6/15/16 150 157
Marriott International Inc. 6.375% 6/15/17 50 53
McDonald's Corp. 5.300% 3/15/17 400 450
McDonald's Corp. 5.800% 10/15/17 300 351
McDonald's Corp. 5.350% 3/1/18 350 400
McDonald's Corp. 6.300% 10/15/37 200 241
McDonald's Corp. 6.300% 3/1/38 300 369
McDonald's Corp. 5.700% 2/1/39 25 28
Nordstrom Inc. 4.750% 5/1/20 600 622
Nordstrom Inc. 6.950% 3/15/28 200 228
Nordstrom Inc. 7.000% 1/15/38 150 172
PACCAR Financial Corp. 1.950% 12/17/12 225 227
PACCAR Inc. 6.875% 2/15/14 200 231


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Staples Inc. 9.750% 1/15/14 1,025 1,253
Target Corp. 5.125% 1/15/13 675 738
Target Corp. 4.000% 6/15/13 525 561
Target Corp. 5.375% 5/1/17 200 228
Target Corp. 7.000% 7/15/31 175 212
Target Corp. 6.350% 11/1/32 450 518
Time Warner Inc. 6.875% 5/1/12 100 109
Time Warner Inc. 4.875% 3/15/20 625 644
Time Warner Inc. 7.625% 4/15/31 460 545
Time Warner Inc. 7.700% 5/1/32 590 707
Time Warner Inc. 6.200% 3/15/40 150 157
TJX Cos. Inc. 6.950% 4/15/19 175 217
Toll Brothers Finance Corp. 5.150% 5/15/15 400 395
Toyota Motor Credit Corp. 3.200% 6/17/15 700 713
VF Corp. 5.950% 11/1/17 250 283
VF Corp. 6.450% 11/1/37 150 170
Viacom Inc. 4.375% 9/15/14 350 372
Viacom Inc. 6.250% 4/30/16 275 312
Viacom Inc. 5.625% 9/15/19 650 713
Wal-Mart Stores Inc. 4.550% 5/1/13 2,275 2,474
Wal-Mart Stores Inc. 7.250% 6/1/13 150 175
Wal-Mart Stores Inc. 3.200% 5/15/14 550 580
Wal-Mart Stores Inc. 4.500% 7/1/15 450 495
Wal-Mart Stores Inc. 5.375% 4/5/17 200 229
Wal-Mart Stores Inc. 5.800% 2/15/18 200 236
Wal-Mart Stores Inc. 5.875% 4/5/27 1,950 2,190
Wal-Mart Stores Inc. 5.250% 9/1/35 175 183
Wal-Mart Stores Inc. 6.500% 8/15/37 550 667
Walgreen Co. 5.250% 1/15/19 875 991
Walt Disney Co. 5.700% 7/15/11 1,150 1,208
Walt Disney Co. 6.375% 3/1/12 150 163
Walt Disney Co. 4.500% 12/15/13 125 137
Walt Disney Co. 5.625% 9/15/16 50 58
Walt Disney Co. 7.000% 3/1/32 400 511
Western Union Co. 6.500% 2/26/14 300 338
Western Union Co. 5.930% 10/1/16 400 445
Western Union Co. 6.200% 11/17/36 325 347
Yum! Brands Inc. 7.700% 7/1/12 250 277
Yum! Brands Inc. 6.875% 11/15/37 750 871
Consumer Noncyclical (1.1%)        
Abbott Laboratories 4.350% 3/15/14 250 272
Abbott Laboratories 5.875% 5/15/16 1,350 1,578
Abbott Laboratories 5.600% 11/30/17 475 551
Abbott Laboratories 6.150% 11/30/37 325 378
Abbott Laboratories 6.000% 4/1/39 325 371
Allergan Inc. 5.750% 4/1/16 125 146
Altria Group Inc. 8.500% 11/10/13 1,325 1,549
Altria Group Inc. 9.700% 11/10/18 1,200 1,516
Altria Group Inc. 9.950% 11/10/38 275 361
Altria Group Inc. 10.200% 2/6/39 675 898
AmerisourceBergen Corp. 5.875% 9/15/15 1,175 1,314
Amgen Inc. 4.850% 11/18/14 500 555
Amgen Inc. 5.850% 6/1/17 125 145
Amgen Inc. 5.700% 2/1/19 200 233
Amgen Inc. 6.375% 6/1/37 400 468
Amgen Inc. 6.400% 2/1/39 700 830
Anheuser-Busch Cos. Inc. 5.500% 1/15/18 250 273
Anheuser-Busch Cos. Inc. 6.800% 8/20/32 900 1,018
Anheuser-Busch InBev Worldwide Inc. 3.000% 10/15/12 450 463
6 Anheuser-Busch InBev Worldwide Inc. 2.500% 3/26/13 350 354
Anheuser-Busch InBev Worldwide Inc. 4.125% 1/15/15 525 550
Anheuser-Busch InBev Worldwide Inc. 5.375% 1/15/20 975 1,051
6 Anheuser-Busch InBev Worldwide Inc. 5.000% 4/15/20 675 706


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Anheuser-Busch InBev Worldwide Inc. 6.375% 1/15/40 250 285
Archer-Daniels-Midland Co. 5.935% 10/1/32 350 395
AstraZeneca PLC 5.400% 9/15/12 750 819
AstraZeneca PLC 5.400% 6/1/14 875 988
AstraZeneca PLC 6.450% 9/15/37 1,175 1,415
Baxter FinCo BV 4.750% 10/15/10 500 506
Baxter International Inc. 4.625% 3/15/15 250 276
Baxter International Inc. 5.900% 9/1/16 150 176
Baxter International Inc. 6.250% 12/1/37 100 118
Becton Dickinson and Co. 5.000% 5/15/19 50 55
Biogen Idec Inc. 6.000% 3/1/13 600 657
Bottling Group LLC 4.625% 11/15/12 300 323
Bottling Group LLC 5.000% 11/15/13 100 111
Bottling Group LLC 6.950% 3/15/14 500 589
Bottling Group LLC 5.500% 4/1/16 1,275 1,462
Bristol-Myers Squibb Co. 5.450% 5/1/18 300 344
Bristol-Myers Squibb Co. 5.875% 11/15/36 725 812
Bunge Ltd. Finance Corp. 5.350% 4/15/14 350 368
Bunge Ltd. Finance Corp. 8.500% 6/15/19 175 208
Campbell Soup Co. 3.050% 7/15/17 50 50
Cardinal Health Inc. 4.000% 6/15/15 100 104
CareFusion Corp. 4.125% 8/1/12 50 52
CareFusion Corp. 5.125% 8/1/14 100 108
CareFusion Corp. 6.375% 8/1/19 75 85
Cia de Bebidas das Americas 10.500% 12/15/11 280 315
Cia de Bebidas das Americas 8.750% 9/15/13 25 29
Clorox Co. 5.000% 3/1/13 375 407
Clorox Co. 3.550% 11/1/15 325 342
Coca-Cola Co. 5.350% 11/15/17 225 257
Coca-Cola Co. 4.875% 3/15/19 900 994
Coca-Cola Enterprises Inc. 7.375% 3/3/14 600 714
Coca-Cola Enterprises Inc. 4.250% 3/1/15 300 325
Coca-Cola Enterprises Inc. 4.500% 8/15/19 150 162
Coca-Cola Enterprises Inc. 8.500% 2/1/22 125 173
Coca-Cola Enterprises Inc. 6.950% 11/15/26 500 623
Coca-Cola Enterprises Inc. 6.750% 9/15/28 250 308
6 Coca-Cola Femsa SAB de CV 4.625% 2/15/20 100 103
ConAgra Foods Inc. 5.875% 4/15/14 275 310
ConAgra Foods Inc. 7.125% 10/1/26 50 60
ConAgra Foods Inc. 7.000% 10/1/28 100 118
Covidien International Finance SA 6.550% 10/15/37 525 632
CR Bard Inc. 6.700% 12/1/26 450 538
Delhaize Group SA 5.875% 2/1/14 250 279
Diageo Capital PLC 5.200% 1/30/13 75 82
Diageo Capital PLC 5.750% 10/23/17 75 85
Diageo Finance BV 5.300% 10/28/15 625 700
Diageo Investment Corp. 9.000% 8/15/11 1,000 1,086
Dr Pepper Snapple Group Inc. 1.700% 12/21/11 125 125
Dr Pepper Snapple Group Inc. 2.350% 12/21/12 150 152
Dr Pepper Snapple Group Inc. 6.120% 5/1/13 375 417
Eli Lilly & Co. 3.550% 3/6/12 125 130
Eli Lilly & Co. 6.000% 3/15/12 125 136
Eli Lilly & Co. 5.500% 3/15/27 625 682
Express Scripts Inc. 5.250% 6/15/12 225 240
Express Scripts Inc. 6.250% 6/15/14 250 283
Express Scripts Inc. 7.250% 6/15/19 75 91
Fortune Brands Inc. 3.000% 6/1/12 350 355
Fortune Brands Inc. 6.375% 6/15/14 475 528
Fortune Brands Inc. 5.375% 1/15/16 25 27
Fortune Brands Inc. 5.875% 1/15/36 250 241
Genentech Inc. 4.750% 7/15/15 150 166
Genentech Inc. 5.250% 7/15/35 325 339
General Mills Inc. 6.000% 2/15/12 592 636
General Mills Inc. 5.650% 9/10/12 250 271


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
General Mills Inc. 5.200% 3/17/15 875 984
General Mills Inc. 5.700% 2/15/17 575 665
General Mills Inc. 5.650% 2/15/19 375 426
GlaxoSmithKline Capital Inc. 4.850% 5/15/13 700 764
GlaxoSmithKline Capital Inc. 4.375% 4/15/14 1,025 1,115
GlaxoSmithKline Capital Inc. 5.375% 4/15/34 300 313
GlaxoSmithKline Capital Inc. 6.375% 5/15/38 1,050 1,253
Hasbro Inc. 6.300% 9/15/17 550 580
Hershey Co. 5.450% 9/1/16 150 170
HJ Heinz Finance Co. 6.625% 7/15/11 850 897
Hospira Inc. 5.900% 6/15/14 200 222
Johnson & Johnson 5.150% 8/15/12 400 437
Johnson & Johnson 5.150% 7/15/18 125 142
Johnson & Johnson 6.950% 9/1/29 100 130
Johnson & Johnson 4.950% 5/15/33 550 581
Johnson & Johnson 5.850% 7/15/38 325 383
Kellogg Co. 5.125% 12/3/12 225 245
Kellogg Co. 4.250% 3/6/13 125 134
Kellogg Co. 4.150% 11/15/19 250 262
Kellogg Co. 7.450% 4/1/31 150 199
Kimberly-Clark Corp. 4.875% 8/15/15 650 721
Kimberly-Clark Corp. 6.125% 8/1/17 200 236
Koninklijke Philips Electronics NV 4.625% 3/11/13 150 161
Koninklijke Philips Electronics NV 5.750% 3/11/18 250 282
Koninklijke Philips Electronics NV 6.875% 3/11/38 200 247
Kraft Foods Inc. 2.625% 5/8/13 800 815
Kraft Foods Inc. 6.750% 2/19/14 125 143
Kraft Foods Inc. 4.125% 2/9/16 1,425 1,500
Kraft Foods Inc. 6.500% 8/11/17 525 610
Kraft Foods Inc. 6.125% 8/23/18 750 849
Kraft Foods Inc. 5.375% 2/10/20 150 160
Kraft Foods Inc. 6.500% 11/1/31 875 964
Kraft Foods Inc. 7.000% 8/11/37 725 854
Kraft Foods Inc. 6.875% 2/1/38 700 819
Kraft Foods Inc. 6.875% 1/26/39 250 293
Kraft Foods Inc. 6.500% 2/9/40 450 500
Kroger Co. 6.200% 6/15/12 25 27
Kroger Co. 4.950% 1/15/15 500 543
Kroger Co. 8.000% 9/15/29 750 971
Laboratory Corp. of America Holdings 5.625% 12/15/15 325 359
Life Technologies Corp. 4.400% 3/1/15 225 234
Life Technologies Corp. 6.000% 3/1/20 200 217
Lorillard Tobacco Co. 8.125% 6/23/19 1,150 1,280
McKesson Corp. 7.750% 2/1/12 350 383
McKesson Corp. 5.250% 3/1/13 75 81
6 Mead Johnson Nutrition Co. 3.500% 11/1/14 75 78
6 Mead Johnson Nutrition Co. 4.900% 11/1/19 150 158
6 Mead Johnson Nutrition Co. 5.900% 11/1/39 125 134
Medco Health Solutions Inc. 7.250% 8/15/13 675 774
Medco Health Solutions Inc. 7.125% 3/15/18 600 717
Medtronic Inc. 3.000% 3/15/15 425 442
Medtronic Inc. 4.750% 9/15/15 550 611
Medtronic Inc. 4.450% 3/15/20 175 187
Medtronic Inc. 5.550% 3/15/40 75 84
Merck & Co. Inc. 4.750% 3/1/15 275 306
Merck & Co. Inc. 4.000% 6/30/15 350 379
Merck & Co. Inc. 6.000% 9/15/17 500 588
Merck & Co. Inc. 5.000% 6/30/19 375 418
Merck & Co. Inc. 6.400% 3/1/28 225 268
Merck & Co. Inc. 5.950% 12/1/28 250 288
Merck & Co. Inc. 6.550% 9/15/37 850 1,060
Merck & Co. Inc. 5.850% 6/30/39 100 116
Novant Health Inc. 5.850% 11/1/19 300 324
Novartis Capital Corp. 1.900% 4/24/13 250 254


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Novartis Capital Corp. 4.125% 2/10/14 1,000 1,079
Novartis Capital Corp. 2.900% 4/24/15 450 461
Novartis Securities Investment Ltd. 5.125% 2/10/19 750 837
PepsiAmericas Inc. 5.750% 7/31/12 225 246
PepsiAmericas Inc. 5.000% 5/15/17 450 496
PepsiCo Inc. 5.150% 5/15/12 125 135
PepsiCo Inc. 4.650% 2/15/13 250 272
PepsiCo Inc. 3.750% 3/1/14 875 933
PepsiCo Inc. 5.000% 6/1/18 775 863
PepsiCo Inc. 7.900% 11/1/18 450 584
Pfizer Inc. 4.450% 3/15/12 1,175 1,242
Pfizer Inc. 5.350% 3/15/15 825 934
Pfizer Inc. 6.200% 3/15/19 1,125 1,338
Pfizer Inc. 7.200% 3/15/39 800 1,049
Philip Morris International Inc. 4.875% 5/16/13 625 676
Philip Morris International Inc. 6.875% 3/17/14 475 549
Philip Morris International Inc. 5.650% 5/16/18 275 302
Philip Morris International Inc. 6.375% 5/16/38 525 611
4 Procter & Gamble - Esop 9.360% 1/1/21 982 1,250
Procter & Gamble Co. 4.950% 8/15/14 100 112
Procter & Gamble Co. 3.500% 2/15/15 525 558
Procter & Gamble Co. 4.700% 2/15/19 175 192
Procter & Gamble Co. 6.450% 1/15/26 600 734
Quest Diagnostics Inc. 5.450% 11/1/15 250 276
Reynolds American Inc. 7.250% 6/1/12 200 215
Reynolds American Inc. 6.750% 6/15/17 100 106
Reynolds American Inc. 7.250% 6/15/37 375 375
Safeway Inc. 6.250% 3/15/14 300 340
Safeway Inc. 7.250% 2/1/31 50 61
St. Jude Medical Inc. 2.200% 9/15/13 300 304
St. Jude Medical Inc. 3.750% 7/15/14 425 449
St. Jude Medical Inc. 4.875% 7/15/19 75 81
Stryker Corp. 3.000% 1/15/15 100 104
Stryker Corp. 4.375% 1/15/20 100 106
Sysco Corp. 5.250% 2/12/18 300 337
Sysco Corp. 5.375% 9/21/35 500 542
Teva Pharmaceutical Finance Co. LLC 6.150% 2/1/36 150 172
Teva Pharmaceutical Finance II BV/Teva Pharmaceutical        
Finance III LLC 3.000% 6/15/15 225 229
Teva Pharmaceutical Finance III LLC 1.500% 6/15/12 600 601
Thermo Fisher Scientific Inc. 2.150% 12/28/12 125 126
Thermo Fisher Scientific Inc. 3.250% 11/20/14 100 104
Thermo Fisher Scientific Inc. 3.200% 5/1/15 400 414
Unilever Capital Corp. 7.125% 11/1/10 400 408
Unilever Capital Corp. 3.650% 2/15/14 275 291
Unilever Capital Corp. 4.800% 2/15/19 150 164
UST LLC 5.750% 3/1/18 250 260
Whirlpool Corp. 5.500% 3/1/13 250 269
Wyeth 5.500% 2/15/16 400 458
Wyeth 6.450% 2/1/24 400 468
Wyeth 6.500% 2/1/34 200 237
Wyeth 6.000% 2/15/36 1,125 1,269
Energy (0.6%)        
Alberta Energy Co. Ltd. 7.375% 11/1/31 750 885
Anadarko Petroleum Corp. 7.625% 3/15/14 300 285
Anadarko Petroleum Corp. 5.750% 6/15/14 125 113
Anadarko Petroleum Corp. 5.950% 9/15/16 700 600
Anadarko Petroleum Corp. 6.950% 6/15/19 50 43
Anadarko Petroleum Corp. 6.450% 9/15/36 650 515
Anadarko Petroleum Corp. 7.950% 6/15/39 125 106
Apache Corp. 6.000% 9/15/13 300 336
Apache Corp. 5.625% 1/15/17 75 84
Apache Corp. 6.900% 9/15/18 500 609


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Apache Finance Canada Corp. 7.750% 12/15/29 225 288
Baker Hughes Inc. 6.875% 1/15/29 400 476
BJ Services Co. 6.000% 6/1/18 100 111
BP Capital Markets PLC 5.250% 11/7/13 750 690
BP Capital Markets PLC 3.625% 5/8/14 675 579
BP Capital Markets PLC 3.875% 3/10/15 250 212
^ BP Capital Markets PLC 4.750% 3/10/19 750 622
Burlington Resources Finance Co. 6.500% 12/1/11 300 323
Burlington Resources Finance Co. 7.400% 12/1/31 600 752
Canadian Natural Resources Ltd. 5.450% 10/1/12 250 270
Canadian Natural Resources Ltd. 4.900% 12/1/14 175 191
Canadian Natural Resources Ltd. 7.200% 1/15/32 500 567
Canadian Natural Resources Ltd. 6.450% 6/30/33 400 433
Canadian Natural Resources Ltd. 6.500% 2/15/37 425 474
6 Cenovus Energy Inc. 4.500% 9/15/14 950 1,010
6 Cenovus Energy Inc. 5.700% 10/15/19 475 516
6 Cenovus Energy Inc. 6.750% 11/15/39 375 428
Chevron Corp. 3.450% 3/3/12 250 260
Chevron Corp. 3.950% 3/3/14 425 454
Chevron Corp. 4.950% 3/3/19 750 825
ConocoPhillips 4.750% 2/1/14 250 275
ConocoPhillips 4.600% 1/15/15 200 218
ConocoPhillips 5.750% 2/1/19 1,575 1,799
ConocoPhillips 6.500% 2/1/39 375 450
ConocoPhillips Canada Funding Co. I 5.950% 10/15/36 250 279
ConocoPhillips Holding Co. 6.950% 4/15/29 175 214
Devon Energy Corp. 5.625% 1/15/14 525 581
Devon Energy Corp. 7.950% 4/15/32 75 96
Devon Financing Corp. ULC 6.875% 9/30/11 475 506
Devon Financing Corp. ULC 7.875% 9/30/31 375 472
Diamond Offshore Drilling Inc. 4.875% 7/1/15 100 104
Diamond Offshore Drilling Inc. 5.875% 5/1/19 75 78
Diamond Offshore Drilling Inc. 5.700% 10/15/39 225 204
EnCana Corp. 4.750% 10/15/13 25 27
EnCana Corp. 7.200% 11/1/31 625 740
EnCana Holdings Finance Corp. 5.800% 5/1/14 50 56
EOG Resources Inc. 6.125% 10/1/13 575 649
EOG Resources Inc. 5.625% 6/1/19 275 311
Halliburton Co. 6.150% 9/15/19 525 573
Halliburton Co. 7.450% 9/15/39 700 823
Hess Corp. 8.125% 2/15/19 600 747
Hess Corp. 7.875% 10/1/29 150 184
Hess Corp. 7.125% 3/15/33 375 435
Husky Energy Inc. 6.250% 6/15/12 350 378
Husky Energy Inc. 7.250% 12/15/19 300 362
Husky Energy Inc. 6.800% 9/15/37 100 114
Kerr-McGee Corp. 6.950% 7/1/24 1,000 902
Kerr-McGee Corp. 7.875% 9/15/31 150 137
Marathon Oil Corp. 6.125% 3/15/12 475 510
Nabors Industries Inc. 9.250% 1/15/19 600 734
Nexen Inc. 5.050% 11/20/13 400 428
Nexen Inc. 5.650% 5/15/17 175 190
Nexen Inc. 7.875% 3/15/32 100 120
Nexen Inc. 7.500% 7/30/39 625 743
Noble Energy Inc. 8.250% 3/1/19 300 362
Occidental Petroleum Corp. 6.750% 1/15/12 125 135
Occidental Petroleum Corp. 7.000% 11/1/13 650 760
PC Financial Partnership 5.000% 11/15/14 25 27
Petro-Canada 4.000% 7/15/13 75 79
Petro-Canada 7.875% 6/15/26 100 121
Petro-Canada 5.350% 7/15/33 450 430
Petro-Canada 5.950% 5/15/35 500 504
QEP Resources Inc. 6.050% 9/1/16 350 375
Rowan Cos. Inc. 7.875% 8/1/19 125 138


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Shell International Finance BV 1.875% 3/25/13 450 454
Shell International Finance BV 4.000% 3/21/14 600 634
Shell International Finance BV 3.100% 6/28/15 1,075 1,091
Shell International Finance BV 3.250% 9/22/15 200 204
Shell International Finance BV 5.200% 3/22/17 300 332
Shell International Finance BV 4.300% 9/22/19 700 720
Shell International Finance BV 4.375% 3/25/20 325 335
Shell International Finance BV 6.375% 12/15/38 300 357
Shell International Finance BV 5.500% 3/25/40 175 186
Smith International Inc. 9.750% 3/15/19 600 815
Statoil ASA 3.875% 4/15/14 300 319
Statoil ASA 2.900% 10/15/14 75 77
Statoil ASA 5.250% 4/15/19 650 713
Statoil ASA 7.150% 1/15/29 250 314
Suncor Energy Inc. 6.100% 6/1/18 225 254
Suncor Energy Inc. 6.500% 6/15/38 1,075 1,195
Suncor Energy Inc. 6.850% 6/1/39 600 697
Sunoco Inc. 4.875% 10/15/14 175 179
Sunoco Inc. 5.750% 1/15/17 200 203
Talisman Energy Inc. 5.125% 5/15/15 100 109
Talisman Energy Inc. 5.850% 2/1/37 650 682
Tosco Corp. 8.125% 2/15/30 1,150 1,535
Total Capital SA 3.000% 6/24/15 575 580
Total Capital SA 3.125% 10/2/15 25 25
Total Capital SA 4.450% 6/24/20 325 330
Transocean Inc. 5.250% 3/15/13 100 94
Transocean Inc. 6.000% 3/15/18 425 389
Transocean Inc. 7.500% 4/15/31 300 274
Valero Energy Corp. 6.875% 4/15/12 700 752
Valero Energy Corp. 4.500% 2/1/15 75 77
Valero Energy Corp. 6.125% 2/1/20 150 155
Valero Energy Corp. 7.500% 4/15/32 750 792
Valero Energy Corp. 6.625% 6/15/37 300 292
Weatherford International Inc. 6.800% 6/15/37 150 140
Weatherford International Ltd. 9.625% 3/1/19 775 937
Weatherford International Ltd. 6.500% 8/1/36 800 722
Williams Cos. Inc. 7.500% 1/15/31 519 568
Williams Cos. Inc. 7.750% 6/15/31 149 164
XTO Energy Inc. 5.900% 8/1/12 425 466
XTO Energy Inc. 6.250% 4/15/13 250 282
XTO Energy Inc. 5.750% 12/15/13 900 1,017
XTO Energy Inc. 4.900% 2/1/14 200 220
XTO Energy Inc. 5.000% 1/31/15 200 223
XTO Energy Inc. 6.250% 8/1/17 400 477
XTO Energy Inc. 6.100% 4/1/36 175 207
XTO Energy Inc. 6.750% 8/1/37 575 739
Other Industrial (0.0%)        
Cintas Corp. No 2 6.125% 12/1/17 225 260
 
Technology (0.3%)        
Adobe Systems Inc. 3.250% 2/1/15 200 206
Adobe Systems Inc. 4.750% 2/1/20 325 333
Agilent Technologies Inc. 4.450% 9/14/12 25 26
Agilent Technologies Inc. 5.500% 9/14/15 550 592
Agilent Technologies Inc. 6.500% 11/1/17 350 387
Amphenol Corp. 4.750% 11/15/14 200 211
Analog Devices Inc. 5.000% 7/1/14 175 189
BMC Software Inc. 7.250% 6/1/18 175 208
CA Inc. 5.375% 12/1/19 175 184
Cisco Systems Inc. 4.950% 2/15/19 200 220
Cisco Systems Inc. 4.450% 1/15/20 2,075 2,190
Cisco Systems Inc. 5.900% 2/15/39 425 469
Cisco Systems Inc. 5.500% 1/15/40 325 342


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Computer Sciences Corp. 6.500% 3/15/18 125 138
Corning Inc. 6.625% 5/15/19 50 58
Dell Inc. 3.375% 6/15/12 625 649
Dell Inc. 5.875% 6/15/19 175 197
Equifax Inc. 6.300% 7/1/17 125 138
Equifax Inc. 7.000% 7/1/37 150 167
Fiserv Inc. 6.800% 11/20/17 475 521
Harris Corp. 5.000% 10/1/15 425 457
Hewlett-Packard Co. 4.500% 3/1/13 625 675
Hewlett-Packard Co. 6.125% 3/1/14 1,050 1,202
Hewlett-Packard Co. 5.400% 3/1/17 225 258
Hewlett-Packard Co. 5.500% 3/1/18 1,025 1,183
HP Enterprise Services LLC 6.000% 8/1/13 225 253
IBM International Group Capital LLC 5.050% 10/22/12 1,100 1,196
International Business Machines Corp. 7.500% 6/15/13 550 642
International Business Machines Corp. 5.700% 9/14/17 500 581
International Business Machines Corp. 5.600% 11/30/39 1,720 1,907
International Game Technology 7.500% 6/15/19 125 146
International Game Technology 5.500% 6/15/20 125 128
Intuit Inc. 5.400% 3/15/12 200 212
Lexmark International Inc. 5.900% 6/1/13 150 160
Lexmark International Inc. 6.650% 6/1/18 375 395
Maxim Integrated Products Inc. 3.450% 6/14/13 100 101
Microsoft Corp. 2.950% 6/1/14 675 706
Microsoft Corp. 4.200% 6/1/19 50 54
Microsoft Corp. 5.200% 6/1/39 350 383
Motorola Inc. 8.000% 11/1/11 25 27
Motorola Inc. 5.375% 11/15/12 275 289
Motorola Inc. 7.500% 5/15/25 75 81
Motorola Inc. 6.500% 11/15/28 19 19
Motorola Inc. 6.625% 11/15/37 26 27
Nokia Oyj 5.375% 5/15/19 175 184
Nokia Oyj 6.625% 5/15/39 100 112
Oracle Corp. 3.750% 7/8/14 200 214
Oracle Corp. 5.250% 1/15/16 1,900 2,162
Oracle Corp. 5.750% 4/15/18 300 347
Oracle Corp. 5.000% 7/8/19 975 1,084
Oracle Corp. 6.125% 7/8/39 500 586
Pitney Bowes Inc. 3.875% 6/15/13 225 237
Pitney Bowes Inc. 4.875% 8/15/14 25 27
Pitney Bowes Inc. 4.750% 1/15/16 1,300 1,402
Science Applications International Corp. 6.250% 7/1/12 100 109
Science Applications International Corp. 5.500% 7/1/33 100 94
Xerox Corp. 6.875% 8/15/11 200 211
Xerox Corp. 5.500% 5/15/12 150 160
Xerox Corp. 7.625% 6/15/13 225 228
Xerox Corp. 8.250% 5/15/14 300 351
Xerox Corp. 6.400% 3/15/16 375 423
Xerox Corp. 6.750% 2/1/17 350 393
Xerox Corp. 6.350% 5/15/18 350 389
Xerox Corp. 5.625% 12/15/19 50 53
Transportation (0.2%)        
4 American Airlines Pass Through Trust 2009-1A 10.375% 7/2/19 124 139
Burlington Northern Santa Fe LLC 5.900% 7/1/12 350 380
Burlington Northern Santa Fe LLC 5.650% 5/1/17 75 84
Burlington Northern Santa Fe LLC 7.000% 12/15/25 200 241
Burlington Northern Santa Fe LLC 6.200% 8/15/36 125 140
Canadian National Railway Co. 6.250% 8/1/34 350 411
Canadian National Railway Co. 6.200% 6/1/36 350 411
Canadian Pacific Railway Co. 7.125% 10/15/31 450 516
Canadian Pacific Railway Co. 5.950% 5/15/37 250 266
Con-way Inc. 6.700% 5/1/34 350 344
4 Continental Airlines 1998-1 Class A Pass Through Trust 6.648% 9/15/17 500 498


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
4 Continental Airlines 2009-2 Class A Pass Through Trust 7.250% 11/10/19 150 159
CSX Corp. 6.300% 3/15/12 400 429
CSX Corp. 5.600% 5/1/17 25 28
CSX Corp. 7.900% 5/1/17 126 155
CSX Corp. 6.250% 3/15/18 725 833
CSX Corp. 7.375% 2/1/19 1,050 1,284
6 CSX Corp. 6.220% 4/30/40 174 191
4 Delta Air Lines Inc. 7.750% 12/17/19 418 450
4 Delta Air Lines Inc. 6.821% 8/10/22 253 253
Norfolk Southern Corp. 5.750% 1/15/16 175 197
Norfolk Southern Corp. 7.700% 5/15/17 400 496
Norfolk Southern Corp. 5.750% 4/1/18 100 113
Norfolk Southern Corp. 5.900% 6/15/19 425 487
Norfolk Southern Corp. 5.590% 5/17/25 72 77
Norfolk Southern Corp. 7.800% 5/15/27 100 126
Norfolk Southern Corp. 5.640% 5/17/29 100 105
Norfolk Southern Corp. 7.050% 5/1/37 200 246
Norfolk Southern Corp. 7.900% 5/15/97 100 128
Norfolk Southern Railway Co. 9.750% 6/15/20 116 162
Ryder System Inc. 5.850% 3/1/14 250 271
Ryder System Inc. 5.850% 11/1/16 75 83
Southwest Airlines Co. 5.750% 12/15/16 200 211
Southwest Airlines Co. 5.125% 3/1/17 400 408
4 Southwest Airlines Co. 2007-1 Pass Through Trust 6.150% 8/1/22 136 143
Union Pacific Corp. 6.125% 1/15/12 25 27
Union Pacific Corp. 6.500% 4/15/12 38 41
Union Pacific Corp. 5.450% 1/31/13 650 709
Union Pacific Corp. 7.875% 1/15/19 775 988
Union Pacific Corp. 7.125% 2/1/28 500 600
Union Pacific Corp. 6.625% 2/1/29 200 230
United Parcel Service Inc. 3.875% 4/1/14 50 54
United Parcel Service Inc. 5.125% 4/1/19 175 200
United Parcel Service Inc. 6.200% 1/15/38 725 870
        387,046
Utilities (0.9%)        
Electric (0.7%)        
AEP Texas Central Co. 6.650% 2/15/33 400 454
Alabama Power Co. 4.850% 12/15/12 200 217
Alabama Power Co. 5.500% 10/15/17 550 622
American Water Capital Corp. 6.593% 10/15/37 500 557
Appalachian Power Co. 3.400% 5/24/15 300 305
Arizona Public Service Co. 5.800% 6/30/14 50 55
Arizona Public Service Co. 4.650% 5/15/15 275 293
Baltimore Gas & Electric Co. 5.900% 10/1/16 375 433
Carolina Power & Light Co. 6.500% 7/15/12 350 382
Carolina Power & Light Co. 5.125% 9/15/13 325 358
Carolina Power & Light Co. 5.300% 1/15/19 675 759
CenterPoint Energy Houston Electric LLC 5.700% 3/15/13 500 549
CenterPoint Energy Houston Electric LLC 7.000% 3/1/14 175 204
Cleveland Electric Illuminating Co. 5.650% 12/15/13 325 361
Cleveland Electric Illuminating Co. 7.880% 11/1/17 200 245
Cleveland Electric Illuminating Co. 5.500% 8/15/24 750 820
Commonwealth Edison Co. 5.950% 8/15/16 500 572
Commonwealth Edison Co. 6.150% 9/15/17 600 688
Commonwealth Edison Co. 5.800% 3/15/18 150 170
Commonwealth Edison Co. 5.900% 3/15/36 100 109
Connecticut Light & Power Co. 6.350% 6/1/36 250 293
Consolidated Edison Co. of New York Inc. 5.375% 12/15/15 125 140
Consolidated Edison Co. of New York Inc. 5.500% 9/15/16 350 391
Consolidated Edison Co. of New York Inc. 6.650% 4/1/19 225 275
Consolidated Edison Co. of New York Inc. 5.300% 3/1/35 300 304
Consolidated Edison Co. of New York Inc. 6.200% 6/15/36 400 457
Consolidated Edison Co. of New York Inc. 6.300% 8/15/37 450 522


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Consolidated Natural Gas Co. 6.250% 11/1/11 300 317
Constellation Energy Group Inc. 4.550% 6/15/15 175 184
Constellation Energy Group Inc. 7.600% 4/1/32 100 121
Consumers Energy Co. 5.000% 2/15/12 725 764
Consumers Energy Co. 5.375% 4/15/13 175 191
Detroit Edison Co. 5.700% 10/1/37 125 134
Dominion Resources Inc. 6.000% 11/30/17 550 626
Dominion Resources Inc. 5.250% 8/1/33 200 220
4 Dominion Resources Inc. 7.500% 6/30/66 175 174
4 Dominion Resources Inc. 6.300% 9/30/66 50 46
Duke Energy Carolinas LLC 6.100% 6/1/37 1,000 1,146
Duke Energy Carolinas LLC 6.050% 4/15/38 50 58
Duke Energy Carolinas LLC 5.300% 2/15/40 375 395
Duke Energy Corp. 3.350% 4/1/15 375 383
Duke Energy Corp. 5.050% 9/15/19 175 188
Duke Energy Indiana Inc. 5.000% 9/15/13 250 271
Duke Energy Ohio Inc. 5.700% 9/15/12 675 731
Duke Energy Ohio Inc. 2.100% 6/15/13 325 330
El Paso Electric Co. 6.000% 5/15/35 175 171
Entergy Louisiana LLC 6.500% 9/1/18 100 114
Exelon Corp. 4.900% 6/15/15 500 536
Exelon Generation Co. LLC 5.200% 10/1/19 225 240
Exelon Generation Co. LLC 6.250% 10/1/39 425 452
FirstEnergy Solutions Corp. 4.800% 2/15/15 475 498
Florida Power & Light Co. 5.950% 10/1/33 100 114
Florida Power & Light Co. 5.625% 4/1/34 225 246
Florida Power & Light Co. 4.950% 6/1/35 50 50
Florida Power & Light Co. 6.200% 6/1/36 50 59
Florida Power & Light Co. 5.650% 2/1/37 300 331
Florida Power & Light Co. 5.850% 5/1/37 150 170
Florida Power & Light Co. 5.950% 2/1/38 175 198
Florida Power & Light Co. 5.960% 4/1/39 1,175 1,356
Florida Power Corp. 4.800% 3/1/13 50 54
Florida Power Corp. 5.650% 6/15/18 50 57
FPL Group Capital Inc. 2.550% 11/15/13 1,025 1,033
4 FPL Group Capital Inc. 6.350% 10/1/66 225 206
4 FPL Group Capital Inc. 6.650% 6/15/67 275 257
Georgia Power Co. 5.950% 2/1/39 575 634
Iberdrola USA Inc. 6.750% 6/15/12 500 540
Iberdrola USA Inc. 6.750% 7/15/36 400 428
Illinois Power Co. 6.125% 11/15/17 25 28
4 Integrys Energy Group Inc. 6.110% 12/1/66 300 270
Interstate Power & Light Co. 6.250% 7/15/39 100 117
Jersey Central Power & Light Co. 5.625% 5/1/16 350 378
Jersey Central Power & Light Co. 5.650% 6/1/17 350 384
Kansas City Power & Light Co. 6.050% 11/15/35 200 218
MidAmerican Energy Co. 5.650% 7/15/12 75 81
MidAmerican Energy Co. 5.950% 7/15/17 150 171
MidAmerican Energy Co. 6.750% 12/30/31 325 392
Midamerican Energy Holdings Co. 5.875% 10/1/12 750 812
Midamerican Energy Holdings Co. 5.000% 2/15/14 300 325
Midamerican Energy Holdings Co. 6.125% 4/1/36 400 443
Midamerican Energy Holdings Co. 5.950% 5/15/37 525 567
National Rural Utilities Cooperative Finance Corp. 4.375% 10/1/10 150 151
National Rural Utilities Cooperative Finance Corp. 2.625% 9/16/12 750 768
National Rural Utilities Cooperative Finance Corp. 5.500% 7/1/13 275 304
National Rural Utilities Cooperative Finance Corp. 4.750% 3/1/14 700 760
National Rural Utilities Cooperative Finance Corp. 5.450% 2/1/18 150 167
National Rural Utilities Cooperative Finance Corp. 8.000% 3/1/32 600 770
Nevada Power Co. 7.125% 3/15/19 450 535
6 Niagara Mohawk Power Corp. 4.881% 8/15/19 400 418
Nisource Finance Corp. 5.400% 7/15/14 300 324
Nisource Finance Corp. 6.125% 3/1/22 450 482
Northern States Power Co. 6.200% 7/1/37 250 297


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Northern States Power Co. 5.350% 11/1/39 175 186
NSTAR Electric Co. 4.875% 10/15/12 75 81
NSTAR Electric Co. 4.875% 4/15/14 225 244
NSTAR Electric Co. 5.625% 11/15/17 325 379
Oglethorpe Power Corp. 5.950% 11/1/39 100 113
Ohio Edison Co. 6.400% 7/15/16 550 615
Ohio Power Co. 5.750% 9/1/13 475 527
Ohio Power Co. 6.000% 6/1/16 150 170
Oklahoma Gas & Electric Co. 5.850% 6/1/40 150 162
Oncor Electric Delivery Co. LLC 5.950% 9/1/13 325 359
Oncor Electric Delivery Co. LLC 6.375% 1/15/15 175 199
Oncor Electric Delivery Co. LLC 7.250% 1/15/33 600 722
Pacific Gas & Electric Co. 4.800% 3/1/14 650 707
Pacific Gas & Electric Co. 5.625% 11/30/17 250 283
Pacific Gas & Electric Co. 8.250% 10/15/18 275 352
Pacific Gas & Electric Co. 6.050% 3/1/34 825 920
Pacific Gas & Electric Co. 5.800% 3/1/37 525 570
PacifiCorp 6.900% 11/15/11 500 538
PacifiCorp 5.250% 6/15/35 475 488
PacifiCorp 6.250% 10/15/37 650 764
Peco Energy Co. 5.350% 3/1/18 125 139
Pennsylvania Electric Co. 6.050% 9/1/17 75 83
Pepco Holdings Inc. 6.450% 8/15/12 175 192
PPL Electric Utilities Corp. 6.250% 5/15/39 100 116
PPL Energy Supply LLC 6.400% 11/1/11 250 265
PPL Energy Supply LLC 6.200% 5/15/16 68 77
Progress Energy Inc. 6.050% 3/15/14 100 112
Progress Energy Inc. 7.050% 3/15/19 75 89
Progress Energy Inc. 7.750% 3/1/31 625 797
Progress Energy Inc. 7.000% 10/30/31 550 653
Progress Energy Inc. 6.000% 12/1/39 25 27
6 PSEG Power LLC 2.500% 4/15/13 250 253
PSEG Power LLC 5.000% 4/1/14 650 695
PSEG Power LLC 5.500% 12/1/15 450 500
6 PSEG Power LLC 5.125% 4/15/20 200 208
Public Service Co. of Colorado 5.800% 8/1/18 100 117
Public Service Co. of Colorado 5.125% 6/1/19 175 194
Public Service Co. of Colorado 6.250% 9/1/37 300 355
Public Service Co. of Oklahoma 5.150% 12/1/19 600 632
Public Service Co. of Oklahoma 6.625% 11/15/37 275 316
Public Service Electric & Gas Co. 2.700% 5/1/15 225 229
Public Service Electric & Gas Co. 5.500% 3/1/40 300 331
Puget Sound Energy Inc. 5.483% 6/1/35 100 100
Puget Sound Energy Inc. 6.274% 3/15/37 500 554
San Diego Gas & Electric Co. 5.300% 11/15/15 100 114
San Diego Gas & Electric Co. 5.350% 5/15/35 100 107
San Diego Gas & Electric Co. 6.000% 6/1/39 50 59
Sierra Pacific Power Co. 6.000% 5/15/16 525 590
Sierra Pacific Power Co. 6.750% 7/1/37 400 458
South Carolina Electric & Gas Co. 6.625% 2/1/32 450 539
South Carolina Electric & Gas Co. 6.050% 1/15/38 150 172
Southern California Edison Co. 4.650% 4/1/15 775 860
Southern California Edison Co. 5.000% 1/15/16 275 309
Southern California Edison Co. 6.650% 4/1/29 225 265
Southern California Edison Co. 5.750% 4/1/35 275 310
Southern California Edison Co. 5.350% 7/15/35 350 373
Southern Power Co. 6.250% 7/15/12 425 463
Southern Power Co. 4.875% 7/15/15 400 436
Southwestern Electric Power Co. 6.450% 1/15/19 250 274
Southwestern Electric Power Co. 6.200% 3/15/40 75 78
Tampa Electric Co. 6.550% 5/15/36 375 429
Teco Finance Inc. 4.000% 3/15/16 100 103
Teco Finance Inc. 5.150% 3/15/20 125 130
TransAlta Corp. 6.650% 5/15/18 100 112


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Union Electric Co. 5.400% 2/1/16 350 375
United Utilities PLC 5.375% 2/1/19 325 335
Virginia Electric and Power Co. 5.100% 11/30/12 225 244
Virginia Electric and Power Co. 5.400% 1/15/16 700 787
Virginia Electric and Power Co. 6.000% 5/15/37 550 613
Virginia Electric and Power Co. 6.350% 11/30/37 750 875
Virginia Electric and Power Co. 8.875% 11/15/38 100 145
Wisconsin Electric Power Co. 6.000% 4/1/14 550 628
Wisconsin Electric Power Co. 4.250% 12/15/19 175 181
Wisconsin Electric Power Co. 5.625% 5/15/33 200 217
4 Wisconsin Energy Corp. 6.250% 5/15/67 525 483
Wisconsin Power & Light Co. 5.000% 7/15/19 25 28
Wisconsin Power & Light Co. 6.375% 8/15/37 300 353
Xcel Energy Inc. 5.613% 4/1/17 631 693
Xcel Energy Inc. 4.700% 5/15/20 100 104
Xcel Energy Inc. 6.500% 7/1/36 225 260
Natural Gas (0.2%)        
Atmos Energy Corp. 8.500% 3/15/19 250 314
Boardwalk Pipelines LP 5.500% 2/1/17 200 207
CenterPoint Energy Resources Corp. 7.875% 4/1/13 250 287
CenterPoint Energy Resources Corp. 6.150% 5/1/16 300 329
El Paso Natural Gas Co. 5.950% 4/15/17 225 238
Enbridge Energy Partners LP 9.875% 3/1/19 550 721
Energy Transfer Partners LP 5.650% 8/1/12 275 289
Energy Transfer Partners LP 6.000% 7/1/13 700 749
Energy Transfer Partners LP 5.950% 2/1/15 300 321
Energy Transfer Partners LP 6.125% 2/15/17 300 314
Energy Transfer Partners LP 9.000% 4/15/19 275 325
Energy Transfer Partners LP 6.625% 10/15/36 150 144
7 Enron Corp. 9.125% 4/1/03 700 2
7 Enron Corp. 7.125% 5/15/07 300 1
7 Enron Corp. 6.875% 10/15/07 1,000 2
Enterprise Products Operating LLC 4.600% 8/1/12 225 235
Enterprise Products Operating LLC 5.600% 10/15/14 775 846
Enterprise Products Operating LLC 6.300% 9/15/17 275 308
Enterprise Products Operating LLC 6.875% 3/1/33 1,000 1,088
EQT Corp. 8.125% 6/1/19 400 470
KeySpan Corp. 8.000% 11/15/30 200 259
Kinder Morgan Energy Partners LP 7.125% 3/15/12 475 516
Kinder Morgan Energy Partners LP 5.850% 9/15/12 175 188
Kinder Morgan Energy Partners LP 5.000% 12/15/13 350 374
Kinder Morgan Energy Partners LP 5.125% 11/15/14 475 502
Kinder Morgan Energy Partners LP 5.625% 2/15/15 75 81
Kinder Morgan Energy Partners LP 6.850% 2/15/20 225 258
Kinder Morgan Energy Partners LP 5.800% 3/15/35 300 283
Kinder Morgan Energy Partners LP 6.500% 9/1/39 375 388
Magellan Midstream Partners LP 5.650% 10/15/16 150 162
Magellan Midstream Partners LP 6.550% 7/15/19 125 141
National Grid PLC 6.300% 8/1/16 275 313
NuStar Logistics LP 7.650% 4/15/18 350 403
Oneok Inc. 5.200% 6/15/15 300 317
Oneok Inc. 6.000% 6/15/35 275 260
ONEOK Partners LP 5.900% 4/1/12 350 373
ONEOK Partners LP 6.150% 10/1/16 600 677
ONEOK Partners LP 8.625% 3/1/19 400 495
ONEOK Partners LP 6.650% 10/1/36 525 538
Panhandle Eastern Pipeline Co. LP 6.200% 11/1/17 800 812
Plains All American Pipeline LP / PAA Finance Corp. 6.500% 5/1/18 50 55
Plains All American Pipeline LP / PAA Finance Corp. 8.750% 5/1/19 125 150
Sempra Energy 6.000% 2/1/13 200 219
Southern California Gas Co. 5.750% 11/15/35 25 28
6 Southern Natural Gas Co. 5.900% 4/1/17 225 239
Spectra Energy Capital LLC 5.668% 8/15/14 400 435


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Tennessee Gas Pipeline Co. 7.625% 4/1/37 350 390
Texas Gas Transmission LLC 4.600% 6/1/15 250 262
TransCanada PipeLines Ltd. 4.000% 6/15/13 750 797
TransCanada PipeLines Ltd. 6.500% 8/15/18 300 350
TransCanada PipeLines Ltd. 5.600% 3/31/34 800 790
TransCanada PipeLines Ltd. 5.850% 3/15/36 125 127
TransCanada PipeLines Ltd. 6.200% 10/15/37 475 515
4 TransCanada PipeLines Ltd. 6.350% 5/15/67 400 358
6 Williams Partners LP 3.800% 2/15/15 125 127
6 Williams Partners LP 5.250% 3/15/20 900 928
6 Williams Partners LP 6.300% 4/15/40 225 226
Other Utility (0.0%)        
Veolia Environnement 6.000% 6/1/18 600 664
 
        82,825
 
Total Corporate Bonds (Cost $678,265)       725,862
 
Sovereign Bonds (U.S. Dollar-Denominated) (1.8%)        
African Development Bank 1.000% 11/23/11 275 274
African Development Bank 1.750% 10/1/12 225 228
African Development Bank 1.625% 2/11/13 325 328
African Development Bank 3.000% 5/27/14 875 904
Asian Development Bank 4.500% 9/4/12 500 537
Asian Development Bank 1.625% 7/15/13 625 629
Asian Development Bank 3.625% 9/5/13 900 967
Asian Development Bank 2.750% 5/21/14 1,175 1,212
Asian Development Bank 4.250% 10/20/14 300 327
Asian Development Bank 2.625% 2/9/15 600 618
Asian Development Bank 5.500% 6/27/16 100 116
Asian Development Bank 5.593% 7/16/18 500 577
Brazilian Government International Bond 11.000% 1/11/12 300 344
Brazilian Government International Bond 10.250% 6/17/13 150 183
Brazilian Government International Bond 7.875% 3/7/15 475 563
Brazilian Government International Bond 6.000% 1/17/17 1,975 2,170
4 Brazilian Government International Bond 8.000% 1/15/18 89 103
Brazilian Government International Bond 5.875% 1/15/19 1,225 1,341
Brazilian Government International Bond 8.875% 10/14/19 175 229
Brazilian Government International Bond 8.875% 4/15/24 325 437
Brazilian Government International Bond 8.750% 2/4/25 800 1,078
Brazilian Government International Bond 10.125% 5/15/27 875 1,310
Brazilian Government International Bond 8.250% 1/20/34 75 99
Brazilian Government International Bond 7.125% 1/20/37 650 777
Brazilian Government International Bond 11.000% 8/17/40 1,825 2,449
Brazilian Government International Bond 5.625% 1/7/41 650 641
Chile Government International Bond 7.125% 1/11/12 300 323
Chile Government International Bond 5.500% 1/15/13 150 163
China Development Bank Corp. 4.750% 10/8/14 450 492
China Development Bank Corp. 5.000% 10/15/15 175 192
China Government International Bond 4.750% 10/29/13 200 219
Corp. Andina de Fomento 5.200% 5/21/13 425 459
Corp. Andina de Fomento 5.750% 1/12/17 375 403
Council Of Europe Development Bank 2.750% 2/10/15 275 281
8 Development Bank of Japan 4.250% 6/9/15 250 273
Eksportfinans ASA 5.500% 5/25/16 1,025 1,166
Eksportfinans ASA 5.500% 6/26/17 450 514
European Bank for Reconstruction & Development 2.750% 4/20/15 1,000 1,020
European Investment Bank 4.625% 9/15/10 1,325 1,336
European Investment Bank 3.125% 7/15/11 1,800 1,843
European Investment Bank 2.000% 2/10/12 2,475 2,520
6 European Investment Bank 1.125% 4/16/12 950 954
European Investment Bank 1.750% 9/14/12 650 659
European Investment Bank 1.625% 3/15/13 600 603
European Investment Bank 2.875% 3/15/13 650 675


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
European Investment Bank 1.875% 6/17/13 700 709
European Investment Bank 4.250% 7/15/13 2,400 2,599
European Investment Bank 2.375% 3/14/14 375 383
European Investment Bank 4.625% 5/15/14 2,000 2,205
European Investment Bank 3.125% 6/4/14 2,825 2,963
European Investment Bank 2.875% 1/15/15 450 469
European Investment Bank 2.750% 3/23/15 900 922
European Investment Bank 4.875% 2/16/16 550 619
European Investment Bank 5.125% 9/13/16 300 345
European Investment Bank 4.875% 1/17/17 1,225 1,380
European Investment Bank 5.125% 5/30/17 800 918
Export Development Canada 2.375% 3/19/12 850 870
Export Development Canada 1.750% 9/24/12 975 988
Export Development Canada 3.500% 5/16/13 475 495
Export Development Canada 2.250% 5/28/15 150 152
Export-Import Bank of Korea 5.500% 10/17/12 1,100 1,161
Export-Import Bank of Korea 8.125% 1/21/14 1,375 1,570
Export-Import Bank of Korea 5.875% 1/14/15 250 271
Export-Import Bank of Korea 5.125% 3/16/15 150 159
Financement-Quebec 5.000% 10/25/12 500 543
Hydro Quebec 6.300% 5/11/11 775 810
Hydro Quebec 8.400% 1/15/22 825 1,145
Inter-American Development Bank 1.625% 7/15/13 50 50
Inter-American Development Bank 3.000% 4/22/14 1,325 1,386
Inter-American Development Bank 2.250% 7/15/15 2,175 2,189
Inter-American Development Bank 4.250% 9/10/18 1,875 2,037
Inter-American Development Bank 3.875% 9/17/19 100 105
Inter-American Development Bank 3.875% 2/14/20 500 529
Inter-American Development Bank 7.000% 6/15/25 250 321
International Bank for Reconstruction & Development 3.125% 11/15/11 600 619
International Bank for Reconstruction & Development 2.000% 4/2/12 2,175 2,218
International Bank for Reconstruction & Development 1.750% 7/15/13 1,100 1,117
International Bank for Reconstruction & Development 3.500% 10/8/13 75 80
International Bank for Reconstruction & Development 2.375% 5/26/15 1,650 1,676
International Bank for Reconstruction & Development 4.750% 2/15/35 1,050 1,147
International Finance Corp. 3.500% 5/15/13 375 401
International Finance Corp. 3.000% 4/22/14 875 915
International Finance Corp. 2.750% 4/20/15 900 930
Israel Government International Bond 4.625% 6/15/13 200 214
Israel Government International Bond 5.500% 11/9/16 850 953
Israel Government International Bond 5.125% 3/26/19 300 321
8 Japan Bank for International Cooperation 2.125% 11/5/12 1,400 1,428
Japan Bank for International Cooperation 4.250% 6/18/13 75 80
8 Japan Bank for International Cooperation 2.875% 2/2/15 625 642
8 Japan Finance Corp. 1.500% 7/6/12 700 703
8 Japan Finance Organization for Municipalities 4.625% 4/21/15 500 554
Japan Finance Organization for Municipalities 5.000% 5/16/17 500 553
Korea Development Bank 8.000% 1/23/14 800 912
Korea Development Bank 4.375% 8/10/15 700 716
Korea Electric Power Corp. 7.750% 4/1/13 750 844
9 Kreditanstalt fuer Wiederaufbau 2.000% 1/17/12 275 280
9 Kreditanstalt fuer Wiederaufbau 2.250% 4/16/12 1,125 1,150
Kreditanstalt fuer Wiederaufbau 4.750% 5/15/12 775 829
9 Kreditanstalt fuer Wiederaufbau 1.250% 6/15/12 1,625 1,634
9 Kreditanstalt fuer Wiederaufbau 1.875% 1/14/13 1,250 1,267
Kreditanstalt fuer Wiederaufbau 3.500% 5/16/13 1,200 1,267
Kreditanstalt fuer Wiederaufbau 4.000% 10/15/13 1,325 1,423
Kreditanstalt fuer Wiederaufbau 4.125% 10/15/14 25 27
9 Kreditanstalt fuer Wiederaufbau 2.750% 10/21/14 1,225 1,257
9 Kreditanstalt fuer Wiederaufbau 2.625% 3/3/15 950 968
Kreditanstalt fuer Wiederaufbau 5.125% 3/14/16 775 869
Kreditanstalt fuer Wiederaufbau 4.375% 3/15/18 2,200 2,338
Kreditanstalt fuer Wiederaufbau 4.500% 7/16/18 350 367
9 Kreditanstalt fuer Wiederaufbau 4.875% 6/17/19 4,775 5,299


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
9 Kreditanstalt fuer Wiederaufbau 4.000% 1/27/20 150 157
9 Landwirtschaftliche Rentenbank 5.250% 7/2/12 1,075 1,167
Landwirtschaftliche Rentenbank 1.875% 9/24/12 1,500 1,526
9 Landwirtschaftliche Rentenbank 3.125% 7/15/15 325 340
Landwirtschaftliche Rentenbank 4.875% 11/16/15 1,025 1,148
Malaysia Government International Bond 7.500% 7/15/11 350 371
Mexico Government International Bond 7.500% 1/14/12 145 157
Mexico Government International Bond 6.375% 1/16/13 917 1,005
Mexico Government International Bond 6.625% 3/3/15 493 562
Mexico Government International Bond 11.375% 9/15/16 100 141
Mexico Government International Bond 5.625% 1/15/17 750 820
Mexico Government International Bond 6.750% 9/27/34 2,757 3,180
Nordic Investment Bank 1.625% 1/28/13 550 555
Nordic Investment Bank 2.625% 10/6/14 475 490
Nordic Investment Bank 2.500% 7/15/15 400 407
10 Oesterreichische Kontrollbank AG 1.875% 3/21/12 1,425 1,445
10 Oesterreichische Kontrollbank AG 4.750% 10/16/12 275 298
10 Oesterreichische Kontrollbank AG 1.750% 3/11/13 700 706
10 Oesterreichische Kontrollbank AG 5.000% 4/25/17 300 332
Ontario Electricity Financial Corp. 7.450% 3/31/13 600 683
Panama Government International Bond 5.200% 1/30/20 1,225 1,275
Panama Government International Bond 7.125% 1/29/26 600 696
Panama Government International Bond 6.700% 1/26/36 200 221
Pemex Project Funding Master Trust 9.125% 10/13/10 60 61
Pemex Project Funding Master Trust 5.750% 3/1/18 950 994
Pemex Project Funding Master Trust 6.625% 6/15/38 375 385
Peruvian Government International Bond 7.125% 3/30/19 500 591
Peruvian Government International Bond 7.350% 7/21/25 700 836
Peruvian Government International Bond 8.750% 11/21/33 560 760
Petrobras International Finance Co. 6.125% 10/6/16 1,225 1,326
Petrobras International Finance Co. 5.875% 3/1/18 600 625
Petrobras International Finance Co. 8.375% 12/10/18 600 703
Petrobras International Finance Co. 7.875% 3/15/19 650 743
Petrobras International Finance Co. 5.750% 1/20/20 325 325
Petrobras International Finance Co. 6.875% 1/20/40 275 277
6 Petroleos Mexicanos 4.875% 3/15/15 75 78
Petroleos Mexicanos 8.000% 5/3/19 700 836
6 Petroleos Mexicanos 6.000% 3/5/20 425 445
Poland Government International Bond 6.250% 7/3/12 350 376
Poland Government International Bond 5.000% 10/19/15 375 395
Poland Government International Bond 6.375% 7/15/19 1,850 2,021
Province of British Columbia Canada 2.850% 6/15/15 750 776
Province of Manitoba Canada 4.900% 12/6/16 825 921
Province of Nova Scotia Canada 5.750% 2/27/12 250 269
Province of Ontario Canada 5.000% 10/18/11 2,500 2,640
Province of Ontario Canada 1.875% 11/19/12 1,050 1,062
Province of Ontario Canada 4.100% 6/16/14 1,625 1,745
Province of Ontario Canada 2.950% 2/5/15 250 256
Province of Ontario Canada 2.700% 6/16/15 875 884
Province of Ontario Canada 4.750% 1/19/16 75 83
Province of Ontario Canada 4.000% 10/7/19 850 877
Province of Ontario Canada 4.400% 4/14/20 475 506
Province of Quebec Canada 4.875% 5/5/14 250 277
Province of Quebec Canada 4.600% 5/26/15 350 387
Province of Quebec Canada 5.125% 11/14/16 525 595
Province of Quebec Canada 4.625% 5/14/18 625 692
Province of Quebec Canada 7.125% 2/9/24 400 523
Province of Quebec Canada 7.500% 9/15/29 475 659
Region of Lombardy Italy 5.804% 10/25/32 500 500
Republic of Italy 5.625% 6/15/12 875 915
Republic of Italy 2.125% 10/5/12 2,100 2,065
Republic of Italy 4.375% 6/15/13 525 541
Republic of Italy 3.125% 1/26/15 750 725
Republic of Italy 4.750% 1/25/16 575 586


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Republic of Italy 5.250% 9/20/16 1,825 1,898
Republic of Italy 6.875% 9/27/23 125 142
Republic of Italy 5.375% 6/15/33 1,400 1,351
Republic of Korea 4.250% 6/1/13 625 654
Republic of Korea 5.750% 4/16/14 875 957
Republic of Korea 7.125% 4/16/19 425 509
South Africa Government International Bond 7.375% 4/25/12 575 627
South Africa Government International Bond 6.875% 5/27/19 875 1,001
South Africa Government International Bond 5.500% 3/9/20 425 439
South Africa Government International Bond 5.875% 5/30/22 100 105
Svensk Exportkredit AB 3.250% 9/16/14 1,025 1,069
United Mexican States 5.875% 2/17/14 1,325 1,452
United Mexican States 5.950% 3/19/19 1,725 1,897
United Mexican States 5.125% 1/15/20 100 105
United Mexican States 6.050% 1/11/40 650 681
 
Total Sovereign Bonds (Cost $150,255)       157,657
 
Taxable Municipal Bonds (0.3%)        
American Muni. Power Ohio Inc. 6.053% 2/15/43 50 52
Bay Area Toll Auth. CA Toll Bridge Rev. 6.793% 4/1/30 100 101
Bay Area Toll Auth. CA Toll Bridge Rev. 6.918% 4/1/40 175 176
Bay Area Toll Auth. CA Toll Bridge Rev. 6.263% 4/1/49 325 343
Board of Regents of the Univ. of Texas System Rev.        
Financing System 5.134% 8/15/42 150 154
Board of Trustees of The Leland Stanford Junior        
University 3.625% 5/1/14 400 426
Board of Trustees of The Leland Stanford Junior        
University 4.250% 5/1/16 100 108
California GO 5.250% 4/1/14 150 158
California GO 5.750% 3/1/17 150 158
California GO 6.200% 10/1/19 600 629
California GO 7.500% 4/1/34 1,200 1,280
California GO 5.650% 4/1/39 200 214
California GO 7.300% 10/1/39 150 158
California GO 7.350% 11/1/39 1,125 1,184
California GO 7.625% 3/1/40 450 487
Central Puget Sound WA Regional Transit Auth. Sales        
& Use Tax Rev. 5.491% 11/1/39 100 110
Chicago IL Board of Educ. GO 6.138% 12/1/39 100 103
Chicago IL Metro. Water Reclamation Dist. GO 5.720% 12/1/38 650 708
Chicago IL O'Hare International Airport Rev. 6.845% 1/1/38 50 53
Chicago IL O'Hare International Airport Rev. 6.395% 1/1/40 75 81
Chicago IL Transit Auth. Rev. 6.200% 12/1/40 200 210
Chicago IL Transit Auth. Rev. 6.899% 12/1/40 325 366
Clark County NV Airport Improvement Rev. 6.881% 7/1/42 75 80
Commonwealth Financing Auth. Pennsylvania Rev. 6.218% 6/1/39 325 342
Connecticut GO 5.850% 3/15/32 300 347
Cook County IL GO 6.229% 11/15/34 100 100
Dallas County TX Hosp. Dist. GO 5.621% 8/15/44 100 109
Dallas TX Area Rapid Transit Rev. 5.999% 12/1/44 200 226
Dartmouth College 4.750% 6/1/19 25 27
Denver CO City & County School Dist. 5.664% 12/1/33 75 81
District of Columbia Income Tax Rev. 5.591% 12/1/34 50 55
Georgia GO 4.503% 11/1/25 325 344
Howard Hughes Medical Institute 3.450% 9/1/14 200 211
Illinois GO 2.766% 1/1/12 300 302
Illinois GO 4.071% 1/1/14 300 298
Illinois GO 4.950% 6/1/23 1,450 1,346
Illinois GO 5.100% 6/1/33 1,600 1,267
Illinois GO 6.630% 2/1/35 100 97
Illinois GO 6.725% 4/1/35 275 272
Illinois State Tollway Highway Auth. Toll Highway Rev. 5.851% 12/1/34 75 76


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

      Face Market
    Maturity Amount Value
  Coupon Date ($000) ($000)
Indianapolis IN Local Public Improvement Bond Bank        
Notes 6.116% 1/15/40 475 513
Johns Hopkins University 5.250% 7/1/19 375 419
Kansas Dev. Finance Auth. Rev. (Public Employee        
Retirement System) 5.501% 5/1/34 650 686
Las Vegas Valley Water Dist. Nevada GO 7.013% 6/1/39 75 86
Los Angeles CA Dept. of Water & Power Rev. 5.716% 7/1/39 100 101
Los Angeles CA Dept. of Water & Power Rev. 6.008% 7/1/39 325 355
Los Angeles CA Dept. of Water & Power Rev. 6.166% 7/1/40 100 103
Los Angeles CA USD GO 5.750% 7/1/34 250 250
Los Angeles CA USD GO 6.758% 7/1/34 100 114
Maryland Transp. Auth. Rev. 5.888% 7/1/43 100 111
Massachusetts GO 5.456% 12/1/39 250 265
Massachusetts School Building Auth. Dedicated Sales        
Tax Rev. 5.715% 8/15/39 125 137
Massachusetts Water Pollution Abatement Trust 5.192% 8/1/40 150 150
Metro. Govt. of Nashville & Davidson County TN GO 5.707% 7/1/34 125 130
Metro. New York Transp. Auth. Rev. 5.871% 11/15/39 100 102
Metro. Transp. Auth. NY Rev. 6.648% 11/15/39 175 189
Metro. Washington DC/VA Airports Auth. Airport        
System Rev. 7.462% 10/1/46 75 86
Missouri Highways & Transp. Comm. Road Rev. 5.445% 5/1/33 100 106
Muni. Electric Auth. Georgia Rev. 6.637% 4/1/57 400 395
Muni. Electric Auth. Georgia Rev. 6.655% 4/1/57 300 297
Muni. Electric Auth. Georgia Rev. 7.055% 4/1/57 150 150
New Jersey Econ. Dev. Auth. 7.425% 2/15/29 425 476
New Jersey Transp. Trust Fund Auth. Rev. 6.561% 12/15/40 50 56
New Jersey Turnpike Auth. Rev. 4.252% 1/1/16 15 16
New Jersey Turnpike Auth. Rev. 4.252% 1/1/16 335 338
New Jersey Turnpike Auth. Rev. 7.414% 1/1/40 375 473
New York City NY GO 6.246% 6/1/35 100 103
New York City NY GO 5.968% 3/1/36 150 158
New York City NY GO 5.985% 12/1/36 75 82
New York City NY GO 5.846% 6/1/40 100 103
New York City NY Muni. Water Finance Auth. 6.011% 6/15/42 75 81
New York City NY Muni. Water Finance Auth. Water &        
Sewer System Rev. 5.750% 6/15/41 100 105
New York City NY Muni. Water Finance Auth. Water &        
Sewer System Rev. 5.952% 6/15/42 100 107
New York City NY Transitional Finance Auth. Rev. 5.767% 8/1/36 100 104
New York Metro. Transp. Auth. Rev. 7.336% 11/15/39 125 155
New York Metro. Transp. Auth. Rev. 6.089% 11/15/40 50 53
New York State Dormitory Auth. Rev. (Personal Income        
Tax) 5.500% 3/15/30 325 332
New York State Dormitory Auth. Rev. (Personal Income        
Tax) 5.628% 3/15/39 95 98
New York State Urban Dev. Corp. Rev. 5.770% 3/15/39 300 308
North Texas Tollway Auth. Rev. 6.718% 1/1/49 200 225
Oregon (Taxable Pension) GO 5.762% 6/1/23 250 274
Oregon (Taxable Pension) GO 5.892% 6/1/27 375 418
Oregon GO 4.759% 6/30/28 300 298
Oregon GO 5.528% 6/30/28 125 136
Oregon State Dept. Transp. Highway Usertax Rev. 5.834% 11/15/34 75 83
Pennsylvania GO 4.650% 2/15/26 125 125
Pennsylvania GO 5.350% 5/1/30 400 399
Port Auth. of New York & New Jersey Rev. 6.040% 12/1/29 125 138
Princeton University 5.700% 3/1/39 300 337
San Antonio TX Electric & Gas Rev. 5.985% 2/1/39 225 256
San Antonio TX Electric & Gas Rev. 5.718% 2/1/41 100 110
San Diego County CA Water Auth. 6.138% 5/1/49 100 111
Tobacco Settlement West Virginia Finance Auth. Rev. 7.467% 6/1/47 370 271
Univ. of California Regents 6.583% 5/15/49 125 138
Univ. of Texas Permanent Univ. Fund Rev. 5.262% 7/1/39 100 105
Univ. of Texas Permanent Univ. Fund Rev. 6.276% 8/15/41 75 80


Vanguard® Balanced Index Fund
Schedule of Investments
June 30, 2010

        Face Market
      Maturity Amount Value
    Coupon Date ($000) ($000)
  Utah GO 4.554% 7/1/24 125 135
  Washington GO 5.090% 8/1/33 475 481
  Washington GO 5.481% 8/1/39 50 53
  Washington GO 5.140% 8/1/40 275 279
  Wisconsin GO 4.800% 5/1/13 275 300
  Wisconsin GO 5.700% 5/1/26 325 347
 
Total Taxable Municipal Bonds (Cost $24,946)       25,831
 
Temporary Cash Investments (2.7%) 1        
U.S. Government and Agency Obligations (0.1%)        
3,11 Fannie Mae Discount Notes 0.300% 9/15/10 300 300
3,11 Freddie Mac Discount Notes 0.320% 9/7/10 1,000 1,000
3,11 Freddie Mac Discount Notes 0.331% 12/15/10 2,000 1,997
3,11 Freddie Mac Discount Notes 0.361% 12/16/10 200 200
          3,497
 
 
        Shares  
Money Market Fund (2.6%)        
12,13 Vanguard Market Liquidity Fund 0.286%   230,770,890 230,771
 
 
Total Temporary Cash Investments (Cost $234,267)       234,268
 
Total Investments (102.2%) (Cost $8,077,286)       8,984,006
Other Assets and Liabilities—Net (-2.2%)13       (194,327)
 
Net Assets (100%)       8,789,679

* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $10,635,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures
investments, the fund's effective common stock and temporary cash investment positions represent 58.5% and 2.4%, respectively, of net
assets.
2 Guaranteed by the Federal Deposit Insurance Corporation (FDIC) as part of the Temporary Liquidity Guarantee Program.
3 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
4 The average or expected maturity is shorter than the final maturity shown because of the possibility of interim principal payments and
prepayments or the possibility of the issue being called.
5 Adjustable-rate security.
6 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 2010, the aggregate value of these securities was $23,632,000, representing
0.3% of net assets.
7 Non-income-producing security--security in default.
8 Guaranteed by the Government of Japan.
9 Guaranteed by the Federal Republic of Germany.
10 Guaranteed by the Republic of Austria.
11 Securities with a value of $3,497,000 have been segregated as initial margin for open futures contracts.
12 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day
yield.
13 Includes $11,409,000 of collateral received for securities on loan.
GO—General Obligation Bond.
REIT—Real Estate Investment Trust.
USD—United School District.


© 2010 The Vanguard Group. Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.

SNA 022_082010


Vanguard Managed Payout Funds
Semiannual Report
June 30, 2010

Vanguard Managed Payout Growth Focus Fund
Vanguard Managed Payout Growth and Distribution Fund
Vanguard Managed Payout Distribution Focus Fund


> For the fiscal half-year ended June 30, 2010, returns for the three Vanguard

Managed Payout Funds ranged from –2.62% to –5.47%.

> The broad U.S. stock market finished the period down –5.67%, while the

aggregate U.S. bond market was up 5.33% for the six months.

> The Managed Payout Funds’ underlying portfolios followed suit, with the bond

funds registering positive returns and the equity funds—except for the REIT

Index Fund—ending the period in negative territory.

Contents  
Your Fund’s Total Returns. 1
Chairman’s Letter. 2
Advisor’s Report. 7
Managed Payout Growth Focus Fund. 9
Managed Payout Growth and Distribution Fund. 19
Managed Payout Distribution Focus Fund. 29
About Your Fund’s Expenses. 39
Trustees Approve Advisory Arrangement. 41
Glossary. 42

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.

Cover photograph: Veronica Coia.


Your Fund’s Total Returns

Six Months Ended June 30, 2010  
  Total
  Returns
Vanguard Managed Payout Growth Focus Fund -5.47%
Managed Payout Growth Focus Composite Index -6.05

Managed Payout Growth Focus Composite Index: Weighted 65% FTSE All-World Index, 5% Barclays Capital U.S. Aggregate Bond Index, 10% Citigroup 3-Month Treasury Bill Index, 10% Dow Jones-UBS Commodity Index, and 10% MSCI US REIT Index through December 31, 2009, after which the Barclays index was replaced by the Barclays Capital U.S. Aggregate Float Adjusted Index. (MSCI US REIT Index was adjusted to include a 2% cash position through April 30, 2009.)

Vanguard Managed Payout Growth and Distribution Fund -4.08%
Managed Payout Growth and Distribution Composite Index -4.12

Managed Payout Growth and Distribution Composite Index: Weighted 50% FTSE All-World Index, 15% Barclays Capital U.S. Aggregate Bond Index, 15% Citigroup 3-Month Treasury Bill Index, 10% Dow Jones-UBS Commodity Index, and 10% MSCI US REIT Index through December 31, 2009, after which the Barclays index was replaced by the Barclays Capital U.S. Aggregate Float Adjusted Index. (MSCI US REIT Index was adjusted to include a 2% cash position through April 30, 2009.)

Vanguard Managed Payout Distribution Focus Fund -2.62%
Managed Payout Distribution Focus Composite Index -2.50

Managed Payout Distribution Focus Composite Index: Weighted 40% FTSE All-World Index, 20% Barclays Capital U.S. Aggregate Bond Index, 10% Barclays Capital U.S. Treasury Inflation Protected Securities Index, 10% Citigroup 3-Month Treasury Bill Index, 10% Dow Jones-UBS Commodity Index, and 10% MSCI US REIT Index through December 31, 2009, after which the Barclays index was replaced by the Barclays Capital U.S. Aggregate Float Adjusted Index. (MSCI US REIT Index was adjusted to include a 2% cash position through April 30, 2009.)

Your Fund’s Performance at a Glance
December 31, 2009 , Through June 30, 2010

      Distributions Per Share  
  Starting Ending Income Capital Return of
  Share Price Share Price Dividends Gains Capital
Vanguard Managed Payout Growth Focus Fund $15.97 $14.78 $0.339 $0.000 $0.000
Vanguard Managed Payout Growth and          
Distribution Fund $15.92 $14.91 $0.380 $0.000 $0.000
Vanguard Managed Payout Distribution Focus          
Fund $15.60 $14.68 $0.533 $0.000 $0.000

The funds pay monthly and other distributions that may include some combination of dividend income, return of capital, and capital gains. The tax characteristics of these distributions, however, cannot be determined until after the end of the year.

1


 

 

 

Chairman’s Letter

Dear Shareholder,

For the six-month period ended June 30, returns for the Vanguard Managed Payout Funds ranged from –2.62% for the Distribution Focus Fund to –5.47% for the Growth Focus Fund. The Growth and Distribution Fund fell almost exactly in the middle, returning –4.08%. The performance of all three funds was more or less in line with their respective benchmarks.

The primary objective of the Managed Payout Funds is to meet the needs of investors—typically retirees—who desire monthly income to meet expenses. Each fund seeks to generate regular monthly cash payments while preserving investors’ savings. As we previously reported, for calendar-year 2010 the funds’ investment committee reduced each fund’s monthly payout, following the policy of basing payment levels on investment performance (please see the table on page 4).

Sovereign debt worries pulled down stock returns

The six-month period was particularly trying for stock markets in the United States and abroad. In the U.S. market, the decline was sudden and startling.

After pulling back a bit in January from 2009’s strong gains, U.S. stocks rose steadily as winter turned to spring.

2


Rapid growth in corporate earnings and optimism about the strength of the economic recovery were dominant themes. But in May, the scope of Europe’s fiscal challenges became clearer, and stock prices retreated sharply. For the full six months, U.S. stocks returned about –6%. Small-capitalization stocks, representing companies less exposed to global turmoil than large-cap multinationals, lost less ground than larger stocks.

International stocks also posted negative six-month returns. For U.S.-based investors, a strengthening U.S. dollar further reduced the returns from stocks abroad, particularly in Europe, where the euro fell noticeably in value.

Bonds continued to show strength as investors looked for safer assets

With the economic recovery appearing to decelerate and inflation remaining dormant, bonds stayed in favor throughout the period. As worries persisted about possible fallout from Europe’s sovereign debt problems, many investors sought safety in U.S. Treasuries. Higher-quality corporate bonds also performed well as earnings reports indicated that company balance sheets remained in good shape.

Municipal bonds, with their history of low default rates, also held their ground despite ongoing concerns about deficits confronting many state and local governments. In this risk-averse environment, lower-rated, higher-risk corporate bonds lagged a bit.

Market Barometer      
 
  Total Returns
  Periods Ended June 30, 2010
  Six One Five Years
  Months Year (Annualized)
Stocks      
Russell 1000 Index (Large-caps) -6.40% 15.24% -0.56%
Russell 2000 Index (Small-caps) -1.95 21.48 0.37
Dow Jones U.S. Total Stock Market Index -5.67 16.20 -0.08
MSCI All Country World Index ex USA (International) -10.80 10.87 3.84
 
Bonds      
Barclays Capital U.S. Aggregate Bond Index (Broad      
taxable market) 5.33% 9.50% 5.54%
Barclays Capital Municipal Bond Index 3.31 9.61 4.40
Citigroup Three-Month U.S. Treasury Bill Index 0.06 0.12 2.63
 
CPI      
Consumer Price Index 0.93% 1.05% 2.30%

3


For the full six months, the broad taxable market returned more than 5%; municipal securities returned more than 3%.

The funds’ underlying holdings reflected the markets’ trends

Over the past six months, the Managed Payout Funds’ bond holdings helped to cushion them to an extent from the declines in stocks. Still, with sizable equity allocations, the funds reflect the volatility that has characterized stock markets not only during the most recent six-month period, but more or less since the funds’ inception in May 2008. This is evident in their recent record: Prior to their half-year declines, all three funds posted gains above 20% in calendar year 2009.

The Managed Payout Funds invest largely in Vanguard index portfolios, which did their job of mirroring the broad financial markets during the semiannual period. The three underlying fixed income funds turned in positive results, while the equity funds—with the exception of Vanguard REIT Index Fund—were down for the half-year.

In line with the pattern of market returns globally, Vanguard European Index Fund took the biggest hit among the underlying funds, falling almost –17%. Vanguard Market Neutral Fund produced a modest positive return for the period. This fund, which seeks to add modest stock-selection gains to the return of 3-month U.S. Treasury bills, accounted for 5% of each Managed Payout Fund’s assets for most of the period.

  Monthly Payout Per Share
Managed Payout Fund 2009 2010
Growth Focus $0.0412 $0.0373
Growth and Distribution 0.0699 0.0634
Distribution Focus 0.0983 0.0889

4


With a return of –2.62%, the Managed Payout Distribution Focus Fund held up best among the three funds in the period. The fund seeks to preserve an investment’s long-term principal while providing higher current payouts. Of the three, the Distribution Focus Fund has the largest allocation to bonds, which gave it more of a buffer against stock volatility in the period.

The Managed Payout Growth Focus Fund, which seeks to deliver long-term capital appreciation and inflation protection and more modest current payouts, was the group’s worst performer, returning –5.47%. The fund’s disappointing return wasn’t surprising, given its heavy allocation to equities.

The Managed Payout Growth and Distribution Fund, which offers a combination of the other two funds’ investment strategies, fell in between them, returning –4.08% for the half-year.

Long-term diversification is always a good idea

The past six months have been a dramatic time in the U.S. stock market. At the beginning of the period, stocks looked set to continue the impressive rally that began in March 2009, amid the worst recession in decades. However, in May, stocks retreated swiftly as investors grew increasingly concerned about the European debt crisis, the strength of the economic recovery, and repercussions from the oil spill in the Gulf of Mexico.

  Percentage of Managed Payout Funds’ Investments1
    Growth and  
  Growth Distribution Distribution
  Focus Fund Fund Focus Fund
Vanguard Stock Funds (Investor Shares)      
Total Stock Market Index 36.7% 30.7% 24.6%
European Stock Index 13.3 11.2 9.5
REIT Index 9.9 9.8 9.7
Pacific Stock Index 7.5 6.3 5.3
Emerging Markets Stock Index 7.3 6.1 5.1
 
Vanguard Bond Funds (Investor Shares)      
Intermediate-Term Investment-Grade 4.9% 10.3% 15.4%
Total Bond Market II Index 0.0 5.2 5.2
Inflation-Protected Securities 0.0 0.0 5.1
 
Vanguard Market Neutral Fund (Investor Shares) 10.1% 10.3% 10.0%
 
Commodities2 10.3% 10.1% 10.1%

1 As of June 30, 2010.
2 The funds invest a portion of their assets in commodities through the use of swap contracts.

5


Although the U.S. fixed income market has held up better than the stock market, bonds have had their own share of ups and downs in the past few years.

It’s important to remember that, while you can’t control what happens in the financial markets, you can control how you invest your hard-earned money. Vanguard encourages you to adopt a well-balanced, diversified investment plan, and then stick with it for the long haul.

The Vanguard Managed Payout Funds embody these principles, combining broad diversification with an investment strategy intended to provide income and some capital growth over the long term. In addition, all three funds are composed largely of Vanguard index funds, whose low costs enable you to keep more of the return on your investment.

Whether you’re looking for long-term capital appreciation and inflation protection or for higher monthly payouts, one of our Managed Payout Funds can be suitable to your goals.

Thank you for entrusting your assets to Vanguard.

Sincerely,


F. William McNabb III

Chairman and Chief Executive Officer July 15, 2010


Advisor’s Report

For the six months ended June 30, 2010, the MSCI All-Country World Index returned –9.37%, while the Barclays Capital U.S. Aggregate Float Adjusted Index gained 5.32%.

The Managed Payout Funds make regular monthly cash payments while seeking to preserve or increase the value of a shareholder’s investment over time. We’ve established long-term, or “policy,” asset allocations for the three funds that, in our judgment, are consistent with their payout and capital preservation or appreciation objectives. When the relative attractiveness of various asset classes changes, we may tilt the funds’ allocations away from the “policy portfolios” in an effort to capture opportunities for outperformance or reduce risk relative to their benchmarks.

During the past six months, our allocation shifts had limited impact on the funds’ performance relative to their composite benchmarks.

Distribution Focus Fund

The Distribution Focus Fund returned –2.62% versus –2.50% for its composite index. Relative to its benchmark, the fund benefited during the half-year from its investment in the Vanguard Intermediate-Term Investment-Grade Fund, which resulted in an above-benchmark weighting in corporate bonds. The fund’s overweighting in equities and its underweighting in REITs restrained performance modestly.

Toward the end of the period, the Distribution Focus Fund shifted 5% of its assets from the Vanguard Total Bond Market II Index Fund into the Market Neutral Fund. It also shifted 5% of fund assets from the Total Bond Market II Index Fund into the Vanguard REIT Index Fund. Both changes moved the fund’s allocation closer to that of its composite benchmark. (In the composite benchmark, the Market Neutral Fund’s allocation is represented by the Citigroup Three-month Treasury Bill Index. The Market Neutral Fund seeks to limit its exposure to the broad stock market’s movements while adding modest stock selection gains to the return of the 3-month Treasury bill.)

Growth and Distribution Fund

The Growth and Distribution Fund returned –4.08% versus –4.12% for its composite index. Like the Distribution Focus Fund, the fund benefited during the half-year from its investment in the Vanguard Intermediate-Term Investment-Grade Fund, and paid a modest penalty for its overweighting in equities and its underweighting in REITs.

During the period, we shifted the 5% of assets that was allocated to Vanguard Inflation-Protected Securities Fund, which holds Treasury Inflation-Protected Securities (TIPS), into the Vanguard Intermediate-Term Investment-Grade Fund. We made this decision based on the relative expected income streams from the two asset classes and on our assessment of TIPS valuations.

7


We subsequently shifted 5% of fund assets from the Intermediate-Term Investment-Grade Fund into REITs. We also moved 5% of the fund from the Total Bond Market II Index Fund into the Market Neutral Fund. As in the Distribution Focus Fund, these shifts brought the fund’s exposures closer to those of its benchmark.

Growth Focus Fund

The Growth Focus Fund returned –5.47%, beating the –6.05% return for its composite index, benefiting from its exposure to the Intermediate-Term Investment-Grade Fund. As in the two other funds, our decision to hold a below-benchmark weight in REITs for most of the period was a drag on performance.

In May and June, the Growth Focus Fund moved 5% of its assets from the Total Bond Market II Index Fund to the Market Neutral Fund, bringing its allocation to this strategy in line with that of the benchmark. We also shifted 5% of fund assets from the Intermediate-Term Investment-Grade Fund into the REIT Index Fund, bringing the fund’s REIT exposure in line with that of its composite benchmark.

Assessment of relative values during the period

Our decision to trim the funds’ fixed income exposure, restore REITs to a benchmark weight, and maintain neutral or above-benchmark exposure to stocks reflected our view that:

1) The outperformance of bonds made them expensive relative to other asset classes.

2) Recent REIT weakness strengthened the case for returning the funds to a benchmark-neutral REIT allocation.

3) The recent stock market correction presented an opportunity, as overall, forward-looking U.S. equity market valuations appeared more attractive than they had in several months.

Outlook

Looking ahead, we remain cautiously optimistic regarding the performance of riskier assets. While the events in Europe have increased the uncertainty with respect to the near-term economic and market outlook, the committee does not foresee a repeat of the 2008 global financial crisis. The global economy continues to recover and trend inflation remains low, although the pace of growth varies markedly across regions. Equity market valuations are in line with, and in some cases cheaper than, historical levels.

Both the near-term and longer-horizon median forecasts are supportive of this broad allocation to riskier assets, a category that includes global equities, REITs, and commodities, among other assets. Accordingly, we’re comfortable with keeping the funds’ allocations to riskier assets either at or slightly above those of the benchmark.

George U. Sauter, Chief Investment Officer

Chris McIsaac, Principal

Joseph H. Davis, Principal

John Ameriks, Principal

July 20, 2010

8


Managed Payout Growth Focus Fund

Fund Profile
As of June 30, 2010

Total Fund Characteristics  
Ticker Symbol VPGFX
30-Day SEC Yield 2.98%
Acquired Fund Fees and Expenses1 0.53%

Allocation to Underlying Investments  
Vanguard Total Stock Market Index Fund  
Investor Shares 36.7%
Vanguard European Stock Index Fund  
Investor Shares 13.3
Vanguard Market Neutral Fund Investor  
Shares 10.1
Vanguard REIT Index Fund Investor  
Shares 9.9
Vanguard Pacific Stock Index Fund  
Investor Shares 7.5
Vanguard Emerging Markets Stock Index  
Fund Investor Shares 7.3
Vanguard Intermediate-Term  
Investment-Grade Fund Investor Shares 4.9
Commodities 10.3

The fund invests a portion of its assets in commodities through the use of swap contracts.

Fund Asset Allocation

 

 

 

1 This figure—drawn from the prospectus dated April 28, 2010—represents an estimate of the weighted average of the expense ratios and
any transaction fees charged by the underlying mutual funds (the ”acquired” funds) in which the Managed Payout Growth Focus Fund invests.
The Managed Payout Growth Focus Fund does not charge any expenses or fees of its own. For the six months ended June 30, 2010, the
annualized acquired fund fees and expenses were 0.30% (approximately one-third of this amount is attributable to the short-sale dividend
and borrowing expenses reported by Vanguard Market Neutral Fund).

9


Managed Payout Growth Focus Fund

Performance Summary

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

Fiscal-Year Total Returns (%): May 2, 2008, Through June 30, 2010


Managed Payout Growth Focus Composite Index: Weighted 65% FTSE All-World Index, 5% Barclays Capital U.S. Aggregate Bond Index, 10% Citigroup 3-Month Treasury Bill Index, 10% Dow Jones-UBS Commodity Index, and 10% MSCI US REIT Index through December 31, 2009, after which the Barclays index was replaced by the Barclays Capital U.S. Aggregate Float Adjusted Index. (MSCI US REIT Index was adjusted to include a 2% cash position through April 30, 2009.) Note: For 2010, performance data reflect the six months ended June 30, 2010.

Average Annual Total Returns: Periods Ended June 30, 2010

      Since Inception
  Inception Date One Year Income Capital Total
Managed Payout Growth          
Focus Fund 5/2/2008 12.74% 2.36% -12.08% -9.72%

See Financial Highlights for dividend and capital gains information.

10


Managed Payout Growth Focus Fund

Financial Statements (unaudited)

Statement of Net Assets
As of June 30, 2010

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

    Market
    Value•
  Shares ($000)
Investment Companies (89.4%)    
U.S. Stock Funds (46.5%)    
Vanguard Total Stock Market Index Fund Investor Shares 692,668 17,725
Vanguard REIT Index Fund Investor Shares 310,959 4,795
    22,520
International Stock Funds (28.0%)    
Vanguard European Stock Index Fund Investor Shares 297,217 6,408
Vanguard Pacific Stock Index Fund Investor Shares 402,203 3,624
Vanguard Emerging Markets Stock Index Fund Investor Shares 146,666 3,538
    13,570
Bond Fund (4.9%)    
Vanguard Intermediate-Term Investment-Grade Fund Investor Shares 234,116 2,346
 
Market Neutral Fund (10.0%)    
Vanguard Market Neutral Fund Investor Shares 497,197 4,863
Total Investment Companies (Cost $54,881)   43,299
Temporary Cash Investments (10.1%)1    
Money Market Fund (9.6%)    
2 Vanguard Market Liquidity Fund, 0.286% 4,632,483 4,632
 
  Face  
  Amount  
  ($000)  
U.S. Government and Agency Obligations (0.5%)    
3 Freddie Mac Discount Notes, 0.320%, 9/20/10 250 250
Total Temporary Cash Investments (Cost $4,882)   4,882
Total Investments (99.5%) (Cost $59,763)   48,181

11


Managed Payout Growth Focus Fund

  Market
  Value•
  ($000)
Other Assets and Liabilities (0.5%)  
Other Assets 340
Liabilities (78)
  262
Net Assets (100%)  
Applicable to 3,278,240 outstanding $.001 par value shares of  
beneficial interest (unlimited authorization) 48,443
Net Asset Value Per Share $14.78

At June 30, 2010, net assets consisted of:  
  Amount
  ($000)
Paid-in Capital 63,302
Overdistributed Net Investment Income (824)
Accumulated Net Realized Losses (2,453)
Unrealized Appreciation (Depreciation)  
Investment Securities (11,582)
Swap Contracts —
Net Assets 48,443

• See Note A in Notes to Financial Statements.
1 The fund invests a portion of its assets in commodities through the use of swap contracts. After giving effect to swap investments, the
fund’s effective commodity and temporary cash investment positions represent 10.3% and -0.2%, respectively, of net assets.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the
7-day yield.
3 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
See accompanying Notes, which are an integral part of the Financial Statements.

12


Managed Payout Growth Focus Fund

Statement of Operations

  Six Months Ended
  June 30, 2010
  ($000)
Investment Income  
Income  
Income Distributions Received 361
Net Investment Income—Note B 361
Realized Net Gain (Loss)  
Capital Gain Distributions Received 19
Investment Securities Sold 450
Swap Contracts (453)
Realized Net Gain (Loss) 16
Change in Unrealized Appreciation (Depreciation) of Investment Securities (3,389)
Net Increase (Decrease) in Net Assets Resulting from Operations (3,012)

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

13


Managed Payout Growth Focus Fund

Statement of Changes in Net Assets

  Six Months Ended Year Ended
  June 30, December 31,
  2010 2009
  ($000) ($000)
Increase (Decrease) in Net Assets    
Operations    
Net Investment Income 361 1,066
Realized Net Gain (Loss) 16 201
Change in Unrealized Appreciation (Depreciation) (3,389) 8,263
Net Increase (Decrease) in Net Assets Resulting from Operations (3,012) 9,530
Distributions    
Net Investment Income (1,063) (1,426)
Realized Capital Gain — —
Total Distributions (1,063) (1,426)
Capital Share Transactions    
Issued 12,622 16,374
Issued in Lieu of Cash Distributions 783 879
Redeemed (8,122) (13,998)
Net Increase (Decrease) from Capital Share Transactions 5,283 3,255
Total Increase (Decrease) 1,208 11,359
Net Assets    
Beginning of Period 47,235 35,876
End of Period1 48,443 47,235

1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of ($824,000) and $331,000.

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

14


Managed Payout Growth Focus Fund

Financial Highlights

  Six Months Year April 21,
  Ended Ended 20081 to
  June 30, Dec. 31, Dec. 31,
For a Share Outstanding Throughout Each Period 2010 2009 2008
Net Asset Value, Beginning of Period $15.97 $13.15 $20.00
Investment Operations      
Net Investment Income .114 .372 .3942
Capital Gain Distributions Received .005 .006 .0722
Net Realized and Unrealized Gain (Loss) on Investments (.970) 2.936 (6.916)
Total from Investment Operations (.851) 3.314 (6.450)
Distributions      
Dividends from Net Investment Income (.339) (.494) —
Distributions from Realized Capital Gains — — —
Return of Capital — — (.400)
Total Distributions (.339) (.494) (.400)
Net Asset Value, End of Period $14.78 $15.97 $13.15
 
Total Return -5.47% 25.90% -32.62%
 
Ratios/Supplemental Data      
Net Assets, End of Period (Millions) $48 $47 $36
Ratio of Total Expenses to Average Net Assets 0%3 0% 0%
Ratio of Net Investment Income to Average Net Assets 1.44%4 2.66% 3.52%4
Portfolio Turnover Rate 48%4 60%5 68%

1 Subscription period for the fund was April 21, 2008, to May 2, 2008, during which time all assets were held in money market instruments.
Performance measurement began May 2, 2008, at a net asset value of $20.01.
2 Calculated based on average shares outstanding.
3 The acquired fund fees and expenses were 0.30% (annualized).
4 Annualized.
5 Excludes the value of mutual fund shares delivered and received in connection with a change in the fund’s bond investments from
Vanguard Total Bond Market Index Fund to Vanguard Total Bond Market II Index Fund because those transactions were effected in kind and
did not cause the fund to incur transaction costs.

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

15


Managed Payout Growth Focus Fund

Notes to Financial Statements

Vanguard Managed Payout Growth Focus Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund combines a managed distribution policy with an endowment-like investment strategy. The fund may invest across a wide spectrum of asset classes and investments that are expected to add diversification and result in a more consistent return pattern than a traditional balanced portfolio of stocks, bonds, and cash.

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

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. 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. Swap Contracts: The fund has entered into swap transactions to earn the total return on a specified commodity index. Under the terms of the swaps, the fund receives the total return (either receiving the increase or paying the decrease) on a reference index, applied to a notional principal amount. In return, the fund agrees to pay the counterparty a floating rate, which is reset periodically based on short-term interest rates, applied to the same notional amount. At the same time, the fund invests an amount approximating the notional amount of the swap in high-quality temporary cash investments.

The notional amounts of swap contracts are not recorded in the Statement of Net Assets. Swaps are valued daily and the change in value is recorded as unrealized appreciation (depreciation) until periodic payments are made, or the swap terminates, at which time realized gain (loss) is recorded. The primary risk associated with the swaps is that a counterparty will default on its obligation to pay net amounts due to the fund. The fund’s maximum risk of loss from counterparty credit risk is the amount of unrealized appreciation on the swap contract. This risk is mitigated by entering into swaps only with highly rated counterparties, by a master netting arrangement between the fund and the counterparty, and by the posting of collateral by the counterparty. The swap contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has posted. Any securities posted as collateral for open contracts are noted in the Statement of Net Assets.

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (December 31, 2008–2009), and for the period ended June 30, 2010, and has concluded that no provision for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions are determined based on a specified percentage payout rate of 3% of the fund’s average net asset value. The monthly distribution rate is reset annually based on changes in the fund’s average net asset value. Effective January 1, 2010, the monthly distribution rate is $.0373. The fund also distributed $.1148 per share of ordinary income remaining from 2009 to shareholders of record on January 4, 2010. Distributions to shareholders are recorded on the ex-dividend date. Monthly distributions declared by the fund are reallocated at fiscal year-end to ordinary income, capital gain, and return of capital to reflect their tax character.

16


Managed Payout Growth Focus Fund

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

B. Under a service agreement, The Vanguard Group furnishes investment advisory, corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the period ended June 30, 2010, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

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

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

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

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

The following table summarizes the fund’s investments as of June 30, 2010, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments ($000) ($000) ($000)
Investment Companies 43,299 — —
Temporary Cash Investments 4,632 250 —
Total 47,931 250 —

D. At June 30, 2010, the fund had the following open total return swap contract:

        Floating Unrealized
      Notional Interest Rate Appreciation
  Termination   Amount Received (Depreciation)
Reference Entity Date Counterparty1 ($000) (Paid)2 ($000)
MLCX-Enhanced Benchmark A 01          
Total Return Index 7/30/10 ML 4,991 (0.560%) —

MLCX—Merrill Lynch Commodity index eXtra.
1 ML—Merrill Lynch Capital Services.
2 Based on three-month U.S. Treasury bill rate plus a fixed fee of 0.40%.

17


Managed Payout Growth Focus Fund

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.

Realized and unrealized gains (losses) on certain of the fund’s swap contracts are treated as ordinary income (loss) for tax purposes; the effect on the fund’s income dividends to shareholders is offset by a change in principal return. Realized losses of $453,000 on swap contracts have been reclassified from accumulated net realized losses to overdistributed net investment income.

The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at December 31, 2009, the fund had available capital loss carryforwards totaling $2,537,000 to offset future net capital gains of $1,188,000 through December 31, 2016, and $1,349,000 through December 31, 2017. In addition, the fund realized losses of $313,000 during the period from November 1, 2009, through December 31, 2009, which are deferred and will be treated as realized for tax purposes in fiscal 2010. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending December 31, 2010; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.

At June 30, 2010, the cost of investment securities for tax purposes was $59,763,000. Net unrealized depreciation of investment securities for tax purposes was $11,582,000, consisting of unrealized gains of $738,000 on securities that had risen in value since their purchase and $12,320,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the six months ended June 30, 2010, the fund purchased $14,393,000 of investment securities and sold $10,625,000 of investment securities, other than temporary cash investments.

G. Capital shares issued and redeemed were:

  Six Months Ended Year Ended
  June 30, 2010 December 31, 2009
  Shares Shares
  (000) (000)
Issued 789 1,192
Issued in Lieu of Cash Distributions 49 64
Redeemed (518) (1,025)
Net Increase (Decrease) in Shares Outstanding 320 231

H. In preparing the financial statements as of June 30, 2010, management considered the impact of subsequent events for potential recognition or disclosure in these financial statements.

18


Managed Payout Growth and Distribution Fund

Fund Profile
As of June 30, 2010

Total Fund Characteristics  
Ticker Symbol VPGDX
30-Day SEC Yield 3.02%
Acquired Fund Fees and Expenses1 0.48%

Allocation to Underlying Investments  
Vanguard Total Stock Market Index Fund  
Investor Shares 30.7%
Vanguard European Stock Index Fund  
Investor Shares 11.2
Vanguard Market Neutral Fund Investor  
Shares 10.3
Vanguard Intermediate-Term  
Investment-Grade Fund Investor Shares 10.3
Vanguard REIT Index Fund Investor  
Shares 9.8
Vanguard Pacific Stock Index Fund  
Investor Shares 6.3
Vanguard Emerging Markets Stock Index  
Fund Investor Shares 6.1
Vanguard Total Bond Market II Index Fund  
Investor Shares 5.2
Commodities 10.1

The fund invests a portion of its assets in commodities through the use of swap contracts.

Fund Asset Allocation

 

 

 

1 This figure—drawn from the prospectus dated April 28, 2010—represents an estimate of the weighted average of the expense ratios and
any transaction fees charged by the underlying mutual funds (the ”acquired” funds) in which the Managed Payout Growth and Distribution
Fund invests. The Managed Payout Growth and Distribution Fund does not charge any expenses or fees of its own. For the six months ended
June 30, 2010, the annualized acquired fund fees and expenses were 0.30% (approximately one-third of this amount is attributable to the
short-sale dividend and borrowing expenses reported by Vanguard Market Neutral Fund).

19


Managed Payout Growth and Distribution Fund

Performance Summary

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

Fiscal-Year Total Returns (%): May 2, 2008, Through June 30, 2010


Managed Payout Growth and Distribution Composite Index: Weighted 50% FTSE All-World Index, 15% Barclays Capital U.S. Aggregate Bond
Index, 15% Citigroup 3-Month Treasury Bill Index, 10% Dow Jones-UBS Commodity Index, and 10% MSCI US REIT Index through December
31, 2009, after which the Barclays index was replaced by the Barclays Capital U.S. Aggregate Float Adjusted Index. (MSCI US REIT Index was
adjusted to include a 2% cash position through April 30, 2009.)
Note: For 2010, performance data reflect the six months ended June 30, 2010.

Average Annual Total Returns: Periods Ended June 30, 2010

      Since Inception
  Inception Date One Year Income Capital Total
Managed Payout Growth          
and Distribution Fund 5/2/2008 12.51% 3.50% -11.07% -7.57%

See Financial Highlights for dividend and capital gains information.

20


Managed Payout Growth and Distribution Fund

Financial Statements (unaudited)

Statement of Net Assets
As of June 30, 2010

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

      Market
      Value•
    Shares ($000)
Investment Companies (89.7%)    
U.S. Stock Funds (40.4%)    
  Vanguard Total Stock Market Index Fund Investor Shares 2,348,331 60,094
  Vanguard REIT Index Fund Investor Shares 1,238,076 19,091
      79,185
International Stock Funds (23.5%)    
  Vanguard European Stock Index Fund Investor Shares 1,019,253 21,975
  Vanguard Pacific Stock Index Fund Investor Shares 1,362,850 12,279
  Vanguard Emerging Markets Stock Index Fund Investor Shares 495,683 11,956
      46,210
Bond Funds (15.5%)    
  Vanguard Intermediate-Term Investment-Grade Fund Investor Shares 2,009,023 20,130
1 Vanguard Total Bond Market II Index Fund Investor Shares 967,191 10,272
      30,402
Market Neutral Fund (10.3%)    
  Vanguard Market Neutral Fund Investor Shares 2,061,964 20,166
Total Investment Companies (Cost $204,070)   175,963
Temporary Cash Investments (10.1%)2    
Money Market Fund (7.8%)    
1 Vanguard Market Liquidity Fund, 0.286% 15,348,000 15,348
 
    Face  
    Amount  
    ($000)  
U.S. Government and Agency Obligations (2.3%)    
3 Federal Home Loan Bank, 0.300%, 11/19/10 1,500 1,498
3 Freddie Mac Discount Notes, 0.320%, 9/7/10 500 500
3 Freddie Mac Discount Notes, 0.320%, 9/20/10 500 500
3 Freddie Mac Discount Notes, 0.300%, 11/1/10 1,000 999
3 Freddie Mac Discount Notes, 0.321%, 12/15/10 1,000 999
      4,496
Total Temporary Cash Investments (Cost $19,842)   19,844
Total Investments (99.8%) (Cost $223,912)   195,807

21


Managed Payout Growth and Distribution Fund

  Market
  Value•
  ($000)
Other Assets and Liabilities (0.2%)  
Other Assets 863
Liabilities (451)
  412
Net Assets (100%)  
Applicable to 13,162,012 outstanding $.001 par value shares of  
beneficial interest (unlimited authorization) 196,219
Net Asset Value Per Share $14.91
 
 
At June 30, 2010, net assets consisted of:  
  Amount
  ($000)
Paid-in Capital 230,654
Overdistributed Net Investment Income (4,801)
Accumulated Net Realized Losses (1,529)
Unrealized Appreciation (Depreciation)  
Investment Securities (28,105)
Swap Contracts —
Net Assets 196,219

• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market
Liquidity Fund is the 7-day yield.
2 The fund invests a portion of its assets in commodities through the use of swap contracts. After giving effect to swap investments,
the fund’s effective commodity and temporary cash investment positions represent 10.1% and 0.0%, respectively, of net assets.
3 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
See accompanying Notes, which are an integral part of the Financial Statements.

22


Managed Payout Growth and Distribution Fund

Statement of Operations

  Six Months Ended
  June 30, 2010
  ($000)
Investment Income  
Income  
Income Distributions Received 1,642
Interest 3
Net Investment Income—Note B 1,645
Realized Net Gain (Loss)  
Capital Gain Distributions Received 73
Investment Securities Sold 1,113
Swap Contracts (1,744)
Realized Net Gain (Loss) (558)
Change in Unrealized Appreciation (Depreciation) of Investment Securities (9,722)
Net Increase (Decrease) in Net Assets Resulting from Operations (8,635)

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

23


Managed Payout Growth and Distribution Fund

Statement of Changes in Net Assets

  Six Months Ended Year Ended
  June 30, December 31,
  2010 2009
  ($000) ($000)
Increase (Decrease) in Net Assets    
Operations    
Net Investment Income 1,645 3,842
Realized Net Gain (Loss) (558) 2,642
Change in Unrealized Appreciation (Depreciation) (9,722) 23,757
Net Increase (Decrease) in Net Assets Resulting from Operations (8,635) 30,241
Distributions    
Net Investment Income (4,702) (6,309)
Realized Capital Gain — —
Return of Capital — (1,713)
Total Distributions (4,702) (8,022)
Capital Share Transactions    
Issued 55,592 75,423
Issued in Lieu of Cash Distributions 1,764 3,332
Redeemed (25,805) (38,232)
Net Increase (Decrease) from Capital Share Transactions 31,551 40,523
Total Increase (Decrease) 18,214 62,742
Net Assets    
Beginning of Period 178,005 115,263
End of Period1 196,219 178,005

1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of ($4,801,000) and $0.

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

24


Managed Payout Growth and Distribution Fund

Financial Highlights

  Six Months Year April 21,
  Ended Ended 20081 to
  June 30, Dec. 31, Dec. 31,
For a Share Outstanding Throughout Each Period 2010 2009 2008
Net Asset Value, Beginning of Period $15.92 $13.68 $20.00
Investment Operations      
Net Investment Income .1332 .439 .4362
Capital Gain Distributions Received .0062 .006 .0822
Net Realized and Unrealized Gain (Loss) on Investments (.769) 2.634 (6.172)
Total from Investment Operations (.630) 3.079 (5.654)
Distributions      
Dividends from Net Investment Income (.380) (.660) —
Distributions from Realized Capital Gains — — —
Return of Capital — (.179) (.666)
Total Distributions (.380) (.839) (.666)
Net Asset Value, End of Period $14.91 $15.92 $13.68
 
Total Return -4.08% 23.51% -28.79%
 
Ratios/Supplemental Data      
Net Assets, End of Period (Millions) $196 $178 $115
Ratio of Total Expenses to Average Net Assets 0%3 0% 0%
Ratio of Net Investment Income to Average Net Assets 1.69%4 2.81% 3.92%4
Portfolio Turnover Rate 53%4 50%5 73%

1 Subscription period for the fund was April 21, 2008, to May 2, 2008, during which time all assets were held in money market instruments.
Performance measurement began May 2, 2008, at a net asset value of $20.01.
2 Calculated based on average shares outstanding.
3 The acquired fund fees and expenses were 0.30% (annualized).
4 Annualized.
5 Excludes the value of mutual fund shares delivered and received in connection with a change in the fund’s bond investments from
Vanguard Total Bond Market Index Fund to Vanguard Total Bond Market II Index Fund because those transactions were effected in
kind and did not cause the fund to incur transaction costs.

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

25


Managed Payout Growth and Distribution Fund

Notes to Financial Statements

Vanguard Managed Payout Growth and Distribution Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund combines a managed distribution policy with an endowment-like investment strategy. The fund may invest across a wide spectrum of asset classes and investments that are expected to add diversification and result in a more consistent return pattern than a traditional balanced portfolio of stocks, bonds, and cash.

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

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. 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. Swap Contracts: The fund has entered into swap transactions to earn the total return on a specified commodity index. Under the terms of the swaps, the fund receives the total return (either receiving the increase or paying the decrease) on a reference index, applied to a notional principal amount. In return, the fund agrees to pay the counterparty a floating rate, which is reset periodically based on short-term interest rates, applied to the same notional amount. At the same time, the fund invests an amount approximating the notional amount of the swap in high-quality temporary cash investments.

The notional amounts of swap contracts are not recorded in the Statement of Net Assets. Swaps are valued daily and the change in value is recorded as unrealized appreciation (depreciation) until periodic payments are made, or the swap terminates, at which time realized gain (loss) is recorded. The primary risk associated with the swaps is that a counterparty will default on its obligation to pay net amounts due to the fund. The fund’s maximum risk of loss from counterparty credit risk is the amount of unrealized appreciation on the swap contract. This risk is mitigated by entering into swaps only with highly rated counterparties, by a master netting arrangement between the fund and the counterparty, and by the posting of collateral by the counterparty. The swap contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has posted. Any securities posted as collateral for open contracts are noted in the Statement of Net Assets.

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (December 31, 2008–2009), and for the period ended June 30, 2010, and has concluded that no provision for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions are determined based on a specified percentage payout rate of 5% of the fund’s average net asset value. The monthly distribution rate is reset annually based on changes in the fund’s average net asset value. Effective January 1, 2010, the monthly distribution rate is $.0634. Distributions to shareholders are recorded on the ex-dividend date. Monthly distributions declared by the fund are reallocated at fiscal year-end to ordinary income, capital gain, and return of capital to reflect their tax character.

26


Managed Payout Growth and Distribution Fund

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

B. Under a service agreement, The Vanguard Group furnishes investment advisory, corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the period ended June 30, 2010, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

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

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

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

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

The following table summarizes the fund’s investments as of June 30, 2010, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments ($000) ($000) ($000)
Investment Companies 175,963 — —
Temporary Cash Investments 15,348 4,496 —
Total 191,311 4,496 —

D. At June 30, 2010, the fund had the following open total return swap contract:

        Floating Unrealized
      Notional Interest Rate Appreciation
  Termination   Amount Received (Depreciation)
Reference Entity Date Counterparty1 ($000) (Paid)2 ($000)
MLCX-Enhanced Benchmark          
A 01 Total Return Index 7/30/10 ML 19,744 (0.560%) —

MLCX—Merrill Lynch Commodity index eXtra.
1 ML—Merrill Lynch Capital Services.
2 Based on three-month U.S. Treasury bill rate plus a fixed fee of 0.40%.

27


Managed Payout Growth and Distribution Fund

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.

Realized and unrealized gains (losses) on certain of the fund’s swap contracts are treated as ordinary income (loss) for tax purposes; the effect on the fund’s income dividends to shareholders is offset by a change in principal return. Realized losses of $1,744,000 on swap contracts have been reclassified from accumulated net realized losses to overdistributed net investment income.

The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at December 31, 2009, the fund had available capital loss carryforwards totaling $2,638,000 to offset future net capital gains of $1,288,000 through December 31, 2016, and $1,350,000 through December 31, 2017. In addition, the fund realized losses of $36,000 during the period from November 1, 2009, through December 31, 2009, which are deferred and will be treated as realized for tax purposes in fiscal 2010. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending December 31, 2010; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.

At June 30, 2010, the cost of investment securities for tax purposes was $223,912,000. Net unrealized depreciation of investment securities for tax purposes was $28,105,000, consisting of unrealized gains of $4,474,000 on securities that had risen in value since their purchase and $32,579,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the six months ended June 30, 2010, the fund purchased $70,681,000 of investment securities and sold $45,568,000 of investment securities, other than temporary cash investments.

G. Capital shares issued and redeemed were:

  Six Months Ended Year Ended
  June 30, 2010 December 31, 2009
  Shares Shares
  (000) (000)
Issued 3,504 5,249
Issued in Lieu of Cash Distributions 111 236
Redeemed (1,634) (2,729)
Net Increase (Decrease) in Shares Outstanding 1,981 2,756

H. In preparing the financial statements as of June 30, 2010, management considered the impact of subsequent events for potential recognition or disclosure in these financial statements.

28


Managed Payout Distribution Focus Fund

Fund Profile

As of June 30, 2010

Total Fund Characteristics  
Ticker Symbol VPDFX
30-Day SEC Yield 3.05%
Acquired Fund Fees and Expenses1 0.45%

Allocation to Underlying Investments  
Vanguard Total Stock Market Index Fund  
Investor Shares 24.6%
Vanguard Intermediate-Term  
Investment-Grade Fund Investor Shares 15.4
Vanguard Market Neutral Fund Investor  
Shares 10.0
Vanguard REIT Index Fund Investor  
Shares 9.7
Vanguard European Stock Index Fund  
Investor Shares 9.5
Vanguard Pacific Stock Index Fund  
Investor Shares 5.3
Vanguard Total Bond Market II Index Fund  
Investor Shares 5.2
Vanguard Emerging Markets Stock Index  
Fund Investor Shares 5.1
Vanguard Inflation-Protected Securities  
Fund Investor Shares 5.1
Commodities 10.1

The fund invests a portion of its assets in commodities through the use of swap contracts.

Fund Asset Allocation

 

 

 

1 This figure—drawn from the prospectus dated April 28, 2010—represents an estimate of the weighted average of the expense ratios and
any transaction fees charged by the underlying mutual funds (the ”acquired” funds) in which the Managed Payout Distribution Focus Fund
invests. The Managed Payout Distribution Focus Fund does not charge any expenses or fees of its own. For the six months ended June 30,
2010, the annualized acquired fund fees and expenses were 0.29% (approximately one-third of this amount is attributable to the short-sale
dividend and borrowing expenses reported by Vanguard Market Neutral Fund).

29


Managed Payout Distribution Focus Fund

Performance Summary

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

Fiscal-Year Total Returns (%): May 2, 2008, Through June 30, 2010


Managed Payout Distribution Focus Composite Index: Weighted 40% FTSE All-World Index, 20% Barclays Capital U.S. Aggregate Bond Index,
10% Barclays Capital U.S. Treasury Inflation Protected Securities Index, 10% Citigroup 3-Month Treasury Bill Index, 10% Dow Jones-UBS
Commodity Index, and 10% MSCI US REIT Index through December 31, 2009, after which the Barclays index was replaced by the Barclays
Capital U.S. Aggregate Float Adjusted Index. (MSCI US REIT Index was adjusted to include a 2% cash position through April 30, 2009.)
Note: For 2010, performance data reflect the six months ended June 30, 2010.

Average Annual Total Returns: Periods Ended June 30, 2010

      Since Inception
  Inception Date One Year Income Capital Total
Managed Payout          
Distribution Focus Fund 5/2/2008 13.23% 5.00% -11.06% -6.06%

See Financial Highlights for dividend and capital gains information.

30


Managed Payout Distribution Focus Fund

Financial Statements (unaudited)

Statement of Net Assets
As of June 30, 2010

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

      Market
      Value•
    Shares ($000)
Investment Companies (89.8%)    
U.S. Stock Funds (34.4%)    
  Vanguard Total Stock Market Index Fund Investor Shares 2,339,233 59,861
  Vanguard REIT Index Fund Investor Shares 1,530,228 23,596
      83,457
International Stock Funds (19.8%)    
  Vanguard European Stock Index Fund Investor Shares 1,063,261 22,924
  Vanguard Pacific Stock Index Fund Investor Shares 1,423,384 12,825
  Vanguard Emerging Markets Stock Index Fund Investor Shares 514,648 12,413
      48,162
Bond Funds (25.7%)    
  Vanguard Intermediate-Term Investment-Grade Fund Investor Shares 3,716,930 37,243
1 Vanguard Total Bond Market II Index Fund Investor Shares 1,196,309 12,705
  Vanguard Inflation-Protected Securities Fund Investor Shares 955,724 12,396
      62,344
Market Neutral Fund (9.9%)    
  Vanguard Market Neutral Fund Investor Shares 2,468,707 24,144
Total Investment Companies (Cost $236,410)   218,107
Temporary Cash Investments (9.3%)2    
Money Market Fund (7.0%)    
1 Vanguard Market Liquidity Fund, 0.286% 17,016,012 17,016
 
    Face  
    Amount  
    ($000)  
U.S. Government and Agency Obligations (2.3%)    
3 Federal Home Loan Bank, 0.300%, 11/19/10 1,500 1,498
3 Freddie Mac Discount Notes, 0.320%, 9/7/10 500 500
3 Freddie Mac Discount Notes, 0.320%, 9/20/10 500 500
3 Freddie Mac Discount Notes, 0.300%, 11/1/10 2,000 1,998
3 Freddie Mac Discount Notes, 0.321%, 12/15/10 1,000 999
      5,495
Total Temporary Cash Investments (Cost $22,510)   22,511
Total Investments (99.1%) (Cost $258,920)   240,618

31


Managed Payout Distribution Focus Fund

  Market
  Value•
  ($000)
Other Assets and Liabilities (0.9%)  
Other Assets 2,735
Liabilities (429)
  2,306
Net Assets (100%)  
Applicable to 16,552,649 outstanding $.001 par value shares of  
beneficial interest (unlimited authorization) 242,924
Net Asset Value Per Share $14.68
 
 
At June 30, 2010, net assets consisted of:  
  Amount
  ($000)
Paid-in Capital 268,927
Overdistributed Net Investment Income (7,615)
Accumulated Net Realized Losses (86)
Unrealized Appreciation (Depreciation)  
Investment Securities (18,302)
Swap Contracts —
Net Assets 242,924

• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market
Liquidity Fund is the 7-day yield.
2 The fund invests a portion of its assets in commodities through the use of swap contracts. After giving effect to swap investments, the
fund’s effective commodity and temporary cash investment positions represent 10.0% and -0.7%, respectively, of net assets.
3 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the U.S. government.
See accompanying Notes, which are an integral part of the Financial Statements.

32


Managed Payout Distribution Focus Fund

Statement of Operations

  Six Months Ended
  June 30, 2010
  ($000)
Investment Income  
Income  
Income Distributions Received 2,236
Interest 2
Net Investment Income—Note B 2,238
Realized Net Gain (Loss)  
Capital Gain Distributions Received 125
Investment Securities Sold 338
Swap Contracts (1,976)
Realized Net Gain (Loss) (1,513)
Change in Unrealized Appreciation (Depreciation) of Investment Securities (8,094)
Net Increase (Decrease) in Net Assets Resulting from Operations (7,369)

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

33


Managed Payout Distribution Focus Fund

Statement of Changes in Net Assets

  Six Months Ended Year Ended
  June 30, December 31,
  2010 2009
  ($000) ($000)
Increase (Decrease) in Net Assets    
Operations    
Net Investment Income 2,238 3,796
Realized Net Gain (Loss) (1,513) 3,709
Change in Unrealized Appreciation (Depreciation) (8,094) 19,919
Net Increase (Decrease) in Net Assets Resulting from Operations (7,369) 27,424
Distributions    
Net Investment Income (7,877) (6,213)
Realized Capital Gain — —
Return of Capital — (4,130)
Total Distributions (7,877) (10,343)
Capital Share Transactions    
Issued 92,154 106,069
Issued in Lieu of Cash Distributions 2,158 3,402
Redeemed (26,076) (25,791)
Net Increase (Decrease) from Capital Share Transactions 68,236 83,680
Total Increase (Decrease) 52,990 100,761
Net Assets    
Beginning of Period 189,934 89,173
End of Period1 242,924 189,934

1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of ($7,615,000) and $0.

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

34


Managed Payout Distribution Focus Fund

Financial Highlights

  Six Months Year April 21,
  Ended Ended 20081 to
  June 30, Dec. 31, Dec. 31,
For a Share Outstanding Throughout Each Period 2010 2009 2008
Net Asset Value, Beginning of Period $15.60 $13.84 $20.00
Investment Operations      
Net Investment Income .1532 .4332 .4482
Capital Gain Distributions Received .0092 .0102 .0842
Net Realized and Unrealized Gain (Loss) on Investments (.549) 2.497 (5.758)
Total from Investment Operations (.387) 2.940 (5.226)
Distributions      
Dividends from Net Investment Income (.533) (.709) —
Distributions from Realized Capital Gains — — —
Return of Capital — (.471) (.934)
Total Distributions (.533) (1.180) (.934)
Net Asset Value, End of Period $14.68 $15.60 $13.84
 
Total Return -2.62% 22.56% -26.80%
 
Ratios/Supplemental Data      
Net Assets, End of Period (Millions) $243 $190 $89
Ratio of Total Expenses to Average Net Assets 0%3 0% 0%
Ratio of Net Investment Income to Average Net Assets 1.98%4 3.02% 4.01%4
Portfolio Turnover Rate 44%4 48%5 82%

1 Subscription period for the fund was April 21, 2008, to May 2, 2008, during which time all assets were held in money market instruments.
Performance measurement began May 2, 2008, at a net asset value of $20.01.
2 Calculated based on average shares outstanding.
3 The acquired fund fees and expenses were 0.29% (annualized).
4 Annualized.
5 Excludes the value of mutual fund shares delivered and received in connection with a change in the fund’s bond investments from
Vanguard Total Bond Market Index Fund to Vanguard Total Bond Market II Index Fund because those transactions were effected in
kind and did not cause the fund to incur transaction costs.

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

35


Managed Payout Distribution Focus Fund

Notes to Financial Statements

Vanguard Managed Payout Distribution Focus Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund combines a managed distribution policy with an endowment-like investment strategy. The fund may invest across a wide spectrum of asset classes and investments that are expected to add diversification and result in a more consistent return pattern than a traditional balanced portfolio of stocks, bonds, and cash.

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

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. 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. Swap Contracts: The fund has entered into swap transactions to earn the total return on a specified commodity index. Under the terms of the swaps, the fund receives the total return (either receiving the increase or paying the decrease) on a reference index, applied to a notional principal amount. In return, the fund agrees to pay the counterparty a floating rate, which is reset periodically based on short-term interest rates, applied to the same notional amount. At the same time, the fund invests an amount approximating the notional amount of the swap in high-quality temporary cash investments.

The notional amounts of swap contracts are not recorded in the Statement of Net Assets. Swaps are valued daily and the change in value is recorded as unrealized appreciation (depreciation) until periodic payments are made, or the swap terminates, at which time realized gain (loss) is recorded. The primary risk associated with the swaps is that a counterparty will default on its obligation to pay net amounts due to the fund. The fund’s maximum risk of loss from counterparty credit risk is the amount of unrealized appreciation on the swap contract. This risk is mitigated by entering into swaps only with highly rated counterparties, by a master netting arrangement between the fund and the counterparty, and by the posting of collateral by the counterparty. The swap contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has posted. Any securities posted as collateral for open contracts are noted in the Statement of Net Assets.

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (December 31, 2008–2009), and for the period ended June 30, 2010, and has concluded that no provision for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions are determined based on a specified percentage payout rate of 7% of the fund’s average net asset value. The monthly distribution rate is reset annually based on changes in the fund’s average net asset value. Effective January 1, 2010, the monthly distribution rate is $.0889. Distributions to shareholders are recorded on the ex-dividend date. Monthly distributions declared by the fund are reallocated at fiscal year-end to ordinary income, capital gain, and return of capital to reflect their tax character.

36


Managed Payout Distribution Focus Fund

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

B. Under a service agreement, The Vanguard Group furnishes investment advisory, corporate management, administrative, marketing, and distribution services to the fund. The service agreement provides that the fund’s expenses may be reduced or eliminated to the extent of savings realized by the Vanguard funds by the operation of the fund. Accordingly, all incremental expenses for services provided by Vanguard and all other expenses incurred by the fund during the period ended June 30, 2010, were borne by the funds in which the fund invests. The fund’s trustees and officers are also directors and officers of Vanguard and the funds in which the fund invests.

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

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

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

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

The following table summarizes the fund’s investments as of June 30, 2010, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments ($000) ($000) ($000)
Investment Companies 218,107 — —
Temporary Cash Investments 17,016 5,495 —
Total 235,123 5,495 —

D. At June 30, 2010, the fund had the following open total return swap contract:

        Floating Unrealized
      Notional Interest Rate Appreciation
  Termination   Amount Received (Depreciation)
Reference Entity Date Counterparty1 ($000) (Paid)2 ($000)
MLCX-Enhanced Benchmark          
A 01 Total Return Index 7/30/10 ML 24,410 (0.560%) —

MLCX—Merrill Lynch Commodity index eXtra.
1 ML—Merrill Lynch Capital Services.
2 Based on three-month U.S. Treasury bill rate plus a fixed fee of 0.40%.

37


Managed Payout Distribution Focus Fund

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.

Realized and unrealized gains (losses) on certain of the fund’s swap contracts are treated as ordinary income (loss) for tax purposes; the effect on the fund’s income dividends to shareholders is offset by a change in principal return. Realized losses of $1,976,000 on swap contracts have been reclassified from accumulated net realized losses to overdistributed net investment income.

The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at December 31, 2009, the fund had available capital loss carryforwards totaling $495,000 to offset future net capital gains through December 31, 2016. In addition, the fund realized losses of $46,000 during the period from November 1, 2009, through December 31, 2009, which are deferred and will be treated as realized for tax purposes in fiscal 2010. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending December 31, 2010; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.

At June 30, 2010, the cost of investment securities for tax purposes was $258,920,000. Net unrealized depreciation of investment securities for tax purposes was $18,302,000, consisting of unrealized gains of $7,022,000 on securities that had risen in value since their purchase and $25,324,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the six months ended June 30, 2010, the fund purchased $100,719,000 of investment securities and sold $44,435,000 of investment securities, other than temporary cash investments.

G. Capital shares issued and redeemed were:

  Six Months Ended Year Ended
  June 30, 2010 December 31, 2009
  Shares Shares
  (000) (000)
Issued 5,929 7,356
Issued in Lieu of Cash Distributions 139 239
Redeemed (1,693) (1,859)
Net Increase (Decrease) in Shares Outstanding 4,375 5,736

H. In preparing the financial statements as of June 30, 2010, management considered the impact of subsequent events for potential recognition or disclosure in these financial statements.

38


About Your Fund’s Expenses

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

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

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

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

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

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

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

Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include the account service fee described in the prospectus. If such a fee were applied to your account, your costs would be higher. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a “sales load.” The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.

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

39


Six Months Ended June 30, 2010      
  Beginning Ending Expenses
  Account Value Account Value Paid During
  12/31/2009 6/30/2010 Period
Based on Actual Fund Return      
Managed Payout Growth Focus Fund $1,000.00 $945.26 $1.45
Managed Payout Growth and Distribution Fund $1,000.00 $959.18 $1.46
Managed Payout Distribution Focus Fund $1,000.00 $973.83 $1.42
Based on Hypothetical 5% Yearly Return      
Managed Payout Growth Focus Fund $1,000.00 $1,023.31 $1.51
Managed Payout Growth and Distribution Fund $1,000.00 $1,023.31 $1.51
Managed Payout Distribution Focus Fund $1,000.00 $1,023.36 $1.45

These calculations are based on the acquired fund fees and expenses. The Managed Payout Funds’ annualized expense figures for the period shown are (in order as listed from top to bottom above) 0.30%, 0.30%, and 0.29%. The dollar amounts shown as ”Expenses Paid” are equal to the expense figure 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.

40


Trustees Approve Advisory Arrangement

The board of trustees of Vanguard Managed Payout Growth Focus Fund, Managed Payout Growth and Distribution Fund, and Managed Payout Distribution Focus Fund has renewed the funds’ investment advisory arrangement with The Vanguard Group, Inc. Vanguard’s Quantitative Equity Group—through an investment committee—serves as the investment advisor for the funds. The board determined that continuing the funds’ internalized management structure was in the best interests of the funds and their shareholders.

The board based its decision upon an evaluation of the advisor’s investment staff, portfolio management process, and performance. The trustees considered the factors discussed below, among others. However, no single factor determined whether the board approved the arrangement. Rather, it was the totality of the circumstances that drove the board’s decision.

Nature, extent, and quality of services

The board considered the quality of the investment management services provided to the funds since their inception in 2008 and took into account the organizational depth and stability of the advisor.

The board noted that Vanguard has been managing investments for more than three decades. The Quantitative Equity Group adheres to a sound, disciplined investment management process; the team has considerable experience, stability, and depth.

The board concluded that Vanguard’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangement.

Investment performance

The board considered each fund’s performance since its inception in 2008 against a relevant benchmark and concluded that the funds have performed in line with expectations, and that their results have been consistent with their investment strategies. Information about each fund’s most recent performance can be found in the Performance Summary sections of this report.

Cost

The board concluded that the funds’ expense ratios (or acquired fund fees and expenses) were well below the average expense ratio charged by similar funds. The funds do not incur advisory expenses directly; however, the board noted that each of the underlying funds in which the Managed Payout Funds invest has advisory expenses well below its relevant peer-group average. Information about the Managed Payout Funds’ acquired fund fees and expenses appears in the About Your Funds’ Expenses section of this report as well as in the Financial Statements sections.

The board does not conduct a profitability analysis of Vanguard, because of Vanguard’s unique “at-cost” structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees, and produces “profits” only in the form of reduced expenses for fund shareholders.

The benefit of economies of scale

The board concluded that Vanguard’s low-cost arrangement with each of the Managed Payout Funds and their underlying funds ensures that the funds will realize economies of scale as they grow, with the cost to shareholders declining as fund assets increase.

The board will consider whether to renew the advisory arrangement again after a one-year period.

41


Glossary

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

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

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

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

42


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The People Who Govern Your Fund

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

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 162 Vanguard funds.

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

Interested Trustee1 Rajiv L. Gupta
  Born 1945. Trustee Since December 2001.2
F. William McNabb III Principal Occupation(s) During the Past Five Years:
Born 1957. Trustee Since July 2009. Chairman of the Chairman and Chief Executive Officer (retired 2009)
Board. Principal Occupation(s) During the Past Five and President (2006–2008) of Rohm and Haas Co.
Years: Chairman of the Board of The Vanguard Group, (chemicals); Director of Tyco International, Ltd.
Inc., and of each of the investment companies served (diversified manufacturing and services) and Hewlett-
by The Vanguard Group, since January 2010; Director Packard Co. (electronic computer manufacturing);
of The Vanguard Group since 2008; Chief Executive Trustee of The Conference Board; Member of the
Officer and President of The Vanguard Group and of Board of Managers of Delphi Automotive LLP
each of the investment companies served by The (automotive components).
Vanguard Group since 2008; Director of Vanguard  
Marketing Corporation; Managing Director of The Amy Gutmann
Vanguard Group (1995–2008). Born 1949. Trustee Since June 2006. Principal
  Occupation(s) During the Past Five Years: President
  of the University of Pennsylvania; Christopher H.
Independent Trustees Browne Distinguished Professor of Political Science
  in the School of Arts and Sciences with secondary
Emerson U. Fullwood appointments at the Annenberg School for Commu-
Born 1948. Trustee Since January 2008. Principal nication and the Graduate School of Education of
Occupation(s) During the Past Five Years: Executive the University of Pennsylvania; Director of Carnegie
Chief Staff and Marketing Officer for North America Corporation of New York, Schuylkill River Development
and Corporate Vice President (retired 2008) of Xerox Corporation, and Greater Philadelphia Chamber of
Corporation (document management products and Commerce; Trustee of the National Constitution Center;
services); Director of SPX Corporation (multi-industry Chair of the Presidential Commission for the Study of
manufacturing), the United Way of Rochester, Bioethical Issues.
Amerigroup Corporation (managed health care),  
the University of Rochester Medical Center, and  
Monroe Community College Foundation.  


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

1 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, Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, and the Vanguard
State Tax-Exempt Funds.


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

Connect with Vanguard® > Vanguard.com  
 
 
 
Fund Information > 800-662-7447  
Direct Investor Account Services > 800-662-2739  
Institutional Investor Services > 800-523-1036  
Text Telephone for People  
With Hearing Impairment > 800-749-7273  
 
This material may be used in conjunction  
with the offering of shares of any Vanguard  
fund only if preceded or accompanied by  
the fund’s current prospectus.  
 
All comparative mutual fund data are from Lipper Inc. or  
Morningstar, Inc., unless otherwise noted.  
 
You can obtain a free copy of Vanguard’s proxy voting  
guidelines by visiting our website, Vanguard.com, and  
searching for “proxy voting guidelines,” or by 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 months  
ended June 30. To get the report, visit either  
Vanguard.com or sec.gov.  
 
You can review and copy information about your fund at  
the SEC’s Public Reference Room in Washington, D.C. To  
find out more about this public service, call the SEC at  
202-551-8090. Information about your fund is also  
available on the SEC’s website, and you can receive  
copies of this information, for a fee, by sending a  
request in either of two ways: via e-mail addressed to  
publicinfo@sec.gov or via regular mail addressed to the  
Public Reference Section, Securities and Exchange  
Commission, Washington, DC 20549-1520.  
 
  © 2010 The Vanguard Group, Inc.
  All rights reserved.
  Vanguard Marketing Corporation, Distributor.
 
  Q14972 082010


Item 2: Not Applicable.

Item 3: Not Applicable.

Item 4: Not Applicable.

Item 5: Not Applicable.

Item 6: Not Applicable.

Item 7: Not Applicable.

Item 8: Not Applicable.

Item 9: Not Applicable.

Item 10: Not Applicable.

Item 11: Controls and Procedures.

     (a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

     (b) Internal Control Over Financial Reporting. There were no significant changes in Registrant’s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 12: Exhibits.

(a) Code of Ethics.
(b) Certifications.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  VANGUARD VALLEY FORGE FUNDS
 
BY: /s/ F. WILLIAM MCNABB III*
F. WILLIAM MCNABB III 
CHIEF EXECUTIVE OFFICER 
 
Date: August 23, 2010


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  VANGUARD VALLEY FORGE FUNDS
 
BY: /s/ F. WILLIAM MCNABB III*
F. WILLIAM MCNABB III 
CHIEF EXECUTIVE OFFICER 
Date: August 23, 2010
  VANGUARD VALLEY FORGE FUNDS
 
BY: /s/ THOMAS J. HIGGINS*
  THOMAS J. HIGGINS
CHIEF FINANCIAL OFFICER 
Date: August 23, 2010

* By: /s/ Heidi Stam

Heidi Stam, pursuant to a Power of Attorney filed on April 26, 2010, see file Number 33-53683, is Incorporated by Reference.