See the inside front cover for important information about accessto your fund’s annual and semiannual shareholder reports.
Annual Report | October 31, 2019
Vanguard High Dividend Yield Index Fund
Contents
Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promisesor advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of thisreport. Of course, the risks of investing in your fund are spelled out in the prospectus.
Important information about access to shareholder reports
Beginning on January 1, 2021, as permitted by regulations adopted by theSecurities and Exchange Commission, paper copies of your fund’s annual andsemiannual shareholder reports will no longer be sent to you by mail, unless youspecifically request them. Instead, you will be notified by mail each time a reportis posted on the website and will be provided with a link to access the report.
If you have already elected to receive shareholder reports electronically, you will notbe affected by this change and do not need to take any action. You may elect toreceive shareholder reports and other communications from the fund electronicallyby contacting your financial intermediary (such as a broker-dealer or bank) or, if youinvest directly with the fund, by calling Vanguard at one of the phone numbers onthe back cover of this report or by logging on to vanguard.com.
You may elect to receive paper copies of all future shareholder reports freeof charge. If you invest through a financial intermediary, you can contact theintermediary to request that you continue to receive paper copies. If you investdirectly with the fund, you can call Vanguard at one of the phone numbers on theback cover of this report or log on to vanguard.com. Your election to receive papercopies will apply to all the funds you hold through an intermediary or directly withVanguard.
A Note From Our Chairman. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Your Fund’s Performance at a Glance. . . . . . . . . . . . . . . . . . 2
About Your Fund’s Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 3
Performance Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Dear Shareholder,
Recent volatility in financial markets—affecting stocks, bonds, and commodities— has been a good reminder of the wise old adage, “Never keep all your eggs in one basket.” Maintaining balance and diversification in your investment portfolio can help to both limit risk and set you up for long-term success.
It’s understandable why some investors might become complacent after a long market run-up like the one that lifted stock prices, especially U.S. stock prices, in the years following the global financial crisis. But failing to rebalance regularly can leave a portfolio with a much different mix of assets than intended and, often, more risk than intended.
Balance across and diversification within asset classes are powerful tools for managing risk and achieving your investment goals. A portfolio’s allocation will determine a large portion of its long- term return and also the majority of its volatility risk. A well-diversified portfolio is less vulnerable to significant swings in the performance of any one segment of the asset classes in which it invests.
Balance and diversification will never eliminate the risk of loss, nor will they guarantee positive returns in a declining market. But they should reduce the chance that you’ll suffer disproportionate losses in one particular high-flying asset class or sector when it comes back to earth. And exposure to all key market components should give you at least some participation in the sectors that are performing best at any given time.
Vanguard is committed to helping you achieve balance and diversification in your portfolios to help meet your invest-ment goals. We thank you for your continued loyalty.
Sincerely,
Mortimer J. Buckley Chairman and Chief Executive Officer November 18, 2019
A Note From Our Chairman
Tim BuckleyChairman and Chief Executive Officer
1
• For the 12 months ended October 31, 2019, Vanguard High Dividend Yield Index
Fund returned 11.31% for ETF Shares. It performed in line with its benchmark, the
FTSE High Dividend Yield Index.
• The fund emphasizes large-capitalization stocks that are forecasted to have above-
average dividend yields.
• The broad U.S. stock market, as measured by the Russell 3000 Index, climbed
more than 13% for the year. While stocks endured stretches of volatility at the end
of 2018 and during the spring of 2019, their performance was boosted by the Federal
Reserve’s accommodative stance and corporate earnings that largely exceeded
investor expectations.
• U.S. companies that are committed to paying larger-than-average dividends
underperformed the broad U.S. stock market.
• The fund recorded positive results in nine of its ten market sectors. Technology,
financials, and utilities stocks contributed the most to returns. Oil and gas stocks
delivered the only negative performance.
• For the ten years ended October 31, 2019, the fund’s average annual return of 13.06%
for ETF Shares was in line with that of its benchmark.
Your Fund’s Performance at a Glance
Market Barometer Average Annual Total Returns
Periods Ended October 31, 2019
One Year Three Years Five Years
Stocks
Russell 1000 Index (Large-caps) 14.15% 14.73% 10.55%
Russell 2000 Index (Small-caps) 4.90 10.96 7.37
Russell 3000 Index (Broad U.S. market) 13.49 14.47 10.31
FTSE All-World ex US Index (International) 11.52 8.21 4.16
Bonds
Bloomberg Barclays U.S. Aggregate Bond Index
(Broad taxable market) 11.51% 3.29% 3.24%
Bloomberg Barclays Municipal Bond Index
(Broad tax-exempt market) 9.42 3.62 3.55
FTSE Three-Month U.S. Treasury Bill Index 2.35 1.57 0.98
CPI
Consumer Price Index 1.76% 2.11% 1.62%
2
About Your Fund’s Expenses
3
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 sellingsecurities. Further, the expenses do not include any purchase, redemption, or account servicefees described in the fund prospectus. If such fees were applied to your account, your costswould be higher. Your fund does not carry a “sales load.”
The calculations assume no shares were bought or sold during the period. Your actual costs mayhave been higher or lower, depending on the amount of your investment and the timing of anypurchases or redemptions.
You can find more information about the fund’s expenses, including annual expense ratios, in theFinancial Statements section of this report. For additional information on operating expenses andother shareholder costs, please refer to your fund’s current prospectus.
4
Six Months Ended October 31, 2019
High Dividend Yield Index Fund
BeginningAccount Value
4/30/2019
EndingAccount Value
10/31/2019
ExpensesPaid During
Period
Based on Actual Fund Return
Investor Shares $1,000.00 $1,032.63 $0.72
ETF Shares 1,000.00 1,033.08 0.31
Admiral™ Shares 1,000.00 1,032.82 0.41
Based on Hypothetical 5% Yearly Return
Investor Shares $1,000.00 $1,024.50 $0.71
ETF Shares 1,000.00 1,024.90 0.31
Admiral Shares 1,000.00 1,024.80 0.41
The calculations are based on expenses incurred in the most recent six-month period. The fund’s annualized six-month expense ratios forthat period are 0.14% for Investor Shares, 0.06% for ETF Shares, and 0.08% for Admiral Shares. The dollar amounts shown as “ExpensesPaid” are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of daysin the most recent six-month period, then divided by the number of days in the most recent 12-month period (184/365).
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 thanthe performance data cited. For performance data current to the most recent month-end, visitour website at vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Performance Summary
See Financial Highlights for dividend and capital gains information.
High Dividend Yield Index Fund
5
Cumulative Performance: October 31, 2009, Through October 31, 2019Initial Investment of $10,000
2019201820172016201520142013201220112010
$43,000
7,000
33,805
Average Annual Total ReturnsPeriods Ended October 31, 2019
OneYear
FiveYears
TenYears
Final Valueof a $10,000Investment
High Dividend Yield Index Fund Investor Shares 11.20% 8.93% 12.95% $33,805
• • • • • • • • FTSE High Dividend Yield Index 11.32 9.07 13.15 34,398
________Dow Jones U.S. Total Stock Market Float Adjusted Index 13.39 10.26 13.62 35,859
OneYear
FiveYears
TenYears
Final Valueof a $10,000Investment
High Dividend Yield Index Fund ETF SharesNet Asset Value 11.31% 9.01% 13.06% $34,115
High Dividend Yield Index Fund ETF SharesMarket Price 11.39 9.02 13.07 34,143
FTSE High Dividend Yield Index 11.32 9.07 13.15 34,398
Dow Jones U.S. Total Stock Market FloatAdjusted Index 13.39 10.26 13.62 35,859
High Dividend Yield Index Fund
6
Total ReturnsPeriod Ended October 31, 2019
SinceInception
(2/7/2019)
Final Valueof a $10,000Investment
High Dividend Yield Index Fund Admiral Shares 10.64% $11,064
FTSE High Dividend Yield Index 10.68 11,068
Dow Jones U.S. Total Stock Market Float Adjusted Index 12.61 11,261
"Since Inception" performance is calculated from the Admiral Shares’ inception date for both the fund and its comparative standards.
Cumulative Returns of ETF Shares: October 31, 2009, Through October 31, 2019
OneYear
FiveYears
TenYears
High Dividend Yield Index Fund ETF Shares MarketPrice 11.39% 53.98% 241.43%
High Dividend Yield Index Fund ETF Shares NetAsset Value 11.31 53.92 241.15
FTSE High Dividend Yield Index 11.32 54.36 243.98
For the ETF Shares, the market price is determined by the midpoint of the bid-offer spread as of the closing time of the New York Stock Exchange (generally 4 p.m., Eastern time). The net asset value is also determined as of the NYSE closing time. For more information about how the ETF Shares' market prices have compared with their net asset value, visit vanguard.com, select your ETF, and then select the Price and Performance tab. The ETF premium/discount analysis there shows the percentages of days on which the ETF Shares' market price was above or below the NAV.
Sector DiversificationAs of October 31, 2019
High Dividend Yield Index Fund
7
Basic Materials 3.5%
Consumer Goods 14.1
Consumer Services 9.3
Financials 18.9
Health Care 12.8
Industrials 8.3
Oil & Gas 8.4
Technology 10.4
Other 0.0
Telecommunications 5.3
Utilities 9.0
Sector categories are based on the Industry Classification Bench-mark (“ICB”), except for the “Other” category (if applicable), which includes securities that have not been provided an ICB classifica-tion as of the effective reporting period.
The Industry Classification Benchmark (“ICB”) is owned by FTSE. FTSE does not accept any liability to any person for any loss or damage arising out of any error or omission in the ICB.
Financial Statements
Statement of Net AssetsAs of October 31, 2019
High Dividend Yield Index Fund
Market
Value•
Shares ($000)
Market
Value•
Shares ($000)
Common Stocks (99.8%)1
Basic Materials (3.5%)
Linde plc 1,865,256 369,974
DuPont de Nemours Inc. 2,577,438 169,879
Air Products &
Chemicals Inc. 758,687 161,798
Dow Inc. 2,569,176 129,718
LyondellBasell Industries
NV Class A 914,464 82,027
International Paper Co. 1,350,988 59,011
Nucor Corp. 1,049,163 56,497
Eastman Chemical Co. 466,658 35,485
CF Industries Holdings
Inc. 751,329 34,073
RPM International Inc. 441,207 31,957
Reliance Steel &
Aluminum Co. 222,379 25,805
Huntsman Corp. 752,862 16,661
Scotts Miracle-Gro Co. 135,163 13,569
Olin Corp. 565,011 10,362
Southern Copper Corp. 283,168 10,075
Cabot Corp. 194,776 8,490
Commercial Metals Co. 404,563 7,820
Domtar Corp. 212,020 7,715
Compass Minerals
International Inc. 114,720 6,479
Trinseo SA 137,384 5,839
Schweitzer-Mauduit
International Inc. 103,882 4,206
Orion Engineered
Carbons SA 199,976 3,312
Innophos Holdings Inc. 66,573 2,172
Schnitzer Steel Industries
Inc. 86,089 1,837^ Nexa Resources SA 118,532 1,267
1,256,028
Consumer Goods (14.1%)
Procter & Gamble Co. 8,498,697 1,058,173
Coca-Cola Co. 13,184,928 717,656
PepsiCo Inc. 4,817,083 660,759
Philip Morris
International Inc. 5,342,959 435,130
Altria Group Inc. 6,431,947 288,087
Colgate-Palmolive Co. 2,886,667 198,025
General Motors Co. 4,266,218 158,533
Kimberly-Clark Corp. 1,173,279 155,905
Ford Motor Co. 13,449,984 115,535
General Mills Inc. 2,060,465 104,795
VF Corp. 1,057,332 87,008
Archer-Daniels-Midland
Co. 1,911,486 80,359
Hershey Co. 495,144 72,722
Kraft Heinz Co. 2,150,293 69,519
Corteva Inc. 2,575,838 67,951
Clorox Co. 433,413 64,011
Kellogg Co. 847,311 53,830
Genuine Parts Co. 484,664 49,717
Garmin Ltd. 499,317 46,811
Conagra Brands Inc. 1,649,163 44,610
JM Smucker Co. 379,866 40,144
Hasbro Inc. 399,053 38,832
Coca-Cola European
Partners plc 608,578 32,565
Whirlpool Corp. 213,733 32,513
Molson Coors Brewing
Co. Class B 594,202 31,326
Campbell Soup Co. 570,735 26,431
Tapestry Inc. 994,248 25,711
Bunge Ltd. 469,819 25,370
Newell Brands Inc. 1,295,585 24,577
Autoliv Inc. 298,144 23,207
Leggett & Platt Inc. 447,442 22,954
Harley-Davidson Inc. 533,815 20,771
Polaris Inc. 196,786 19,413
Hanesbrands Inc. 1,227,127 18,665
Flowers Foods Inc. 665,068 14,445
Goodyear Tire & Rubber
Co. 787,517 12,498
Coty Inc. Class A 989,862 11,571
Nu Skin Enterprises Inc.
Class A 197,504 8,805
LCI Industries 81,980 7,962
Spectrum Brands
Holdings Inc. 143,197 7,190
The fund files its complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports
on Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at
www.sec.gov.
8
High Dividend Yield Index Fund
Market
Value•
Shares ($000)
Market
Value•
Shares ($000)
MDC Holdings Inc. 167,868 6,498
Kontoor Brands Inc. 148,418 5,640
HNI Corp. 144,657 5,497
Steelcase Inc. Class A 291,914 5,100
Vector Group Ltd. 372,327 4,542
Universal Corp. 82,390 4,515
Knoll Inc. 164,655 4,403^ B&G Foods Inc. 216,000 3,359
Tenneco Inc. Class A 167,536 2,109
Tupperware Brands Corp. 164,375 1,583
Ethan Allen Interiors Inc. 79,894 1,575
National Presto Industries
Inc. 17,438 1,501
5,020,408
Consumer Services (9.3%)
Comcast Corp. Class A 15,483,048 693,950
Walmart Inc. 4,829,730 566,334
McDonald’s Corp. 2,639,522 519,194
CVS Health Corp. 4,462,273 296,250
Target Corp. 1,713,418 183,182
Walgreens Boots
Alliance Inc. 2,615,922 143,300
Sysco Corp. 1,639,562 130,952
Las Vegas Sands Corp. 1,171,557 72,449
Carnival Corp. 1,368,857 58,710
Omnicom Group Inc. 744,020 57,431
Best Buy Co. Inc. 789,226 56,690
Darden Restaurants Inc. 423,540 47,551
Delta Air Lines Inc. 701,063 38,615
Vail Resorts Inc. 137,161 31,872
Interpublic Group of
Cos. Inc. 1,315,962 28,622
Kohl’s Corp. 555,356 28,468
Viacom Inc. Class B 1,208,125 26,047
Nielsen Holdings plc 1,213,591 24,466
Williams-Sonoma Inc. 266,717 17,814
Wyndham Hotels &
Resorts Inc. 328,233 17,715
H&R Block Inc. 695,899 17,391* IAA Inc. 452,816 17,275
Macy’s Inc. 1,055,006 15,994
Wyndham Destinations
Inc. 311,796 14,470
Cinemark Holdings Inc. 365,060 13,361
L Brands Inc. 778,852 13,272
Nordstrom Inc. 369,415 13,262
Gap Inc. 740,928 12,048
Six Flags Entertainment
Corp. 271,446 11,452
KAR Auction Services Inc. 454,716 11,304
TEGNA Inc. 740,576 11,131
Cracker Barrel Old
Country Store Inc. 65,307 10,155
Extended Stay America
Inc. 635,148 9,025
American Eagle Outfitters
Inc. 577,441 8,881
Sinclair Broadcast Group
Inc. Class A 208,835 8,320
John Wiley & Sons Inc.
Class A 150,014 6,911
Cheesecake Factory Inc. 140,884 5,888
Penske Automotive Group
Inc. 117,437 5,722
Brinker International Inc. 125,303 5,570^ Bed Bath & Beyond Inc. 405,693 5,558
Meredith Corp. 133,847 5,046
International Game
Technology plc 331,759 4,392
Dine Brands Global Inc. 56,307 4,119
Gannett Co. Inc. 355,168 3,854
Office Depot Inc. 1,834,067 3,778
Abercrombie & Fitch Co. 224,610 3,636
Designer Brands Inc.
Class A 218,032 3,598
Big Lots Inc. 135,091 2,927
Guess? Inc. 170,949 2,863
Signet Jewelers Ltd. 175,081 2,808
Copa Holdings SA Class A 26,785 2,725
Buckle Inc. 96,089 2,010
New Media Investment
Group Inc. 204,885 1,805
Weis Markets Inc. 32,827 1,264
3,301,427
Financials (18.9%)
JPMorgan Chase & Co. 10,936,328 1,366,166
Wells Fargo & Co. 13,664,797 705,513
Citigroup Inc. 7,602,638 546,325
US Bancorp 4,917,881 280,418
CME Group Inc. 1,217,014 250,401
Chubb Ltd. 1,565,075 238,549
PNC Financial Services
Group Inc. 1,527,935 224,148
Morgan Stanley 4,083,322 188,037
BlackRock Inc. 406,893 187,862
American International
Group Inc. 2,996,231 158,680
Progressive Corp. 2,000,887 139,462
BB&T Corp. 2,624,579 139,234
Aflac Inc. 2,533,698 134,691
Prudential Financial Inc. 1,408,528 128,373
MetLife Inc. 2,714,148 126,995
Travelers Cos. Inc. 899,255 117,856
SunTrust Banks Inc. 1,521,984 104,012
T. Rowe Price Group Inc. 790,258 91,512
State Street Corp. 1,279,522 84,538
Synchrony Financial 2,302,179 81,428
Fifth Third Bancorp 2,540,327 73,873
Ameriprise Financial Inc. 449,393 67,809
KeyCorp 3,485,960 62,643
9
High Dividend Yield Index Fund
Market
Value•
Shares ($000)
Market
Value•
Shares ($000)
Cincinnati Financial Corp. 522,810 59,187
Arthur J Gallagher & Co. 631,721 57,626
Regions Financial Corp. 3,442,261 55,420
Citizens Financial Group
Inc. 1,540,860 54,177
Huntington Bancshares
Inc. 3,595,561 50,805
Principal Financial Group
Inc. 949,938 50,708
Fidelity National Financial
Inc. 907,508 41,600
Western Union Co. 1,459,970 36,587
Comerica Inc. 514,702 33,672
Franklin Resources Inc. 961,014 26,476
First American Financial
Corp. 373,226 23,058
Invesco Ltd. 1,346,293 22,645
People’s United Financial
Inc. 1,354,015 21,894
AXA Equitable Holdings
Inc. 1,003,261 21,670
Old Republic
International Corp. 962,312 21,498
TCF Financial Corp. 521,292 20,638
Unum Group 708,910 19,523
New York Community
Bancorp Inc. 1,551,344 18,073
Popular Inc. 325,184 17,709
Eaton Vance Corp. 380,925 17,370
Cullen/Frost Bankers Inc. 192,711 17,359
Synovus Financial Corp. 502,802 17,030
First Horizon National
Corp. 1,065,918 17,023
Axis Capital Holdings Ltd. 281,806 16,748
PacWest Bancorp 403,017 14,908
FNB Corp. 1,108,385 13,367
RLI Corp. 136,196 13,255
Lazard Ltd. Class A 353,540 13,198
United Bankshares Inc. 332,366 13,142
Valley National Bancorp 1,104,900 12,795
Janus Henderson Group
plc 549,777 12,716
Glacier Bancorp Inc. 295,289 12,497
First Hawaiian Inc. 456,054 12,464
Bank of Hawaii Corp. 138,433 12,087
Hancock Whitney Corp. 306,004 11,934
Umpqua Holdings Corp. 753,989 11,928
Community Bank System
Inc. 172,986 11,725
Associated Banc-Corp 548,960 11,040
BankUnited Inc. 320,990 11,010
Legg Mason Inc. 292,718 10,907
Federated Investors Inc.
Class B 329,336 10,519
Old National Bancorp 580,227 10,441
Columbia Banking
System Inc. 251,303 9,876
Kennedy-Wilson Holdings
Inc. 414,757 9,543
Navient Corp. 692,566 9,537
Investors Bancorp Inc. 788,896 9,506
CVB Financial Corp. 456,140 9,479
Fulton Financial Corp. 554,796 9,465
Cathay General Bancorp 262,682 9,344
Santander Consumer USA
Holdings Inc. 357,930 8,977
OneMain Holdings Inc. 224,368 8,975
First Financial Bancorp 333,758 7,823
Trustmark Corp. 220,685 7,574
ProAssurance Corp. 182,901 7,173
WesBanco Inc. 181,026 6,805
Pacific Premier Bancorp
Inc. 200,682 6,774
Great Western Bancorp
Inc. 192,612 6,716
Capitol Federal Financial
Inc. 447,598 6,387
Horace Mann Educators
Corp. 139,479 6,076
Bank of NT Butterfield &
Son Ltd. 183,706 6,053
Westamerica
Bancorporation 88,245 5,826
Hope Bancorp Inc. 405,434 5,785
NBT Bancorp Inc. 143,955 5,722
Moelis & Co. Class A 159,243 5,682
Northwest Bancshares
Inc. 336,622 5,679
Provident Financial
Services Inc. 208,468 5,201
BGC Partners Inc. Class A 996,697 5,183
Cohen & Steers Inc. 76,486 5,005
Safety Insurance Group Inc. 49,733 4,834
Berkshire Hills Bancorp Inc. 155,514 4,826
City Holding Co. 59,089 4,688
Clearway Energy Inc. 257,773 4,673
First Commonwealth
Financial Corp. 328,584 4,630
Artisan Partners Asset
Management Inc. Class A 167,925 4,593
Mercury General Corp. 91,825 4,413
CNA Financial Corp. 95,025 4,261
S&T Bancorp Inc. 113,055 4,257
Brookline Bancorp Inc. 264,022 4,145
Sandy Spring Bancorp Inc. 118,869 4,101
Waddell & Reed Financial
Inc. Class A 241,348 3,997
TFS Financial Corp. 183,571 3,536
Boston Private Financial
Holdings Inc. 279,155 3,140
10
High Dividend Yield Index Fund
Market
Value•
Shares ($000)
Market
Value•
Shares ($000)
American National
Insurance Co. 25,480 3,057
TrustCo Bank Corp. NY 318,645 2,753
Stock Yards Bancorp Inc. 67,620 2,701
Washington Trust Bancorp
Inc. 50,637 2,587
Oritani Financial Corp. 131,610 2,456
Brightsphere Investment
Group Inc. 235,195 2,310
Community Trust Bancorp
Inc. 51,183 2,242
Dime Community
Bancshares Inc. 107,740 2,078
Flushing Financial Corp. 90,142 1,951
Clearway Energy Inc.
Class A 108,534 1,863
FBL Financial Group Inc.
Class A 31,993 1,836
Republic Bancorp Inc.
Class A 32,305 1,437
6,734,485
Health Care (12.7%)
Johnson & Johnson 9,135,756 1,206,285
Merck & Co. Inc. 8,859,878 767,797
Pfizer Inc. 19,142,355 734,492
Amgen Inc. 2,061,084 439,526
AbbVie Inc. 5,083,924 404,426
Eli Lilly & Co. 2,956,454 336,888
Bristol-Myers Squibb
Co. 5,623,105 322,598
Gilead Sciences Inc. 4,384,783 279,355
Cardinal Health Inc. 1,025,275 50,700
Patterson Cos. Inc. 280,517 4,805
4,546,872
Industrials (8.2%)
Lockheed Martin Corp. 850,448 320,347
3M Co. 1,922,458 317,186
United Parcel Service
Inc. Class B 2,398,493 276,234
Caterpillar Inc. 1,874,510 258,308
Automatic Data
Processing Inc. 1,495,051 242,542
Illinois Tool Works Inc. 1,114,475 187,878
Waste Management Inc. 1,461,113 163,952
Emerson Electric Co. 2,125,788 149,124
Eaton Corp. plc 1,448,471 126,176
Johnson Controls
International plc 2,733,472 118,441
Paychex Inc. 1,100,566 92,051
Cummins Inc. 527,554 90,993
PACCAR Inc. 1,169,679 88,966
Fastenal Co. 1,968,207 70,737
Packaging Corp. of
America 322,421 35,292
CH Robinson Worldwide
Inc. 463,217 35,038
Westrock Co. 868,649 32,461
Snap-on Inc. 187,248 30,460
Toro Co. 361,607 27,891
Hubbell Inc. Class B 185,114 26,231
Xerox Holdings Corp. 625,783 21,233
Sonoco Products Co. 339,347 19,580
Watsco Inc. 110,679 19,513
MDU Resources Group
Inc. 670,891 19,382
National Instruments
Corp. 443,813 18,369
nVent Electric plc 517,079 11,924
Timken Co. 230,334 11,286
MSC Industrial Direct Co.
Inc. Class A 148,977 10,907
Macquarie Infrastructure
Corp. 252,025 10,872
GATX Corp. 121,412 9,658
Kennametal Inc. 281,201 8,703
Ryder System Inc. 178,554 8,683
ABM Industries Inc. 228,006 8,313
Otter Tail Corp. 132,687 7,521
Triton International Ltd. 185,710 6,816
McGrath RentCorp 81,759 6,239
Covanta Holding Corp. 395,697 5,714
Mobile Mini Inc. 151,069 5,683
Aircastle Ltd. 174,411 4,747
Actuant Corp. Class A 187,219 4,637
Seaspan Corp. Class A 375,361 4,069
Ship Finance International
Ltd. 272,836 3,948
H&E Equipment Services
Inc. 107,420 3,646
Greif Inc. Class A 87,062 3,410
Greenbrier Cos. Inc. 107,821 3,158
AVX Corp. 158,534 2,429
Myers Industries Inc. 120,133 2,034
GasLog Ltd. 136,723 1,875
2,934,657
Oil & Gas (8.4%)
Exxon Mobil Corp. 14,561,689 983,933
Chevron Corp. 6,556,456 761,467
Phillips 66 1,541,491 180,077
Schlumberger Ltd. 4,763,736 155,726
Marathon Petroleum
Corp. 2,256,819 144,323
Valero Energy Corp. 1,431,827 138,859
Kinder Morgan Inc. 6,721,945 134,304
Occidental Petroleum
Corp. 3,078,236 124,668
ONEOK Inc. 1,413,618 98,713
Williams Cos. Inc. 4,158,303 92,772
Targa Resources Corp. 780,855 30,360
11
High Dividend Yield Index Fund
Market
Value•
Shares ($000)
Market
Value•
Shares ($000)
OGE Energy Corp. 682,017 29,368
Apache Corp. 1,282,413 27,777
Helmerich & Payne Inc. 363,281 13,623
PBF Energy Inc. Class A 409,990 13,234
Murphy Oil Corp. 526,209 10,856
Delek US Holdings Inc. 266,242 10,636
Equitrans Midstream Corp. 700,546 9,752^,* Cosan Ltd. 398,794 6,708
Core Laboratories NV 150,901 6,646
CVR Energy Inc. 99,151 4,702
Golar LNG Ltd. 320,037 4,407
Archrock Inc. 444,968 4,289
SemGroup Corp. Class A 265,578 4,276
Nabors Industries Ltd. 1,202,062 2,224^ RPC Inc. 200,030 828
2,994,528
Other (0.0%)2 *,§ A Schulman Inc. CVR 77,428 34
Technology (10.4%)
Intel Corp. 15,253,129 862,259
Cisco Systems Inc. 14,728,009 699,728
International Business
Machines Corp. 3,048,771 407,712
Broadcom Inc. 1,327,639 388,799
Texas Instruments Inc. 3,220,276 379,960
QUALCOMM Inc. 4,179,689 336,214
KLA Corp. 546,408 92,365
HP Inc. 5,193,546 90,212
Corning Inc. 2,652,547 78,595
Hewlett Packard
Enterprise Co. 4,608,144 75,620
Maxim Integrated
Products Inc. 952,908 55,897
Seagate Technology plc 918,938 53,326
Western Digital Corp. 1,006,662 51,994
NetApp Inc. 816,786 45,642
Cypress Semiconductor
Corp. 1,257,444 29,261
Juniper Networks Inc. 1,165,827 28,936
Cogent Communications
Holdings Inc. 144,026 8,446
Xperi Corp. 165,464 3,360
TiVo Corp. 407,495 3,317
Pitney Bowes Inc. 568,189 2,500
ADTRAN Inc. 162,190 1,429
3,695,572
Telecommunications (5.3%)
AT&T Inc. 25,113,986 966,637
Verizon
Communications Inc. 14,235,961 860,849
CenturyLink Inc. 3,756,838 48,613
1,876,099
Utilities (9.0%)
NextEra Energy Inc. 1,645,186 392,114
Duke Energy Corp. 2,502,029 235,841
Dominion Energy Inc. 2,754,087 227,350
Southern Co. 3,574,279 223,964
American Electric Power
Co. Inc. 1,697,156 160,195
Exelon Corp. 3,333,556 151,643
Sempra Energy 942,750 136,237
Xcel Energy Inc. 1,763,271 111,985
Public Service Enterprise
Group Inc. 1,730,787 109,576
Consolidated Edison Inc. 1,144,492 105,545
WEC Energy Group Inc. 1,084,180 102,347
Eversource Energy 1,110,358 92,981
FirstEnergy Corp. 1,824,949 88,182
PPL Corp. 2,484,291 83,199
Entergy Corp. 681,352 82,771
DTE Energy Co. 628,180 79,980
Edison International 1,200,337 75,501
Ameren Corp. 840,334 65,294
CMS Energy Corp. 971,408 62,092
Evergy Inc. 809,537 51,737
CenterPoint Energy Inc. 1,727,720 50,225
Atmos Energy Corp. 410,972 46,226
Alliant Energy Corp. 816,006 43,526
AES Corp. 2,284,946 38,958
Pinnacle West Capital
Corp. 387,198 36,443
NiSource Inc. 1,283,204 35,981
UGI Corp. 710,397 33,865
Aqua America Inc. 744,005 33,726
IDACORP Inc. 171,361 18,442
Portland General Electric
Co. 304,531 17,322
Hawaiian Electric
Industries Inc. 380,416 17,176
ONE Gas Inc. 177,611 16,489
Black Hills Corp. 207,004 16,318
Southwest Gas Holdings
Inc. 184,258 16,086
ALLETE Inc. 176,068 15,152
Spire Inc. 169,512 14,249
PNM Resources Inc. 270,199 14,091
New Jersey Resources
Corp. 302,640 13,195
National Fuel Gas Co. 279,723 12,674
NorthWestern Corp. 172,495 12,509
Avista Corp. 223,830 10,751
South Jersey Industries
Inc. 316,636 10,183
Avangrid Inc. 193,312 9,675
El Paso Electric Co. 139,021 9,274
12
High Dividend Yield Index Fund
Market
Value•
Shares ($000)
At October 31, 2019, net assets consisted of:
Amount
($000)
Pattern Energy Group Inc.
Class A 302,816 8,488
Northwest Natural
Holding Co. 103,433 7,174
Atlantica Yield plc 198,369 4,763
TerraForm Power Inc.
Class A 247,105 4,196
3,205,691
Total Common Stocks
(Cost $30,639,061) 35,565,801
Temporary Cash Investments (0.0%)1
Money Market Fund (0.0%)3,4 Vanguard Market Liquidity
Fund, 1.984% 106,742 10,675
Face
Amount
($000)
U.S. Government and Agency Obligations (0.0%) 5 United States Treasury
Bill, 2.211%, 11/7/19 3,000 2,9995 United States Treasury
Bill, 1.997%, 12/26/19 1,400 1,397
4,396
Total Temporary Cash Investments
(Cost $15,070) 15,071
Total Investments (99.8%)
(Cost $30,654,131) 35,580,872
Amount
($000)
Other Assets and Liabilities (0.2%)
Other Assets
Investment in Vanguard 1,636
Receivables for Investment Securities Sold 72,553
Receivables for Accrued Income 61,938
Receivables for Capital Shares Issued 34,740
Other Assets 3,730
Total Other Assets 174,597
Liabilities
Payables for Investment Securities
Purchased (105,194)
Collateral for Securities on Loan (5,305)
Payables for Capital Shares Redeemed (4,200)
Payables to Vanguard (4,545)
Variation Margin Payable—Future
Contracts (269)
Total Liabilities (119,513)
Net Assets (100%) 35,635,956
Paid-in Capital 31,594,056
Total Distributable Earnings (Loss) 4,041,900
Net Assets 35,635,956
Investor Shares—Net Assets
Applicable to 158,975 outstanding
$.001 par value shares of beneficial
interest (unlimited authorization) 5,644
Net Asset Value Per Share—
Investor Shares $35.50
ETF Shares—Net Assets
Applicable to 299,273,138 outstanding
$.001 par value shares of beneficial
interest (unlimited authorization) 26,816,016
Net Asset Value Per Share—
ETF Shares $89.60
Admiral Shares—Net Assets
Applicable to 326,230,045 outstanding
$.001 par value shares of beneficial
interest (unlimited authorization) 8,814,296
Net Asset Value Per Share—
Admiral Shares $27.02
• See Note A in Notes to Financial Statements.
^ Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $4,863,000.
* Non-income-producing security.
§ Security value determined using significant unobservable inputs.
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 100.0% and -0.2%, respectively, of net assets.
2 “Other” represents securities that are not classified by the fund’s benchmark index.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
4 Collateral of $5,305,000 was received for securities on loan.
5 Securities with a value of $3,046,000 have been segregated as initial margin for open futures contracts.
CVR—Contingent Value Rights.
13
High Dividend Yield Index Fund
See accompanying Notes, which are an integral part of the Financial Statements.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Value and Number of Unrealized Long (Short) Notional Appreciation Expiration Contracts Amount (Depreciation)
Long Futures Contracts
E-mini S&P 500 Index December 2019 449 68,154 922
14
Year Ended
October 31, 2019
($000)
Investment Income
Income
Dividends 1,098,701
Interest1 610
Securities Lending—Net 1,229
Total Income 1,100,540
Expenses
The Vanguard Group—Note B
Investment Advisory Services 3,293
Management and Administrative—Investor Shares 5,023
Management and Administrative—ETF Shares 9,775
Management and Administrative—Admiral Shares 2,627
Marketing and Distribution—Investor Shares 519
Marketing and Distribution—ETF Shares 1,076
Marketing and Distribution—Admiral Shares 109
Custodian Fees 414
Auditing Fees 33
Shareholders’ Reports—Investor Shares 89
Shareholders’ Reports—ETF Shares 542
Shareholders’ Reports—Admiral Shares 11
Trustees’ Fees and Expenses 15
Total Expenses 23,526
Net Investment Income 1,077,014
Realized Net Gain (Loss)
Investment Securities Sold1,2 898,618
Futures Contracts 5,287
Realized Net Gain (Loss) 903,905
Change in Unrealized Appreciation (Depreciation)
Investment Securities1 1,471,844
Futures Contracts 5,864
Change in Unrealized Appreciation (Depreciation) 1,477,708
Net Increase (Decrease) in Net Assets Resulting from Operations 3,458,627
1 Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $499,000, $37,000, and $1,000, respectively. Purchases and sales are for temporary cash investment purposes.
2 Includes $1,387,069,000 of net gain (loss) resulting from in-kind redemptions, such gain (loss) is not taxable to the fund.
Statement of Operations
High Dividend Yield Index Fund
See accompanying Notes, which are an integral part of the Financial Statements.
15
Statement of Changes in Net Assets
High Dividend Yield Index Fund
See accompanying Notes, which are an integral part of the Financial Statements.
Year Ended October 31,
2019 2018
($000) ($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 1,077,014 896,721
Realized Net Gain (Loss) 903,905 2,076,558
Change in Unrealized Appreciation (Depreciation) 1,477,708 (1,857,134)
Net Increase (Decrease) in Net Assets Resulting from Operations 3,458,627 1,116,145
Distributions
Net Investment Income
Investor Shares (136,910) (235,382)
ETF Shares (785,436) (640,458)
Admiral Shares (131,730) —
Realized Capital Gain
Investor Shares — —
ETF Shares — —
Admiral Shares — —
Total Distributions (1,054,076) (875,840)
Capital Share Transactions
Investor Shares (8,358,258) 350,836
ETF Shares 3,714,888 1,139,552
Admiral Shares 8,543,837 —
Net Increase (Decrease) from Capital Share Transactions 3,900,467 1,490,388
Total Increase (Decrease) 6,305,018 1,730,693
Net Assets
Beginning of Period 29,330,938 27,600,245
End of Period 35,635,956 29,330,938
16
Investor Shares
For a Share Outstanding Year Ended October 31,
Throughout Each Period 2019 2018 2017 2016 2015
Net Asset Value, Beginning of Period $32.98 $32.67 $28.20 $26.89 $26.98
Investment Operations
Net Investment Income 1.1411 1.0111 .9271 .854 .815
Net Realized and Unrealized Gain (Loss)
on Investments 2.461 .284 4.472 1.286 (.088)
Total from Investment Operations 3.602 1.295 5.399 2.140 .727
Distributions
Dividends from Net Investment Income (1.082) (.985) (.929) (.830) (.817)
Distributions from Realized Capital Gains — — — — —
Total Distributions (1.082) (.985) (.929) (.830) (.817)
Net Asset Value, End of Period $35.50 $32.98 $32.67 $28.20 $26.89
Total Return2 11.20% 3.96% 19.37% 8.11% 2.78%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $6 $8,003 $7,590 $5,879 $4,368
Ratio of Total Expenses to Average Net Assets 0.14% 0.14% 0.15% 0.15% 0.16%
Ratio of Net Investment Income to
Average Net Assets 3.43% 3.00% 3.00% 3.19% 3.06%
Portfolio Turnover Rate3 7% 13% 9% 7% 11%
1 Calculated based on average shares outstanding.
2 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
Financial Highlights
See accompanying Notes, which are an integral part of the Financial Statements.
High Dividend Yield Index Fund
17
ETF Shares
For a Share Outstanding Year Ended October 31,
Throughout Each Period 2019 2018 2017 2016 2015
Net Asset Value, Beginning of Period $83.26 $82.46 $71.19 $67.88 $68.11
Investment Operations
Net Investment Income 2.8911 2.6231 2.3941 2.203 2.104
Net Realized and Unrealized Gain (Loss)
on Investments 6.251 .731 11.301 3.245 (.222)
Total from Investment Operations 9.142 3.354 13.695 5.448 1.882
Distributions
Dividends from Net Investment Income (2.802) (2.554) (2.425) (2.138) (2.112)
Distributions from Realized Capital Gains — — — — —
Total Distributions (2.802) (2.554) (2.425) (2.138) (2.112)
Net Asset Value, End of Period $89.60 $83.26 $82.46 $71.19 $67.88
Total Return 11.31% 4.05% 19.46% 8.18% 2.84%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $26,816 $21,328 $20,010 $15,497 $11,214
Ratio of Total Expenses to Average Net Assets 0.06% 0.06% 0.08% 0.08% 0.09%
Ratio of Net Investment Income to
Average Net Assets 3.38% 3.08% 3.07% 3.26% 3.13%
Portfolio Turnover Rate2 7% 13% 9% 7% 11%
1 Calculated based on average shares outstanding.
2 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
Financial Highlights
See accompanying Notes, which are an integral part of the Financial Statements.
High Dividend Yield Index Fund
18
Admiral Shares
February 7, 20191 to
For a Share Outstanding Throughout the Period October 31, 2019
Net Asset Value, Beginning of Period $25.00
Investment Operations
Net Investment Income2 .624
Net Realized and Unrealized Gain (Loss) on Investments 2.010
Total from Investment Operations 2.634
Distributions
Dividends from Net Investment Income (.614)
Distributions from Realized Capital Gains —
Total Distributions (.614)
Net Asset Value, End of Period $27.02
Total Return3 10.64%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $8,814
Ratio of Total Expenses to Average Net Assets 0.08%4
Ratio of Net Investment Income to Average Net Assets 3.24%4
Portfolio Turnover Rate5 7%6
1 Inception.
2 Calculated based on average shares outstanding.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 Annualized.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
6 Reflects the fund’s portfolio turnover for the fiscal year ended October 31, 2019.
Financial Highlights
See accompanying Notes, which are an integral part of the Financial Statements.
High Dividend Yield Index Fund
19
Notes to Financial Statements
High Dividend Yield Index Fund
Vanguard High Dividend Yield Index Fund is registered under the Investment Company Act of 1940
as an open-end investment company, or mutual fund. The fund offers three classes of shares:
Investor Shares, ETF Shares, and Admiral Shares. Each of the share classes has different eligibility
and minimum purchase requirements, and is designed for different types of investors. ETF Shares
are listed for trading on NYSE Arca; they can be purchased and sold through a broker. Admiral
shares were issued on February 7, 2019.
A. The following significant accounting policies conform to generally accepted accounting
principles for U.S. investment companies. The fund consistently follows such policies in preparing
its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock
Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at
the latest quoted sales prices or official closing prices taken from the primary market in which
each security trades; such securities not traded on the valuation date are valued at the mean of the
latest quoted bid and asked prices. Securities for which market quotations are not readily available,
or whose values have been 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. Investments in Vanguard Market Liquidity Fund are valued at that
fund’s net asset value. Temporary cash investments 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.
2. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objectives
of maintaining full exposure to the stock market, 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 primary risks associated with the
use of futures contracts are imperfect correlation between changes in market values of stocks held
by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty
risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of
the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an
exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered
into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin
requirements to secure the fund’s performance and requires daily settlement of variation margin
representing changes in the market value of each contract. Any assets pledged as initial margin for
open contracts are noted in the Statement of Net Assets.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the
contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts
are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations
as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as
realized futures gains (losses).
During the year ended October 31, 2019, the fund’s average investments in long and short futures
contracts represented less than 1% and 0% of net assets, respectively, based on the average of
the notional amounts at each quarter-end during the period.
20
High Dividend Yield Index Fund
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 (October 31, 2016–2019), and has concluded that no provision for
federal income tax is required in the fund’s financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions
are determined on a tax basis and may differ from net investment income and realized capital gains
for financial reporting purposes.
5. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional
borrowers. Security loans are subject to termination by the fund at any time, and are required to be
secured at all times by collateral in an amount at least equal to the market value of securities loaned.
Daily market fluctuations could cause the value of loaned securities to be more or less than the
value of the collateral received. When this occurs, the collateral is adjusted and settled before the
opening of the market on the next business day. The fund further mitigates its counterparty risk by
entering into securities lending transactions only with a diverse group of prequalified counterparties,
monitoring their financial strength, and entering into master securities lending agreements with
its counterparties. The master securities lending agreements provide that, in the event of a
counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower,
determine the net amount owed, and sell or retain the collateral up to the net amount owed to
the fund; however, such actions may be subject to legal proceedings. While collateral mitigates
counterparty risk, in the event of a default, the fund may experience delays and costs in recovering
the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund,
and records a liability in the Statement of Net Assets for the return of the collateral, during the
period the securities are on loan. Securities lending income represents fees charged to borrowers
plus income earned on invested cash collateral, less expenses associated with the loan. During the
term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
6. Credit Facility: The fund and certain other funds managed by The Vanguard Group (“Vanguard”)
participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to
a credit agreement that may be renewed annually; each fund is individually liable for its borrowings,
if any, under the credit facility. Borrowings may be utilized for temporary and emergency purposes,
and are subject to the fund’s regulatory and contractual borrowing restrictions. The participating
funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn
amount of the facility; these fees are allocated to the funds based on a method approved by the
fund’s board of trustees and included in Management and Administrative expenses on the fund’s
Statement of Operations. Any borrowings under this facility bear interest at a rate based upon the
higher of the one-month London Interbank Offered Rate, federal funds effective rate, or overnight
bank funding rate plus an agreed-upon spread.
The fund had no borrowings outstanding at October 31, 2019, or at any time during the period
then ended.
7. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income
distributions received from Vanguard Market Liquidity Fund and is accrued daily. Premiums and
discounts on debt securities purchased are amortized and accreted, respectively, to interest income
over the lives of the respective securities. Security transactions are accounted for on the date
securities are bought or sold. Costs used to determine realized gains (losses) on the sale of
investment securities are those of the specific securities sold.
21
High Dividend Yield Index Fund
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. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and
the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative,
marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These
costs of operations are allocated to the fund based on methods and guidelines approved by the
board of trustees. Vanguard does not require reimbursement in the current period for certain costs
of operations (such as deferred compensation/benefits and risk/insurance costs); the fund’s liability
for these costs of operations is included in Payables to Vanguard on the Statement of Net Assets.
All other costs of operations payable to Vanguard are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in
Vanguard. At October 31, 2019, the fund had contributed to Vanguard capital in the amount of
$1,636,000, representing less than 0.01%of the fund’s net assets and 0.65% of Vanguard’s capital
received pursuant to the FSA. The fund’s trustees and officers are also directors and employees,
respectively, of Vanguard.
C. Various inputs may be used to determine the value of the fund’s investments. These inputs are
summarized in three broad levels for financial statement purposes. The inputs or methodologies
used to value securities are not necessarily an indication of the risk associated with investing in
those securities.
Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest
rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine
the fair value of investments). Any investments valued with significant unobservable inputs are
noted on the Statement of Net Assets.
The following table summarizes the market value of the fund’s investments and derivatives as of
October 31, 2019, based on the inputs used to value them:
Level 1 Level 2 Level 3
Investments ($000) ($000) ($000)
Common Stocks 35,565,767 — 34
Temporary Cash Investments 10,675 4,396 —
Futures Contracts—Liabilities1 (269) — —
Total 35,576,173 4,396 34
1 Represents variation margin on the last day of the reporting period.
22
High Dividend Yield Index Fund
D. Permanent differences between book-basis and tax-basis components of net assets are
reclassified among capital accounts in the financial statements to reflect their tax character.
These reclassifications have no effect on net assets or net asset value per share. As of period
end, permanent differences primarily attributable to the accounting for in-kind redemptions and
passive foreign investment companies were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 1,389,784
Total Distributable Earnings (Loss) (1,389,784)
Temporary differences between book-basis and tax-basis components of total distributable
earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods
for financial statement and tax purposes; these differences will reverse at some time in the future.
The differences are primarily related to the tax deferral of losses on wash sales, the realization of
unrealized gains or losses on certain futures contracts, and unrealized gains on passive foreign
investment companies. As of period end, the tax-basis components of total distributable earnings
(loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 98,770
Undistributed Long-Term Gains —
Capital Loss Carryforwards (Non-expiring) (978,815)
Net Unrealized Gains (Losses) 4,925,239
As of October 31, 2019, gross unrealized appreciation and depreciation for investments and
derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 30,655,633
Gross Unrealized Appreciation 6,488,941
Gross Unrealized Depreciation (1,563,702)
Net Unrealized Appreciation (Depreciation) 4,925,239
E. During the year ended October 31, 2019, the fund purchased $9,967,850,000 of investment
securities and sold $6,024,468,000 of investment securities, other than temporary cash investments.
Purchases and sales include $6,311,784,000 and $3,786,158,000, respectively, in connection with
in-kind purchases and redemptions of the fund’s capital shares.
23
24
High Dividend Yield Index Fund
F. Capital share transactions for each class of shares were:
Year Ended October 31,
2019 2018
Amount Shares Amount Shares ($000) (000) ($000) (000)
Investor Shares
Issued 1,187,273 35,128 1,640,168 48,448
Issued in Lieu of Cash Distributions 112,567 3,539 189,358 5,676
Redeemed1 (9,658,098) (281,141) (1,478,690) (43,829)
Net Increase (Decrease)—Investor Shares (8,358,258) (242,474) 350,836 10,295
ETF Shares
Issued 7,516,552 88,367 7,116,592 83,559
Issued in Lieu of Cash Distributions — — — —
Redeemed (3,801,664) (45,250) (5,977,040) (70,075)
Net Increase (Decrease)—ETF Shares 3,714,888 43,117 1,139,552 13,484
Admiral Shares2
Issued1 9,304,199 355,228 — —
Issued in Lieu of Cash Distributions 100,934 3,824 — —
Redeemed (861,296) (32,822) — —
Net Increase (Decrease)—Admiral Shares 8,543,837 326,230 — —
1 In November 2018, the fund announced changes to the availability and minimum investment criteria of the Investor and Admiral share classes. As a result, all of the outstanding Investor Shares automatically converted to Admiral Shares beginning in April 2019, with the exception of those held by Vanguard funds and certain other institutional investors. Investor Shares—Redeemed and Admiral Shares—Issued include 244,521,000 and 321,285,000 shares, respectively, in the amount of $8,204,425,000 from the conversion during the year ended October 31, 2019.
2 Inception was February 7, 2019, for Admiral Shares.
G. Effective at the close of business on November 7, 2019, the remaining Investor Shares were converted to Admiral Shares.
Management has determined that no other events or transactions occurred subsequent to October 31, 2019, that would require recognition or disclosure in these financial statements.
To the Board of Trustees of Vanguard Whitehall Funds and Shareholders of Vanguard High Dividend Yield Index Fund
Opinion on the Financial Statements
We have audited the accompanying statement of net assets of Vanguard High Dividend Yield Index Fund (one of the funds constituting Vanguard Whitehall Funds, referred to hereafter as the “Fund”) as of October 31, 2019, the related statement of operations for the year ended October 31, 2019, the statement of changes in net assets for each of the two years in the period ended October 31, 2019, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended October 31, 2019 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2019 by correspondence with the custodian and brokers and by agreement to the underlying ownership records of the transfer agent; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP Philadelphia, Pennsylvania December 13, 2019
We have served as the auditor of one or more investment companies in The Vanguard Group of Funds since 1975.
Report of Independent Registered Public Accounting Firm
25
Special 2019 tax information (unaudited) for Vanguard High Dividend Yield Index Fund
This information for the fiscal year ended October 31, 2019, is included pursuant to provisions of
the Internal Revenue Code.
The fund distributed $1,054,076,000 of qualified dividend income to shareholders during the
fiscal year.
For corporate shareholders, 97.6% of investment income (dividend income plus short-term gains,
if any) qualifies for the dividends-received deduction.
26
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Russell indexes are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX
and Russell under license. All information is provided for information purposes only. Every effort is made to ensure that
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27
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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.
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
213 Vanguard funds.
Information for each trustee and executive officer of the fund appears below. That information,
as well as the Vanguard fund count, is as of the date on the cover of this fund report. The mailing
address of the trustees and officers is P.O. Box 876, Valley Forge, PA 19482. More information
about the trustees is in the Statement of Additional Information, which can be obtained, without
charge, by contacting Vanguard at 800-662-7447, or online at vanguard.com.
Interested Trustee1
Mortimer J. Buckley
Born in 1969. Trustee since January 2018. Principal
occupation(s) during the past five years and other
experience: chairman of the board (January 2019–
present) of Vanguard and of each of the investment
companies served by Vanguard; chief executive officer
(January 2018–present) of Vanguard; chief executive
officer, president, and trustee (January 2018–present)
of each of the investment companies served by
Vanguard; president and director (2017–present) of
Vanguard; and president (February 2018–present) of
Vanguard Marketing Corporation. Chief investment
officer (2013–2017), managing director (2002–2017),
head of the Retail Investor Group (2006–2012), and
chief information officer (2001–2006) of Vanguard.
Chairman of the board (2011–2017) and trustee
(2009–2017) of the Children’s Hospital of Philadelphia;
trustee (2018–present) of The Shipley School.
Independent Trustees
Emerson U. Fullwood
Born in 1948. Trustee since January 2008. Principal
occupation(s) during the past five years and other
experience: executive chief staff and marketing officer
for North America and corporate vice president (retired
2008) of Xerox Corporation (document management
products and services). Former president of the
Worldwide Channels Group, Latin America, and
Worldwide Customer Service and executive chief
staff officer of Developing Markets of Xerox. Executive
in residence and 2009–2010 Distinguished Minett
Professor at the Rochester Institute of Technology.
Director of SPX FLOW, Inc. (multi-industry manufac-
turing). Director of the University of Rochester Medical
Center, the Monroe Community College Foundation,
the United Way of Rochester, North Carolina A&T
University, and Roberts Wesleyan College. Trustee
of the University of Rochester.
Amy Gutmann
Born in 1949. Trustee since June 2006. Principal
occupation(s) during the past five years and other
experience: president (2004–present) of the University
of Pennsylvania. Christopher H. Browne Distinguished
Professor of Political Science, School of Arts and
Sciences, and professor of communication, Annenberg
School for Communication, with secondary faculty
appointments in the Department of Philosophy, School
of Arts and Sciences, and at the Graduate School of
Education, University of Pennsylvania. Trustee of the
National Constitution Center.
F. Joseph Loughrey
Born in 1949. Trustee since October 2009. Principal
occupation(s) during the past five years and other
experience: president and chief operating officer
(retired 2009) and vice chairman of the board
(2008–2009) of Cummins Inc. (industrial machinery).
Chairman of the board of Hillenbrand, Inc. (specialized
consumer services), and the Lumina Foundation.
1 Mr. Buckley is considered an “interested person,” as defined in the Investment Company Act of 1940, because he is an officer of the Vanguard funds.
Director of the V Foundation and Oxfam America.
Member of the advisory council for the College of
Arts and Letters and chair of the advisory board to
the Kellogg Institute for International Studies, both
at the University of Notre Dame.
Mark Loughridge
Born in 1953. Trustee since March 2012. Principal
occupation(s) during the past five years and other
experience: senior vice president and chief financial
officer (retired 2013) of IBM (information technology
services). Fiduciary member of IBM’s Retirement
Plan Committee (2004–2013), senior vice president
and general manager (2002–2004) of IBM Global
Financing, vice president and controller (1998–2002)
of IBM, and a variety of other prior management roles
at IBM. Member of the Council on Chicago Booth.
Scott C. Malpass
Born in 1962. Trustee since March 2012. Principal
occupation(s) during the past five years and other
experience: chief investment officer (1989–present)
and vice president (1996–present) of the University
of Notre Dame. Assistant professor of finance at the
Mendoza College of Business, University of Notre
Dame, and member of the Notre Dame 403(b)
Investment Committee. Chairman of the board of
TIFF Advisory Services, Inc. Member of the board
of Catholic Investment Services, Inc. (investment
advisors) and the board of superintendence
of the Institute for the Works of Religion.
Deanna Mulligan
Born in 1963. Trustee since January 2018. Principal
occupation(s) during the past five years and other
experience: president (2010–present) and chief
executive officer (2011–present) of The Guardian
Life Insurance Company of America. Chief operating
officer (2010–2011) and executive vice president
(2008–2010) of Individual Life and Disability of
The Guardian Life Insurance Company of America.
Member of the board of The Guardian Life Insurance
Company of America, the American Council of Life
Insurers, the Partnership for New York City (business
leadership), and the Committee Encouraging Corporate
Philanthropy. Trustee of the Economic Club of New
York and the Bruce Museum (arts and science).
Member of the Advisory Council for the Stanford
Graduate School of Business.
André F. Perold
Born in 1952. Trustee since December 2004. Principal
occupation(s) during the past five years and other
experience: George Gund Professor of Finance and
Banking, Emeritus at the Harvard Business School
(retired 2011). Chief investment officer and co-
managing partner of HighVista Strategies (private
investment firm). Board of advisors and investment
committee member of the Museum of Fine Arts
Boston. Board member (2018–present) of RIT Capital
Partners (investment firm); investment committee
member of Partners Health Care System.
Sarah Bloom Raskin
Born in 1961. Trustee since January 2018. Principal
occupation(s) during the past five years and other
experience: deputy secretary (2014–2017) of
the United States Department of the Treasury.
Governor (2010–2014) of the Federal Reserve
Board. Commissioner (2007–2010) of financial
regulation for the State of Maryland. Member of
the board of directors (2012–2014) of Neighborhood
Reinvestment Corporation. Director (2017–present)
of i(x) Investments; director (2017–present) of Reserve
Trust. Rubinstein Fellow (2017–present) of Duke
University; trustee (2017–present) of Amherst College.
Peter F. Volanakis
Born in 1955. Trustee since July 2009. Principal
occupation(s) during the past five years and other
experience: president and chief operating officer
(retired 2010) of Corning Incorporated (communications
equipment) and director of Corning Incorporated
(2000–2010) and Dow Corning (2001–2010).
Director (2012) of SPX Corporation (multi-industry
manufacturing). Overseer of the Amos Tuck School
of Business Administration, Dartmouth College
(2001–2013). Chairman of the board of trustees of
Colby-Sawyer College. Member of the board of
Hypertherm Inc. (industrial cutting systems, software,
and consumables).
Executive Officers
John Bendl
Born in 1970. Principal occupation(s) during the past
five years and other experience: principal of Vanguard.
Chief financial officer (October 2019–present) of each
of the investment companies served by Vanguard.
Chief accounting officer, treasurer, and controller of
Vanguard (2017–present). Partner (2003–2016) at
KPMG (audit, tax, and advisory services).
Glenn Booraem
Born in 1967. Principal occupation(s) during the past
five years and other experience: principal of Vanguard.
Investment stewardship officer (2017–present),
treasurer (2015–2017), controller (2010–2015),
and assistant controller (2001–2010) of each of
the investment companies served by Vanguard.
Christine M. Buchanan
Born in 1970. Principal occupation(s) during the past
five years and other experience: principal of Vanguard.
Treasurer (2017–present) of each of the investment
companies served by Vanguard. Partner (2005–2017)
at KPMG (audit, tax, and advisory services).
David Cermak
Born in 1960. Principal occupation(s) during the past
five years and other experience: principal of Vanguard.
Finance director (October 2019–present) of each
of the investment companies served by Vanguard.
Managing director and head (2017–present) of
Vanguard Investments Singapore. Managing director
and head (2017–2019) of Vanguard Investments Hong
Kong. Representative director and head (2014–2017)
of Vanguard Investments Japan.
Thomas J. Higgins
Born in 1957. Principal occupation(s) during the
past five years and other experience: principal of
Vanguard. Finance director (October 2019–present),
chief financial officer (2008–2019), and treasurer
(1998–2008) of each of the investment companies
served by Vanguard.
Peter Mahoney
Born in 1974. Principal occupation(s) during the past
five years and other experience: principal of Vanguard.
Controller (2015–present) of each of the investment
companies served by Vanguard. Head of International
Fund Services (2008–2014) at Vanguard.
Anne E. Robinson
Born in 1970. Principal occupation(s) during the
past five years and other experience: general
counsel (2016–present) of Vanguard. Secretary
(2016–present) of Vanguard and of each of the
investment companies served by Vanguard.
Managing director (2016–present) of Vanguard.
Managing director and general counsel of Global
Cards and Consumer Services (2014–2016) at
Citigroup. Counsel (2003–2014) at American Express.
Michael Rollings
Born in 1963. Principal occupation(s) during the
past five years and other experience: finance
director (2017–present) and treasurer (2017) of each
of the investment companies served by Vanguard.
Managing director (2016–present) of Vanguard. Chief
financial officer (2016–present) of Vanguard. Director
(2016–present) of Vanguard Marketing Corporation.
Executive vice president and chief financial officer
(2006–2016) of MassMutual Financial Group.
John E. Schadl
Born in 1972. Principal occupation(s) during the
past five years and other experience: principal of
Vanguard. Chief compliance officer (2019–present)
of Vanguard and of each of the investment companies
served by Vanguard. Assistant vice president (May
2019–present) of Vanguard Marketing Corporation.
Vanguard Senior Management Team
Joseph Brennan Chris D. McIsaac
Mortimer J. Buckley James M. Norris
Gregory Davis Thomas M. Rampulla
John James Karin A. Risi
Martha G. King Anne E. Robinson
John T. Marcante Michael Rollings
P.O. Box 2600Valley 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 PeopleWho Are Deaf or Hard of Hearing > 800-749-7273
This material may be used in conjunctionwith the offering of shares of any Vanguardfund only if preceded or accompanied bythe fund’s current prospectus.
All comparative mutual fund data are from Morningstar,Inc., unless otherwise noted.
You can obtain a free copy of Vanguard’s proxy votingguidelines by visiting vanguard.com/proxyreporting or bycalling Vanguard at 800-662-2739. The guidelines arealso available from the SEC’s website, www.sec.gov. Inaddition, you may obtain a free report on how your fundvoted the proxies for securities it owned during the 12months ended June 30. To get the report, visit eithervanguard.com/proxyreporting or www.sec.gov.
You can review information about your fund on theSEC’s website, and you can receive copies of thisinformation, for a fee, by sending a request via emailaddressed to [email protected].
Source for Bloomberg Barclays indexes: BloombergIndex Services Limited. Copyright 2019, Bloomberg. Allrights reserved.
© 2019 The Vanguard Group, Inc.All rights reserved.U.S. Patent Nos. 6,879,964; 7,337,138;7,720,749; 7,925,573; 8,090,646; 8,417,623; and 8,626,636.Vanguard Marketing Corporation, Distributor.
Q6230 122019