vanguard 500 index fund · about your fund’s expenses 1 as a shareholder of the fund, you incur...

See the inside front cover for important information about accessto your fund’s annual and semiannual shareholder reports.

Semiannual Report | June 30, 2019

Vanguard 500 Index Fund

Contents

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.

About Your Fund’s Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 1

Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Trustees Approve Advisory Arrangement. . . . . . . . . . . . . . 24

About Your Fund’s Expenses

1

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.

2

Six Months Ended June 30, 2019

500 Index Fund

BeginningAccount Value

12/31/2018

EndingAccount Value

6/30/2019

ExpensesPaid During

Period

Based on Actual Fund Return

Investor Shares $1,000.00 $1,184.70 $0.76

ETF Shares 1,000.00 1,185.26 0.16

Admiral™ Shares 1,000.00 1,185.26 0.22

Institutional Select Shares 1,000.00 1,185.45 0.05

Based on Hypothetical 5% Yearly Return

Investor Shares $1,000.00 $1,024.10 $0.70

ETF Shares 1,000.00 1,024.65 0.15

Admiral Shares 1,000.00 1,024.60 0.20

Institutional Select Shares 1,000.00 1,024.74 0.05

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, 0.03% for ETF Shares, 0.04% for Admiral Shares, and 0.01% for Institutional Select Shares. Thedollar amounts shown as “Expenses Paid” are equal to the annualized expense ratio multiplied by the average account value over theperiod, multiplied by the number of days in the most recent six-month period, then divided by the number of days in the most recent12-month period (181/365).

Sector DiversificationAs of June 30, 2019

500 Index Fund

3

Communication Services 10.2%

Consumer Discretionary 10.2

Consumer Staples 7.3

Energy 5.0

Financials 13.1

Health Care 14.2

Industrials 9.4

Information Technology 21.5

Materials 2.8

Real Estate 3.0

Utilities 3.3

The table reflects the fund’s equity exposure, based on its invest-ments in stocks and stock index futures. Any holdings in short-termreserves are excluded. Sector categories are based on the GlobalIndustry Classification Standard (“GICS”), except for the “Other”category (if applicable), which includes securities that have notbeen provided a GICS classification as of the effective reportingperiod.

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard and Poor’s, a division of McGraw-Hill Companies, Inc. (“S&P”), and is licensed for use by Vanguard. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classification makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of its affiliates or any third party involved in making or compiling the GICS or any GICS classification have any liability for any direct, indirect, special, punitive,consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

Financial Statements (unaudited)

Statement of Net AssetsAs of June 30, 2019

500 Index Fund

Market

Value•

Shares ($000)

Market

Value•

Shares ($000)

Common Stocks (99.5%)1

Communication Services (10.1%) * Facebook Inc. Class A 47,278,335 9,124,719* Alphabet Inc. Class C 6,032,827 6,520,943* Alphabet Inc. Class A 5,890,672 6,378,420

AT&T Inc. 143,615,084 4,812,541

Walt Disney Co. 34,353,680 4,797,148

Verizon

Communications Inc. 81,384,513 4,649,497

Comcast Corp. Class A 89,132,852 3,768,537* Netflix Inc. 8,604,104 3,160,459* Charter

Communications Inc.

Class A 3,385,349 1,337,822

Activision Blizzard Inc. 15,072,185 711,407* Electronic Arts Inc. 5,836,306 590,984* Twitter Inc. 14,365,321 501,350

Omnicom Group Inc. 4,333,892 355,162

CBS Corp. Class B 6,921,874 345,402* Take-Two Interactive

Software Inc. 2,215,354 251,509

Fox Corp. Class A 6,803,562 249,282

CenturyLink Inc. 18,887,509 222,117

Viacom Inc. Class B 6,961,294 207,934* Discovery

Communications Inc. 7,045,842 200,454* DISH Network Corp.

Class A 4,541,748 174,449

Interpublic Group of

Cos. Inc. 7,618,805 172,109

News Corp. Class A 10,069,982 135,844

Fox Corp. Class B 3,361,443 122,794* Discovery

Communications Inc.

Class A 3,154,175 96,833* TripAdvisor Inc. 2,037,581 94,320

News Corp. Class B 6,219 87

48,982,123

Consumer Discretionary (10.2%) * Amazon.com Inc. 8,138,251 15,410,836

Home Depot Inc. 21,652,434 4,503,057

McDonald’s Corp. 15,025,420 3,120,179

NIKE Inc. Class B 24,728,892 2,075,990

Starbucks Corp. 23,834,266 1,998,027* Booking Holdings Inc. 851,946 1,597,152

Lowe’s Cos. Inc. 15,404,682 1,554,486

TJX Cos. Inc. 23,863,607 1,261,908

General Motors Co. 25,956,896 1,000,119

Target Corp. 10,081,540 873,162

Ford Motor Co. 77,105,626 788,791

Marriott International

Inc. Class A 5,438,173 762,921

Ross Stores Inc. 7,229,838 716,622

Dollar General Corp. 5,082,762 686,986

Yum! Brands Inc. 6,020,340 666,271

eBay Inc. 16,118,825 636,694* O’Reilly Automotive Inc. 1,540,009 568,756

Hilton Worldwide

Holdings Inc. 5,726,302 559,689

VF Corp. 6,407,096 559,660* AutoZone Inc. 482,509 530,504* Dollar Tree Inc. 4,673,953 501,936

Royal Caribbean

Cruises Ltd. 3,383,978 410,172

Aptiv plc 5,071,478 409,928* Ulta Beauty Inc. 1,093,199 379,220

Carnival Corp. 7,881,680 366,892* Chipotle Mexican Grill

Inc. Class A 480,020 351,797

Best Buy Co. Inc. 4,573,157 318,886

Expedia Group Inc. 2,329,195 309,853

Genuine Parts Co. 2,875,154 297,808

Darden Restaurants Inc. 2,420,788 294,683

DR Horton Inc. 6,684,086 288,285

MGM Resorts

International 10,045,911 287,012* CarMax Inc. 3,270,562 283,983

Lennar Corp. Class A 5,557,001 269,292

Tractor Supply Co. 2,374,863 258,385

Hasbro Inc. 2,279,205 240,866

Wynn Resorts Ltd. 1,907,305 236,487* Norwegian Cruise Line

Holdings Ltd. 4,239,899 227,386

Advance Auto Parts Inc. 1,412,051 217,654

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.

4

500 Index Fund

Market

Value•

Shares ($000)

Market

Value•

Shares ($000)

Tiffany & Co. 2,126,816 199,155

Garmin Ltd. 2,386,717 190,460

Tapestry Inc. 5,711,215 181,217* Mohawk Industries Inc. 1,211,557 178,668

Whirlpool Corp. 1,245,644 177,330

BorgWarner Inc. 4,080,581 171,303* LKQ Corp. 6,171,304 164,218

PulteGroup Inc. 5,018,437 158,683

Kohl’s Corp. 3,189,407 151,656

PVH Corp. 1,474,632 139,559

Macy’s Inc. 6,080,099 130,479

Hanesbrands Inc. 7,115,513 122,529

L Brands Inc. 4,515,062 117,843

Newell Brands Inc. 7,616,614 117,448

H&R Block Inc. 4,001,925 117,256

Ralph Lauren Corp.

Class A 1,027,456 116,709

Harley-Davidson Inc. 3,130,603 112,169* Capri Holdings Ltd. 2,971,122 103,038

Leggett & Platt Inc. 2,583,691 99,136* Under Armour Inc.

Class A 3,686,125 93,443

Foot Locker Inc. 2,209,402 92,618* Under Armour Inc.

Class C 3,841,088 85,272

Gap Inc. 4,166,868 74,879

Nordstrom Inc. 2,070,224 65,957

Lennar Corp. Class B 76,975 2,964

Wyndham Hotels &

Resorts Inc. 216 12

48,986,336

Consumer Staples (7.2%)

Procter & Gamble Co. 49,358,698 5,412,181

Coca-Cola Co. 75,555,404 3,847,281

PepsiCo Inc. 27,585,452 3,617,280

Walmart Inc. 27,525,934 3,041,340

Philip Morris

International Inc. 30,615,636 2,404,246

Costco Wholesale Corp. 8,654,209 2,286,961

Altria Group Inc. 36,815,406 1,743,209

Mondelez International

Inc. Class A 28,346,123 1,527,856

Colgate-Palmolive Co. 16,895,046 1,210,868

Kimberly-Clark Corp. 6,765,087 901,651

Walgreens Boots

Alliance Inc. 15,292,314 836,031

Estee Lauder Cos. Inc.

Class A 4,314,677 790,061

Sysco Corp. 9,303,735 657,960

Constellation Brands

Inc. Class A 3,289,386 647,812

General Mills Inc. 11,781,252 618,751* Monster Beverage Corp. 7,699,226 491,442

Tyson Foods Inc.

Class A 5,799,388 468,243

Archer-Daniels-Midland

Co. 11,018,951 449,573

Clorox Co. 2,507,180 383,874

Kraft Heinz Co. 12,247,093 380,150

McCormick & Co. Inc. 2,410,690 373,681

Hershey Co. 2,742,037 367,515

Church & Dwight Co.

Inc. 4,846,716 354,101

Kroger Co. 15,878,785 344,728

Kellogg Co. 4,892,903 262,113

JM Smucker Co. 2,239,191 257,932

Conagra Brands Inc. 9,564,381 253,647^ Hormel Foods Corp. 5,360,524 217,316

Molson Coors Brewing

Co. Class B 3,696,404 206,999

Lamb Weston

Holdings Inc. 2,876,828 182,276

Brown-Forman Corp.

Class B 3,274,449 181,503

Campbell Soup Co. 3,793,906 152,022

Coty Inc. Class A 5,909,159 79,183

34,949,786

Energy (5.0%)

Exxon Mobil Corp. 83,265,034 6,380,600

Chevron Corp. 37,487,114 4,664,896

ConocoPhillips 22,240,040 1,356,642

Schlumberger Ltd. 27,256,853 1,083,187

EOG Resources Inc. 11,419,838 1,063,872

Kinder Morgan Inc. 38,306,054 799,830

Phillips 66 8,218,294 768,739

Occidental Petroleum

Corp. 14,718,281 740,035

Marathon Petroleum

Corp. 13,037,437 728,532

Valero Energy Corp. 8,209,330 702,801

Anadarko Petroleum

Corp. 9,879,589 697,104

Williams Cos. Inc. 23,841,346 668,511

ONEOK Inc. 8,120,343 558,761

Pioneer Natural

Resources Co. 3,313,336 509,790

Concho Resources Inc. 3,945,622 407,109

Halliburton Co. 17,190,401 390,910

Diamondback Energy

Inc. 3,044,127 331,719

Hess Corp. 5,017,396 318,956

Baker Hughes a GE Co.

Class A 10,135,346 249,634

Devon Energy Corp. 8,173,152 233,098

Marathon Oil Corp. 16,100,270 228,785

TechnipFMC plc 8,290,635 215,059

Apache Corp. 7,399,925 214,376

5

500 Index Fund

Market

Value•

Shares ($000)

Market

Value•

Shares ($000)

Noble Energy Inc. 9,413,743 210,868

Cabot Oil & Gas Corp. 8,332,179 191,307

National Oilwell Varco

Inc. 7,596,375 168,867

HollyFrontier Corp. 3,092,485 143,120

Cimarex Energy Co. 1,996,690 118,464

Helmerich & Payne Inc. 2,175,533 110,126

24,255,698

Financials (13.0%) * Berkshire Hathaway

Inc. Class B 36,928,481 7,872,044

JPMorgan Chase &

Co. 63,834,373 7,136,683

Bank of America Corp. 174,006,336 5,046,184

Wells Fargo & Co. 79,595,739 3,766,470

Citigroup Inc. 45,506,247 3,186,802

American Express Co. 13,474,132 1,663,247

US Bancorp 29,445,769 1,542,958

Goldman Sachs

Group Inc. 6,693,270 1,369,443

CME Group Inc. 7,044,816 1,367,469

Chubb Ltd. 9,010,668 1,327,181

PNC Financial

Services Group Inc. 8,883,693 1,219,553

S&P Global Inc. 4,842,341 1,103,037

Morgan Stanley 25,157,504 1,102,150

BlackRock Inc. 2,341,283 1,098,764

Marsh & McLennan

Cos. Inc. 10,062,242 1,003,709

Intercontinental

Exchange Inc. 11,095,214 953,523

Charles Schwab Corp. 23,379,590 939,626

MetLife Inc. 18,700,575 928,858

Progressive Corp. 11,491,572 918,521

Aon plc 4,732,926 913,360

American International

Group Inc. 17,114,776 911,875

Capital One Financial

Corp. 9,239,724 838,413

Prudential Financial Inc. 7,988,547 806,843

Aflac Inc. 14,667,765 803,940

Travelers Cos. Inc. 5,153,487 770,549

Bank of New York

Mellon Corp. 17,331,749 765,197

BB&T Corp. 15,070,037 740,391

Allstate Corp. 6,553,759 666,452

Moody’s Corp. 3,245,387 633,857

SunTrust Banks Inc. 8,731,497 548,775

T. Rowe Price Group

Inc. 4,651,636 510,331

Discover Financial

Services 6,368,287 494,115

Willis Towers Watson

plc 2,542,304 486,953

M&T Bank Corp. 2,687,550 457,072

Synchrony Financial 12,474,239 432,482

State Street Corp. 7,339,513 411,453

Fifth Third Bancorp 14,302,998 399,054

MSCI Inc. Class A 1,665,502 397,705

Hartford Financial

Services Group Inc. 7,115,573 396,480

Northern Trust Corp. 4,281,872 385,368

Ameriprise Financial

Inc. 2,633,562 382,288

KeyCorp 19,847,859 352,300

Arthur J Gallagher & Co. 3,646,720 319,416

Citizens Financial

Group Inc. 9,022,310 319,029

Cincinnati Financial

Corp. 2,986,320 309,592

Regions Financial Corp. 19,943,546 297,957

Principal Financial

Group Inc. 5,099,265 295,349

Loews Corp. 5,280,931 288,709

Huntington

Bancshares Inc. 20,600,472 284,699* Berkshire Hathaway

Inc. Class A 809 257,545

Lincoln National Corp. 3,982,867 256,696

First Republic Bank 2,493,691 243,509* SVB Financial Group 1,028,619 231,018

Cboe Global Markets

Inc. 2,198,837 227,865

Comerica Inc. 3,034,832 220,450

Nasdaq Inc. 2,282,997 219,556

E*TRADE Financial

Corp. 4,815,746 214,782

Raymond James

Financial Inc. 2,486,865 210,264

Franklin Resources Inc. 5,794,208 201,638

Everest Re Group Ltd. 801,826 198,195

MarketAxess Holdings

Inc. 599,833 192,798

Torchmark Corp. 1,990,415 178,063

Zions Bancorp NA 3,593,996 165,252

Invesco Ltd. 7,884,901 161,325

Unum Group 4,170,858 139,932

People’s United

Financial Inc. 7,765,013 130,297

Assurant Inc. 1,154,205 122,784

Jefferies Financial

Group Inc. 4,984,598 95,854

Affiliated Managers

Group Inc. 1,007,732 92,852

62,926,901

Health Care (14.1%)

Johnson & Johnson 52,248,525 7,277,175

Pfizer Inc. 109,253,987 4,732,883

6

500 Index Fund

Market

Value•

Shares ($000)

Market

Value•

Shares ($000)

UnitedHealth Group

Inc. 18,011,977 4,395,103

Merck & Co. Inc. 50,665,894 4,248,335

Abbott Laboratories 34,716,360 2,919,646

Medtronic plc 26,382,383 2,569,380

Thermo Fisher

Scientific Inc. 7,871,388 2,311,669

Amgen Inc. 12,002,776 2,211,872

AbbVie Inc. 29,090,465 2,115,459

Eli Lilly & Co. 17,002,819 1,883,742

Danaher Corp. 12,397,330 1,771,826

Gilead Sciences Inc. 25,021,103 1,690,426

Bristol-Myers Squibb

Co. 32,185,355 1,459,606

Anthem Inc. 5,061,641 1,428,446

CVS Health Corp. 25,566,162 1,393,100

Becton Dickinson

and Co. 5,308,230 1,337,727* Celgene Corp. 13,879,619 1,283,032

Stryker Corp. 6,094,172 1,252,840* Intuitive Surgical Inc. 2,271,914 1,191,732

Cigna Corp. 7,467,280 1,176,470* Boston Scientific Corp. 27,366,717 1,176,222

Zoetis Inc. 9,419,359 1,069,003* Illumina Inc. 2,892,820 1,064,992

Allergan plc 6,063,001 1,015,128* Vertex Pharmaceuticals

Inc. 5,039,865 924,210* Biogen Inc. 3,815,492 892,329

Baxter International Inc. 9,335,586 764,584* Edwards Lifesciences

Corp. 4,102,642 757,922

HCA Healthcare Inc. 5,253,483 710,113

Humana Inc. 2,657,034 704,911* Alexion

Pharmaceuticals Inc. 4,411,403 577,806

McKesson Corp. 3,737,072 502,225* IQVIA Holdings Inc. 3,104,930 499,583* Regeneron

Pharmaceuticals Inc. 1,546,962 484,199

Zimmer Biomet

Holdings Inc. 4,028,818 474,353

Cerner Corp. 6,401,465 469,227* IDEXX Laboratories Inc. 1,691,904 465,832

Agilent Technologies Inc. 6,216,316 464,172* Centene Corp. 8,131,697 426,426* Mettler-Toledo

International Inc. 487,852 409,796* Align Technology Inc. 1,433,117 392,244

ResMed Inc. 2,822,650 344,448* Laboratory Corp. of

America Holdings 1,938,861 335,229

Cooper Cos. Inc. 974,120 328,171

Teleflex Inc. 908,495 300,848

* Incyte Corp. 3,503,609 297,667* Waters Corp. 1,367,639 294,371* WellCare Health Plans

Inc. 990,364 282,323

Cardinal Health Inc. 5,867,329 276,351

Quest Diagnostics Inc. 2,645,064 269,294

Dentsply Sirona Inc. 4,605,763 268,792

AmerisourceBergen

Corp. Class A 3,061,503 261,024* Hologic Inc. 5,276,515 253,378* Varian Medical

Systems Inc. 1,790,188 243,698* ABIOMED Inc. 888,313 231,397

Universal Health

Services Inc. Class B 1,631,448 212,725

PerkinElmer Inc. 2,183,492 210,358* Henry Schein Inc. 2,934,495 205,121* Mylan NV 10,146,531 193,190* DaVita Inc. 2,489,321 140,049* Nektar Therapeutics

Class A 3,431,184 122,082

Perrigo Co. plc 2,462,762 117,277

68,083,539

Industrials (9.3%)

Boeing Co. 10,297,003 3,748,212

Honeywell

International Inc. 14,321,068 2,500,315

Union Pacific Corp. 13,929,379 2,355,597

United Technologies

Corp. 15,961,912 2,078,241

3M Co. 11,342,733 1,966,149

General Electric Co. 171,603,849 1,801,840

Lockheed Martin Corp. 4,836,924 1,758,415

Caterpillar Inc. 11,252,271 1,533,572

United Parcel Service

Inc. Class B 13,727,036 1,417,591

CSX Corp. 15,127,497 1,170,414

Northrop Grumman

Corp. 3,341,457 1,079,658

Norfolk Southern Corp. 5,233,823 1,043,258

Deere & Co. 6,237,917 1,033,685

General Dynamics Corp. 5,343,182 971,497

Raytheon Co. 5,481,354 953,098

Illinois Tool Works Inc. 5,897,406 889,388

Waste Management Inc. 7,688,116 886,978

Emerson Electric Co. 12,093,548 806,882

FedEx Corp. 4,716,900 774,468

Roper Technologies Inc. 2,043,123 748,314

Eaton Corp. plc 8,324,656 693,277

Delta Air Lines Inc. 11,721,230 665,180

Johnson Controls

International plc 15,657,007 646,791

Ingersoll-Rand plc 4,744,587 600,997

Cummins Inc. 2,852,026 488,666

7

500 Index Fund

Market

Value•

Shares ($000)

Market

Value•

Shares ($000)

PACCAR Inc. 6,815,031 488,365

Southwest Airlines Co. 9,614,981 488,249

Fortive Corp. 5,804,352 473,171

Verisk Analytics Inc.

Class A 3,219,718 471,560* TransDigm Group Inc. 962,484 465,650* IHS Markit Ltd. 7,160,770 456,284

Harris Corp. 2,331,607 440,977

Stanley Black & Decker

Inc. 2,980,674 431,035

Parker-Hannifin Corp. 2,525,223 429,313

AMETEK Inc. 4,484,843 407,403

Cintas Corp. 1,667,371 395,651

L3 Technologies Inc. 1,559,616 382,371

Rockwell Automation

Inc. 2,328,013 381,398* United Continental

Holdings Inc. 4,347,237 380,601

Republic Services Inc.

Class A 4,241,245 367,462

Fastenal Co. 11,265,616 367,146

Equifax Inc. 2,378,398 321,655* Copart Inc. 3,968,629 296,615

Xylem Inc. 3,541,775 296,234

Dover Corp. 2,860,734 286,646

Expeditors International

of Washington Inc. 3,385,692 256,839

American Airlines

Group Inc. 7,793,117 254,134

Textron Inc. 4,581,621 243,009

Kansas City Southern 1,979,149 241,100

WW Grainger Inc. 884,019 237,120^ Wabtec Corp. 3,184,357 228,509

CH Robinson

Worldwide Inc. 2,688,211 226,751

Masco Corp. 5,772,145 226,499* United Rentals Inc. 1,547,638 205,263

Allegion plc 1,848,979 204,405

Arconic Inc. 7,859,582 202,934

Jacobs Engineering

Group Inc. 2,258,730 190,614

Huntington Ingalls

Industries Inc. 818,006 183,839

Snap-on Inc. 1,089,162 180,409

Nielsen Holdings plc 6,998,044 158,156

Fortune Brands Home

& Security Inc. 2,752,919 157,274

JB Hunt Transport

Services Inc. 1,712,490 156,539

Alaska Air Group Inc. 2,431,254 155,381

Flowserve Corp. 2,581,394 136,014

Robert Half

International Inc. 2,329,556 132,808

AO Smith Corp. 2,774,361 130,839

Pentair plc 3,112,888 115,799

Quanta Services Inc. 2,796,723 106,807

Rollins Inc. 2,901,496 104,077

45,075,388

Information Technology (21.4%)

Microsoft Corp. 150,793,803 20,200,338

Apple Inc. 86,017,198 17,024,524

Visa Inc. Class A 34,221,069 5,939,067

Mastercard Inc.

Class A 17,686,575 4,678,630

Cisco Systems Inc. 84,243,219 4,610,631

Intel Corp. 88,102,216 4,217,453* Adobe Inc. 9,602,354 2,829,334

Oracle Corp. 47,750,680 2,720,356* PayPal Holdings Inc. 23,121,287 2,646,463

International Business

Machines Corp. 17,448,354 2,406,128

Accenture plc Class A 12,551,668 2,319,172* salesforce.com Inc. 15,281,141 2,318,608

Broadcom Inc. 7,789,678 2,242,337

Texas Instruments Inc. 18,462,509 2,118,758

NVIDIA Corp. 11,983,678 1,968,079

QUALCOMM Inc. 23,922,053 1,819,751

Automatic Data

Processing Inc. 8,565,272 1,416,096

Intuit Inc. 5,101,850 1,333,266* Micron Technology Inc. 21,775,172 840,304

Applied Materials Inc. 18,419,378 827,214

Analog Devices Inc. 7,275,892 821,230

Fidelity National

Information Services

Inc. 6,372,028 781,720

Cognizant Technology

Solutions Corp.

Class A 11,201,158 710,041* Autodesk Inc. 4,321,325 703,944* Fiserv Inc. 7,721,649 703,906* Red Hat Inc. 3,497,415 656,675

TE Connectivity Ltd. 6,627,618 634,793

HP Inc. 29,635,499 616,122

Xilinx Inc. 4,995,835 589,109

Amphenol Corp.

Class A 5,877,238 563,862

Lam Research Corp. 2,949,564 554,046

Motorola Solutions Inc. 3,242,011 540,541* Advanced Micro

Devices Inc. 17,448,186 529,901

Paychex Inc. 6,292,877 517,841

Corning Inc. 15,438,267 513,014

Global Payments Inc. 3,082,510 493,602* FleetCor

Technologies Inc. 1,695,508 476,183* VeriSign Inc. 2,063,184 431,536

8

500 Index Fund

Market

Value•

Shares ($000)

Market

Value•

Shares ($000)

Total System

Services Inc. 3,202,602 410,798^ Microchip Technology

Inc. 4,683,498 406,059

Hewlett Packard

Enterprise Co. 26,340,079 393,784* Cadence Design

Systems Inc. 5,532,182 391,734* Synopsys Inc. 2,948,563 379,451

KLA-Tencor Corp. 3,181,451 376,048* ANSYS Inc. 1,652,090 338,381* Keysight Technologies

Inc. 3,704,004 332,657

Maxim Integrated

Products Inc. 5,360,882 320,688

NetApp Inc. 4,861,383 299,947

Broadridge Financial

Solutions Inc. 2,286,250 291,908

DXC Technology Co. 5,280,615 291,226* Gartner Inc. 1,773,429 285,416

Western Digital Corp. 5,767,114 274,226* Arista Networks Inc. 1,040,675 270,180

Symantec Corp. 12,169,023 264,798

Skyworks Solutions Inc. 3,399,385 262,670* Akamai Technologies

Inc. 3,230,128 258,862

Citrix Systems Inc. 2,462,162 241,637

Seagate Technology plc 4,959,189 233,677* Fortinet Inc. 2,857,219 219,520

Jack Henry &

Associates Inc. 1,519,752 203,525

Juniper Networks Inc. 6,778,114 180,501* F5 Networks Inc. 1,175,097 171,129

Western Union Co. 8,478,898 168,645* Qorvo Inc. 2,345,534 156,236

FLIR Systems Inc. 2,665,846 144,222

Xerox Corp. 3,846,634 136,209

Alliance Data Systems

Corp. 886,905 124,282* IPG Photonics Corp. 700,862 108,108

103,251,099

Materials (2.8%)

Linde plc 10,680,871 2,144,719

DuPont de Nemours Inc. 14,735,261 1,106,176

Ecolab Inc. 4,991,279 985,478

Air Products &

Chemicals Inc. 4,331,600 980,544

Sherwin-Williams Co. 1,598,568 732,608

Dow Inc. 14,732,859 726,477

Newmont Goldcorp

Corp. 16,125,802 620,360

PPG Industries Inc. 4,644,796 542,094

LyondellBasell

Industries NV Class A 5,973,851 514,528

Ball Corp. 6,589,148 461,174* Corteva Inc. 14,729,250 435,544^ Amcor plc 31,949,852 367,104

Vulcan Materials Co. 2,600,147 357,026

International Paper Co. 7,813,908 338,499

Freeport-McMoRan

Inc. 28,555,031 331,524

Nucor Corp. 5,999,496 330,572^ International Flavors

& Fragrances Inc. 1,995,094 289,468

Martin Marietta

Materials Inc. 1,229,848 283,000

Celanese Corp. Class A 2,492,233 268,663

FMC Corp. 2,591,686 214,980

Eastman Chemical Co. 2,727,860 212,309

CF Industries

Holdings Inc. 4,351,790 203,272

Avery Dennison Corp. 1,661,673 192,222

Westrock Co. 5,059,519 184,521

Packaging Corp. of

America 1,859,984 177,294

Mosaic Co. 6,986,119 174,863

Albemarle Corp. 2,085,708 146,855

Sealed Air Corp. 3,064,814 131,113

13,452,987

Real Estate (3.1%)

American Tower Corp. 8,697,834 1,778,272

Crown Castle

International Corp. 8,181,206 1,066,420

Prologis Inc. 12,412,564 994,246

Simon Property Group

Inc. 6,080,253 971,381

Equinix Inc. 1,654,502 834,349

Public Storage 2,953,015 703,320

Welltower Inc. 7,967,118 649,559

AvalonBay

Communities Inc. 2,741,976 557,115

Equity Residential 7,286,814 553,215* SBA Communications

Corp. Class A 2,229,272 501,229

Ventas Inc. 7,271,522 497,009

Digital Realty Trust Inc. 4,099,861 482,923

Realty Income Corp. 6,196,869 427,398

Boston Properties Inc. 3,041,423 392,344

Weyerhaeuser Co. 14,660,295 386,152

Essex Property Trust

Inc. 1,293,507 377,613* CBRE Group Inc.

Class A 6,155,620 315,783

Alexandria Real Estate

Equities Inc. 2,223,012 313,645

HCP Inc. 9,408,959 300,898

Extra Space Storage Inc. 2,508,867 266,191

9

500 Index Fund

Market

Value•

Shares ($000)

Market

Value•

Shares ($000)

Host Hotels &

Resorts Inc. 14,583,402 265,710

Mid-America Apartment

Communities Inc. 2,243,900 264,242

UDR Inc. 5,546,829 248,997

Duke Realty Corp. 7,074,748 223,633

Regency Centers Corp. 3,284,606 219,215

Vornado Realty Trust 3,416,982 219,029

Federal Realty

Investment Trust 1,474,483 189,854

Iron Mountain Inc. 5,647,359 176,762

Kimco Realty Corp. 8,308,037 153,532

Apartment Investment

& Management Co. 2,929,544 146,829

SL Green Realty Corp. 1,659,889 133,405

Macerich Co. 2,079,341 69,637

14,679,907

Utilities (3.3%)

NextEra Energy Inc. 9,423,754 1,930,550

Duke Energy Corp. 14,327,151 1,264,228

Dominion Energy Inc. 15,789,599 1,220,852

Southern Co. 20,482,043 1,132,247

Exelon Corp. 19,105,390 915,912

American Electric

Power Co. Inc. 9,709,203 854,507

Sempra Energy 5,398,781 742,009

Xcel Energy Inc. 10,125,041 602,339

Public Service

Enterprise Group Inc. 9,943,848 584,897

Consolidated Edison Inc. 6,435,165 564,235

WEC Energy Group Inc. 6,205,611 517,362

Eversource Energy 6,316,814 478,562

DTE Energy Co. 3,603,982 460,877

PPL Corp. 14,207,303 440,569

Edison International 6,413,147 432,310

FirstEnergy Corp. 9,938,295 425,458

American Water

Works Co. Inc. 3,550,589 411,868

Entergy Corp. 3,735,934 384,540

Ameren Corp. 4,834,362 363,109

CMS Energy Corp. 5,585,889 323,479

Evergy Inc. 4,804,179 288,971

CenterPoint Energy Inc. 9,885,306 283,016

Atmos Energy Corp. 2,302,833 243,087

Alliant Energy Corp. 4,651,790 228,310

AES Corp. 13,064,960 218,969

NiSource Inc. 7,344,356 211,517

Pinnacle West Capital

Corp. 2,210,278 207,965

NRG Energy Inc. 5,258,647 184,684

15,916,429

Total Common Stocks

(Cost $306,905,649) 480,560,193

Temporary Cash Investments (0.6%)1

Money Market Fund (0.6%) 2,3 Vanguard Market

Liquidity Fund,

2.499% 27,919,525 2,792,511

Face

Amount

($000)

U.S. Government and Agency Obligations (0.0%)

United States Treasury Bill,

2.385%, 8/1/19 15,000 14,9744 United States Treasury Bill,



2.275%, 11/29/19 40,000 39,655

111,448

Total Temporary Cash Investments

(Cost $2,903,439) 2,903,959

Total Investments (100.1%)

(Cost $309,809,088) 483,464,152

Amount

($000)

Other Assets and Liabilities (-0.1%)

Other Assets

Investment in Vanguard 22,563

Receivables for Investment Securities Sold 20,802

Receivables for Accrued Income 399,202

Receivables for Capital Shares Issued 550,463

Variation Margin Receivable—Futures

Contracts 9,767

Unrealized Appreciation—OTC Swap

Contracts 3,696

Other Assets 2,560

Total Other Assets 1,009,053

Liabilities

Payables for Investment Securities

Purchased (187,725)

Collateral for Securities on Loan (194,262)

Payables for Capital Shares Redeemed (240,303)

Payables for Distributions (595,471)

Payables to Vanguard (84,318)

Total Liabilities (1,302,079)

Net Assets (100%) 483,171,126

10

500 Index Fund

At June 30, 2019, net assets consisted of:

Amount

($000)

Paid-in Capital 311,786,040

Total Distributable Earnings (Loss) 171,385,086

Net Assets 483,171,126

Investor Shares—Net Assets

Applicable to 83,799,111 outstanding

$.001 par value shares of beneficial

interest (unlimited authorization) 22,744,062

Net Asset Value Per Share—

Investor Shares $271.41

ETF Shares—Net Assets





ETF Shares $269.33

Admiral Shares—Net Assets

Applicable to 1,015,712,676 outstanding




Admiral Shares $271.39

Amount

($000)

Institutional Select Shares—Net Assets





Institutional Select Shares $143.81

• See Note A in Notes to Financial Statements.

* Non-income-producing security.

^ Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $189,208,000.

1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts and swap contracts. After giving effect to futures and swap investments, the fund’s effective common stock and temporary cash investment positions represent 100.0% and 0.1%, 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 Includes $194,262,000 of collateral received for securities on loan.

4 Securities with a value of $95,327,000 have been segregated as initial margin for open futures contracts.

OTC—Over-the-Counter.

11

500 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 September 2019 15,880 2,337,695 35,890

Over-the-Counter Total Return Swaps

Floating

Interest

Rate Value and Value and

Notional Received Unrealized Unrealized

Termination Amount (Paid)1 Appreciation (Depreciation)

Reference Entity Date Counterparty ($000) (%) ($000) ($000)

Assurant Inc. 2/4/20 GSI 5,872 (2.590) 8 —

First Republic Bank 2/4/20 GSI 71,453 (3.020) 1,731 —

UnitedHealth Group Inc. 9/4/19 BOANA 55,614 (2.881) 650 —

UnitedHealth Group Inc. 9/4/19 BOANA 111,228 (2.780) 1,307 —

3,696 —

1 Payment received/paid monthly.

BOANA—Bank of America NA.

GSI—Goldman Sachs International.

At June 30, 2019, a counterparty had deposited in segregated accounts securities with a value of

$601,000 and cash of $2,560,000 in connection with open swap contracts.

12

Six Months Ended

June 30, 2019

($000)

Investment Income

Income

Dividends 4,535,368

Interest1 23,457

Securities Lending—Net 7,160

Total Income 4,565,985

Expenses

The Vanguard Group—Note B

Investment Advisory Services 5,548

Management and Administrative—Investor Shares 15,478

Management and Administrative—ETF Shares 10,897

Management and Administrative—Admiral Shares 42,046

Management and Administrative—Institutional Select Shares 2,259

Marketing and Distribution—Investor Shares 1,043

Marketing and Distribution—ETF Shares 2,643

Marketing and Distribution—Admiral Shares 5,101

Marketing and Distribution—Institutional Select Shares 2

Custodian Fees 810

Shareholders’ Reports—Investor Shares 161

Shareholders’ Reports—ETF Shares 694

Shareholders’ Reports—Admiral Shares 652

Shareholders’ Reports—Institutional Select Shares —

Trustees’ Fees and Expenses 109

Total Expenses 87,443

Net Investment Income 4,478,542

Realized Net Gain (Loss)

Investment Securities Sold1,2 4,294,154

Futures Contracts 235,939

Swap Contracts 6,746

Realized Net Gain (Loss) 4,536,839

Change in Unrealized Appreciation (Depreciation)

Investment Securities1 65,562,020

Futures Contracts 100,737

Swap Contracts 3,696

Change in Unrealized Appreciation (Depreciation) 65,666,453

Net Increase (Decrease) in Net Assets Resulting from Operations 74,681,834

1 Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $22,113,000, ($55,000), and $309,000, respectively. Purchases and sales are for temporary cash investment purposes.

2 Includes $5,928,499,000 of net gain (loss) resulting from in-kind redemptions; such gain (loss) is not taxable to the fund.

Statement of Operations

500 Index Fund


13

Statement of Changes in Net Assets

500 Index Fund


Six Months Ended Year Ended

June 30, December 31,

2019 2018

($000) ($000)

Increase (Decrease) in Net Assets

Operations

Net Investment Income 4,478,542 8,659,224

Realized Net Gain (Loss) 4,536,839 14,303,086

Change in Unrealized Appreciation (Depreciation) 65,666,453 (43,378,031)

Net Increase (Decrease) in Net Assets Resulting from Operations 74,681,834 (20,415,721)

Distributions

Net Investment Income

Investor Shares (245,334) (474,872)

ETF Shares (1,199,785) (1,812,323)

Admiral Shares (2,856,923) (4,653,557)

Institutional Select Shares (716,789) (1,066,831)

Realized Capital Gain

Investor Shares — —

ETF Shares — —

Admiral Shares — —

Institutional Select Shares — —

Total Distributions (5,018,831) (8,007,583)

Capital Share Transactions

Investor Shares (4,268,167) (3,019,824)

ETF Shares 8,296,716 14,094,239

Admiral Shares 5,328,802 10,715,967

Institutional Select Shares 3,443,423 15,905,665

Net Increase (Decrease) from Capital Share Transactions 12,800,774 37,696,047

Total Increase (Decrease) 82,463,777 9,272,743

Net Assets

Beginning of Period 400,707,349 391,434,606

End of Period 483,171,126 400,707,349

14

Investor Shares

Six Months

Ended

For a Share Outstanding June 30, Year Ended December 31,

Throughout Each Period 2019 2018 2017 2016 2015 2014

Net Asset Value, Beginning of Period $231.44 $246.82 $206.57 $188.48 $189.89 $170.36

Investment Operations

Net Investment Income 2.4151 4.8961 4.2211 3.997 3.775 3.326

Net Realized and Unrealized Gain (Loss)

on Investments 40.253 (15.776) 40.205 18.069 (1.438) 19.507

Total from Investment Operations 42.668 (10.880) 44.426 22.066 2.337 22.833

Distributions

Dividends from Net Investment Income (2.698) (4.500) (4.176) (3.976) (3.747) (3.303)

Distributions from Realized Capital Gains — — — — — —

Total Distributions (2.698) (4.500) (4.176) (3.976) (3.747) (3.303)

Net Asset Value, End of Period $271.41 $231.44 $246.82 $206.57 $188.48 $189.89

Total Return2 18.47% -4.52% 21.67% 11.82% 1.25% 13.51%

Ratios/Supplemental Data

Net Assets, End of Period (Millions) $22,744 $23,162 $27,656 $26,652 $26,092 $28,040

Ratio of Total Expenses to

Average Net Assets 0.14% 0.14% 0.14% 0.14% 0.16% 0.17%

Ratio of Net Investment Income to


Portfolio Turnover Rate3 4% 4% 3% 4% 3% 3%

The expense ratio, net investment income ratio, and turnover rate for the current period have been annualized.

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


500 Index Fund

15

ETF Shares

Six Months

Ended







on Investments 39.944 (15.719) 39.874 17.933 (1.427) 19.352


Distributions





Total Return 18.53% -4.42% 21.78% 11.93% 1.35% 13.63%













500 Index Fund

16

Admiral Shares

Six Months

Ended







on Investments 40.240 (15.808) 40.193 18.074 (1.439) 19.503


Distributions





Total Return2 18.53% -4.43% 21.79% 11.93% 1.36% 13.64%










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.




500 Index Fund

17



500 Index Fund

Institutional Select Shares

Six Months June 24,

Ended Year Ended 20161 to

June 30, December 31, Dec. 31,

For a Share Outstanding Throughout Each Period 2019 2018 2017 2016

Net Asset Value, Beginning of Period $122.64 $130.79 $109.45 $99.57


Net Investment Income 1.3742 2.8082 2.4232 1.200

Net Realized and Unrealized Gain (Loss) on Investments 21.325 (8.400) 21.283 9.859

Total from Investment Operations 22.699 (5.592) 23.706 11.059

Distributions

Dividends from Net Investment Income (1.529) (2.558) (2.366) (1.179)

Distributions from Realized Capital Gains — — — —

Total Distributions (1.529) (2.558) (2.366) (1.179)

Net Asset Value, End of Period $143.81 $122.64 $130.79 $109.45

Total Return 18.55% -4.40% 21.83% 11.12%


Net Assets, End of Period (Millions) $69,808 $56,531 $44,907 $17,753

Ratio of Total Expenses to Average Net Assets 0.01% 0.01% 0.01% 0.01%3

Ratio of Net Investment Income to Average Net Assets 2.04% 2.08% 2.00% 2.26%3

Portfolio Turnover Rate4 4% 4% 3% 4%5


1 Inception.


3 Annualized.


5 Reflects the fund’s portfolio turnover for the fiscal year ended December 31, 2016.

18

Notes to Financial Statements

500 Index Fund

Vanguard 500 Index Fund is registered under the Investment Company Act of 1940 as an open-end

investment company, or mutual fund. The fund offers four classes of shares: Investor Shares, ETF

Shares, Admiral Shares, and Institutional Select 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.

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 Assets and Liabilities 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 six months ended June 30, 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.

3. Swap Contracts: The fund has entered into equity swap contracts to earn the total return on

selected reference stocks in the fund’s target index. Under the terms of the swaps, the fund receives

the total return on the referenced stock (i.e., receiving the increase or paying the decrease in value

19

500 Index Fund

of the selected reference stock and receiving the equivalent of any dividends in respect of the

selected referenced stock) over a specified period of time, applied to a notional amount that

represents the value of a designated number of shares of the selected reference stock at the

beginning of the equity swap contract. The fund also pays a floating rate that is based on short-term

interest rates, applied to the notional amount. At the same time, the fund generally 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 based on market quotations received from independent pricing services or recognized

dealers and the change in value is recorded in the Statement of Net Assets as an asset (liability)

and in the Statement of Operations as unrealized appreciation (depreciation) until termination of

the swap, at which time realized gain (loss) is recorded.

A risk associated with all types of swaps is the possibility that a counterparty may default on its

obligation to pay net amounts due to the fund. The fund’s maximum amount subject to counterparty

risk is the unrealized appreciation on the swap contract. The fund mitigates its counterparty risk by

entering into swaps only with a diverse group of prequalified counterparties, monitoring their financial

strength, entering into master netting arrangements with its counterparties, and requiring its

counterparties to transfer collateral as security for their performance. In the absence of a default,

the collateral pledged or received by the fund cannot be repledged, resold, or rehypothecated. In

the event of a counterparty’s default (including bankruptcy), the fund may terminate any swap

contracts with that counterparty, determine the net amount owed by either party in accordance

with its master netting arrangements, and sell or retain any collateral held up to the net amount

owed to the fund under the master netting arrangements. The swap contracts contain provisions

whereby a counterparty may terminate open contracts if the fund net assets decline below a

certain level, triggering a payment by the fund if the fund is in a net liability position at the time of

the termination. The payment amount would be reduced by any collateral the fund has pledged.

Any securities pledged as collateral for open contracts are noted in the Statement of Net Assets.

The value of collateral received or pledged is compared daily to the value of the swap contracts

exposure with each counterparty, and any difference, if in excess of a specified minimum transfer

amount, is adjusted and settled within two business days.

During the six months ended June 30, 2019, the fund’s average amounts of investments in total

return swaps represented less than 1% of net assets, based on the average of notional amounts

at each quarter-end during the period.

4. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment

company and distribute all of its taxable income. Management has analyzed the fund’s tax positions

taken for all open federal income tax years (December 31, 2015–2018), and for the period ended

June 30, 2019, 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. Distributions

are determined on a tax basis and may differ from net investment income and realized capital gains

for financial reporting purposes.

6. 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

20

500 Index Fund

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.

7. 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 June 30, 2019, or at any time during the period

then ended.

8. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income

distributions received from Vanguard Market Liquidity Fund and is accrued daily. Premiums and

discounts on debt securities are amortized and accreted, respectively, to interest income over the

lives of the respective securities, except for premiums on certain callable debt securities that are

amortized to the earliest call 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.

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

21

500 Index Fund

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 June 30, 2019, the fund had contributed to Vanguard capital in the amount of

$22,563,000, representing 0.00% of the fund’s net assets and 9.02% of Vanguard’s capitalization.

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 as of June 30, 2019,

based on the inputs used to value them:

Level 1 Level 2 Level 3

Investments ($000) ($000) ($000)

Common Stocks 480,560,193 — —

Temporary Cash Investments 2,792,511 111,448 —

Futures Contracts—Assets1 9,767 — —

Swap Contracts—Assets — 3,696 —

Total 483,362,471 115,144 —

1 Represents variation margin on the last day of the reporting period.

D. As of June 30, 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 309,809,088

Gross Unrealized Appreciation 189,036,259

Gross Unrealized Depreciation (15,341,609)

Net Unrealized Appreciation (Depreciation) 173,694,650

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, 2018, the fund had available capital losses totaling $996,573,000

that may be carried forward indefinitely to offset future net capital gains. The fund will use these

22

500 Index Fund

capital losses to offset net taxable capital gains, if any, realized during the year ending December 31,

2019; should the fund realize net capital losses for the year, the losses will be added to the loss

carryforward balance above.

E. During the six months ended June 30, 2019, the fund purchased $28,234,772,000 of

investment securities and sold $16,093,168,000 of investment securities, other than temporary

cash investments. Purchases and sales include $15,542,497,000 and $8,161,469,000, respectively,

in connection with in-kind purchases and redemptions of the fund’s capital shares.

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

Six Months Ended Year Ended

June 30, 2019 December 31, 2018

Amount Shares Amount Shares

($000) (000) ($000) (000)

Investor Shares

Issued 665,513 2,583 3,739,073 14,707

Issued in Lieu of Cash Distributions 229,157 868 444,813 1,788

Redeemed1 (5,162,837) (19,730) (7,203,710) (28,466)

Net Increase (Decrease)—Investor Shares (4,268,167) (16,279) (3,019,824) (11,971)

ETF Shares

Issued 16,365,533 63,432 33,022,329 130,065

Issued in Lieu of Cash Distributions — — — —

Redeemed (8,068,817) (31,225) (18,928,090) (76,900)

Net Increase (Decrease)—ETF Shares 8,296,716 32,207 14,094,239 53,165

Admiral Shares

Issued1 19,489,908 75,290 40,632,052 160,485

Issued in Lieu of Cash Distributions 2,515,810 9,511 4,116,552 16,541

Redeemed (16,676,916) (64,496) (34,032,637) (134,667)

Net Increase (Decrease)—Admiral Shares 5,328,802 20,305 10,715,967 42,359

Institutional Select Shares

Issued 4,089,427 29,239 19,415,700 143,348

Issued in Lieu of Cash Distributions 716,789 5,114 1,066,831 8,093

Redeemed (1,362,793) (9,889) (4,576,866) (33,838)

Net Increase (Decrease)—Institutional Select Shares 3,443,423 24,464 15,905,665 117,603

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 $3,431,485,000 from the conversion during the six months ended June 30, 2019.

G. Management has determined that no events or transactions occurred subsequent to June 30,

2019, that would require recognition or disclosure in these financial statements.

23

The board of trustees of Vanguard 500 Index Fund has renewed the fund’s investment advisory

arrangement with The Vanguard Group, Inc. (Vanguard), through its Equity Index Group. 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

management process, and performance. This evaluation included information provided to the board

by Vanguard’s Portfolio Review Department, which is responsible for fund and advisor oversight

and product management. The Portfolio Review Department met regularly with the advisor and

made monthly presentations to the board during the fiscal year that directed the board’s focus to

relevant information and topics.

The board, or an investment committee made up of board members, also received information

throughout the year during advisor presentations. For each advisor presentation, the board was

provided with letters and reports that included information about, among other things, the advisory

firm and the advisor’s assessment of the investment environment, portfolio performance, and

portfolio characteristics.

In addition, the board received monthly reports, which included a Market and Economic Report,

a Fund Dashboard Monthly Summary, and a Fund Performance Report.

Prior to their meeting, the trustees were provided with a memo and materials that summarized the

information they received over the course of the year. They also 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 reviewed the quality of the fund’s investment management services over both the short

and long term and took into account the organizational depth and stability of the advisor. The board

considered that Vanguard has been managing investments for more than four decades. The Equity

Index 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 the short- and long-term performance of the fund, including any periods of

outperformance or underperformance compared with its target index and peer group. The board

concluded that the performance was such that the advisory arrangement should continue.

Trustees Approve Advisory Arrangement

24

Cost

The board concluded that the fund’s expense ratio was well below the average expense ratio

charged by funds in its peer group and that the fund’s advisory expenses were also well below the

peer-group average.

The board does not conduct a profitability analysis of Vanguard because of Vanguard’s unique

structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds

it oversees.

The benefit of economies of scale

The board concluded that the fund’s 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.

25

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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.

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, 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 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].

© 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.

Q402 082019

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