Vanguard® Vanguard® PRIMECAP Core Fund Product Summary Vanguard Style View : Large Blend Multi-cap equity, investing in a broad spectrum of stocks covering Diversified multi-cap portfolio of growth and value stocks across industry sectors. both growth and value stocks and a range of industries. Investment style Seeks long-term capital appreciation. Value Blend Growth Invests in out-of-favor companies at attractive valuations. Large Fundamental, research-driven stock selection process. The managers develop separate subportfolios. Mid Note: This fund is closed to new investors. Small Market capitalization Central tendency Expected range of fund holdings Quarterly Commentary The human toll of COVID-19 further mounted during the second People and Process quarter of 2021 amid fresh outbreaks of the virus and new variants. The global economy nevertheless continued to rebound Vanguard PRIMECAP Core Fund seeks to provide long-term capital sharply if unevenly. Countries that have better succeeded in appreciation through investments in companies at attractive containing the virus—whether through vaccinations, lockdowns, or valuation levels. The fund employs a fundamental, research-driven both—tended to fare the best. With the reopening of economies approach in seeking to identify companies with long-term potential and pent-up demand boosting corporate profits, global stocks overlooked by the market. The fund has the flexibility to invest finished the quarter significantly higher. U.S. stocks outperformed across all industry sectors and market capitalizations. Each other developed markets as a whole as well as emerging markets. portfolio manager independently manages a portion of the fund, searching out stocks that offer a balance between reasonable The broad U.S. stock market returned 8.24% for the quarter, as valuations and attractive earnings-growth prospects. measured by the Russell 3000 Index. Small-capitalization stocks, after a strong first quarter of the year, fell behind in the second, with the Russell 2000 Index (+4.29%) trailing its Russell 1000 PRIMECAP Management Company Index (+8.54%) counterpart. Similarly, the value rotation at the start of the year faltered, as the Russell 3000 Growth Index Founded in 1983, PRIMECAP Management Company, Pasadena, (+11.38%) outperformed the Russell 3000 Value Index (+5.16%) California, is recognized for its long-term approach to growth by a wide margin. equity investing. The firm has advised Vanguard PRIMECAP Core Fund since 2004. For the quarter, Vanguard PRIMECAP Core Fund underperformed its benchmark, the MSCI US Prime Market 750 Index (+8.75%), Investment Manager Biographies and the average return of its peers (+7.42%). Poor security selection in information technology detracted most from Joel P. Fried, President. Portfolio manager. Advised the fund since performance. Selection within industrials and consumer 2004. Worked in investment management since 1985. B.S., discretionary, notably an overweight to Southwest Airlines (–13%), University of California, Los Angeles. M.B.A., Anderson Graduate also detracted. Health care firms Eli Lilly (+23%), Biogen (+24%), School of Business, University of California, Los Angeles. and AstraZeneca (20%) added to relative performance. Overall Theo A. Kolokotrones, Chairman. Portfolio manager. Advised the sector positioning had a muted effect on returns. fund since 2004. Worked in investment management since 1970. For the 12 months ended June 30, the fund outperformed its B.A., University of Chicago. M.B.A., Harvard Business School. benchmark (+42.86%) and its peer group average (+41.95%). Ten Alfred W. Mordecai, Executive Vice President. Portfolio manager. of 11 sectors boosted relative returns. Strong security selection Advised the fund since 2004. Worked in investment management within information technology and industrials contributed most to since 1997. B.S.E., Duke University. M.E.A., Virginia Polytechnic outperformance. A significant underweight to consumer staples, Institute and State University. M.B.A., Harvard Business School. as well as selection in financials and consumer discretionary, also contributed. Health care positioning and selection detracted, M. Mohsin Ansari, Executive Vice President. Portfolio manager. specifically among pharmaceutical and biotech companies. Top Advised the fund since 2007. Worked in investment management contributors included overweight allocations to FedEx (+115%), since 2000. B.A., Colgate University. B.S., Washington University. Applied Materials (+138%), and KLA (+69%). M.B.A., Harvard Business School. James M. Marchetti, Senior Vice President. Portfolio manager. Advised the fund since 2015. Worked in investment management Note: Company returns may differ if a security was held in the since 2005. B.A., Massachusetts Institute of Technology. M.B.A., portfolio for less than the full period. MIT Sloan School of Management. As of June 30, 2021 Vanguard PRIMECAP Core Fund Total Returns Expense Year Ratio Quarter to Date 1 Year 3 Years 5 Years 10 Years PRIMECAP Core Fund (12/9/2004) 0.46% 6.30% 19.43% 48.97% 17.05% 18.25% 14.99% MSCI US Prime Market 750 Index — 8.75 14.90 42.86 19.36 18.15 15.00 Multi-Cap Core Funds Average — 7.42 14.90 41.95 15.59 15.21 11.91 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: Average fund returns are derived from data provided by Lipper, a Thomson Reuters Company. As of June 30, 2021 Vanguard PRIMECAP Core Fund Quarterly Returns Year-End MSCI US PRIMECAP Prime Market Assets Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Core Fund 750 Index (Millions) 2021 12.35% 6.30% — — — — $12,143 2020 -23.07 16.81 7.93% 15.57% 12.09% 21.26% 10,658 2019 10.85 2.89 1.46 10.34 27.70 31.65 11,528 2018 -0.19 1.56 9.72 -14.50 -4.90 -4.61 9,730 2017 7.44 5.25 4.98 6.33 26.23 21.97 10,690 2016 -0.43 0.14 8.62 3.73 12.35 11.72 8,623 2015 1.85 -2.18 -6.03 7.82 0.94 1.22 7,740 2014 5.20 4.60 2.24 6.03 19.29 13.58 7,328 2013 13.19 3.20 6.94 8.98 36.14 32.83 6,168 2012 9.27 -3.93 5.79 3.17 14.57 16.18 4,652 2011 5.16 0.97 -15.39 10.36 -0.86 1.65 4,628 Fund Facts Volatility Measures Fund Number 1220 R-Squared Beta Ticker VPCCX MSCI US Prime Market 750 Index 0.92 0.98 Newspaper Listing PrmcpCor DJ US Total Stock Mkt Float Adj Idx 0.93 0.97 CUSIP Number 921921508 R-squared and beta are calculated from trailing 36-month fund returns Assets (millions) $12,143 relative to the associated benchmark. Inception 12/9/2004 Expense Ratio (as of 1/2021) 0.46% Top 10 Largest Holdings % of Total Net Assets Equity Characteristics Eli Lilly & Co. 4.8% MSCI US Prime Alphabet Inc. 3.5 PRIMECAP Market Biogen Inc. 3.2 Core Fund 750 Index Microsoft Corp. 3.2 Number of stocks 163 760 Southwest Airlines Co. 3.0 Median market cap $126.6 Billion $149.2 Billion Amgen Inc. 2.9 Average market cap $264.7 Billion $497.8 Billion AstraZeneca plc 2.8 Price/earnings ratio 23.8x 27.2x Texas Instruments Inc. 2.7 Price/book ratio 4.2x 4.5x Siemens AG 2.1 Return on equity 17.4% 19.8% FedEx Corp. 2.1 Earnings growth rate 13.1% 19.0% Total 30.3% Equity yield (dividend) 1.1% 1.3% The holdings listed exclude any temporary cash investments and equity Foreign holdings 13.8% 0.0% index products. Short-term reserves 3.2% — Turnover rate (fiscal year end) 7.5% — As of June 30, 2021 Vanguard PRIMECAP Core Fund Sector Diversification (% of Stocks) MSCI US PRIMECAP Prime Market Overweight/ Core Fund 750 Index Underweight Communication Services 6.4% 11.1% -4.7 Consumer Discretionary 12.3 12.1 0.2 Consumer Staples 0.5 5.6 -5.1 Energy 1.7 2.6 -0.9 Financials 10.2 10.9 -0.7 Health Care 25.0 13.1 11.9 Industrials 16.6 8.8 7.8 Information Technology 25.8 27.9 -2.1 Materials 1.4 2.6 -1.2 Other 0.0 0.0 0.0 Real Estate 0.1 2.9 -2.8 Utilities 0.0 2.4 -2.4 Total 100.0% 100.0% Sector categories are based on the Global Industry Classification Standard (GICS), except for the Other category (if applicable), which includes securities that have not been provided a GICS classification as of the effective reporting period. 3 month attribution Portfolio Benchmark Attribution Avg. 3 mo. Contrib. Avg. 3 mo. Contrib. Alloc. Select Total weight return Return weight return Return effect effect effect Health Care 23.2 13.9 3.1 13.1 9.1 1.2 0.0 1.0 1.0 Consumer Staples 0.5 0.4 0.0 5.8 3.7 0.2 0.3 0.0 0.2 Financials 9.8 10.3 1.0 11.1 8.7 1.0 0.0 0.2 0.2 Utilities 0.0 0.0 0.0 2.5 -0.4 0.0 0.2 0.0 0.2 Materials 1.4 8.2 0.1 2.8 4.6 0.1 0.0 0.0 0.1 Communication Services 6.1 13.9 0.8 11.0 11.1 1.2 -0.1 0.1 0.0 Energy 1.6 6.8 0.1 2.6 11.4 0.3 0.0 -0.1 -0.1 Real Estate 0.1 14.1 0.0 2.9 12.7 0.4 -0.1 0.0 -0.1 Cash 3.6 0.0 0.0 0.0 0.0 0.0 -0.2 0.0 -0.2 Consumer Discretionary 12.1 0.1 0.0 12.2 6.8 0.8 0.0 -0.8 -0.8 Industrials 16.7 -0.8 -0.1 9.0 4.6 0.4 -0.3 -0.9 -1.2 Information Technology 24.9 5.0 1.3 27.2 11.7 3.2 -0.1 -1.6 -1.7 Total 100.0 6.4 6.4 100.0 8.8 8.8 -0.3 -2.0 -2.3 As of June 30, 2021 Vanguard PRIMECAP Core Fund 12 month attribution Portfolio Benchmark Attribution Avg.