UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT COMPANY
Investment Company Act file number: 811-03916 |
Name of Registrant: Vanguard Specialized Funds |
Address of Registrant: |
P.O. Box 2600 |
Valley Forge, PA 19482 |
Name and address of agent for service: |
Anne E. Robinson, Esquire |
P.O. Box 876 |
Valley Forge, PA 19482 |
Date of fiscal year end: January 31 |
Date of reporting period: October 31, 2018 |
Item 1: Schedule of Investments |
Vanguard Global Capital Cycles Fund
Schedule of Investments (unaudited)
As of October 31, 2018
Market | |||
Value | |||
Shares | ($000) | ||
Common Stocks (93.0%) | |||
Aerospace & Defense (4.0%) | |||
Lockheed Martin Corp. | 106,750 | 31,369 | |
General Dynamics Corp. | 177,613 | 30,652 | |
62,021 | |||
Building Products (1.0%) | |||
Cie de Saint-Gobain | 405,437 | 15,273 | |
Coal & Consumable Fuels (3.1%) | |||
Cameco Corp. | 2,746,201 | 29,439 | |
China Shenhua Energy Co. Ltd. | 7,829,500 | 17,714 | |
47,153 | |||
Communications Equipment (0.6%) | |||
Telefonaktiebolaget LM Ericsson Class B | 1,006,092 | 8,760 | |
Construction & Engineering (1.1%) | |||
Vinci SA | 187,943 | 16,727 | |
Construction Materials (1.1%) | |||
LafargeHolcim Ltd. | 380,459 | 17,516 | |
Diversified Banks (6.8%) | |||
ING Groep NV | 2,668,653 | 31,573 | |
Bank of China Ltd. | 61,033,000 | 26,002 | |
Bank of America Corp. | 881,524 | 24,242 | |
Citigroup Inc. | 367,491 | 24,056 | |
105,873 | |||
Diversified Capital Markets (1.5%) | |||
UBS Group AG | 1,645,858 | 23,004 | |
Diversified Metals & Mining (2.5%) | |||
* | Trevali Mining Corp. | 33,703,437 | 12,545 |
* | Metals X Ltd. | 28,513,568 | 9,424 |
* | Base Resources Ltd. | 47,515,366 | 8,289 |
*,1 Neo Lithium Corp. | 6,935,301 | 5,321 | |
*,1 Osisko Metals Inc. | 6,575,000 | 2,597 | |
* | Aguia Resources Ltd. | 3,281,752 | 467 |
38,643 | |||
Electric Utilities (3.0%) | |||
* | PG&E Corp. | 973,651 | 45,577 |
Electrical Components & Equipment (4.0%) | |||
ABB Ltd. ADR | 1,499,832 | 30,087 | |
Schneider Electric SE | 220,000 | 15,908 | |
Legrand SA | 240,351 | 15,695 | |
61,690 |
Electronic Equipment & Instruments (1.0%) | |||
Keyence Corp. | 31,900 | 15,584 | |
Fertilizers & Agricultural Chemicals (2.6%) | |||
Nutrien Ltd. | 428,359 | 22,673 | |
Mosaic Co. | 564,227 | 17,457 | |
40,130 | |||
Financial Exchanges & Data (1.1%) | |||
Hong Kong Exchanges & Clearing Ltd. | 628,400 | 16,732 | |
Gas Utilities (0.6%) | |||
Rubis SCA | 178,425 | 9,206 | |
Gold (17.8%) | |||
* | B2Gold Corp. | 21,500,975 | 52,892 |
* | Endeavour Mining Corp. | 3,172,548 | 48,656 |
*,1 SEMAFO Inc. | 17,300,000 | 37,847 | |
OceanaGold Corp. | 12,546,400 | 36,120 | |
*,1 Roxgold Inc. | 29,402,796 | 18,315 | |
* | Dacian Gold Ltd. | 9,565,327 | 16,212 |
*,1 Premier Gold Mines Ltd. | 11,191,200 | 14,622 | |
* | Alacer Gold Corp. | 8,739,400 | 14,273 |
* | Gold Road Resources Ltd. | 23,705,855 | 11,703 |
* | Tahoe Resources Inc. | 2,689,462 | 6,354 |
*,1 Nighthawk Gold Corp. | 17,775,860 | 5,199 | |
* | Guyana Goldfields Inc. | 3,531,100 | 4,748 |
* | B2Gold Corp. | 1,860,800 | 4,594 |
* | Saracen Mineral Holdings Ltd. | 899,043 | 1,568 |
* | Tahoe Resources Inc. | 460,338 | 1,091 |
*,1 Troilus Gold Corp. | 2,789,980 | 1,060 | |
* | Atlantic Gold Corp. | 575,010 | 703 |
* | Osisko Gold Royalties Warrants Exp. 02/26/2019 | 231,787 | 6 |
275,963 | |||
Heavy Electrical Equipment (2.1%) | |||
Mitsubishi Electric Corp. | 2,599,400 | 32,907 | |
Household Products (2.5%) | |||
Procter & Gamble Co. | 432,092 | 38,318 | |
Integrated Oil & Gas (3.2%) | |||
Royal Dutch Shell plc Class B | 783,201 | 25,542 | |
TOTAL SA | 413,919 | 24,287 | |
49,829 | |||
Integrated Telecommunication Services (4.5%) | |||
China Unicom Hong Kong Ltd. | 38,464,000 | 40,231 | |
Verizon Communications Inc. | 504,222 | 28,786 | |
69,017 | |||
Life & Health Insurance (5.2%) | |||
Sony Financial Holdings Inc. | 2,050,100 | 47,295 | |
Ping An Insurance Group Co. of China Ltd. | 1,794,500 | 16,965 | |
AIA Group Ltd. | 2,104,200 | 16,007 | |
80,267 | |||
Multi-Utilities (4.6%) | |||
National Grid plc | 4,431,383 | 46,814 | |
E.ON SE | 2,566,898 | 24,822 |
71,636 | |||
Oil & Gas Drilling (1.4%) | |||
* | Transocean Ltd. | 1,990,161 | 21,912 |
Oil & Gas Exploration & Production (2.6%) | |||
* | WPX Energy Inc. | 951,649 | 15,264 |
Diamondback Energy Inc. | 123,231 | 13,846 | |
* | Concho Resources Inc. | 84,547 | 11,760 |
40,870 | |||
Other (0.0%) | |||
*, | 2 Americas Silver Corp. Warrants Expire 06/09/2021 | 7,108,333 | — |
* | Osisko Metals Inc. Warrants Expire 07/18/2019 | 3,287,500 | — |
* | Troilus Gold Inc. Warrants Expire 05/21/2020 | 3,048,780 | — |
* | Barkerville Gold Mines Warrants Expire 11/18/2018 | 263,158 | — |
* | Orla Mining Ltd. Warrants Expire 02/15/2021 | 192,500 | — |
— | |||
Pharmaceuticals (5.8%) | |||
Teva Pharmaceutical Industries Ltd. ADR | 1,137,893 | 22,735 | |
* | Mylan NV | 710,734 | 22,210 |
Allergan plc | 95,598 | 15,106 | |
Ono Pharmaceutical Co. Ltd. | 658,000 | 14,932 | |
Bristol-Myers Squibb Co. | 293,937 | 14,856 | |
89,839 | |||
Precious Metals & Minerals (0.4%) | |||
Lucara Diamond Corp. | 1,627,111 | 2,695 | |
* | Petra Diamonds Ltd. | 4,250,000 | 2,129 |
Mountain Province Diamonds Inc. | 1,183,206 | 1,995 | |
6,819 | |||
Real Estate Operating Companies (0.6%) | |||
BR Properties SA | 4,606,700 | 9,668 | |
Retail REITs (3.0%) | |||
Simon Property Group Inc. | 255,474 | 46,885 | |
Semiconductors (1.2%) | |||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 486,315 | 18,529 | |
Silver (4.1%) | |||
Hochschild Mining plc | 10,694,450 | 21,528 | |
* | Fortuna Silver Mines Inc. | 5,052,797 | 19,191 |
* | MAG Silver Corp. | 2,537,273 | 18,233 |
* | ,1 Americas Silver Corp. | 2,367,144 | 4,711 |
63,663 | |||
Total Common Stocks (Cost $1,599,867) | 1,440,011 |
Coupon | |||
Temporary Cash Investment (6.3%) | |||
Money Market Fund (6.3%) | |||
3 Vanguard Market Liquidity Fund (Cost | |||
$97,364) | 2.308% | 973,641 | 97,364 |
Total Investments (99.3%) (Cost $1,697,231) | 1,537,375 | ||
Other Assets and Liabilities-Net (0.7%) | 10,572 | ||
Net Assets (100%) | 1,547,947 |
* Non-income-producing security.
1 Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities
of such company.
2 Restricted security, representing 0.0% of net assets. See Restricted Securities table for additional information.
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.
ADR—American Depositary Receipt. | ||
Restricted Securities as of Period End | ||
Acquisition Cost | ||
Security Name | Acquisition Date | ($000) |
Americas Silver Corp. Warrants Expire 06/09/2021 | June 2016 | 0 |
A. 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 affected by events occurring before the fund's pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund's pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value.
B. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund's pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are
settled in cash, at which time they are recorded as realized foreign currency gains (losses).
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 Schedule of Investments.
The following table summarizes the market value of the fund's investments as of October 31, 2018, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | |
Investments | ($000) | ($000) | ($000) |
Common Stocks | 849,192 | 590,819 | — |
Temporary Cash Investments | 97,364 | — | — |
Total | 946,556 | 590,819 | — |
D. Certain of the fund's investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company or the issuer is another member of The Vanguard Group. Transactions during the period in securities of these companies were as follows:
Current Period Transactions | ||||||||
Jan. 31, | Proceeds | Oct. 31, | ||||||
2018 | from | Realized | Change in | Capital Gain | 2018 | |||
Market Purchases Securities | Net Gain Unrealized | Distributions | Market | |||||
Value | at Cost | Sold | (Loss) App.(Dep.) | Income Received | Value | |||
($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | |
Aguia Resources Ltd. | 1,875 | — | 640 | (2,002) | 1,234 | — | — | NA1 |
Alacer Gold Corp. | 29,025 | — | 14,501 | (12,347) | (2,163) | — | — | NA1 |
Americas Silver Corp. | 9,497 | — | 6 | — | (4,780) | — | — | 4,711 |
Base Resources Ltd. | 15,645 | — | 3,655 | (739) | (2,962) | — | — | NA1 |
Beadell Resources Ltd. | 10,085 | — | 4,677 | (16,446) | 11,038 | — | — | — |
Dalradian Resources Inc. | 45,996 | — | 49,766 | 18,395 | (14,625) | — | — | — |
Fortuna Silver Mines Inc. | 48,519 | — | 27,912 | 4,498 | (5,914) | — | — | NA1 |
Guyana Goldfields Inc. | 43,018 | — | 9,825 | (22,019) | (6,426) | — | — | NA1 |
Neo Lithium Corp. | 12,984 | — | 1,007 | 189 | (6,845) | — | — | 5,321 |
Nevsun Resources Ltd. | 70,572 | — | 116,069 | 41,227 | 4,270 | — | — | — |
Nighthawk Gold Corp. | 9,683 | — | — | — | (4,484) | — | — | 5,199 |
Osisko Metals Inc. | 4,170 | 15,583 | — | — | (17,156) | — | — | 2,597 |
Osisko Mining Inc. | 53,681 | 3,073 | 29,332 | (16,014) | (11,408) | — | — | — |
Premier Gold Mines Ltd. | 30,632 | — | 1,778 | (637) | (13,595) | — | — | 14,622 |
Roxgold Inc. | 26,685 | — | 126 | (68) | (8,176) | — | — | 18,315 |
SEMAFO Inc. | 61,564 | — | 9,243 | (5,265) | (9,209) | — | — | 37,847 |
Troilus Gold Corp. | 4,551 | — | 9 | (2) | (3,480) | — | — | 1,060 |
Vanguard Market | ||||||||
Liquidity Fund | 75,587 | NA2 | NA2 | 1 | — | 1,089 | — | 97,364 |
Total | 553,769 | (11,229) | (94,681) | 1,089 | — | 187,036 |
1 Not applicable—at October 31, 2018, the issuer was not an affiliated company of the fund.
2 Not applicable—purchases and sales are for temporary cash investment purposes.
Vanguard Health Care Fund
Schedule of Investments (unaudited)
As of October 31, 2018
Market | |||
Value | |||
Shares | ($000) | ||
Common Stocks (97.1%) | |||
United States (70.6%) | |||
Biotechnology (13.1%) | |||
* | Biogen Inc. | 3,695,803 | 1,124,522 |
* | Vertex Pharmaceuticals Inc. | 6,371,017 | 1,079,632 |
* | Regeneron Pharmaceuticals Inc. | 2,718,125 | 922,097 |
*,1 | Incyte Corp. | 11,113,220 | 720,359 |
*,1 | Alnylam Pharmaceuticals Inc. | 8,915,550 | 717,078 |
*,1 | Alkermes plc | 8,990,310 | 367,074 |
*,1 | Agios Pharmaceuticals Inc. | 4,402,124 | 277,598 |
* | Bluebird Bio Inc. | 1,651,678 | 189,447 |
* | Seattle Genetics Inc. | 2,792,067 | 156,719 |
* | BeiGene Ltd. ADR | 1,033,365 | 130,142 |
*,^,1 TESARO Inc. | 4,099,228 | 118,386 | |
* | Ionis Pharmaceuticals Inc. | 2,119,180 | 105,005 |
* | Ironwood Pharmaceuticals Inc. Class A | 4,594,407 | 60,187 |
*,^ | Portola Pharmaceuticals Inc. | 2,913,937 | 57,375 |
* | Prothena Corp. plc | 1,659,427 | 20,577 |
6,046,198 | |||
Equity Real Estate Investment Trusts (REITs) (0.4%) | |||
Alexandria Real Estate Equities Inc. | 1,365,900 | 166,954 | |
Food & Staples Retailing (1.4%) | |||
Walgreens Boots Alliance Inc. | 8,048,160 | 642,002 | |
Health Care Equipment & Supplies (10.6%) | |||
Abbott Laboratories | 16,026,981 | 1,104,900 | |
* | Boston Scientific Corp. | 30,541,914 | 1,103,785 |
Medtronic plc | 10,987,384 | 986,887 | |
Baxter International Inc. | 6,309,991 | 394,437 | |
Danaher Corp. | 3,798,100 | 377,531 | |
Zimmer Biomet Holdings Inc. | 2,447,976 | 278,065 | |
* | Edwards Lifesciences Corp. | 1,519,700 | 224,308 |
* | Hologic Inc. | 4,927,800 | 192,135 |
* | Align Technology Inc. | 301,700 | 66,736 |
Hill-Rom Holdings Inc. | 770,000 | 64,742 | |
* | DexCom Inc. | 371,900 | 49,377 |
Teleflex Inc. | 198,600 | 47,811 | |
* | Insulet Corp. | 289,600 | 25,546 |
4,916,260 | |||
Health Care Providers & Services (18.0%) | |||
UnitedHealth Group Inc. | 10,310,736 | 2,694,711 | |
HCA Healthcare Inc. | 7,284,545 | 972,705 | |
McKesson Corp. | 6,753,804 | 842,605 | |
Aetna Inc. | 4,051,023 | 803,723 | |
Cigna Corp. | 2,642,289 | 564,948 | |
Universal Health Services Inc. Class B | 4,593,600 | 558,398 | |
Anthem Inc. | 1,973,833 | 543,929 | |
Cardinal Health Inc. | 6,818,446 | 345,013 | |
CVS Health Corp. | 4,518,118 | 327,067 |
* | WellCare Health Plans Inc. | 1,061,400 | 292,936 |
* | Acadia Healthcare Co. Inc. | 4,337,455 | 180,004 |
* | Centene Corp. | 826,300 | 107,683 |
Humana Inc. | 215,600 | 69,080 | |
* | LifePoint Health Inc. | 341,100 | 22,124 |
* | Community Health Systems Inc. Rights Exp. 12/31/2049 | 18,834,700 | 64 |
8,324,990 | |||
Health Care Technology (2.1%) | |||
* | Cerner Corp. | 11,367,617 | 651,137 |
* | athenahealth Inc. | 1,824,411 | 232,685 |
*,1 | Allscripts Healthcare Solutions Inc. | 9,026,993 | 107,512 |
991,334 | |||
Life Sciences Tools & Services (3.0%) | |||
Thermo Fisher Scientific Inc. | 3,317,665 | 775,172 | |
* | Illumina Inc. | 693,688 | 215,841 |
* | IQVIA Holdings Inc. | 1,527,921 | 187,827 |
Agilent Technologies Inc. | 1,427,950 | 92,517 | |
* | PRA Health Sciences Inc. | 832,586 | 80,653 |
* | Syneos Health Inc. | 475,600 | 21,702 |
1,373,712 | |||
Pharmaceuticals (22.0%) | |||
Bristol-Myers Squibb Co. | 50,408,161 | 2,547,628 | |
Allergan plc | 14,473,701 | 2,286,989 | |
Eli Lilly & Co. | 20,384,365 | 2,210,481 | |
Merck & Co. Inc. | 21,807,344 | 1,605,239 | |
*,1 | Mylan NV | 33,338,442 | 1,041,826 |
* | Nektar Therapeutics Class A | 6,877,913 | 266,038 |
*,^,1 Medicines Co. | 5,564,220 | 129,424 | |
* | Amneal Pharmaceuticals Inc. | 6,002,440 | 110,745 |
*,^ | Elanco Animal Health Inc. | 901,500 | 27,478 |
10,225,848 | |||
Total United States | 32,687,298 | ||
International (26.5%) | |||
Belgium (2.3%) | |||
1 | UCB SA | 11,840,914 | 994,406 |
* | Galapagos NV | 804,349 | 82,638 |
1,077,044 | |||
China (0.1%) | |||
Shanghai Fosun Pharmaceutical Group Co. Ltd. | 14,799,500 | 44,503 | |
Sino Biopharmaceutical Ltd. | 26,203,500 | 23,651 | |
68,154 | |||
Denmark (0.6%) | |||
* | Genmab A/S | 1,737,968 | 237,813 |
H Lundbeck A/S | 1,151,911 | 53,727 | |
291,540 |
France (0.7%) | ||||
EssilorLuxottica SA | 2,470,611 | 337,434 | ||
Germany (0.1%) | ||||
* QIAGEN NV | 1,388,100 | 50,387 | ||
Ireland (0.1%) | ||||
* ICON plc | 170,300 | 23,515 | ||
Israel (0.9%) | ||||
Teva Pharmaceutical Industries Ltd. ADR | 21,321,101 | 425,996 | ||
Japan (10.0%) | ||||
1 Eisai Co. Ltd. | 16,887,225 | 1,406,375 | ||
Chugai Pharmaceutical Co. Ltd. | 15,610,000 | 913,915 | ||
Shionogi & Co. Ltd. | 9,105,154 | 582,217 | ||
Ono Pharmaceutical Co. Ltd. | 19,628,460 | 445,441 | ||
Takeda Pharmaceutical Co. Ltd. | 10,010,100 | 415,014 | ||
Astellas Pharma Inc. | 23,126,500 | 357,309 | ||
Sysmex Corp. | 2,013,900 | 141,254 | ||
Kyowa Hakko Kirin Co. Ltd. | 5,952,900 | 115,289 | ||
Nippon Shinyaku Co. Ltd. | 1,717,100 | 98,650 | ||
Terumo Corp. | 1,799,300 | 97,130 | ||
Daiichi Sankyo Co. Ltd. | 1,229,900 | 47,011 | ||
4,619,605 | ||||
Netherlands (0.5%) | ||||
Koninklijke Philips NV | 6,489,599 | 242,037 | ||
South Africa (0.1%) | ||||
Aspen Pharmacare Holdings Ltd. | 2,091,304 | 22,116 | ||
Switzerland (4.5%) | ||||
Novartis AG | 16,468,155 | 1,442,155 | ||
Roche Holding AG | 2,148,502 | 522,865 | ||
Roche Holding AG (Bearer) | 376,066 | 91,556 | ||
* Idorsia Ltd. | 809,587 | 15,677 | ||
2,072,253 | ||||
United Kingdom (6.6%) | ||||
AstraZeneca plc | 34,744,993 | 2,657,634 | ||
Hikma Pharmaceuticals plc | 7,939,027 | 192,561 | ||
Smith & Nephew plc | 10,138,968 | 164,807 | ||
NMC Health plc | 433,790 | 19,559 | ||
3,034,561 | ||||
Total International | 12,264,642 | |||
Total Common Stocks (Cost $28,043,851) | 44,951,940 | |||
Coupon | ||||
Temporary Cash Investments (2.9%) | ||||
Money Market Fund (0.1%) | ||||
2,3 Vanguard Market Liquidity Fund | 2.308% | 330 | 32,990 | |
Face | ||||
Maturity | Amount | |||
Date | ($000) | |||
Repurchase Agreements (2.8%) | ||||
Natixis Treas Triparty | 2.190% | 11/1/18 | 325,000 | 325,000 |
Health Care Fund | ||||
(Dated 10/31/18, Repurchase Value | ||||
$325,020,000, collateralized by U.S. Treasury | ||||
Note/Bond. 0.000%-2.750%, 12/31/18- | ||||
2/15/48, Federal Home Loan Bank | ||||
3.370%, 2/12/30, with a value of | ||||
$331,500,000) | ||||
Wells Fargo & Co. | 2.210% | 11/1/18 | 286,500 | 286,500 |
(Dated 10/31/18, Repurchase Value | ||||
$286,518,000, collateralized by Government | ||||
National Mortgage Assn. 3.000%-7.500%, | ||||
5/20/26-6/20/46, Federal | ||||
National Mortgage Assn. 2.000%- | ||||
6.500%,12/1/18-10/1/48, Federal Home Loan | ||||
Mortgage Corp. 2.500%-6.500%, 1/1/27 | ||||
6/1/48, Federal Home Loan Bank 2.625%- | ||||
2.890%, 3/30/21-3/11/22 with a value of | ||||
$292,230,000) | ||||
Bank of Nova Scotia | 2.190% | 11/1/18 | 245,700 | 245,700 |
(Dated 10/31/18, Repurchase Value | ||||
$245,715,000, collateralized by U.S. Treasury | ||||
Note/Bond 0.000%-7.875%, 12/27/18-2/15/48, | ||||
with a value of $250,629,000) | ||||
BNP Paribas Securities Corp. | 2.210% | 11/1/18 | 183,100 | 183,100 |
(Dated 10/31/18, Repurchase Value | ||||
$183,111,000, collateralized by Government | ||||
National Mortgage Assn. 2.000%-5.500%, | ||||
6/15/39-6/20/48, Federal National Mortgage | ||||
Assn. 3.500%-6.000%, 10/1/19-9/1/48, | ||||
Federal Home Loan Mortgage Corp. 3.000%- | ||||
6.000%, 1/1/33-10/1/48, with a value of | ||||
$186,762,000) | ||||
RBC Capital Markets LLC | 2.190% | 11/1/18 | 85,200 | 85,200 |
(Dated 10/31/18, Repurchase Value | ||||
$85,205,000, collateralized by Government | ||||
National Mortgage Assn. 5.000%-7.000%, | ||||
9/20/36-7/20/48, Federal National Mortgage | ||||
Assn. 2.350%-6.000%, 1/1/19-11/1/48, Federal | ||||
Home Loan Mortgage Corp. 4.000%-4.500%, | ||||
8/1/48-9/1/48, with a value of $86,904,000) | ||||
Nomura International PLC | 2.190% | 11/1/18 | 75,000 | 75,000 |
(Dated 10/31/18,Repurchase Value | ||||
$75,005,000, collateralized by U.S. Treasury | ||||
Note/Bond 0.000%-4.375%, 11/8/18-11/15/40, | ||||
with a value of $76,500,000) | ||||
HSBC Bank USA | 2.200% | 11/1/18 | 60,000 | 60,000 |
(Dated 10/31/18, Repurchase Value | ||||
$60,004,000, collateralized by Federal | ||||
National Mortgage Assn. 3.000%-4.000%, | ||||
11/1/46-10/1/47, Federal Home Loan | ||||
Mortgage Corp., 4.000%, 9/1/47, with a value | ||||
of $61,200,000) | ||||
Barclays Capital Inc. | 2.190% | 11/1/18 | 28,100 | 28,100 |
(Dated 10/31/18, Repurchase Value | ||||
$28,102,000, collateralized by U.S. Treasury | ||||
Note/Bond 0.000%-3.375%, 12/31/18-8/15/48, | ||||
with a value of $28,662,000) |
Health Care Fund | ||||
Bank of America Securities, LLC | 2.210% | 11/1/18 | 10,400 | 10,400 |
(Dated 10/31/18, Repurchase Value | ||||
$10,401,000, collateralized by Government | ||||
National Mortgage Assn. 4.500%, 4/20/47, | ||||
with a value of $10,608,000) | ||||
1,299,000 | ||||
Total Temporary Cash Investments (Cost $1,331,990) | 1,331,990 | |||
Total Investments (100.0%) (Cost $29,375,841) | 46,283,930 | |||
Other Assets and Liabilities-Net (0.0%)3 | 7,545 | |||
Net Assets (100%) | 46,291,475 |
* | Non-income-producing security. |
^ | Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $30,761,000. |
1 | Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company. |
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 $32,998,000 of collateral received for securities on loan, of which $32,990,000 is held in Vanguard Market Liquidity Fund and $8,000 is held in cash. |
ADR—American Depositary Receipt. | |
A. | 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 affected by events occurring before the fund's pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund's pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. 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.
B. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund's pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).
C. Repurchase Agreements: The fund enters into repurchase agreements with institutional counterparties. Securities pledged as collateral to the fund under repurchase agreements are held by
Health Care Fund
a custodian bank until the agreements mature, and in the absence of a default, such collateral cannot be repledged, resold, or rehypothecated. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. The fund further mitigates its counterparty risk by entering into repurchase agreements only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master repurchase agreements with its counterparties. The master repurchase agreements provide that, in the event of a counterparty's default (including bankruptcy), the fund may terminate any repurchase agreements with that counterparty, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund. Such action may be subject to legal proceedings, which may delay or limit the disposition of collateral.
D. 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 Schedule of Investments.
The following table summarizes the market value of the fund's investments as of October 31, 2018, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | |
Investments | ($000) | ($000) | ($000) |
Common Stocks—United States | 32,687,298 | — | — |
Common Stocks—International | 449,511 | 11,815,131 | — |
Temporary Cash Investments | 32,990 | 1,299,000 | — |
Total | 33,169,799 | 13,114,131 | — |
E. Certain of the fund's investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company or the issuer is another member of The Vanguard Group. Transactions during the period in securities of these companies were as follows:
Health Care Fund
Current Period Transactions | ||||||||
Jan. 31, | Proceeds | Capital | Oct. 31, | |||||
2018 | from Realized Change in | Gain | 2018 | |||||
Market Purchases Securities Net Gain Unrealized | Distribution | Market | ||||||
Value | at Cost | Sold | (Loss) App.(Dep.) | Income s Received | Value | |||
($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | |
Acadia Healthcare Co | ||||||||
Inc. | 156,814 | — | 10,564 | (6,011) | 39,765 | — | — | NA1 |
Agios Pharmaceuticals | ||||||||
Inc. | 342,852 | 10,326 | 9,929 | (3,328) | (62,323) | — | — | 277,598 |
Alkermes plc | 518,485 | 8,156 | 17,727 | (904) | (140,936) | — | — | 367,074 |
Allscripts Healthcare | ||||||||
Solutions Inc. | 140,506 | — | 5,204 | (366) | (27,424) | — | — | 107,512 |
Alnylam | ||||||||
Pharmaceuticals Inc. | 867,028 | 209,136 | — | — | (359,086) | — | — | 717,078 |
athenahealth Inc. | 279,963 | — | 57,516 | 8,529 | 1,709 | — | — | NA1 |
Eisai Co. Ltd. | 951,518 | 51,350 | 36,918 | 343 | 440,082 | 20,920 | — | 1,406,375 |
Incyte Corp. | NA2 | 104,402 | — | — | (238,816) | — | — | 720,359 |
Medicines Co. | 184,343 | — | — | — | (54,919) | — | — | 129,424 |
Mylan NV | 1,278,817 | 123,389 | — | — | (360,380) | — | — | 1,041,826 |
Prothena Corp. plc | 89,882 | — | 6,130 | (11,161) | (52,014) | — | — | NA1 |
TESARO Inc. | 202,153 | 34,057 | — | — | (117,824) | — | — | 118,386 |
UCB SA | 1,031,202 | 9,822 | 10,450 | 1,354 | (37,522) | 14,250 | — | 994,406 |
Vanguard Market | ||||||||
Liquidity Fund | 166,428 | NA3 | NA3 | 10,670 | (1) | — | — | 32,990 |
Total | 6,209,991 | (874) | (969,689) | 35,170 | — | 5,913,028 |
1 | Not applicable—at October 31, 2018, the issuer was not an affiliated company of the fund. |
2 | Not applicable—at January 31, 2018, the security was still held, but the issuer was not an affiliated company of the fund. |
3 | Not applicable—purchases and sales are for temporary cash investment purposes. |
Vanguard Energy Fund
Schedule of Investments (unaudited)
As of October 31, 2018
Market | |||
Value | |||
Shares | ($000) | ||
Common Stocks (96.5%)1 | |||
United States (63.6%) | |||
Electric Utilities (0.9%) | |||
Avangrid Inc. | 1,052,623 | 49,484 | |
OGE Energy Corp. | 812,391 | 29,368 | |
78,852 | |||
Energy Equipment & Services (6.4%) | |||
Schlumberger Ltd. | 3,448,140 | 176,924 | |
Halliburton Co. | 4,327,608 | 150,081 | |
*,2 ProPetro Holding Corp. | 5,027,727 | 88,739 | |
^ | Liberty Oilfield Services Inc. Class A | 2,697,083 | 51,191 |
Patterson-UTI Energy Inc. | 3,000,448 | 49,928 | |
Baker Hughes a GE Co. Class A | 930,899 | 24,846 | |
National Oilwell Varco Inc. | 5,008 | 184 | |
541,893 | |||
Multi-Utilities (1.2%) | |||
Sempra Energy | 882,993 | 97,235 | |
Oil, Gas & Consumable Fuels (54.1%) | |||
Integrated Oil & Gas (17.2%) | |||
Exxon Mobil Corp. | 9,147,232 | 728,851 | |
Chevron Corp. | 5,087,336 | 568,001 | |
Occidental Petroleum Corp. | 2,400,962 | 161,033 | |
Oil & Gas Exploration & Production (26.5%) | |||
Pioneer Natural Resources Co. | 1,982,778 | 292,004 | |
EOG Resources Inc. | 2,605,306 | 274,443 | |
Diamondback Energy Inc. | 2,409,143 | 270,691 | |
* | Concho Resources Inc. | 1,409,442 | 196,039 |
ConocoPhillips | 1,925,154 | 134,568 | |
Cabot Oil & Gas Corp. | 4,308,812 | 104,402 | |
Hess Corp. | 1,689,429 | 96,973 | |
* | Newfield Exploration Co. | 4,678,939 | 94,515 |
Anadarko Petroleum Corp. | 1,748,885 | 93,041 | |
* | Callon Petroleum Co. | 6,994,439 | 69,735 |
* | WPX Energy Inc. | 4,208,708 | 67,508 |
* | Centennial Resource Development Inc. Class A | 3,076,015 | 58,936 |
Devon Energy Corp. | 1,673,034 | 54,206 | |
Noble Energy Inc. | 2,157,332 | 53,610 | |
* | SRC Energy Inc. | 7,143,957 | 50,579 |
*,^ Jagged Peak Energy Inc. | 3,977,360 | 49,001 | |
Viper Energy Partners LP | 1,355,624 | 48,748 | |
Marathon Oil Corp. | 2,062,027 | 39,158 | |
* | Parsley Energy Inc. Class A | 1,666,704 | 39,034 |
* | Antero Resources Corp. | 2,448,071 | 38,900 |
EQT Corp. | 1,136,219 | 38,597 | |
* | PDC Energy Inc. | 538,171 | 22,845 |
*,^ Alta Mesa Resources Inc. Class A | 5,064,382 | 15,953 | |
* | Extraction Oil & Gas Inc. | 1,871,947 | 14,957 |
* | Kosmos Energy Ltd. | 2,078,405 | 13,489 |
Murphy Oil Corp. | 101,903 | 3,247 |
* Continental Resources Inc. | 52,766 | 2,780 |
Oil & Gas Refining & Marketing (8.0%) | ||
Marathon Petroleum Corp. | 3,855,774 | 271,639 |
Valero Energy Corp. | 2,812,911 | 256,228 |
Phillips 66 | 1,151,143 | 118,361 |
Delek US Holdings Inc. | 674,701 | 24,775 |
HollyFrontier Corp. | 61,855 | 4,172 |
Oil & Gas Storage & Transportation (2.4%) | ||
Kinder Morgan Inc. | 5,691,361 | 96,867 |
Targa Resources Corp. | 1,418,069 | 73,271 |
Scorpio Tankers Inc. | 14,933,311 | 26,731 |
Williams Cos. Inc. | 95,641 | 2,327 |
ONEOK Inc. | 26,831 | 1,760 |
4,571,975 | ||
Other (0.6%) | ||
^,3 Vanguard Energy ETF | 578,000 | 53,396 |
Semiconductors & Semiconductor Equipment (0.4%) | ||
* First Solar Inc. | 798,120 | 33,361 |
Total United States | 5,376,712 | |
International (32.9%) | ||
Australia (0.1%) | ||
Santos Ltd. | 801,460 | 3,762 |
Woodside Petroleum Ltd. | 46,975 | 1,156 |
4,918 | ||
Austria (0.0%) | ||
OMV AG | 55,090 | 3,059 |
Brazil (1.4%) | ||
Petroleo Brasileiro SA ADR | 6,325,304 | 102,786 |
Petroleo Brasileiro SA | 758,562 | 6,180 |
Petroleo Brasileiro SA Preference Shares | 633,000 | 4,698 |
113,664 | ||
Canada (4.1%) | ||
Suncor Energy Inc. | 4,118,899 | 137,200 |
TransCanada Corp. (New York Shares) | 2,354,414 | 88,808 |
Encana Corp. | 8,288,398 | 84,873 |
Canadian Natural Resources Ltd. (New York Shares) | 493,294 | 13,477 |
Canadian Natural Resources Ltd. | 262,816 | 7,211 |
Suncor Energy Inc. (New York Shares) | 184,681 | 6,195 |
Enbridge Inc. | 182,927 | 5,700 |
TransCanada Corp. | 78,170 | 2,948 |
Husky Energy Inc. | 202,357 | 2,861 |
349,273 | ||
China (1.5%) | ||
CNOOC Ltd. ADR | 577,378 | 97,721 |
CNOOC Ltd. | 3,991,717 | 6,798 |
China Petroleum & Chemical Corp. | 6,603,600 | 5,379 |
PetroChina Co. Ltd. | 6,508,000 | 4,679 |
Kunlun Energy Co. Ltd. | 2,604,000 | 2,963 |
China Longyuan Power Group Corp. Ltd. | 3,503,000 | 2,666 |
Huaneng Renewables Corp. Ltd. | 8,994,000 | 2,315 |
* GCL-Poly Energy Holdings Ltd. | 10,312,000 | 613 |
123,134 | ||
Colombia (0.0%) | ||
Ecopetrol SA ADR | 147,255 | 3,425 |
Finland (0.1%) | ||
Neste Oyj | 51,833 | 4,256 |
France (4.6%) | ||
TOTAL SA ADR | 6,332,542 | 371,087 |
TOTAL SA | 328,423 | 19,271 |
390,358 | ||
Germany (0.3%) | ||
E.ON SE | 2,428,081 | 23,480 |
Greece (0.1%) | ||
Motor Oil Hellas Corinth Refineries SA | 104,147 | 2,467 |
Hellenic Petroleum SA | 182,941 | 1,450 |
3,917 | ||
Hungary (0.0%) | ||
MOL Hungarian Oil & Gas plc | 192,316 | 2,017 |
India (1.7%) | ||
Reliance Industries Ltd. | 6,076,083 | 87,230 |
Power Grid Corp. of India Ltd. | 23,257,433 | 58,461 |
145,691 | ||
Israel (0.0%) | ||
Oil Refineries Ltd. | 5,073,435 | 2,412 |
Paz Oil Co. Ltd. | 1,400 | 209 |
2,621 | ||
Italy (2.7%) | ||
Eni SPA ADR | 4,250,120 | 150,199 |
Tenaris SA ADR | 2,253,900 | 65,882 |
Eni SPA | 515,331 | 9,152 |
225,233 | ||
Japan (0.9%) | ||
Inpex Corp. | 5,459,579 | 62,166 |
JXTG Holdings Inc. | 849,600 | 5,741 |
Idemitsu Kosan Co. Ltd. | 74,000 | 3,352 |
Cosmo Energy Holdings Co. Ltd. | 79,700 | 2,931 |
Showa Shell Sekiyu KK | 27,300 | 521 |
Japan Petroleum Exploration Co. Ltd. | 22,000 | 460 |
75,171 | ||
Norway (0.6%) | ||
Equinor ASA ADR | 1,867,237 | 47,988 |
Equinor ASA | 250,030 | 6,467 |
54,455 |
Poland (0.0%) | ||
Grupa Lotos SA | 149,187 | 2,690 |
Portugal (0.9%) | ||
Galp Energia SGPS SA | 4,281,876 | 74,455 |
Russia (3.5%) | ||
Lukoil PJSC ADR | 2,808,954 | 209,433 |
Rosneft Oil Co. PJSC GDR | 9,322,203 | 65,314 |
Gazprom PJSC | 2,455,004 | 5,784 |
^ Tatneft PJSC ADR | 49,800 | 3,495 |
AK Transneft OAO Preference Shares | 1,291 | 3,351 |
Tatneft PJSC | 155,950 | 1,844 |
Lukoil PJSC | 23,865 | 1,789 |
Gazprom PJSC ADR | 124,150 | 587 |
Novatek PJSC GDR | 1,421 | 240 |
Surgutneftegas PJSC | 561,100 | 226 |
292,063 | ||
South Korea (0.0%) | ||
GS Holdings Corp. | 60,163 | 2,568 |
Spain (0.9%) | ||
* Iberdrola SA | 5,449,150 | 38,558 |
* Repsol SA | 1,895,095 | 33,863 |
72,421 | ||
Sweden (0.8%) | ||
Lundin Petroleum AB | 2,253,370 | 68,557 |
Thailand (0.1%) | ||
* PTT Exploration and Production PCL (Local) | 832,500 | 3,487 |
PTT PCL (Foreign) | 2,200,000 | 3,383 |
IRPC PCL (Foreign) | 14,024,500 | 2,582 |
* PTT PCL | 1,648,400 | 2,535 |
11,987 | ||
Turkey (0.0%) | ||
Tupras Turkiye Petrol Rafinerileri AS | 29,000 | 684 |
United Kingdom (8.6%) | ||
Royal Dutch Shell plc ADR | 6,469,596 | 408,814 |
BP plc ADR | 5,842,517 | 253,390 |
BP plc | 3,321,630 | 23,994 |
Royal Dutch Shell plc Class B | 493,293 | 16,088 |
Royal Dutch Shell plc Class A | 381,491 | 12,117 |
Royal Dutch Shell plc Class A (XLON) | 307,003 | 9,781 |
Petrofac Ltd. | 308,868 | 2,271 |
726,455 | ||
Total International | 2,776,552 | |
Total Common Stocks (Cost $5,420,414) | 8,153,264 |
Coupon | |||||
Temporary Cash Investments (4.3%)1 | |||||
Money Market Fund (1.5%) | |||||
4,5 Vanguard Market Liquidity Fund | 2.308% | 1,265,485 | 126,549 | ||
Face | |||||
Amount | |||||
($000) | |||||
Repurchase Agreements (2.7%) | |||||
RBS Securities, Inc. 2.190%, 11/1/18 (Dated | |||||
10/31/18, Repurchase Value $139,108,000, | |||||
collateralized by U.S. Treasury Note/Bond | |||||
1.500%–1.625%, 5/15/26–8/15/26, with a | |||||
value of $141,882,000) | 139,100 | 139,100 | |||
Societe Generale 2.190%, 11/1/18 (Dated | |||||
10/31/18, Repurchase Value $87,705,000, | |||||
collateralized by Government National | |||||
Mortgage Association 3.000%–4.656%, | |||||
7/20/46–12/20/64, and U.S. Treasury | |||||
Note/Bond 0.000%–3.000%, 11/15/18– | |||||
11/15/45, with a value of $89,454,000) | 87,700 | 87,700 | |||
226,800 | |||||
Maturity | |||||
Date | |||||
U.S. Government and Agency Obligations (0.1%) | |||||
6 | United States Treasury Bill | 2.078% | 11/15/18 | 5,000 | 4,996 |
6 | United States Treasury Bill | 2.194% | 1/24/19 | 1,000 | 995 |
6 | United States Treasury Bill | 2.292%–2.314% | 2/28/19 | 700 | 694 |
6,685 | |||||
Total Temporary Cash Investments (Cost $360,029) | 360,034 | ||||
Total Investments (100.8%) (Cost $5,780,443) | 8,513,298 | ||||
Other Assets and Liabilities-Net (-0.8%)5,6 | (65,810) | ||||
Net Assets (100%) | 8,447,488 |
* Non-income-producing security.
^ Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $38,299,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After
giving effect to futures investments, the fund's effective common stock and temporary cash investment positions
represent 97.7% and 3.1%, respectively, of net assets.
2 Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities
of such company.
3 Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
4 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by
Vanguard. Rate shown is the 7-day yield.
5 Includes $40,078,000 of collateral received for securities on loan.
6 Securities with a value of $4,387,000 and cash of $52,000 have been segregated as initial margin for open
futures contracts.
ADR—American Depositary Receipt.
GDR—Global Depositary Receipt.
Energy Fund
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 2018 | 701 | 95,024 (6,876) |
A. 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 affected by events occurring before the fund's pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund's pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. 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.
B. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund's pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).
C. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objective of maintaining full exposure to the stock market while maintaining liquidity. The fund may purchase or sell futures contracts to achieve a desired level of investment, whether to accommodate portfolio turnover or cash flows from capital share transactions. 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
Energy Fund
representing changes in the market value of each contract. Any assets pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Schedule of Investments. Fluctuations in the value of the contracts are recorded as an asset (liability).
D. Repurchase Agreements: The fund enters into repurchase agreements with institutional counterparties. Securities pledged as collateral to the fund under repurchase agreements are held by a custodian bank until the agreements mature, and in the absence of a default, such collateral cannot be repledged, resold, or rehypothecated. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. The fund further mitigates its counterparty risk by entering into repurchase agreements only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master repurchase agreements with its counterparties. The master repurchase agreements provide that, in the event of a counterparty's default (including bankruptcy), the fund may terminate any repurchase agreements with that counterparty, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund. Such action may be subject to legal proceedings, which may delay or limit the disposition of collateral.
E. 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 Schedule of Investments.
The following table summarizes the market value of the fund's investments as of October 31, 2018, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | |
Investments | ($000) | ($000) | ($000) |
Common Stocks—United States | 5,376,712 | — | — |
Common Stocks—International | 1,861,443 | 915,109 | — |
Temporary Cash Investments | 126,549 | 233,485 | — |
Futures Contracts—Assets1 | 904 | — | — |
Total | 7,365,608 | 1,148,594 | — |
1 Represents variation margin on the last day of the reporting period. |
Energy Fund
F. Certain of the fund's investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company or the issuer is another member of The Vanguard Group. Transactions during the period in securities of these companies were as follows:
Current Period Transactions | ||||||||
Jan. 31, | Proceeds | Oct. 31, | ||||||
2018 | from | Realized Change in | Capital Gain | 2018 | ||||
Market Purchases Securities | Net Gain Unrealized | Distributions | Market | |||||
Value | at Cost | Sold | (Loss) App.(Dep.) | Income | Received | Value | ||
($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | |
ProPetro Holding Corp. | — | 83,087 | 468 | (1) | 6,121 | — | — | 88,739 |
Vanguard Energy ETF | 58,996 | — | — | — | (5,600) | 1,106 | — | 53,396 |
Vanguard Market | ||||||||
Liquidity Fund | 192,265 | NA1 | NA1 | (38) | 22 | 1,464 | — | 126,549 |
Total | 251,261 | (39) | 543 | 2,570 | — | 268,684 | ||
1 Not applicable—purchases and sales are for temporary cash investment purposes. |
Vanguard Real Estate Index Fund | |||
Schedule of Investments (unaudited) | |||
As of October 31, 2018 | |||
Market | |||
Value | |||
Shares | ($000) | ||
Equity Real Estate Investment Trusts (REITs) (96.6%)1 | |||
Diversified REITs (4.2%) | |||
WP Carey Inc. | 5,261,317 | 347,300 | |
VEREIT Inc. | 43,124,367 | 316,102 | |
Liberty Property Trust | 7,253,804 | 303,717 | |
Forest City Realty Trust Inc. Class A | 11,147,324 | 280,467 | |
STORE Capital Corp. | 8,748,182 | 253,960 | |
Colony Capital Inc. | 23,132,903 | 135,790 | |
PS Business Parks Inc. | 1,005,632 | 131,336 | |
Empire State Realty Trust Inc. | 6,861,309 | 108,820 | |
Washington REIT | 3,859,649 | 107,568 | |
Lexington Realty Trust | 10,601,034 | 82,370 | |
Global Net Lease Inc. | 3,305,014 | 66,926 | |
Alexander & Baldwin Inc. | 3,355,004 | 65,557 | |
American Assets Trust Inc. | 1,621,808 | 62,213 | |
^ | iStar Inc. | 3,332,691 | 34,993 |
Armada Hoffler Properties Inc. | 2,220,374 | 33,261 | |
Gladstone Commercial Corp. | 1,393,913 | 26,470 | |
One Liberty Properties Inc. | 704,753 | 18,274 | |
§,2 Winthrop Realty Trust | 1,892,511 | 2,061 | |
2,377,185 | |||
Health Care REITs (8.3%) | |||
Welltower Inc. | 18,257,726 | 1,206,288 | |
Ventas Inc. | 17,488,625 | 1,015,040 | |
HCP Inc. | 23,058,617 | 635,265 | |
Medical Properties Trust Inc. | 17,902,207 | 266,027 | |
Healthcare Trust of America Inc. Class A | 10,070,909 | 264,462 | |
^ | Omega Healthcare Investors Inc. | 7,557,725 | 252,050 |
Sabra Health Care REIT Inc. | 8,750,592 | 189,450 | |
Senior Housing Properties Trust | 11,663,399 | 187,431 | |
Healthcare Realty Trust Inc. | 6,144,972 | 171,199 | |
National Health Investors Inc. | 2,038,444 | 149,744 | |
Physicians Realty Trust | 8,933,152 | 148,111 | |
LTC Properties Inc. | 1,945,054 | 83,190 | |
CareTrust REIT Inc. | 3,736,994 | 65,995 | |
Universal Health Realty Income Trust | 640,442 | 41,052 | |
New Senior Investment Group Inc. | 4,030,535 | 23,055 | |
MedEquities Realty Trust Inc. | 1,407,704 | 11,642 | |
4,710,001 | |||
Hotel & Resort REITs (4.9%) | |||
Host Hotels & Resorts Inc. | 36,386,532 | 695,347 | |
Park Hotels & Resorts Inc. | 9,871,927 | 286,977 | |
Hospitality Properties Trust | 8,066,657 | 206,668 | |
LaSalle Hotel Properties | 5,417,813 | 178,842 | |
Ryman Hospitality Properties Inc. | 2,265,274 | 175,763 | |
Apple Hospitality REIT Inc. | 10,740,345 | 173,671 | |
RLJ Lodging Trust | 8,599,411 | 167,172 | |
Sunstone Hotel Investors Inc. | 11,073,693 | 160,236 | |
^ | Pebblebrook Hotel Trust | 3,388,688 | 114,233 |
Xenia Hotels & Resorts Inc. | 5,243,920 | 107,763 | |
DiamondRock Hospitality Co. | 9,844,149 | 102,871 | |
MGM Growth Properties LLC Class A | 3,480,229 | 98,456 | |
Chesapeake Lodging Trust | 2,963,672 | 87,102 | |
Summit Hotel Properties Inc. | 5,139,047 | 59,202 | |
Chatham Lodging Trust | 2,251,456 | 43,903 | |
CorePoint Lodging Inc. | 2,017,704 | 33,030 | |
Hersha Hospitality Trust Class A | 1,833,894 | 32,203 | |
Ashford Hospitality Trust Inc. | 4,599,193 | 23,686 | |
Braemar Hotels & Resorts Inc. | 1,435,970 | 15,279 | |
2,762,404 | |||
Industrial REITs (5.7%) | |||
Prologis Inc. | 30,863,856 | 1,989,793 | |
Duke Realty Corp. | 17,523,832 | 483,132 | |
First Industrial Realty Trust Inc. | 6,152,929 | 188,895 | |
EastGroup Properties Inc. | 1,715,125 | 164,292 | |
STAG Industrial Inc. | 4,772,369 | 126,277 | |
Rexford Industrial Realty Inc. | 3,979,434 | 126,029 | |
Terreno Realty Corp. | 2,747,812 | 102,850 | |
Monmouth Real Estate Investment Corp. | 4,173,387 | 62,434 | |
3,243,702 | |||
Office REITs (9.1%) | |||
Boston Properties Inc. | 7,576,564 | 914,946 | |
Alexandria Real Estate Equities Inc. | 5,054,625 | 617,827 | |
Vornado Realty Trust | 8,400,491 | 571,905 | |
2 | SL Green Realty Corp. | 4,340,012 | 396,069 |
Kilroy Realty Corp. | 4,851,345 | 334,161 | |
Douglas Emmett Inc. | 7,922,949 | 286,732 | |
Hudson Pacific Properties Inc. | 7,690,239 | 233,014 | |
Highwoods Properties Inc. | 5,076,238 | 216,451 | |
JBG SMITH Properties | 5,499,975 | 206,139 | |
Equity Commonwealth | 5,960,856 | 177,514 | |
Cousins Properties Inc. | 20,626,465 | 171,406 | |
Paramount Group Inc. | 10,623,930 | 151,816 | |
Columbia Property Trust Inc. | 5,821,255 | 130,687 | |
Corporate Office Properties Trust | 5,013,423 | 129,547 | |
Brandywine Realty Trust | 8,762,608 | 123,202 | |
Piedmont Office Realty Trust Inc. Class A | 6,290,604 | 113,357 | |
Mack-Cali Realty Corp. | 4,424,129 | 89,810 | |
Select Income REIT | 4,392,378 | 83,060 | |
Easterly Government Properties Inc. | 2,830,818 | 51,436 | |
Tier REIT Inc. | 2,351,955 | 50,967 | |
^ | Government Properties Income Trust | 4,866,452 | 42,971 |
Franklin Street Properties Corp. | 5,263,114 | 36,631 | |
NorthStar Realty Europe Corp. | 2,305,337 | 30,938 | |
City Office REIT Inc. | 1,685,222 | 18,571 | |
^ | New York REIT Inc. | 825,330 | 11,637 |
5,190,794 | |||
Other (11.0%)3 | |||
4,5 Vanguard Real Estate II Index Fund Institutional Plus Shares | 330,262,780 | 6,236,964 | |
Residential REITs (12.0%) | |||
AvalonBay Communities Inc. | 6,783,592 | 1,189,706 | |
Equity Residential | 18,072,822 | 1,174,011 | |
Essex Property Trust Inc. | 3,241,709 | 812,956 | |
Mid-America Apartment Communities Inc. | 5,585,134 | 545,723 | |
UDR Inc. | 13,134,446 | 514,739 |
Camden Property Trust | 4,553,592 | 411,053 |
Sun Communities Inc. | 3,930,760 | 394,923 |
Equity LifeStyle Properties Inc. | 4,137,797 | 391,808 |
Invitation Homes Inc. | 15,325,745 | 335,327 |
Apartment Investment & Management Co. | 7,723,127 | 332,403 |
American Homes 4 Rent Class A | 13,040,998 | 274,774 |
American Campus Communities Inc. | 6,708,780 | 265,064 |
Independence Realty Trust Inc. | 4,268,819 | 42,304 |
Preferred Apartment Communities Inc. Class A | 1,925,019 | 32,437 |
Investors Real Estate Trust | 5,896,550 | 32,018 |
NexPoint Residential Trust Inc. | 866,052 | 30,866 |
Front Yard Residential Corp. | 2,494,101 | 23,120 |
UMH Properties Inc. | 1,612,740 | 23,111 |
6,826,343 | ||
Retail REITs (13.5%) | ||
Simon Property Group Inc. | 15,200,292 | 2,789,558 |
Realty Income Corp. | 13,958,367 | 841,271 |
Regency Centers Corp. | 7,063,510 | 447,544 |
Federal Realty Investment Trust | 3,333,878 | 413,568 |
^ National Retail Properties Inc. | 7,551,265 | 353,022 |
Kimco Realty Corp. | 20,244,945 | 325,741 |
Macerich Co. | 5,190,130 | 267,914 |
Brixmor Property Group Inc. | 14,443,424 | 233,983 |
2 Brookfield Property REIT Inc. Class A | 11,688,929 | 225,479 |
Weingarten Realty Investors | 5,975,408 | 168,028 |
Taubman Centers Inc. | 2,993,614 | 164,679 |
Spirit Realty Capital Inc. | 21,034,245 | 164,488 |
2 Retail Properties of America Inc. | 10,773,061 | 132,185 |
Urban Edge Properties | 5,592,117 | 114,582 |
Acadia Realty Trust | 4,004,588 | 111,488 |
^ Tanger Factory Outlet Centers Inc. | 4,632,540 | 103,120 |
* SITE Centers Corp. | 7,700,461 | 95,717 |
Retail Opportunity Investments Corp. | 5,002,569 | 87,995 |
Agree Realty Corp. | 1,523,209 | 87,234 |
Kite Realty Group Trust | 4,106,980 | 65,055 |
^ Seritage Growth Properties Class A | 1,644,139 | 62,510 |
Washington Prime Group Inc. | 9,128,926 | 58,425 |
Ramco-Gershenson Properties Trust | 3,928,078 | 52,165 |
Getty Realty Corp. | 1,660,065 | 44,540 |
Alexander's Inc. | 112,820 | 35,539 |
Saul Centers Inc. | 650,870 | 31,086 |
^ Pennsylvania REIT | 3,453,163 | 30,906 |
Urstadt Biddle Properties Inc. Class A | 1,479,647 | 29,460 |
^ CBL & Associates Properties Inc. | 8,474,705 | 27,967 |
Whitestone REIT | 1,757,870 | 23,661 |
2 Spirit MTA REIT | 2,202,355 | 23,587 |
* Retail Value Inc. | 724,774 | 20,301 |
Cedar Realty Trust Inc. | 4,500,988 | 16,969 |
Urstadt Biddle Properties Inc. | 45,756 | 781 |
7,650,548 | ||
Specialized REITs (27.9%) | ||
American Tower Corp. | 21,677,670 | 3,377,598 |
Crown Castle International Corp. | 20,360,431 | 2,213,993 |
Public Storage | 7,696,429 | 1,581,385 |
Equinix Inc. | 3,899,963 | 1,477,072 |
Digital Realty Trust Inc. | 10,108,680 | 1,043,822 |
Weyerhaeuser Co. | 37,156,057 | 989,466 |
* | SBA Communications Corp. Class A | 5,653,616 | 916,847 |
Extra Space Storage Inc. | 6,189,725 | 557,447 | |
Iron Mountain Inc. | 13,332,095 | 408,095 | |
Gaming and Leisure Properties Inc. | 9,955,179 | 335,390 | |
Lamar Advertising Co. Class A | 4,130,185 | 302,825 | |
VICI Properties Inc. | 13,625,128 | 294,166 | |
CubeSmart | 8,946,757 | 259,277 | |
CyrusOne Inc. | 4,864,786 | 258,953 | |
EPR Properties | 3,647,843 | 250,753 | |
Life Storage Inc. | 2,283,171 | 214,983 | |
Rayonier Inc. | 6,350,875 | 191,796 | |
CoreSite Realty Corp. | 1,691,103 | 158,727 | |
Uniti Group Inc. | 8,192,765 | 156,810 | |
GEO Group Inc. | 6,038,349 | 133,508 | |
CoreCivic Inc. | 5,818,486 | 130,683 | |
Outfront Media Inc. | 6,831,534 | 121,055 | |
PotlatchDeltic Corp. | 2,926,123 | 106,072 | |
QTS Realty Trust Inc. Class A | 2,504,279 | 95,964 | |
Four Corners Property Trust Inc. | 2,896,351 | 75,537 | |
National Storage Affiliates Trust | 2,769,641 | 73,756 | |
InfraREIT Inc. | 2,157,698 | 45,355 | |
Hannon Armstrong Sustainable Infrastructure Capital Inc. | 1,298,621 | 26,946 | |
CatchMark Timber Trust Inc. Class A | 2,411,783 | 21,344 | |
^ | Farmland Partners Inc. | 1,531,048 | 10,488 |
15,830,113 | |||
Total Equity Real Estate Investment Trusts (REITs) (Cost $51,153,299) | 54,828,054 | ||
Real Estate Management & Development (3.0%) | |||
Diversified Real Estate Activities (0.2%) | |||
* | St. Joe Co. | 1,902,054 | 28,892 |
RMR Group Inc. Class A | 297,542 | 22,577 | |
^,* Five Point Holdings LLC Class A | 2,926,785 | 22,244 | |
* | Tejon Ranch Co. | 1,083,030 | 20,578 |
94,291 | |||
Real Estate Development (0.4%) | |||
* | Howard Hughes Corp. | 2,005,937 | 223,702 |
* | Forestar Group Inc. | 515,306 | 9,275 |
232,977 | |||
Real Estate Operating Companies (0.2%) | |||
Kennedy-Wilson Holdings Inc. | 6,421,435 | 121,879 | |
* | FRP Holdings Inc. | 344,066 | 16,677 |
138,556 | |||
Real Estate Services (2.2%) | |||
* | CBRE Group Inc. Class A | 15,841,712 | 638,263 |
Jones Lang LaSalle Inc. | 2,232,839 | 295,315 | |
^ | Realogy Holdings Corp. | 6,258,825 | 119,356 |
HFF Inc. Class A | 1,823,723 | 67,022 | |
^,* Redfin Corp. | 2,238,836 | 34,590 | |
* | Marcus & Millichap Inc. | 946,097 | 32,848 |
RE/MAX Holdings Inc. Class A | 871,100 | 32,570 | |
^,* Altisource Portfolio Solutions SA | 549,450 | 13,863 | |
1,233,827 | |||
Total Real Estate Management & Development (Cost $2,051,869) | 1,699,651 | ||
Total Common Stock (Cost $53,205,168) | 56,527,705 |
Coupon | ||||
Temporary Cash Investments (0.6%)1 | ||||
Money Market Fund (0.6%) | ||||
6,7 Vanguard Market Liquidity Fund | 2.308% | 3,478,276 | 347,828 | |
Face | ||||
Maturity | Amount | |||
Date | ($000) | |||
U.S. Government and Agency Obligations (0.0%) | ||||
United States Treasury Bill | 2.284% | 2/21/19 | 3,000 | 2,978 |
Total Temporary Cash Investments (Cost $350,800) | 350,806 | |||
Total Investments (100.2%) (Cost $53,555,968) | 56,878,511 | |||
Other Assets and Liabilities-Net (-0.2%)7 | (134,103) | |||
Net Assets (100%) | 56,744,408 |
^ Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $193,502,000.
§ Security value determined using significant unobservable inputs.
* Non-income-producing security.
1 The fund invests a portion of its assets in Real Estate Investment Trusts through the use of index futures and swap contracts. After giving effect to futures and swap investments, the fund's effective Real Estate Investment Trust and temporary cash investment positions represent 100.0% and 0.2%, respectively, of net assets.
2 Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company.
3 “Other” represents securities that are not classified by the fund’s benchmark index.
4 Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
5 Represents a wholly owned subsidiary of the fund. See Appendix for Vanguard Real Estate II Index Fund Schedule of Investments.
6 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
7 Includes $203,091,000 of collateral received for securities on loan.
REIT—Real Estate Investment Trust.
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 2018 | 90 | 12,200 | — | |
Total Return Swaps | |||||
Floating | Value and | ||||
Interest | Unrealized | ||||
Notional | Rate | Appreciation | |||
Termination | Amount | Received | (Depreciation) | ||
Reference Entity | Date | Counterparty | ($000) | (Paid)1 | ($000) |
Omega Healthcare Investors Inc. | 2/4/19 | GSCM | 71,022 | (2.281%) | 3,433 |
VEREIT Inc. | 2/4/19 | GSCM | 31,900 | (2.281%) | 340 |
Real Estate Index Fund | |||||
Federal Realty Investment Trust | 12/3/18 | GSCM | 31,000 | (2.289%) | 1,226 |
Regency Centers Corp. | 2/4/19 | GSCM | 26,468 | (2.282%) | 123 |
Retail Opportunity Investments Corp. | 12/3/18 | GSCM | 9,397 | (2.289%) | (83) |
Kimco Realty Corp. | 12/3/18 | GSCM | 9,144 | (2.289%) | 663 |
Brixmor Property Group Inc. | 12/3/18 | GSCM | 6,439 | (2.289%) | 360 |
6,062 | |||||
GSCM—Goldman Sachs Capital Management. | |||||
1 Payment received/paid quarterly. |
At October 31, 2018, the counterparty had deposited in a segregated account cash of $8,380,000 in connection with open swap contracts.
A. 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.
B. 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 Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Schedule of Investments. Fluctuations in the value of the contracts are recorded as an asset (liability).
C. 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 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
Real Estate Index Fund
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 Schedule of Investments. Swaps are valued daily based on market quotations received from independent pricing services or recognized dealers and the change in value is recorded 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 Schedule of Investments. 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.
D. 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 Schedule of Investments.
The following table summarizes the market value of the fund's investments as of October 31, 2018, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | |
Investments | ($000) | ($000) | ($000) |
Common Stocks | 56,525,644 | — | 2,061 |
Temporary Cash Investments | 347,828 | 2,978 | — |
Futures Contracts—Assets | 94 | — | — |
Swap Contracts—Assets | — | 6,145 | — |
Swap Contracts—Liabilities | — | (83) | — |
Total | 56,873,566 | 9,040 | 2,061 |
Real Estate Index Fund
E. Certain of the fund's investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company or the issuer is another member of The Vanguard Group. Transactions during the period in securities of these companies were as follows:
Current Period Transactions | ||||||||
Capital | ||||||||
January 31, | Proceeds | Gain | October | |||||
2018 | from | Realized | Change in | Distribut- | 31, 2018 | |||
Market | Purchases | Securities | Net Gain | Unrealized | ions | Market | ||
Value | at Cost | Sold1 | (Loss) | App.(Dep.) | Income | Received | Value | |
($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | ($000) | |
Acadia Realty Trust | NA3 | |||||||
135,395 | 12,676 | 50,287 | (12,847) | 26,552 | 2,524 | 1,053 | ||
Agree Realty Corp. | — | NA3 | ||||||
90,915 | 10,360 | 28,556 | 4,371 | 10,065 | 2,111 | |||
Alexander & Baldwin | ||||||||
Inc. | 120,082 | 15,099 | 41,771 | (5,628) | (22,224) | — | — | NA3 |
Alexandria Real | ||||||||
Estate Equities Inc. | 800,695 | 100,033 | 241,729 | 42,329 | (84,470) | 6,645 | 4,046 | NA3 |
Altisource Residential | ||||||||
— | — | — | ||||||
Corp. | 36,772 | 301 | 1,885 | 488 | (35,674) | |||
American Campus | ||||||||
Communities Inc. | 345,867 | 34,350 | 128,862 | (11,666) | 23,811 | 3,499 | 2,274 | NA3 |
Apartment | ||||||||
Investment & | NA3 | |||||||
432,922 | 40,259 | 146,059 | 15,711 | (10,428) | 4,449 | 5,590 | ||
Management Co. | ||||||||
Apple Hospitality | ||||||||
REIT Inc. | 272,226 | 23,746 | 82,100 | (5,678) | (33,734) | 8,625 | 463 | NA3 |
Armada Hoffler | ||||||||
Properties Inc. | 42,716 | 4,060 | 14,729 | 375 | 1,238 | 669 | 44 | NA3 |
Ashford Hospitality | ||||||||
— | ||||||||
Prime Inc. | 15,186 | 448 | 2,974 | (2,566) | 13,439 | 102 | 96 | |
Ashford Hospitality | ||||||||
Trust Inc. | 41,331 | 4,365 | 18,941 | (881) | (10,410) | — | — | NA3 |
AvalonBay | ||||||||
Communities Inc. | 1,550,548 | 148,806 | 527,630 | 11,884 | 6,099 | 24,427 | 7,998 | NA3 |
Boston Properties Inc. | NA3 | |||||||
1,258,471 | 119,991 | 431,688 | 9,975 | (41,801) | 20,236 | 638 | ||
Brandywine Realty | ||||||||
Trust | 207,416 | 17,656 | 62,221 | 3,755 | (43,106) | 2,022 | 2,776 | NA3 |
Brixmor Property | — | NA3 |
Real Estate Index Fund | ||||||||
Group Inc. | 319,202 | 30,784 | 114,268 | (59,169) | 55,732 | 12,260 | ||
Brookfield Property | ||||||||
NA2 | — | |||||||
REIT Inc Class A | 271,730 | 25,914 | (350) | (19,985) | 3,749 | 225,479 | ||
Camden Property | ||||||||
Trust | 528,910 | 51,832 | 184,262 | 20,129 | (5,555) | 5,571 | 5,830 | NA3 |
CareTrust REIT Inc. | — | NA3 | ||||||
79,575 | 8,042 | 27,369 | (2,896) | 8,750 | 2,020 | |||
CBL & Associates | ||||||||
Properties Inc. | 62,714 | 5,438 | 19,975 | (44,088) | 22,736 | 5,288 | — | NA3 |
Cedar Realty Trust | ||||||||
Inc. | 30,746 | 2,606 | 9,229 | (3,946) | (3,100) | 346 | — | NA3 |
Chatham Lodging | ||||||||
Trust | 67,005 | 5,985 | 21,019 | (4,488) | (3,700) | 2,173 | 92 | NA3 |
Chesapeake Lodging | ||||||||
Trust | 108,533 | 11,251 | 40,822 | 2,889 | 4,981 | 3,351 | 79 | NA3 |
Colony NorthStar Inc. | ||||||||
— | ||||||||
Class A | 309,780 | 9,124 | 68,813 | (215,722) | (34,369) | 2,494 | 886 | |
Columbia Property | ||||||||
Trust Inc. | 174,942 | 15,582 | 64,754 | (5,678) | 11,175 | 855 | — | NA3 |
CoreCivic Inc. | — | NA3 | ||||||
180,820 | 17,865 | 61,217 | (30,719) | 22,770 | 7,760 | |||
Corporate Office | ||||||||
Properties Trust | 179,024 | 19,913 | 62,105 | (9,592) | 2,518 | 2,574 | 919 | NA3 |
Cousins Properties | ||||||||
Inc. | 249,205 | 24,290 | 86,588 | (578) | (13,806) | 2,912 | 333 | NA3 |
CubeSmart | NA3 | |||||||
327,031 | 33,734 | 118,367 | 17,646 | (1,693) | 8,113 | 213 | ||
CyrusOne Inc. | — | NA3 | ||||||
329,980 | 73,891 | 123,359 | 22,660 | (44,677) | 321 | |||
DCT Industrial Trust | ||||||||
— | ||||||||
Inc. | 363,151 | 25,669 | 110,700 | 28,120 | (306,109) | 3,231 | 310 | |
DDR Corp. | — | — | ||||||
167,216 | 13,741 | 61,987 | (46,820) | (80,691) | 30,239 | |||
DiamondRock | ||||||||
Hospitality Co. | 155,274 | 14,531 | 52,593 | (2,337) | (12,135) | 3,975 | — | NA3 |
Digital Realty Trust | ||||||||
Inc. | 1,513,956 | 146,505 | 505,066 | 107,801 | (219,372) | 33,092 | 772 | NA3 |
Douglas Emmett Inc. | NA3 | |||||||
394,265 | 39,432 | 130,001 | 20,392 | (38,780) | 1,496 | 21 | ||
Duke Realty Corp. | NA3 |
Real Estate Index Fund | ||||||||
619,410 | 61,900 | 220,433 | 39,978 | (17,722) | 4,080 | 7,967 | ||
Easterly Government | ||||||||
Properties Inc. | 53,553 | 19,229 | 15,544 | 780 | (7,132) | 1,361 | — | NA3 |
EastGroup Properties | ||||||||
Inc. | 196,347 | 20,796 | 68,149 | 16,533 | (1,234) | 3,501 | 182 | NA3 |
Education Realty | ||||||||
— | ||||||||
Trust Inc. | 159,394 | 15,677 | 210,314 | 23,868 | 9,918 | 940 | 1 | |
EPR Properties | NA3 | |||||||
286,885 | 30,733 | 102,358 | (3,441) | 39,192 | 10,897 | 709 | ||
Equinix Inc. | — | NA3 | ||||||
2,339,501 | 212,329 | 717,777 | 107,682 | (464,662) | 29,882 | |||
Equity | ||||||||
Commonwealth | 244,644 | 22,921 | 90,276 | 7,736 | (7,510) | 15,122 | — | NA3 |
Equity LifeStyle | ||||||||
Properties Inc. | 470,384 | 48,659 | 163,427 | 49,060 | (12,540) | 6,292 | 742 | NA3 |
Equity Residential | NA3 | |||||||
1,492,184 | 144,628 | 517,086 | (49,417) | 103,702 | 17,070 | 14,936 | ||
Essex Property Trust | ||||||||
Inc. | 1,013,827 | 99,550 | 359,293 | 50,799 | 8,074 | 17,653 | 1,962 | NA3 |
Extra Space Storage | ||||||||
Inc. | 693,324 | 72,284 | 259,522 | 60,271 | (8,909) | 16,459 | 619 | NA3 |
Federal Realty | ||||||||
Investment Trust | 544,060 | 55,979 | 192,118 | (8,778) | 14,426 | 11,082 | 37 | NA3 |
First Industrial Realty | ||||||||
Trust Inc. | 243,894 | 32,693 | 85,249 | 20,008 | (22,406) | 3,458 | 727 | NA3 |
Forest City Realty | ||||||||
Trust Inc. Class A | 330,139 | 32,739 | 94,943 | 5,196 | 7,336 | 2,568 | 1,884 | NA3 |
Four Corners | ||||||||
Property Trust Inc. | 95,230 | 10,249 | 37,252 | 5,113 | 1,825 | 2,535 | — | NA3 |
Franklin Street | ||||||||
Properties Corp. | 68,033 | 5,510 | 20,442 | (6,816) | (12,028) | 803 | 58 | NA3 |
Front Yard | ||||||||
NA2 | — | NA3 | ||||||
Residential Corp. | 3,559 | 10,597 | (2,559) | 32,718 | 1,215 | |||
Gaming and Leisure | ||||||||
Properties Inc. | 428,876 | 98,783 | 160,099 | (2,134) | (30,343) | 17,493 | 267 | NA3 |
Getty Realty Corp. | NA3 | |||||||
58,003 | 6,255 | 20,147 | 2,018 | (1,565) | 1,424 | 294 | ||
Gladstone | ||||||||
Commercial Corp. | 34,680 | 3,111 | 12,229 | (855) | 362 | 1,710 | — | NA3 |
Global Net Lease Inc. | — | NA3 |
Real Estate Index Fund | ||||||||
81,413 | 10,410 | 32,190 | (7,399) | 13,431 | 5,902 | |||
Government | ||||||||
Properties Income | NA3 | |||||||
108,827 | 9,033 | 33,403 | (11,028) | (31,756) | 3,584 | 320 | ||
Trust | ||||||||
Gramercy Property | ||||||||
— | — | |||||||
Trust | 252,621 | 16,442 | 286,956 | 31,445 | (16,594) | 6,443 | ||
HCP Inc. | NA3 | |||||||
744,106 | 73,733 | 256,843 | (123,190) | 205,903 | 20,861 | 137 | ||
Healthcare Realty | ||||||||
Trust Inc. | 243,780 | 22,479 | 81,168 | (2,556) | (12,890) | 3,147 | 1,491 | NA3 |
Healthcare Trust of | ||||||||
America Inc. Class A | 365,173 | 34,052 | 117,993 | (7,618) | (9,665) | 7,103 | 235 | NA3 |
Hersha Hospitality | ||||||||
Trust Class A | 51,171 | 4,595 | 23,547 | (1,034) | 417 | 1,523 | — | NA3 |
Highwoods | ||||||||
Properties Inc. | 326,002 | 31,621 | 109,612 | 3,957 | (35,404) | 6,263 | 1,664 | NA3 |
Hospitality Properties | ||||||||
Trust | 308,288 | 27,557 | 102,522 | (7,228) | (19,349) | 12,675 | 42 | NA3 |
Host Hotels & | ||||||||
Resorts Inc. | 1,012,323 | 103,526 | 349,051 | 13,197 | (84,647) | 16,187 | 7,409 | NA3 |
Hudson Pacific | ||||||||
Properties Inc. | 327,281 | 32,166 | 116,736 | 10,635 | (16,850) | 169 | 601 | NA3 |
Independence Realty | ||||||||
Trust Inc. | 49,505 | 5,983 | 16,488 | 451 | 2,529 | 1,999 | 426 | NA3 |
Investors Real Estate | ||||||||
Trust | 45,038 | 3,951 | 15,503 | (5,958) | 3,892 | 222 | 911 | NA3 |
Iron Mountain Inc. | — | NA3 | ||||||
611,738 | 59,038 | 195,364 | (14,202) | (48,942) | 21,600 | |||
iStar Inc. | — | NA3 | ||||||
45,217 | 4,600 | 14,461 | (1,833) | 1,471 | 307 | |||
JBG SMITH Properties | — | NA3 | ||||||
210,407 | 46,006 | 69,138 | 1,101 | 17,764 | 2,438 | |||
Kilroy Realty Corp. | NA3 | |||||||
462,201 | 46,599 | 164,007 | 18,390 | (30,664) | 4,934 | 1,932 | ||
Kimco Realty Corp. | NA3 | |||||||
436,518 | 42,423 | 159,734 | (82,538) | 82,531 | 7,375 | 8,141 | ||
Kite Realty Group | ||||||||
Trust | 95,092 | 3,457 | 28,618 | (15,776) | 10,199 | 3,120 | 429 | NA3 |
LaSalle Hotel | ||||||||
Properties | 227,890 | 21,107 | 83,523 | (4,345) | 17,714 | 3,557 | 734 | NA3 |
Real Estate Index Fund | ||||||||
Lexington Realty | ||||||||
Trust | 128,736 | 10,785 | 44,066 | (8,403) | (6,158) | 4,496 | — | NA3 |
Liberty Property Trust | NA3 | |||||||
402,322 | 40,114 | 141,513 | 11,935 | (8,700) | 6,995 | 1,994 | ||
Life Storage Inc. | — | NA3 | ||||||
255,145 | 26,705 | 95,855 | 2,094 | 26,079 | 6,846 | |||
LTC Properties Inc. | NA3 | |||||||
106,910 | 10,153 | 36,922 | (408) | 3,294 | 2,686 | 220 | ||
Macerich Co. | NA3 | |||||||
511,617 | 40,669 | 196,734 | (25,836) | (61,801) | 5,934 | 8,560 | ||
Mack-Cali Realty | ||||||||
Corp. | 112,923 | 10,914 | 32,554 | (16,740) | 16,204 | 1,784 | 90 | NA3 |
Medical Properties | ||||||||
Trust Inc. | 313,870 | 32,411 | 116,740 | (1,442) | 36,169 | 11,226 | 675 | NA3 |
MGM Growth | ||||||||
Properties LLC Class | — | NA3 | ||||||
127,934 | 12,728 | 44,015 | 1,164 | (184) | 4,465 | |||
A | ||||||||
Mid-America | ||||||||
Apartment | NA3 | |||||||
713,570 | 68,783 | 242,308 | 30,541 | (24,862) | 15,523 | 1,126 | ||
Communities Inc. | ||||||||
Monmouth Real | ||||||||
Estate Investment | NA3 | |||||||
75,450 | 15,840 | 19,965 | 3,708 | (12,559) | 1,059 | 35 | ||
Corp. | ||||||||
National Health | ||||||||
Investors Inc. | 190,628 | 18,563 | 65,893 | 4,841 | 497 | 4,688 | 1,498 | NA3 |
National Retail | ||||||||
Properties Inc. | 390,140 | 39,734 | 131,810 | 6,167 | 48,739 | 9,722 | 142 | NA3 |
National Storage | ||||||||
Affiliates Trust | 82,472 | 17,053 | 28,859 | 2,552 | 79 | 2,235 | — | NA3 |
New Senior | ||||||||
Investment Group | — | NA3 | ||||||
41,482 | 3,761 | 19,210 | (11,135) | 6,144 | 64 | |||
Inc. | ||||||||
New York REIT Inc. | — | NA3 | ||||||
22,353 | 2,341 | 7,894 | 8,621 | (13,784) | 7,221 | |||
NexPoint Residential | ||||||||
Trust Inc. | 31,311 | 3,117 | 11,891 | 1,092 | 7,019 | 416 | 109 | NA3 |
NorthStar Realty | ||||||||
Europe Corp. | 41,298 | 3,908 | 20,777 | 2,736 | 2,815 | 388 | — | NA3 |
Omega Healthcare | ||||||||
Investors Inc. | 351,475 | 37,209 | 207,679 | (14,240) | 77,119 | 18,928 | — | NA3 |
Real Estate Index Fund | ||||||||
Paramount Group | ||||||||
Inc. | 200,818 | 19,556 | 60,453 | (8,428) | 951 | 1,015 | 100 | NA3 |
Park Hotels & | ||||||||
NA2 | — | NA3 | ||||||
Resorts Inc | 52,564 | 73,566 | 2,541 | (1,565) | 17,405 | |||
Pebblebrook Hotel | ||||||||
Trust | 177,289 | 16,109 | 58,543 | 7,555 | (28,275) | 4,156 | — | NA3 |
Pennsylvania REIT | — | — | NA3 | |||||
51,388 | 4,686 | 19,477 | (12,337) | 6,038 | ||||
Physicians Realty | ||||||||
Trust | 190,800 | 20,527 | 65,158 | (10,396) | 12,957 | 3,053 | — | NA3 |
Piedmont Office | ||||||||
Realty Trust Inc. Class | NA3 | |||||||
187,225 | 15,307 | 76,784 | (2,915) | (9,172) | 2,785 | 1,910 | ||
A | ||||||||
Preferred Apartment | ||||||||
Communities Inc. | — | NA3 | ||||||
35,483 | 21,158 | 22,996 | (7,667) | 6,547 | 834 | |||
Class A | ||||||||
Prologis Inc. | NA3 | |||||||
2,281,569 | 232,752 | 798,690 | 188,933 | 85,229 | 21,784 | 22,284 | ||
Public Storage | NA3 | |||||||
2,019,383 | 211,962 | 738,104 | 56,608 | 31,538 | 51,377 | 13 | ||
QTS Realty Trust Inc. | ||||||||
Class A | 159,765 | 13,749 | 42,737 | (4,754) | (31,422) | 2,628 | — | NA3 |
Quality Care | ||||||||
— | — | — | ||||||
Properties Inc. | 83,525 | 6,457 | 131,173 | 33,609 | 7,582 | |||
Ramco-Gershenson | ||||||||
Properties Trust | 69,142 | 6,833 | 22,579 | (7,908) | 6,866 | 2,450 | 207 | NA3 |
Realogy Holdings | ||||||||
NA2 | — | NA3 | ||||||
Corp. | 171,218 | 16,705 | (1,295) | (38,814) | 1,101 | |||
Realty Income Corp. | NA3 | |||||||
961,952 | 94,867 | 315,265 | (1,548) | 100,151 | 22,939 | 153 | ||
Regency Centers | ||||||||
Corp. | 634,791 | 92,820 | 269,980 | (14,220) | 4,929 | 11,873 | 519 | NA3 |
Retail Opportunity | ||||||||
Investments Corp. | 123,236 | 13,027 | 43,678 | 1,809 | (6,437) | 2,534 | — | NA3 |
Retail Properties of | ||||||||
America Inc. | 183,468 | 17,064 | 70,195 | (13,820) | 16,799 | 4,749 | 85 | 132,185 |
Rexford Industrial | ||||||||
Realty Inc. | 139,212 | 19,675 | 40,161 | 7,680 | (448) | 1,908 | 42 | NA3 |
RLJ Lodging Trust | — | NA3 | ||||||
266,228 | 23,973 | 87,397 | (8,024) | (28,335) | 8,378 |
Real Estate Index Fund | ||||||||
Ryman Hospitality | ||||||||
Properties Inc. | 232,432 | 23,013 | 82,790 | 23,000 | (20,279) | 6,138 | 111 | NA3 |
Sabra Health Care | ||||||||
REIT Inc. | 209,688 | 22,796 | 78,468 | (23,291) | 61,870 | 7,698 | 48 | NA3 |
SBA Communications | ||||||||
NA2 | — | — | NA3 | |||||
Corp. Class A | 1,008,379 | 94,974 | 456 | (12,617) | ||||
Senior Housing | ||||||||
Properties Trust | 271,328 | 25,083 | 90,115 | (18,238) | 3,638 | 9,671 | 523 | NA3 |
Seritage Growth | ||||||||
Properties Class A | 68,238 | 20,871 | 19,242 | 475 | (7,830) | 1,188 | — | NA3 |
Simon Property | ||||||||
Group Inc. | 3,346,756 | 328,887 | 1,177,673 | 72,509 | 219,080 | 101,844 | 2,070 | NA3 |
SL Green Realty Corp. | ||||||||
655,463 | 54,062 | 266,009 | (21,176) | (26,269) | 5,085 | 7,015 | 396,069 | |
Spirit MTA REIT | NA2 | — | ||||||
28,250 | 7,855 | 417 | 3,023 | 495 | 23,587 | |||
Spirit Realty Capital | ||||||||
Inc. | 246,845 | 21,226 | 99,133 | (26,982) | 27,555 | 22,703 | 1,582 | NA3 |
STAG Industrial Inc. | — | NA3 | ||||||
153,983 | 15,356 | 49,322 | 3,460 | 2,786 | 3,507 | |||
STORE Capital Corp. | NA3 | |||||||
276,198 | 33,577 | 96,442 | 3,766 | 36,778 | 8,026 | 598 | ||
Summit Hotel | ||||||||
Properties Inc. | 106,473 | 9,391 | 33,794 | 2,143 | (25,010) | 3,166 | — | NA3 |
Sun Communities Inc. | NA3 | |||||||
462,846 | 59,112 | 184,605 | 45,368 | 8,186 | 3,129 | 1,493 | ||
Sunstone Hotel | ||||||||
Investors Inc. | 250,335 | 23,012 | 82,744 | 6,679 | (37,046) | 1,275 | 525 | NA3 |
Tanger Factory Outlet | ||||||||
Centers Inc. | 157,570 | 13,351 | 50,348 | (19,425) | 1,299 | 4,869 | 46 | NA3 |
Taubman Centers Inc. | NA3 | |||||||
246,647 | 22,341 | 81,190 | (13,030) | (11,572) | 5,377 | 1,037 | ||
Terreno Realty Corp. | NA3 | |||||||
122,901 | 13,720 | 38,694 | 6,645 | (1,561) | 1,511 | 163 | ||
Tier REIT Inc. | — | NA3 | ||||||
61,273 | 6,847 | 22,938 | 4,612 | 1,642 | 936 | |||
UDR Inc. | NA3 | |||||||
644,129 | 61,503 | 221,772 | 23,172 | 7,708 | 9,130 | 4,611 | ||
UMH Properties Inc. | — | NA3 | ||||||
26,624 | 16,346 | 19,617 | (4,307) | 3,653 | 754 |
Real Estate Index Fund | ||||||||
Universal Health | ||||||||
Realty Income Trust | 56,751 | 5,246 | 18,158 | 3,421 | (6,099) | 1,087 | 206 | NA3 |
Urban Edge | ||||||||
Properties | 175,346 | 15,683 | 56,397 | (3,131) | (16,917) | 3,528 | 557 | NA3 |
Vanguard Market | ||||||||
NA4 | NA4 | — | ||||||
Liquidity Fund | 164,286 | 2 | 9 | 1,225 | 347,828 | |||
Vanguard Real Estate | ||||||||
II Index Fund | 6,126,412 | 201,692 | 2,954 | 9,589 | (87,195) | 165,148 | 21,766 | 6,236,964 |
Ventas Inc. | NA3 | |||||||
1,313,443 | 122,367 | 431,622 | (46,597) | 57,449 | 35,480 | 9,473 | ||
VEREIT Inc. | NA3 | |||||||
462,377 | 41,458 | 201,071 | (97,305) | 101,907 | 18,063 | 1,929 | ||
Vornado Realty Trust | NA3 | |||||||
805,092 | 76,351 | 269,859 | (20,116) | (19,561) | 6,972 | 4,427 | ||
Washington Prime | ||||||||
Group Inc. | 80,600 | 8,522 | 29,445 | (32,858) | 32,602 | 5,250 | 1,463 | NA3 |
Washington REIT | NA3 | |||||||
145,371 | 14,170 | 47,707 | (1,694) | (1,882) | 2,833 | 300 | ||
Weingarten Realty | ||||||||
Investors | 237,807 | 21,734 | 79,964 | (14,160) | 2,691 | 5,184 | 2,656 | NA3 |
Welltower Inc. | NA3 | |||||||
1,457,867 | 144,764 | 482,648 | (84,383) | 169,969 | 33,626 | 19,979 | ||
Whitestone REIT | NA3 | |||||||
33,393 | 3,419 | 13,835 | (756) | 1,111 | 727 | 109 | ||
Winthrop Realty Trust | — | — | — | |||||
12,674 | 10,503 | (109) | 946 | 2,061 | ||||
WP Carey Inc. | NA3 | |||||||
456,443 | 44,653 | 160,168 | (2,529) | 8,013 | 15,078 | 318 | ||
Xenia Hotels & | ||||||||
Resorts Inc. | 156,245 | 15,195 | 54,291 | 1,244 | (10,820) | 4,626 | — | NA3 |
Total | 57,342,038 | 6,939,472 | 18,428,020 | (72,540) | (488,056) | 1,272,414 | 212,616 | 7,364,173 |
1 | Does not include adjustments to related return of capital. |
2 | Not Applicable—at January 31, 2018, the issuer was not an affiliated company of the fund. |
3 | Not Applicable—at October 31, 2018, the security was still held, but the issuer was no longer an affiliated company of the fund. |
4 | Not Applicable—purchases and sales are for temporary cash investment purposes. |
Vanguard Dividend Growth Fund
Schedule of Investments (unaudited)
As of October 31, 2018
Market | ||
Value | ||
Shares | ($000) | |
Common Stocks (97.4%) | ||
Consumer Discretionary (12.3%) | ||
McDonald's Corp. | 6,657,925 | 1,177,787 |
TJX Cos. Inc. | 8,234,407 | 904,796 |
NIKE Inc. Class B | 11,929,678 | 895,203 |
Starbucks Corp. | 10,174,716 | 592,881 |
VF Corp. | 5,705,307 | 472,856 |
4,043,523 | ||
Consumer Staples (15.9%) | ||
Coca-Cola Co. | 24,013,410 | 1,149,762 |
PepsiCo Inc. | 9,389,497 | 1,055,192 |
Colgate-Palmolive Co. | 14,763,020 | 879,138 |
Costco Wholesale Corp. | 3,690,628 | 843,788 |
Diageo plc | 22,275,803 | 770,108 |
Procter & Gamble Co. | 6,223,557 | 551,905 |
5,249,893 | ||
Energy (2.8%) | ||
Exxon Mobil Corp. | 6,311,148 | 502,873 |
Schlumberger Ltd. | 8,447,869 | 433,460 |
936,333 | ||
Financials (11.9%) | ||
Chubb Ltd. | 7,401,037 | 924,464 |
American Express Co. | 8,173,783 | 839,693 |
Marsh & McLennan Cos. Inc. | 9,414,367 | 797,868 |
PNC Financial Services Group Inc. | 6,057,291 | 778,301 |
BlackRock Inc. | 1,441,637 | 593,118 |
3,933,444 | ||
Health Care (15.4%) | ||
Johnson & Johnson | 7,383,863 | 1,033,667 |
Medtronic plc | 9,573,383 | 859,881 |
UnitedHealth Group Inc. | 3,082,806 | 805,691 |
Danaher Corp. | 7,998,873 | 795,088 |
Baxter International Inc. | 9,136,324 | 571,112 |
Merck & Co. Inc. | 7,079,062 | 521,090 |
Amgen Inc. | 2,491,713 | 480,377 |
5,066,906 | ||
Industrials (19.3%) | ||
Union Pacific Corp. | 6,035,346 | 882,488 |
Canadian National Railway Co. | 9,707,655 | 829,883 |
General Dynamics Corp. | 4,747,128 | 819,260 |
Lockheed Martin Corp. | 2,492,476 | 732,414 |
Honeywell International Inc. | 4,759,241 | 689,233 |
United Parcel Service Inc. Class B | 6,437,338 | 685,834 |
Northrop Grumman Corp. | 2,423,209 | 634,760 |
United Technologies Corp. | 4,529,874 | 562,656 |
3M Co. | 2,771,398 | 527,286 |
* Resideo Technologies Inc. | 603,806 | 12,710 |
6,376,524 |
Information Technology (9.2%) | ||||
Microsoft Corp. | 9,084,123 | 970,275 | ||
Visa Inc. Class A | 5,952,516 | 820,554 | ||
Accenture plc Class A | 5,132,628 | 809,005 | ||
Automatic Data Processing Inc. | 2,910,674 | 419,370 | ||
3,019,204 | ||||
Materials (4.7%) | ||||
Ecolab Inc. | 5,659,624 | 866,771 | ||
Praxair Inc. | 4,183,894 | 692,309 | ||
1,559,080 | ||||
Real Estate (5.9%) | ||||
American Tower Corp. | 6,921,128 | 1,078,381 | ||
Public Storage | 4,220,214 | 867,127 | ||
1,945,508 | ||||
Total Common Stocks (Cost $21,515,648) | 32,130,415 | |||
Coupon | ||||
Temporary Cash Investments (2.9%) | ||||
Money Market Fund (0.0%) | ||||
1 Vanguard Market Liquidity Fund | 2.308% | 234 | 23 | |
Face | ||||
Maturity | Amount | |||
Date | ($000) | |||
Repurchase Agreements (2.9%) | ||||
Natixis Treas Triparty | ||||
(Dated 10/31/18, Repurchase Value | ||||
$350,021,000, collateralized by Federal | ||||
Home Loan Mortgage Corp. 0.000%- | ||||
3.750%, 3/27/19-12/17/29, Federal Home | ||||
Loan Bank 2.500%-5.625%, 6/12/28-6/1/38, | ||||
Federal National Mortgage Assn. 0.000%, | ||||
1/15/25-1/15/30, and U.S. Treasury | ||||
Note/Bond 0.000%-8.750%, 11/23/18- | ||||
2/15/48 with a value of $357,000,000) | 2.190% | 11/1/18 | 350,000 | 350,000 |
RBS Securities, Inc. | ||||
(Dated 10/31/18, Repurchase Value | ||||
$288,718,000, collateralized by U.S. | ||||
Treasury Note/Bond 0.125%-2.000%, | ||||
1/15/23-2/15/45, with a value of | ||||
$294,474,000) | 2.190% | 11/1/18 | 288,700 | 288,700 |
Societe Generale | ||||
(Dated 10/31/18, Repurchase Value | ||||
$313,419,000, collateralized by Federal | ||||
Home Loan Bank 0.000%, 11/29/18, | ||||
Federal Farm Credit Bank 2.750%, | ||||
10/12/21, Federal Home Loan Mortgage | ||||
Corp. 2.000%-5.963%, 8/28/19-11/1/30, | ||||
Federal National Mortgage Assn. 2.184%- | ||||
2.543%, 6/1/20-11/1/26, Government | ||||
National Mortgage Assn. 2.500%-4.500%, | ||||
3/20/27-10/15/59, and U.S. Treasury | ||||
Note/Bond 2.250%-8.500%, 2/15/20- | ||||
8/31/25, with a value of $319,668,000) | 2.190% | 11/1/18 | 313,400 | 313,400 |
952,100 | ||||
Total Temporary Cash Investments (Cost $952,123) | 952,123 |
Total Investments (100.3%) (Cost $22,467,771) | 33,082,538 |
Other Assets and Liabilities-Net (-0.3%) | (107,433) |
Net Assets (100%) | 32,975,105 |
* Non-income-producing security. | |
1 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by | |
Vanguard. Rate shown is the 7-day yield. |
A. 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 affected by events occurring before the fund's pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund's pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. 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.
B. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund's pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).
C. Repurchase Agreements: The fund enters into repurchase agreements with institutional counterparties. Securities pledged as collateral to the fund under repurchase agreements are held by a custodian bank until the agreements mature, and in the absence of a default, such collateral cannot be repledged, resold, or rehypothecated. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. The fund further mitigates its counterparty risk by entering into repurchase agreements only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master repurchase agreements with its counterparties. The master repurchase agreements provide that, in the event of a counterparty's default (including bankruptcy), the fund may terminate any repurchase agreements with that counterparty, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund. Such action may be subject to legal proceedings, which may delay or limit the disposition of collateral.
D. 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.
Dividend Growth Fund
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 Schedule of Investments.
The following table summarizes the market value of the fund's investments as of October 31, 2018, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | |
Investments | ($000) | ($000) | ($000) |
Common Stocks | 31,360,307 | 770,108 | — |
Temporary Cash Investments | 23 | 952,100 | — |
Total | 31,360,330 | 1,722,208 | — |
Vanguard Dividend Appreciation Index Fund
Schedule of Investments (unaudited)
As of October 31, 2018
Market | ||
Value | ||
Shares | ($000) | |
Common Stocks (99.8%)1 | ||
Basic Materials (4.0%) | ||
Ecolab Inc. | 2,315,943 | 354,687 |
Air Products & Chemicals Inc. | 1,755,361 | 270,940 |
PPG Industries Inc. | 2,003,436 | 210,541 |
Nucor Corp. | 2,549,040 | 150,699 |
International Flavors & Fragrances Inc. | 726,104 | 105,038 |
Albemarle Corp. | 887,053 | 88,013 |
Westlake Chemical Corp. | 1,037,635 | 73,983 |
RPM International Inc. | 1,071,670 | 65,554 |
Royal Gold Inc. | 524,872 | 40,221 |
NewMarket Corp. | 94,417 | 36,441 |
Sensient Technologies Corp. | 346,039 | 22,444 |
Quaker Chemical Corp. | 106,670 | 19,190 |
HB Fuller Co. | 405,321 | 18,021 |
Stepan Co. | 180,553 | 14,912 |
Hawkins Inc. | 85,760 | 2,887 |
1,473,571 | ||
Consumer Goods (10.7%) | ||
PepsiCo Inc. | 11,384,236 | 1,279,360 |
NIKE Inc. Class B | 10,405,848 | 780,855 |
Colgate-Palmolive Co. | 7,017,967 | 417,920 |
VF Corp. | 3,180,521 | 263,602 |
^ Hormel Foods Corp. | 4,246,758 | 185,329 |
Clorox Co. | 1,037,505 | 154,018 |
McCormick & Co. Inc. | 970,907 | 139,811 |
Church & Dwight Co. Inc. | 1,955,828 | 116,118 |
Brown-Forman Corp. Class B | 2,502,236 | 115,954 |
JM Smucker Co. | 910,863 | 98,665 |
Hasbro Inc. | 995,701 | 91,316 |
Bunge Ltd. | 1,128,081 | 69,715 |
Columbia Sportswear Co. | 561,282 | 50,673 |
Polaris Industries Inc. | 505,517 | 44,981 |
Lancaster Colony Corp. | 220,038 | 37,710 |
Nu Skin Enterprises Inc. Class A | 423,062 | 29,707 |
J&J Snack Foods Corp. | 149,757 | 23,386 |
^ Tootsie Roll Industries Inc. | 314,395 | 9,925 |
Andersons Inc. | 226,018 | 8,137 |
3,917,180 | ||
Consumer Services (21.3%) | ||
Walmart Inc. | 16,005,456 | 1,605,027 |
McDonald's Corp. | 6,369,965 | 1,126,847 |
Costco Wholesale Corp. | 3,520,575 | 804,909 |
Walgreens Boots Alliance Inc. | 7,942,788 | 633,596 |
Lowe's Cos. Inc. | 6,652,682 | 633,468 |
CVS Health Corp. | 8,134,116 | 588,829 |
TJX Cos. Inc. | 5,069,544 | 557,041 |
Ross Stores Inc. | 3,063,893 | 303,325 |
Vanguard Dividend Appreciation Index Fund
Sysco Corp. | 4,184,558 | 298,485 |
Kroger Co. | 7,066,408 | 210,296 |
McKesson Corp. | 1,654,353 | 206,397 |
Best Buy Co. Inc. | 2,343,756 | 164,438 |
AmerisourceBergen Corp. Class A | 1,761,232 | 154,988 |
Tiffany & Co. | 996,429 | 110,903 |
Rollins Inc. | 1,749,646 | 103,579 |
FactSet Research Systems Inc. | 311,678 | 69,741 |
Dun & Bradstreet Corp. | 296,640 | 42,206 |
Casey's General Stores Inc. | 301,040 | 37,964 |
Aaron's Inc. | 567,142 | 26,729 |
John Wiley & Sons Inc. Class A | 382,676 | 20,756 |
Monro Inc. | 263,083 | 19,573 |
Matthews International Corp. Class A | 258,754 | 10,769 |
International Speedway Corp. Class A | 196,210 | 7,360 |
7,737,228 | ||
Financials (7.9%) | ||
Chubb Ltd. | 3,720,879 | 464,775 |
S&P Global Inc. | 2,035,662 | 371,142 |
Travelers Cos. Inc. | 2,176,181 | 272,306 |
Aflac Inc. | 6,248,586 | 269,127 |
T. Rowe Price Group Inc. | 1,959,860 | 190,087 |
Ameriprise Financial Inc. | 1,173,235 | 149,282 |
Franklin Resources Inc. | 4,423,359 | 134,912 |
Cincinnati Financial Corp. | 1,314,879 | 103,402 |
Torchmark Corp. | 914,660 | 77,435 |
WR Berkley Corp. | 974,478 | 73,963 |
American Financial Group Inc. | 708,986 | 70,920 |
SEI Investments Co. | 1,261,012 | 67,401 |
Brown & Brown Inc. | 2,209,724 | 62,270 |
Commerce Bancshares Inc. | 855,565 | 54,414 |
Cullen/Frost Bankers Inc. | 510,550 | 49,993 |
Erie Indemnity Co. Class A | 370,279 | 48,021 |
BOK Financial Corp. | 525,563 | 45,057 |
Eaton Vance Corp. | 946,603 | 42,644 |
RenaissanceRe Holdings Ltd. | 320,950 | 39,207 |
Hanover Insurance Group Inc. | 340,783 | 37,956 |
Prosperity Bancshares Inc. | 559,761 | 36,401 |
Bank OZK | 1,027,409 | 28,110 |
Evercore Inc. Class A | 330,577 | 27,005 |
RLI Corp. | 354,551 | 26,212 |
UMB Financial Corp. | 401,242 | 25,619 |
Community Bank System Inc. | 405,942 | 23,703 |
American Equity Investment Life Holding Co. | 720,755 | 22,502 |
BancFirst Corp. | 255,658 | 14,670 |
Westamerica Bancorporation | 212,976 | 12,397 |
1st Source Corp. | 208,169 | 9,699 |
Tompkins Financial Corp. | 122,007 | 8,922 |
Community Trust Bancorp Inc. | 141,744 | 6,451 |
Bank of Marin Bancorp | 55,958 | 4,756 |
2,870,762 |
Vanguard Dividend Appreciation Index Fund
Health Care (12.8%) | ||
Johnson & Johnson | 11,092,173 | 1,552,793 |
Medtronic plc | 10,851,793 | 974,708 |
Abbott Laboratories | 14,001,391 | 965,256 |
Becton Dickinson and Co. | 2,134,624 | 492,031 |
Stryker Corp. | 3,003,729 | 487,265 |
Perrigo Co. plc | 1,129,210 | 79,383 |
West Pharmaceutical Services Inc. | 593,201 | 62,832 |
^ Healthcare Services Group Inc. | 590,510 | 23,969 |
Ensign Group Inc. | 412,507 | 15,279 |
Atrion Corp. | 14,849 | 10,130 |
4,663,646 | ||
Industrials (31.1%) | ||
Union Pacific Corp. | 6,248,101 | 913,597 |
3M Co. | 4,774,472 | 908,391 |
United Technologies Corp. | 6,412,281 | 796,469 |
Accenture plc Class A | 4,944,187 | 779,303 |
Lockheed Martin Corp. | 2,289,585 | 672,795 |
Caterpillar Inc. | 4,791,509 | 581,306 |
Automatic Data Processing Inc. | 3,553,950 | 512,053 |
CSX Corp. | 7,113,429 | 489,831 |
FedEx Corp. | 2,147,816 | 473,250 |
General Dynamics Corp. | 2,380,687 | 410,859 |
Raytheon Co. | 2,313,114 | 404,887 |
Northrop Grumman Corp. | 1,395,759 | 365,619 |
Illinois Tool Works Inc. | 2,738,369 | 349,334 |
Emerson Electric Co. | 5,089,897 | 345,502 |
Waste Management Inc. | 3,477,065 | 311,093 |
Sherwin-Williams Co. | 753,601 | 296,519 |
Roper Technologies Inc. | 824,418 | 233,228 |
Republic Services Inc. Class A | 2,655,593 | 193,008 |
Cummins Inc. | 1,328,378 | 181,576 |
Cintas Corp. | 853,794 | 155,280 |
Stanley Black & Decker Inc. | 1,235,598 | 143,972 |
WW Grainger Inc. | 449,829 | 127,738 |
L3 Technologies Inc. | 627,163 | 118,829 |
Fastenal Co. | 2,306,251 | 118,564 |
Broadridge Financial Solutions Inc. | 935,308 | 109,375 |
Dover Corp. | 1,238,185 | 102,571 |
CH Robinson Worldwide Inc. | 1,120,509 | 99,759 |
JB Hunt Transport Services Inc. | 880,051 | 97,342 |
Expeditors International of Washington Inc. | 1,415,415 | 95,088 |
Jack Henry & Associates Inc. | 619,504 | 92,820 |
Robert Half International Inc. | 996,290 | 60,305 |
Nordson Corp. | 463,510 | 56,859 |
Graco Inc. | 1,358,758 | 55,206 |
Donaldson Co. Inc. | 1,041,602 | 53,413 |
AO Smith Corp. | 1,166,416 | 53,107 |
AptarGroup Inc. | 498,049 | 50,781 |
Toro Co. | 859,291 | 48,404 |
Carlisle Cos. Inc. | 495,483 | 47,859 |
Hubbell Inc. Class B | 439,567 | 44,704 |
Lincoln Electric Holdings Inc. | 526,230 | 42,577 |
Vanguard Dividend Appreciation Index Fund
ITT Inc. | 707,360 | 35,722 |
HEICO Corp. | 423,350 | 35,489 |
Bemis Co. Inc. | 729,527 | 33,390 |
MSA Safety Inc. | 306,395 | 32,000 |
MSC Industrial Direct Co. Inc. Class A | 361,118 | 29,272 |
Regal Beloit Corp. | 355,162 | 25,465 |
Ryder System Inc. | 424,908 | 23,502 |
Silgan Holdings Inc. | 884,638 | 21,258 |
ABM Industries Inc. | 550,394 | 16,925 |
Franklin Electric Co. Inc. | 373,690 | 15,852 |
Brady Corp. Class A | 386,664 | 15,579 |
Badger Meter Inc. | 233,165 | 11,451 |
McGrath RentCorp | 192,808 | 10,294 |
Tennant Co. | 143,499 | 8,771 |
Lindsay Corp. | 85,923 | 8,216 |
Gorman-Rupp Co. | 209,031 | 7,212 |
Cass Information Systems Inc. | 98,529 | 6,513 |
VSE Corp. | 87,036 | 2,729 |
NACCO Industries Inc. Class A | 42,409 | 1,465 |
11,334,278 | ||
Technology (8.7%) | ||
Microsoft Corp. | 15,363,646 | 1,640,991 |
Texas Instruments Inc. | 7,887,611 | 732,207 |
Analog Devices Inc. | 2,964,943 | 248,195 |
Xilinx Inc. | 2,043,011 | 174,412 |
Harris Corp. | 951,922 | 141,560 |
^ Microchip Technology Inc. | 1,878,865 | 123,592 |
Maxim Integrated Products Inc. | 2,254,670 | 112,779 |
3,173,736 | ||
Telecommunications (0.1%) | ||
Telephone & Data Systems Inc. | 832,592 | 25,669 |
Utilities (3.2%) | ||
NextEra Energy Inc. | 3,774,652 | 651,127 |
CMS Energy Corp. | 2,264,413 | 112,134 |
Atmos Energy Corp. | 889,704 | 82,814 |
UGI Corp. | 1,387,159 | 73,603 |
Vectren Corp. | 665,709 | 47,618 |
Aqua America Inc. | 1,424,707 | 46,346 |
New Jersey Resources Corp. | 702,461 | 31,681 |
Southwest Gas Holdings Inc. | 386,242 | 29,845 |
American States Water Co. | 294,202 | 18,011 |
MGE Energy Inc. | 277,862 | 17,361 |
California Water Service Group | 384,735 | 16,159 |
Chesapeake Utilities Corp. | 130,998 | 10,408 |
SJW Group | 164,992 | 10,020 |
Connecticut Water Service Inc. | 96,927 | 6,700 |
Middlesex Water Co. | 131,111 | 5,900 |
1,159,725 | ||
Total Common Stocks (Cost $28,308,807) | 36,355,795 |
Vanguard Dividend Appreciation Index Fund
Market | |||||
Value | |||||
Coupon | Shares | ($000) | |||
Temporary Cash Investments (0.2%)1 | |||||
Money Market Fund (0.2%) | |||||
2,3 Vanguard Market Liquidity Fund | 2.308% | 714,701 | 71,470 | ||
Face | |||||
Maturity | Amount | ||||
Date | ($000) | ||||
U.S. Government and Agency Obligations (0.0%) | |||||
United States Treasury Bill | 2.078% | 11/15/18 | 1,000 | 999 | |
4 | United States Treasury Bill | 2.078%–2.132% | 1/3/19 | 1,150 | 1,145 |
4 | United States Treasury Bill | 2.280% | 2/7/19 | 1,000 | 994 |
4 | United States Treasury Bill | 2.280% | 2/21/19 | 1,000 | 993 |
4,131 | |||||
Total Temporary Cash Investments (Cost $75,606) | 75,601 | ||||
Total Investments (100.0%) (Cost $28,384,413) | 36,431,396 | ||||
Other Assets and Liabilities-Net (0.0%)3 | 1,617 | ||||
Net Assets (100.0%) | 36,433,013 |
^ Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $39,818,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After
giving effect to futures investments, the fund's effective common stock and temporary cash investment positions
represent 100.0% and 0.0%, 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 $41,125,000 of collateral received for securities on loan.
4 Securities with a value of $3,082,000 have been segregated as initial margin for open futures contracts.
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 2018 | 485 | 65,744 | (3,616) |
Vanguard Dividend Appreciation Index Fund
A. 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.
B. 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 Schedule of Investments.
The following table summarizes the market value of the fund's investments as of October 31, 2018, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | |
Investments | ($000) | ($000) | ($000) |
Common Stocks | 36,355,795 | — | — |
Temporary Cash Investments | 71,470 | 4,131 | — |
Total | 36,427,265 | 4,131 | — |
C. 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 Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Schedule of Investments. Fluctuations in the value of the contracts are recorded as an asset (liability).
Vanguard Dividend Appreciation Index Fund
Item 2: Controls and Procedures
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control Over Financial Reporting. During the last fiscal quarter, there was no significant change in the Registrant’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3: Exhibits
(a) Certifications
VANGUARD SPECIALIZED FUNDS | |
|
|
By: |
/s/ MORTIMER J. BUCKLEY* |
MORTIMER J. BUCKLEY | |
CHIEF EXECUTIVE OFFICER | |
Date: December18, 2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
VANGUARD SPECIALIZED FUNDS | |
|
|
By: |
/s/ MORTIMER J. BUCKLEY* |
MORTIMER J. BUCKLEY | |
CHIEF EXECUTIVE OFFICER | |
Date: | |
|
VANGUARD SPECIALIZED FUNDS |
|
|
By: |
/s/ THOMAS J. HIGGINS* |
THOMAS J. HIGGINS | |
CHIEF FINANCIAL OFFICER | |
Date: December 18, 2018 |
*By: /s/ Anne E. Robinson
Anne E. Robinson, pursuant to a Power of Attorney filed on January 18, 2018 see file Number 33-32216, Incorporated by Reference.