Vanguard®

Vanguard® FTSE Social Index Fund

Product Summary Vanguard Style View : Large Growth

Seeks to track the performance of the FTSE4Good US Select Index. Index of large- and mid-capitalization U.S. companies screened for certain social criteria. Market cap weighted index composed of large- and Investment style mid-capitalization stocks. Value Blend Growth Screened for certain environmental, social, and corporate Large governance (ESG) criteria.

Specifically excludes stocks of certain companies in the following Mid industries: adult entertainment, alcohol, tobacco, weapons, fossil Small fuels, gambling, and nuclear power.* capitalizationMarket Excludes stocks of certain companies that do not meet standards Central tendency of U.N. global compact principles and companies that do not meet Expected range of fund holdings certain diversity criteria.* Employs a passively managed, full-replication approach.

Quarterly Commentary People and Process

The human toll of COVID-19 further mounted during the second Vanguard FTSE Social Index Fund seeks to track the performance quarter of 2021 amid fresh outbreaks of the virus and new of the FTSE4Good US Select Index, a market cap weighted index variants. The global economy nevertheless continued to rebound composed of large- and mid-capitalization stocks that is screened sharply if unevenly. Countries that have better succeeded in for certain environmental, social, and corporate governance (ESG) containing the virus—whether through vaccinations, lockdowns, or criteria by the Index sponsor, which is independent of Vanguard. both—tended to fare the best. With the reopening of economies Specifically, the Index excludes stocks of certain companies in the and pent-up demand boosting corporate profits, global stocks following industries: adult entertainment, alcohol, tobacco, finished the quarter significantly higher. U.S. stocks outperformed weapons, fossil fuels, gambling, and nuclear power. The index other developed markets as a whole as well as emerging markets. methodology also excludes the stocks of certain companies that do not meet the labor, human rights, environmental, and The combination of faster economic growth, a recovery in anti-corruption standards as defined by the U.N. global compact commodity prices, ongoing fiscal and monetary stimulus, and a principles, as well as companies that do not meet certain diversity low basis of comparison from last year pushed inflation readings criteria. For additional details regarding the Index Methodology, higher. Although those forces caused some volatility in longer-term please see the Methodology section of FTSE Group’s website for interest rates (even as central bank policy kept short-term rates the FTSE4Good Index Series. The experience and stability of anchored near zero), they ended the quarter lower in a number of Vanguard’s Equity Index Group have permitted continuous developed markets. The yield of the bellwether U.S. 10-year refinement of techniques for reducing tracking error. The group Treasury note declined by 0.27 percentage points over the quarter uses proprietary software to implement trading decisions that to finish at 1.47%. The broad U.S. investment-grade bond market accommodate cash flow and maintain close correlation with index returned almost 2%, and global bonds returned more than 1% in characteristics. Vanguard’s refined indexing process, combined U.S. dollars (as measured by the Bloomberg Barclays Global with low management fees and efficient trading, has provided tight Aggregate Bond Index). tracking net of expenses. The FTSE4Good US Select Index, which is composed of large- and mid-capitalization stocks that have been screened for certain Vanguard Equity Index Group social, human rights, and environmental criteria by FTSE, returned 9.31% for the second quarter ended June 30. The Russell 3000 Launched in 1975, The Vanguard Group, Malvern, Pennsylvania, is Index, which measures the broad U.S. stock market, returned among the world’s largest equity and fixed income managers. As 8.24% for the quarter. chief investment officer, Gregory Davis, CFA, oversees Vanguard’s Equity Index, Quantitative Equity, and Fixed Income The top contributors were technology (+14.3%), health care Groups. Rodney Comegys, Principal and global head of Vanguard's (+10.0%), and consumer discretionary (+6.0%). Equity Index Group, is responsible for all equity index funds. The The contributor with the smallest impact was energy (+2.5%). Equity Index Group manages indexed equity portfolios covering U.S. and international markets. It has developed sophisticated For the 12-month period ended June 30, 2021, the FTSE4Good US portfolio construction methodologies and efficient trading Select Index returned 42.25%. The top contributors were strategies that seek to deliver returns that are highly correlated technology (+49.8%), consumer discretionary (+44.5%), and with target portfolio benchmarks. The group has advised Vanguard industrials (+47.6%). FTSE Social Index Fund since 2000.

As of June 30, 2021 Vanguard FTSE Social Index Fund

Investment Manager Biographies William Coleman, CFA. Portfolio manager. Advised the fund since 2015. Worked in investment management since 2006. B.S., King's Gerard C. O'Reilly, Principal. Portfolio manager. Advised the fund College. M.S., Saint Joseph's University. since 2015. Worked in investment management since 1992. B.S., Villanova University.

Total Returns

Expense Year Since Ratio Quarter toDate 1Year 3Years 5Years 10Years Inception

FTSE Social Index Fund Admiral Shares (2/7/2019) 0.14% 9.28% 14.37% 42.06% — — — 25.87% Institutional Shares (1/14/2003) 0.12 9.29 14.40 42.11 20.71% 19.81% 16.20% — Spliced Social Index — 9.31 14.45 42.25 20.81 19.92 16.33 26.02

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors’ shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance. Figures for periods of less than one year are cumulative returns. All other figures represent average annual returns. Performance figures include the reinvestment of all dividends and any capital gains distributions. All returns are net of expenses.

*Note: Spliced Social Index: Calvert Social Index through December 16, 2005; FTSE4Good US Select Index thereafter. FTSE4Good US Select Index is a market cap weighted index composed of large- and mid-capitalization stocks and is screened for certain environmental, social, and corporate governance (ESG) criteria by the index sponsor, which is independent of Vanguard. Specifically, the index excludes stocks of companies that FTSE Group determines engage in the following activities (i) produce adult entertainment; (ii) produce alcoholic beverages; (iii) produce tobacco products; (iv) produce (or produce specific and critical parts or services for) nuclear weapon systems, chemical or biological weapons, cluster munitions, and anti-personnel mines; (v) produce other weapons for military use; (vi) produce firearms or ammunition for non-military use; (vii) own proved or probable reserves in coal, oil, or gas, or any company that FTSE determines has a primary business activity in: (a) the exploration for, drilling, production, refining and supply of oil and gas products, (b) the supply of equipment and services to oil fields and offshore platforms, (c) the operations of pipelines carrying oil, gas, or other forms of fuel, (d) integrated oil and gas companies, providing a combination of services listed in (a)-(c) above, including refining and marketing of oil and gas products, or (e) the exploration for or mining of coal; (viii) provide gambling services; and (ix) generate revenues from nuclear power production. For additional details regarding the Index Methodology, please see the Index Resources available on FTSE Group’s website.

Institutional class shareholders are required to maintain a minimum balance of $5 million.

As of June 30, 2021 Vanguard FTSE Social Index Fund

Quarterly Returns: Admiral Shares

Year-End Spliced FTSE Social Social Assets Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Index Fund Index (Millions) 2021 4.66% 9.28% — — — — $7,818 2020 -19.95 23.37 10.58% 12.33% 22.67% 22.79% 6,114 2019 1 4.99 4.55 1.87 10.53 23.59 23.72 4,246

1 Since inception of the share class, 2/7/2019.

Quarterly Returns: Institutional Shares

Year-End Spliced FTSE Social Social Assets Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Index Fund Index (Millions) 2021 4.68% 9.29% — — — — $5,987 2020 -19.96 23.37 10.59% 12.33% 22.66% 22.79% 4,684 2019 13.76 4.58 1.82 10.59 33.96 34.08 3,237 2018 -0.74 4.03 7.67 -13.09 -3.38 -3.32 1,719 2017 7.11 3.59 4.76 6.84 24.19 24.33 1,638 2016 -0.77 1.56 5.61 3.67 10.34 10.42 959 2015 1.73 0.52 -6.91 6.38 1.27 1.38 783 2014 2.67 4.19 1.29 6.92 15.85 16.06 546 2013 11.99 4.57 5.86 10.58 37.09 37.19 328 2012 13.48 -4.75 6.61 2.27 17.84 18.13 223 2011 4.63 -0.13 -13.16 9.63 -0.52 -0.53 164

Fund Facts Admiral Institutional Shares Shares Fund Number 0513 0223 Ticker VFTAX VFTNX Newspaper Listing FTSESocAdml FTScInst CUSIP Number 921910717 921910402 Assets (millions) $7,818 $5,987 (Total $13,804) Inception 2/7/2019 1/14/2003 Expense Ratio (as of 12/2020) 0.14% 0.12%

As of June 30, 2021 Vanguard FTSE Social Index Fund

Equity Characteristics FTSE 4Good Top 10 Largest Holdings FTSE Social US Select Index Fund Index % of Number of stocks 487 487 Total Net Assets Median market cap $191.4 Billion $191.4 Billion Apple Inc. 6.6% Average market cap $578.3 Billion $578.4 Billion Microsoft Corp. 6.3 Price/earnings ratio 28.7x 28.7x Amazon.com Inc. 4.6 Price/book ratio 5.1x 5.1x Alphabet Inc. 4.4 Return on equity 21.0% 21.0% Facebook Inc. 2.6 Earnings growth rate 21.3% 21.3% Tesla Inc. 1.6 Equity yield (dividend) 1.1% 1.1% NVIDIA Corp. 1.5 Foreign holdings 0.0% 0.0% JPMorgan Chase & Co. 1.4 Short-term reserves 0.0% — Visa Inc. 1.2 Turnover rate (fiscal year end) 17.7% — UnitedHealth Group Inc. 1.2 Total 31.4% The holdings listed exclude any temporary cash investments and equity Sector Diversification (% of Stocks) index products.

FTSE 4Good FTSE Social US Select Overweight/ Index Fund Index Underweight

Basic Materials 1.8% 1.8% 0.0

Consumer Discretionary 17.2 17.2 0.0

Consumer Staples 4.8 4.8 0.0

Energy 0.2 0.2 0.0

Financials 10.3 10.3 0.0

Health Care 13.6 13.6 0.0

Industrials 11.2 11.2 0.0

Other 0.0 0.0 0.0

Real Estate 3.1 3.1 0.0

Technology 33.2 33.2 0.0

Telecommunications 3.7 3.7 0.0

Utilities 0.9 0.9 0.0 Total 100.0% 100.0% Sector categories are based on the Industry Classification Benchmark system (“ICB”), except for the “Other” category (if applicable), which includes securities that have not been provided an ICB classification as of the effective reporting period.

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