UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT

OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

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: Natalie Lamarque, Esquire
  P.O. Box 876
  Valley Forge, PA 19482

 

Registrant’s telephone number, including area code: (610) 669-1000

 

Date of fiscal year end: January 31

 

Date of reporting period: February 1, 2026—July 31, 2026

 

 

 

 

 

 

Item 1: Reports to Shareholders.

 

 

 

 

 

TABLE OF CONTENTS

 

Vanguard Real Estate Index Fund
Investor Shares - VGSIX

   

Vanguard Real Estate Index Fund
ETF Shares - VNQ

   

Vanguard Real Estate Index Fund
Admiral™ Shares - VGSLX

   

Vanguard Real Estate Index Fund
Institutional Shares - VGSNX

   

Vanguard Global Capital Cycles Fund
Investor Shares - VGPMX

   

Vanguard Global ESG Select Stock Fund
Investor Shares - VEIGX

   

Vanguard Global ESG Select Stock Fund
Admiral™ Shares - VESGX

   

 

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Vanguard Real Estate Index Fund
Investor Shares (VGSIX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Real Estate Index Fund (the "Fund") for the period of February 1, 2026, to July 31, 2026. You can find additional information about the Fund at https://personal1.vanguard.com/ngf‑next‑gen‑form‑webapp/fund‑literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $14 0.27%1
​1
Annualized.
Fund Statistics
(as of July 31, 2026)
Fund Net Assets
(in millions)		 $73,098
Number of Portfolio Holdings 152
Portfolio Turnover Rate 4%
Portfolio Composition % of Net Assets
(as of July 31, 2026)
Data Center REITs 8.6%
Health Care REITs 15.0%
Industrial REITs 10.0%
Multi-Family Residential REITs 5.7%
Other Specialized REITs 5.6%
Real Estate Services 5.0%
Retail REITs 12.6%
Self-Storage REITs 5.0%
Telecom Tower REITs 6.9%
Vanguard Real Estate II Index Fund1 14.5%
Other Assets and Liabilities—Net 11.1%
This table reflects the Fund’s investments, including short-term investments, derivatives and other assets and liabilities.

​1

Vanguard Real Estate II Index Fund ("the Subsidiary") is the wholly owned subsidiary in which the Fund has invested a portion of its assets.

Where can I find additional information about the Fund?
Additional information about the Fund and the Subsidiary, including their prospectuses, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard ® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2026 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
SR123
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Vanguard Real Estate Index Fund
ETF Shares (VNQ) NYSE Arca
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Real Estate Index Fund (the "Fund") for the period of February 1, 2026, to July 31, 2026. You can find additional information about the Fund at https://personal1.vanguard.com/ngf‑next‑gen‑form‑webapp/fund‑literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
ETF Shares $7 0.13%1
​1
Annualized.
Fund Statistics
(as of July 31, 2026)
Fund Net Assets
(in millions)		 $73,098
Number of Portfolio Holdings 152
Portfolio Turnover Rate 4%
Portfolio Composition % of Net Assets
(as of July 31, 2026)
Data Center REITs 8.6%
Health Care REITs 15.0%
Industrial REITs 10.0%
Multi-Family Residential REITs 5.7%
Other Specialized REITs 5.6%
Real Estate Services 5.0%
Retail REITs 12.6%
Self-Storage REITs 5.0%
Telecom Tower REITs 6.9%
Vanguard Real Estate II Index Fund1 14.5%
Other Assets and Liabilities—Net 11.1%
This table reflects the Fund’s investments, including short-term investments, derivatives and other assets and liabilities.
​1
Vanguard Real Estate II Index Fund ("the Subsidiary") is the wholly owned subsidiary in which the Fund has invested a portion of its assets.

Where can I find additional information about the Fund?
Additional information about the Fund and the Subsidiary, including their prospectuses, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard ® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2026 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
SR986
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Vanguard Real Estate Index Fund
Admiral™ Shares (VGSLX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Real Estate Index Fund (the "Fund") for the period of February 1, 2026, to July 31, 2026. You can find additional information about the Fund at https://personal1.vanguard.com/ngf‑next‑gen‑form‑webapp/fund‑literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Admiral Shares $7 0.13%1
​1
Annualized.
Fund Statistics
(as of July 31, 2026)
Fund Net Assets
(in millions)		 $73,098
Number of Portfolio Holdings 152
Portfolio Turnover Rate 4%
Portfolio Composition % of Net Assets
(as of July 31, 2026)
Data Center REITs 8.6%
Health Care REITs 15.0%
Industrial REITs 10.0%
Multi-Family Residential REITs 5.7%
Other Specialized REITs 5.6%
Real Estate Services 5.0%
Retail REITs 12.6%
Self-Storage REITs 5.0%
Telecom Tower REITs 6.9%
Vanguard Real Estate II Index Fund1 14.5%
Other Assets and Liabilities—Net 11.1%
This table reflects the Fund’s investments, including short-term investments, derivatives and other assets and liabilities.
​1
Vanguard Real Estate II Index Fund ("the Subsidiary") is the wholly owned subsidiary in which the Fund has invested a portion of its assets.

Where can I find additional information about the Fund?
Additional information about the Fund and the Subsidiary, including their prospectuses, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard ® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2026 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
SR5123
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Vanguard Real Estate Index Fund
Institutional Shares (VGSNX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Real Estate Index Fund (the "Fund") for the period of February 1, 2026, to July 31, 2026. You can find additional information about the Fund at https://personal1.vanguard.com/ngf‑next‑gen‑form‑webapp/fund‑literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Institutional Shares $6 0.11%1
​1
Annualized.
Fund Statistics
(as of July 31, 2026)
Fund Net Assets
(in millions)		 $73,098
Number of Portfolio Holdings 152
Portfolio Turnover Rate 4%
Portfolio Composition % of Net Assets
(as of July 31, 2026)
Data Center REITs 8.6%
Health Care REITs 15.0%
Industrial REITs 10.0%
Multi-Family Residential REITs 5.7%
Other Specialized REITs 5.6%
Real Estate Services 5.0%
Retail REITs 12.6%
Self-Storage REITs 5.0%
Telecom Tower REITs 6.9%
Vanguard Real Estate II Index Fund1 14.5%
Other Assets and Liabilities—Net 11.1%
This table reflects the Fund’s investments, including short-term investments, derivatives and other assets and liabilities.
​1
Vanguard Real Estate II Index Fund ("the Subsidiary") is the wholly owned subsidiary in which the Fund has invested a portion of its assets.

Where can I find additional information about the Fund?
Additional information about the Fund and the Subsidiary, including their prospectuses, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard ® • vanguard.com
Fund Information • 800-662-7447
Institutional Investor Services • 800-523-1036
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2026 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
SR3123
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Vanguard Global Capital Cycles Fund
Investor Shares (VGPMX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Global Capital Cycles Fund (the "Fund") for the period of February 1, 2026, to July 31, 2026. You can find additional information about the Fund at https://personal1.vanguard.com/ngf‑next‑gen‑form‑webapp/fund‑literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $20 0.40%1
​1
Annualized.
Fund Statistics
(as of July 31, 2026)
Fund Net Assets
(in millions)		 $3,739
Number of Portfolio Holdings 94
Portfolio Turnover Rate 33%
Portfolio Composition % of Net Assets
(as of July 31, 2026)
Africa 4.0%
Asia 17.6%
Europe 40.4%
North America 28.9%
Oceania 2.8%
South America 5.6%
Other Assets and Liabilities—Net 0.7%
This table reflects the Fund’s investments, including short-term investments and other assets and liabilities.

Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard ® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2026 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
SR53
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Vanguard Global ESG Select Stock Fund
Investor Shares (VEIGX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Global ESG Select Stock Fund (the "Fund") for the period of February 1, 2026, to July 31, 2026. You can find additional information about the Fund at https://personal1.vanguard.com/ngf‑next‑gen‑form‑webapp/fund‑literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $27 0.51%1
​1
Annualized.
Fund Statistics
(as of July 31, 2026)
Fund Net Assets
(in millions)		 $1,611
Number of Portfolio Holdings 39
Portfolio Turnover Rate 32%
Portfolio Composition % of Net Assets
(as of July 31, 2026)
Asia 14.5%
Europe 28.5%
North America 56.3%
Other Assets and Liabilities—Net 0.7%
This table reflects the Fund’s investments, including short-term investments and other assets and liabilities.

Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard ® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2026 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
SR2247
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Vanguard Global ESG Select Stock Fund
Admiral™ Shares (VESGX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Global ESG Select Stock Fund (the "Fund") for the period of February 1, 2026, to July 31, 2026. You can find additional information about the Fund at https://personal1.vanguard.com/ngf‑next‑gen‑form‑webapp/fund‑literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last six months?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Admiral Shares $22 0.41%1
​1
Annualized.
Fund Statistics
(as of July 31, 2026)
Fund Net Assets
(in millions)		 $1,611
Number of Portfolio Holdings 39
Portfolio Turnover Rate 32%
Portfolio Composition % of Net Assets
(as of July 31, 2026)
Asia 14.5%
Europe 28.5%
North America 56.3%
Other Assets and Liabilities—Net 0.7%
This table reflects the Fund’s investments, including short-term investments and other assets and liabilities.

Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard ® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2026 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
SR547

 

Item 2: Code of Ethics.

 

Not applicable.

 

Item 3: Audit Committee Financial Expert.

 

Not applicable.

 

Item 4: Principal Accountant Fees and Services.

 

Not applicable.

 

Item 5: Audit Committee of Listed Registrants.

 

Not applicable.

 

Item 6: Investments.

 

Not applicable. The complete schedule of investments is included in the financial statements filed under Item 7 of this Form.

 

 

 

 

Item 7: Financial Statements and Financial Highlights for Open-End Management Investment Companies.

 

 

 

 
Financial Statements
For the six-months ended July 31, 2026
Vanguard Real Estate Index Funds
 
Vanguard Real Estate Index Fund
Vanguard Real Estate II Index Fund
Real Estate Index Fund
Financial Statements (unaudited)
Schedule of Investments
As of July 31, 2026
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at www.sec.gov. 
 
 
 
 
 
Shares
Market
Value•
($000)
Equity Real Estate Investment Trusts (REITs) (94.3%)
Data Center REITs (8.6%)
 
Equinix Inc.
3,751,939
3,824,276
 
Digital Realty Trust Inc.
13,072,172
2,464,366
 
 
 
 
 
6,288,642
Diversified REITs (1.6%)
 
WP Carey Inc.
8,342,383
613,999
 
Essential Properties Realty Trust Inc.
8,001,642
250,371
 
Broadstone Net Lease Inc.
7,289,035
156,058
 
Global Net Lease Inc.
7,332,101
63,936
 
American Assets Trust Inc.
1,868,370
44,075
 
CTO Realty Growth Inc.
1,175,914
25,835
 
Gladstone Commercial Corp.
1,841,254
23,016
 
AH Realty Trust Inc.
2,971,721
20,683
 
 
 
 
 
1,197,973
Health Care REITs (15.0%)
 
Welltower Inc.
26,540,492
6,222,153
 
Ventas Inc.
18,088,066
1,691,415
 
Healthpeak Properties Inc.
26,449,738
577,398
 
Omega Healthcare Investors Inc.
11,244,394
569,304
 
American Healthcare REIT Inc.
7,299,311
405,842
 
CareTrust REIT Inc.
8,492,619
356,180
 
Alexandria Real Estate Equities Inc.
5,927,663
304,978
 
Healthcare Realty Trust Inc. Class A
12,607,863
264,891
 
Sabra Health Care REIT Inc.
9,592,677
203,077
 
National Health Investors Inc.
1,751,405
134,245
 
LTC Properties Inc.
1,883,381
75,787
1
Medical Properties Trust Inc.
14,947,704
69,208
 
Diversified Healthcare Trust
7,598,004
67,622
 
Universal Health Realty Income Trust
487,827
21,182
 
Community Healthcare Trust Inc.
1,031,508
18,887
 
Chiron Real Estate Inc.
478,892
17,001
 
 
 
 
 
10,999,170
Hotel & Resort REITs (2.3%)
 
Host Hotels & Resorts Inc.
26,166,120
657,555
 
Ryman Hospitality Properties Inc.
2,280,836
304,834
 
Apple Hospitality REIT Inc.
8,517,507
140,624
 
Park Hotels & Resorts Inc.
7,465,455
112,430
 
DiamondRock Hospitality Co.
7,750,042
102,611
 
Pebblebrook Hotel Trust
4,314,197
82,401
 
Sunstone Hotel Investors Inc.
6,835,343
80,452
 
Xenia Hotels & Resorts Inc.
3,509,092
72,217
 
RLJ Lodging Trust
4,624,936
56,655
 
Service Properties Trust
4,557,456
36,596
 
Summit Hotel Properties Inc.
3,933,478
27,062
 
Chatham Lodging Trust
1,698,141
22,636
 
 
 
 
 
1,696,073
Industrial REITs (10.0%)
 
Prologis Inc.
35,464,900
5,128,579
 
EastGroup Properties Inc.
2,045,006
427,427
 
First Industrial Realty Trust Inc.
5,043,386
332,057
 
Rexford Industrial Realty Inc.
8,541,449
322,610
 
Terreno Realty Corp.
4,042,308
289,631
 
STAG Industrial Inc.
7,272,739
278,255
 
Americold Realty Trust Inc.
10,838,011
152,708
 
LXP Industrial Trust
2,247,591
136,047
 
Lineage Inc.
2,591,701
109,810
 
Innovative Industrial Properties Inc.
1,070,137
62,935
 
Industrial Logistics Properties Trust
2,090,123
17,996
1
Real Estate Index Fund
 
 
 
 
 
Shares
Market
Value•
($000)
 
One Liberty Properties Inc.
602,926
14,657
 
 
 
 
 
7,272,712
Multi-Family Residential REITs (5.7%)
 
AvalonBay Communities Inc.
5,292,197
982,285
 
Equity Residential
12,828,345
852,443
 
Essex Property Trust Inc.
2,452,900
696,967
 
Mid-America Apartment Communities Inc.
4,426,191
585,762
 
UDR Inc.
11,158,100
425,793
 
Camden Property Trust
3,685,283
408,366
 
Independence Realty Trust Inc.
8,965,111
149,090
 
Centerspace
638,745
35,029
 
NexPoint Residential Trust Inc.
776,144
20,265
 
Apartment Investment & Management Co. Class A
4,928,853
13,259
 
 
 
 
 
4,169,259
Office REITs (2.3%)
 
BXP Inc.
5,657,998
396,739
 
Vornado Realty Trust
6,097,125
240,166
 
Cousins Properties Inc.
6,321,091
199,430
 
COPT Defense Properties
4,313,436
163,738
 
Kilroy Realty Corp.
4,057,532
157,513
1
SL Green Realty Corp.
2,702,321
143,034
 
Highwoods Properties Inc.
4,194,771
138,973
 
Douglas Emmett Inc.
6,050,859
71,521
*
Piedmont Realty Trust Inc.
4,756,474
46,090
 
Easterly Government Properties Inc. Class A
1,676,888
40,849
 
JBG SMITH Properties
2,244,627
31,537
*
Hudson Pacific Properties Inc.
2,010,412
27,683
 
Empire State Realty Trust Inc. Class A
5,347,173
27,057
 
Brandywine Realty Trust
6,278,809
19,088
*,2
New York REIT Liquidating LLC
1,208
2
 
 
 
 
 
1,703,420
Other (14.5%)3
4,5
Vanguard Real Estate II Index Fund
445,588,339
10,600,547
Other Specialized REITs (5.6%)
 
Iron Mountain Inc.
11,317,007
1,384,296
 
VICI Properties Inc. Class A
38,098,723
1,003,901
 
Lamar Advertising Co. Class A
3,271,346
523,285
 
Gaming & Leisure Properties Inc.
10,235,839
458,463
 
Outfront Media Inc.
5,860,509
186,775
 
EPR Properties
2,910,519
180,656
 
Millrose Properties Inc.
5,865,740
164,123
 
Four Corners Property Trust Inc.
4,175,280
106,887
 
Safehold Inc.
1,775,455
28,727
 
Farmland Partners Inc.
1,533,019
14,334
1
Gladstone Land Corp.
1,516,872
12,302
 
 
 
 
 
4,063,749
Retail REITs (12.6%)
 
Simon Property Group Inc.
12,357,917
2,834,535
 
Realty Income Corp.
35,203,207
2,248,429
 
Kimco Realty Corp.
25,643,527
653,397
 
Regency Centers Corp.
6,268,485
503,297
 
Federal Realty Investment Trust
2,953,968
366,558
 
Agree Realty Corp.
4,569,068
355,474
 
Brixmor Property Group Inc.
11,089,290
349,424
 
NNN REIT Inc.
7,237,865
343,943
 
Macerich Co.
9,764,683
252,319
 
Kite Realty Group Trust
7,724,888
221,086
 
Phillips Edison & Co. Inc.
4,792,313
203,625
 
Tanger Inc.
4,357,380
177,171
 
Acadia Realty Trust
4,986,516
112,047
 
Urban Edge Properties
4,792,688
108,602
 
Curbline Properties Corp.
3,513,329
107,648
 
InvenTrust Properties Corp.
2,956,085
104,675
1
NETSTREIT Corp.
3,699,604
79,357
 
Getty Realty Corp.
2,161,720
73,801
 
CBL & Associates Properties Inc.
589,282
34,597
 
Alexander's Inc.
82,568
21,055
2
Real Estate Index Fund
 
 
 
 
 
Shares
Market
Value•
($000)
 
Saul Centers Inc.
511,907
17,441
 
SITE Centers Corp.
1,797,794
7,695
 
 
 
 
 
9,176,176
Self-Storage REITs (5.0%)
 
Public Storage
6,379,972
2,068,196
 
Extra Space Storage Inc.
8,034,585
1,189,440
 
CubeSmart
8,499,307
352,381
 
Smartstop Self Storage REIT Inc.
2,105,763
70,627
 
 
 
 
 
3,680,644
Single-Family Residential REITs (2.9%)
 
Invitation Homes Inc.
20,524,183
609,979
 
Sun Communities Inc.
4,687,965
578,870
 
Equity LifeStyle Properties Inc.
7,008,666
456,054
 
American Homes 4 Rent Class A
12,088,685
404,004
 
UMH Properties Inc.
3,072,890
46,431
 
 
 
 
 
2,095,338
Telecom Tower REITs (6.9%)
 
American Tower Corp.
17,731,284
3,073,895
 
Crown Castle Inc.
16,589,444
1,265,775
 
SBA Communications Corp.
4,024,518
728,357
 
 
 
 
 
5,068,027
Timber REITs (1.3%)
 
Weyerhaeuser Co.
27,430,614
686,588
 
Rayonier Inc.
10,350,584
225,436
 
 
 
 
 
912,024
Total Equity Real Estate Investment Trusts (REITs) (Cost $59,075,358)
68,923,754
Real Estate Management & Development (5.4%)
Diversified Real Estate Activities (0.2%)
 
St. Joe Co.
1,422,479
88,535
*
Tejon Ranch Co.
770,074
13,038
 
RMR Group Inc. Class A
594,436
11,318
 
 
 
 
 
112,891
Real Estate Development (0.1%)
*
Howard Hughes Holdings Inc.
1,190,990
76,128
*
Forestar Group Inc.
726,381
20,448
 
 
 
 
 
96,576
Real Estate Operating Companies (0.1%)
1
Landbridge Co. LLC Class A
1,058,935
82,088
*
Seaport Entertainment Group Inc.
279,552
7,333
 
 
 
 
 
89,421
Real Estate Services (5.0%)
*
CBRE Group Inc. Class A
11,228,801
1,648,500
*
Jones Lang LaSalle Inc.
1,782,396
632,804
*
CoStar Group Inc.
15,895,272
457,148
*
Compass Inc. Class A
25,900,713
295,009
*
Zillow Group Inc. Class C
5,843,031
199,014
*,1
Opendoor Technologies Inc.
34,635,550
130,576
*
Cushman & Wakefield Ltd.
8,819,939
118,364
 
Newmark Group Inc. Class A
5,897,217
88,429
*,1
Zillow Group Inc. Class A
1,485,061
51,517
 
Marcus & Millichap Inc.
869,122
26,725
 
AGNT Inc.
3,068,042
12,425
 
 
 
 
 
3,660,511
Total Real Estate Management & Development (Cost $4,239,039)
3,959,399
3
Real Estate Index Fund
 
 
 
 
 
Shares
Market
Value•
($000)
Temporary Cash Investments (0.6%)
Money Market Fund (0.6%)
6,7
Vanguard Market Liquidity Fund, 3.718% (Cost $433,698)
4,337,664
433,723
Total Investments (100.3%) (Cost $63,748,095)
73,316,876
Other Assets and Liabilities—Net (-0.3%)
(219,182
)
Net Assets (100%)
73,097,694
 
Cost is in $000.
 
•
See Note A in Notes to Financial Statements.
 
*
Non-income-producing security.
1
Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $213,833.
2
Security value determined using significant unobservable inputs.
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 fund. See accompanying financial statements for Vanguard Real Estate II Index Fund's 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
Collateral of $223,919 was received for securities on loan.
 
 
REIT—Real Estate Investment Trust.
Derivative Financial Instruments Outstanding as of Period End
 
Over-the-Counter Total Return Swaps
Reference Entity
Termination
Date
Counterparty
Notional
Amount
($000)
Floating
Interest
Rate
Received
(Paid)1
(%)
Value and
Unrealized
Appreciation
($000)
Value and
Unrealized
(Depreciation)
($000)
AGNT Inc.
2/1/2027
GSI
2,586
(3.630
)
—
(293
)
BXP Inc.
8/31/2026
BANA
5,191
(3.630
)
119
—
CoStar Group Inc.
8/31/2026
BANA
2,188
(3.630
)
—
(32
)
CubeSmart
2/1/2027
GSI
5,664
(3.630
)
132
—
Lamar Advertising Co. Class A
2/1/2027
GSI
5,610
(3.630
)
—
(20
)
Medical Properties Trust Inc.
2/1/2027
GSI
17,869
(3.630
)
—
(256
)
Realty Income Corp.
8/31/2026
BANA
17,685
(3.630
)
—
(372
)
VICI Properties Inc. Class A
3/12/2027
CITNA
6,024
(4.299
)
—
(117
)
VICI Properties Inc. Class A
8/31/2027
BANA
86,555
(4.340
)
—
(1,326
)
Welltower Inc.
8/31/2026
BANA
65,065
(3.630
)
—
(3,661
)
 
 
251
(6,077
)
 
1Based on Overnight Bank Funding Rate as of the most recent reset date. Floating interest payment received/(paid) monthly.
BANA—Bank of America, N.A.
CITNA—Citibank, N.A.
GSI—Goldman Sachs International.
See accompanying Notes, which are an integral part of the Financial Statements.
4
Real Estate Index Fund
Statement of Assets and Liabilities
As of July 31, 2026
 
 
($000s, except shares and per-share amounts)
Amount
Assets
Investments in Securities, at Value1
Unaffiliated Issuers (Cost $54,979,758)
62,282,606
Affiliated Issuers (Cost $433,698)
433,723
Vanguard Real Estate II Index Fund (Cost $8,334,639)
10,600,547
Total Investments in Securities
73,316,876
Investment in Vanguard
1,298
Cash Collateral Pledged—Over-the-Counter Swap Contracts
5,150
Receivables for Accrued Income
23,098
Receivables for Capital Shares Issued
27,254
Unrealized Appreciation—Over-the-Counter Swap Contracts
251
Other Assets
150
Total Assets
73,374,077
Liabilities
Due to Custodian
1,841
Payables for Investment Securities Purchased
14,210
Collateral for Securities on Loan
223,919
Payables for Capital Shares Redeemed
26,711
Payables to Vanguard
3,625
Unrealized Depreciation—Over-the-Counter Swap Contracts
6,077
Total Liabilities
276,383
Net Assets
73,097,694
1 Includes $213,833 of securities on loan.
 
 
At July 31, 2026, net assets consisted of:
 
Paid-in Capital
69,363,542
Total Distributable Earnings (Loss)
3,734,152
Net Assets
73,097,694
 
Investor Shares—Net Assets
Applicable to 1,921,458 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
63,142
Net Asset Value Per Share—Investor Shares
$32.86
 
ETF Shares—Net Assets
Applicable to 397,001,439 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
39,252,074
Net Asset Value Per Share—ETF Shares
$98.87
 
Admiral™ Shares—Net Assets
Applicable to 156,493,072 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
21,929,001
Net Asset Value Per Share—Admiral Shares
$140.13
 
Institutional Shares—Net Assets
Applicable to 546,548,507 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
11,853,477
Net Asset Value Per Share—Institutional Shares
$21.69
See accompanying Notes, which are an integral part of the Financial Statements.
5
Real Estate Index Fund
Statement of Operations
 
 
 
Six Months Ended
July 31, 2026
 
($000)
Investment Income
Income
Dividends—Unaffiliated Issuers
855,590
Dividends—Vanguard Real Estate II Index Fund
197,075
Interest—Unaffiliated Issuers
95
Interest—Affiliated Issuers
1,942
Securities Lending—Net
397
Total Income
1,055,099
Expenses
The Vanguard Group—Note C
Investment Advisory Services
177
Management and Administrative—Investor Shares
77
Management and Administrative—ETF Shares
19,539
Management and Administrative—Admiral Shares
11,349
Management and Administrative—Institutional Shares
4,975
Marketing and Distribution—Investor Shares
2
Marketing and Distribution—ETF Shares
614
Marketing and Distribution—Admiral Shares
449
Marketing and Distribution—Institutional Shares
161
Custodian Fees
24
Shareholders’ Reports—Investor Shares
1
Shareholders’ Reports—ETF Shares
735
Shareholders’ Reports—Admiral Shares
243
Shareholders’ Reports—Institutional Shares
107
Trustees’ Fees and Expenses
17
Other Expenses
68
Total Expenses
38,538
Net Investment Income
1,016,561
Realized Net Gain (Loss)
Capital Gain Distributions Received—Unaffiliated Issuers
98,967
Capital Gain Distributions Received—Vanguard Real Estate II Index Fund
—
Investment Securities Sold—Unaffiliated Issuers1
216,076
Investment Securities Sold—Affiliated Issuers
(20
)
Investment Securities Sold—Vanguard Real Estate II Index Fund
—
Futures Contracts
71
Swap Contracts
8,099
Realized Net Gain (Loss)
323,193
Change in Unrealized Appreciation (Depreciation)
Investment Securities—Unaffiliated Issuers
5,023,462
Investment Securities—Affiliated Issuers
(8
)
Investment Securities—Vanguard Real Estate II Index Fund
857,189
Swap Contracts
(4,779
)
Change in Unrealized Appreciation (Depreciation)
5,875,864
Net Increase (Decrease) in Net Assets Resulting from Operations
7,215,618
 
1
Includes $594,703 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
6
Real Estate Index Fund
Statement of Changes in Net Assets
 
 
 
Six Months Ended
July 31,
2026
Year Ended
January 31,
2026
 
($000)
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income
1,016,561
1,843,383
Realized Net Gain (Loss)
323,193
750,390
Change in Unrealized Appreciation (Depreciation)
5,875,864
12,880
Net Increase (Decrease) in Net Assets Resulting from Operations
7,215,618
2,606,653
Distributions
Net Investment Income and/or Realized Capital Gains
Investor Shares
(1,150
)
(2,015
)
ETF Shares
(702,391
)
(994,642
)
Admiral Shares
(400,632
)
(588,176
)
Institutional Shares
(213,122
)
(295,796
)
Return of Capital
Investor Shares
—
(687
)
ETF Shares
—
(322,800
)
Admiral Shares
—
(192,134
)
Institutional Shares
—
(95,970
)
Total Distributions
(1,317,295
)
(2,492,220
)
Capital Share Transactions
Investor Shares
(5,822
)
(15,896
)
ETF Shares
1,202,737
(239,183
)
Admiral Shares
(249,622
)
(195,796
)
Institutional Shares
510,206
232,526
Net Increase (Decrease) from Capital Share Transactions
1,457,499
(218,349
)
Total Increase (Decrease)
7,355,822
(103,916
)
Net Assets
Beginning of Period
65,741,872
65,845,788
End of Period
73,097,694
65,741,872
See accompanying Notes, which are an integral part of the Financial Statements.
7
Real Estate Index Fund
Financial Highlights
 
 
  
Investor Shares
 
 
 
 
 
 
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$30.18
$30.11
$27.89
$30.26
$35.37
$28.23
Investment Operations
Net Investment Income1
.440
.813
.774
.787
.684
.602
Net Realized and Unrealized Gain (Loss) on Investments
2.816
.368
2.544
(2.036
)
(4.766
)
7.475
Total from Investment Operations
3.256
1.181
3.318
(1.249
)
(4.082
)
8.077
Distributions
Dividends from Net Investment Income
(.576
)
(.838
)
(.836
)
(.833
)
(.686
)
(.620
)
Distributions from Realized Capital Gains
—
—
—
—
—
—
Return of Capital
—
(.273
)
(.262
)
(.288
)
(.342
)
(.317
)
Total Distributions
(.576
)
(1.111
)
(1.098
)
(1.121
)
(1.028
)
(.937
)
Net Asset Value, End of Period
$32.86
$30.18
$30.11
$27.89
$30.26
$35.37
Total Return2
10.94%
4.04%
12.07%
-3.91%
-11.39%
28.73%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$63
$64
$79
$86
$127
$196
Ratio of Total Expenses to Average Net Assets
0.26%
0.26%
0.26%
0.26%
0.26%3
0.26%
Acquired Fund Fees and Expenses4
0.01%
0.01%
0.01%
0.01%
—
—
Ratio of Net Investment Income to Average Net Assets
2.81%
2.72%
2.62%
2.87%
2.18%
1.77%
Portfolio Turnover Rate5
4%
7%
7%
9%
7%
7%
The expense ratio, acquired fund fees and expenses, and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service
fees.
3
The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.25%.
4
For the fiscal year ended January 31, 2023, and January 31, 2022, the acquired fund fees and expenses were less than 0.01%.
5
Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
See accompanying Notes, which are an integral part of the Financial Statements.
8
Real Estate Index Fund
Financial Highlights
  
ETF Shares
 
 
 
 
 
 
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$90.81
$90.61
$83.94
$91.06
$106.44
$84.96
Investment Operations
Net Investment Income1
1.392
2.567
2.473
2.527
2.240
1.960
Net Realized and Unrealized Gain (Loss) on Investments
8.469
1.105
7.631
(6.154
)
(14.394
)
22.486
Total from Investment Operations
9.861
3.672
10.104
(3.627
)
(12.154
)
24.446
Distributions
Dividends from Net Investment Income
(1.801
)
(2.620
)
(2.613
)
(2.595
)
(2.152
)
(1.943
)
Distributions from Realized Capital Gains
—
—
—
—
—
—
Return of Capital
—
(.852
)
(.821
)
(.898
)
(1.074
)
(1.023
)
Total Distributions
(1.801
)
(3.472
)
(3.434
)
(3.493
)
(3.226
)
(2.966
)
Net Asset Value, End of Period
$98.87
$90.81
$90.61
$83.94
$91.06
$106.44
Total Return
11.02%
4.18%
12.22%
-3.81%
-11.25%
28.88%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$39,252
$34,928
$35,127
$32,359
$36,825
$46,673
Ratio of Total Expenses to Average Net Assets
0.12%
0.12%
0.12%
0.12%
0.12%2
0.12%
Acquired Fund Fees and Expenses3
0.01%
0.01%
0.01%
0.01%
—
—
Ratio of Net Investment Income to Average Net Assets
2.95%
2.85%
2.78%
3.07%
2.38%
1.90%
Portfolio Turnover Rate4
4%
7%
7%
9%
7%
7%
The expense ratio, acquired fund fees and expenses, and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.12%.
3
For the fiscal year ended January 31, 2023, and January 31, 2022, the acquired fund fees and expenses were less than 0.01%.
4
Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
See accompanying Notes, which are an integral part of the Financial Statements.
9
Real Estate Index Fund
Financial Highlights
  
Admiral Shares
 
 
 
 
 
 
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$128.70
$128.41
$118.96
$129.05
$150.85
$120.40
Investment Operations
Net Investment Income1
1.965
3.630
3.495
3.613
3.201
2.761
Net Realized and Unrealized Gain (Loss) on Investments
12.018
1.580
10.820
(8.752
)
(20.428
)
31.890
Total from Investment Operations
13.983
5.210
14.315
(5.139
)
(17.227
)
34.651
Distributions
Dividends from Net Investment Income
(2.553
)
(3.713
)
(3.702
)
(3.678
)
(3.050
)
(2.770
)
Distributions from Realized Capital Gains
—
—
—
—
—
—
Return of Capital
—
(1.207
)
(1.163
)
(1.273
)
(1.523
)
(1.431
)
Total Distributions
(2.553
)
(4.920
)
(4.865
)
(4.951
)
(4.573
)
(4.201
)
Net Asset Value, End of Period
$140.13
$128.70
$128.41
$118.96
$129.05
$150.85
Total Return2
11.02%
4.19%
12.22%
-3.75%
-11.26%
28.91%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$21,929
$20,365
$20,511
$19,879
$22,110
$25,764
Ratio of Total Expenses to Average Net Assets
0.12%
0.12%
0.12%
0.12%
0.12%3
0.12%
Acquired Fund Fees and Expenses4
0.01%
0.01%
0.01%
0.01%
—
—
Ratio of Net Investment Income to Average Net Assets
2.94%
2.85%
2.77%
3.10%
2.41%
1.90%
Portfolio Turnover Rate5
4%
7%
7%
9%
7%
7%
The expense ratio, acquired fund fees and expenses, and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service
fees.
3
The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.12%.
4
For the fiscal year ended January 31, 2023, and January 31, 2022, the acquired fund fees and expenses were less than 0.01%.
5
Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
See accompanying Notes, which are an integral part of the Financial Statements.
10
Real Estate Index Fund
Financial Highlights
  
Institutional Shares
 
 
 
 
 
 
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$19.92
$19.88
$18.41
$19.97
$23.35
$18.64
Investment Operations
Net Investment Income1
.307
.566
.542
.565
.500
.432
Net Realized and Unrealized Gain (Loss) on Investments
1.860
.240
1.685
(1.355
)
(3.168
)
4.933
Total from Investment Operations
2.167
.806
2.227
(.790
)
(2.668
)
5.365
Distributions
Dividends from Net Investment Income
(.397
)
(.578
)
(.576
)
(.572
)
(.475
)
(.432
)
Distributions from Realized Capital Gains
—
—
—
—
—
—
Return of Capital
—
(.188
)
(.181
)
(.198
)
(.237
)
(.223
)
Total Distributions
(.397
)
(.766
)
(.757
)
(.770
)
(.712
)
(.655
)
Net Asset Value, End of Period
$21.69
$19.92
$19.88
$18.41
$19.97
$23.35
Total Return
11.04%
4.18%
12.28%
-3.73%
-11.27%
28.91%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$11,853
$10,385
$10,128
$9,885
$10,610
$12,089
Ratio of Total Expenses to Average Net Assets
0.10%
0.10%
0.10%
0.10%
0.10%2
0.10%
Acquired Fund Fees and Expenses3
0.01%
0.01%
0.01%
0.01%
—
—
Ratio of Net Investment Income to Average Net Assets
2.97%
2.87%
2.78%
3.13%
2.43%
1.92%
Portfolio Turnover Rate4
4%
7%
7%
9%
7%
7%
The expense ratio, acquired fund fees and expenses, and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.10%.
3
For the fiscal year ended January 31, 2023, and January 31, 2022, the acquired fund fees and expenses were less than 0.01%.
4
Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
See accompanying Notes, which are an integral part of the Financial Statements.
11
Real Estate Index Fund
Notes to Financial Statements
Vanguard Real Estate Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers four classes of shares: Investor Shares, ETF Shares, Admiral Shares, and Institutional Shares. Each of the share classes has different eligibility and minimum purchase requirements, and is designed for different types of investors. ETF Shares are listed for trading on NYSE Arca; they can be purchased and sold through a broker.
As a part of its principal investment strategy, the fund attempts to replicate its benchmark index by investing all, or substantially all, of its assets—either directly or indirectly through a wholly owned subsidiary—in the stocks that make up the index. Vanguard Real Estate II Index Fund (“the Subsidiary”) is the wholly owned subsidiary in which the fund has invested a portion of its assets. Expenses of the Subsidiary are reflected in the Acquired Fund Fees and Expenses in the Financial Highlights. For additional financial information about the Subsidiary, refer to the accompanying financial statements.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation
date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been 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 valuation designee to represent fair value and subject to oversight by the board of trustees.
Investments in affiliated Vanguard funds are valued at that fund's net asset value.
2. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objectives of maintaining full exposure to the stock market, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund’s performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities 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 Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the six months ended July 31, 2026, the fund’s average investments in long and short futures contracts represented less than 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period. The fund had no open futures contracts at July 31, 2026.
3. Swap Contracts: The fund has entered into equity swap contracts to earn the total return on selected reference stocks or indexes 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 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.
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's 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.
The notional amounts of swap contracts are not recorded in the Statement of Assets and Liabilities. Swaps are valued daily based on market quotations received from independent pricing services or recognized dealers and the change in value is recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until periodic payments are made or the termination of the swap, at which time realized gain (loss) is recorded.
During the six months ended July 31, 2026, the fund’s average amounts of investments in total return swaps represented less than 1% of net assets, based on the average of notional amounts at each quarter-end during the period.
12
Real Estate Index Fund
4. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund’s tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund’s tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund’s financial statements.
5. Distributions: Distributions to shareholders are recorded on the ex-dividend date. The portion of distributions that exceed a fund's current and accumulated earnings and profits, as measured on a tax basis, constitute a non-taxable return of capital. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
6. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are subject to termination by the fund at any time, and are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled before the opening of the market on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the event of a default, the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the Statement of Assets and Liabilities for the return of the collateral, during the period the securities are on loan. Collateral investments in Vanguard Market Liquidity Fund are subject to market appreciation or depreciation. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan. During the term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
7. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund’s regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under either facility bear interest at the higher of the effective federal funds rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the “Order”) from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund’s investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day’s notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the six months ended July 31, 2026, the fund did not utilize the credit facilities or the Interfund Lending Program.
8. Other: Distributions received from investment securities are recorded on the ex-dividend date. Non-cash dividends included in income, if any, are recorded at the fair value of the securities received. Each investment security reports annually the tax character of its distributions. Dividend income, capital gain distributions received, and unrealized appreciation (depreciation) reflect the amounts of taxable income, capital gain, and return of capital reported by the REITs, and management’s estimates of such amounts for REIT distributions for which actual information has not been reported. Income,
capital gain, and return of capital distributions received from affiliated Vanguard funds are recorded on ex-dividend date. Interest income includes
income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses) and shareholder reporting. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.
B. Vanguard provides investment advisory services to the fund through its wholly owned subsidiary Vanguard Portfolio Management, LLC.
C. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees and are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At July 31, 2026, the fund had contributed to Vanguard capital in the amount of $1,298,000, representing less than 0.01% of the fund’s net assets and 0.52% of Vanguard’s capital received pursuant to the FSA. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
13
Real Estate Index Fund
D. Various inputs may be used to determine the value of the fund’s investments and derivatives. 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 and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
The following table summarizes the market value of the fund's investments and derivatives as of July 31, 2026, based on the inputs used to value them: 
 
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
Investments
 
 
 
 
Assets
Common Stocks
72,883,151
—
2
72,883,153
Temporary Cash Investments
433,723
—
—
433,723
Total
73,316,874
—
2
73,316,876
 
 
 
 
 
Derivative Financial Instruments
 
 
 
 
Assets
Swap Contracts
—
251
—
251
Liabilities
Swap Contracts
—
(6,077
)
—
(6,077
)
 
 
 
E. As of July 31, 2026, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows: 
 
Amount
($000)
Tax Cost
64,179,635
Gross Unrealized Appreciation
16,478,349
Gross Unrealized Depreciation
(7,346,934
)
Net Unrealized Appreciation (Depreciation)
9,131,415
The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at January 31, 2026, the fund had available capital losses totaling $5,543,375,000 that may be carried forward indefinitely to offset future net capital gains. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending January 31, 2027; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.
F. During the six months ended July 31, 2026, the fund purchased $2,866,961,000 of investment securities and sold $2,492,883,000 of investment securities, other than temporary cash investments. In addition, the fund purchased and sold investment securities of $2,646,948,000 and $1,675,181,000, respectively, in connection with in-kind purchases and redemptions of the fund’s capital shares.
The fund purchased securities from and sold securities to other Vanguard funds or accounts managed by Vanguard or its affiliates, in accordance with procedures adopted by the board of trustees in compliance with Rule 17a-7 of the Investment Company Act of 1940. For the six months ended July 31, 2026, such purchases were $0 and sales were $103,000, resulting in net realized gain of $14,000; these amounts, other than temporary cash investments, are included in the purchases and sales of investment securities noted above.
G. Capital share transactions for each class of shares were: 
 
Six Months Ended
July 31, 2026
Year Ended
January 31, 2026
 
Amount
($000)
Shares
(000)
Amount
($000)
Shares
(000)
Investor Shares
Issued
3,542
113
6,582
220
Issued in Lieu of Cash Distributions
1,150
38
2,702
91
Redeemed
(10,514)
(336)
(25,180)
(843)
Net Increase (Decrease)—Investor Shares
(5,822)
(185)
(15,896)
(532)
14
Real Estate Index Fund
 
Six Months Ended
July 31, 2026
Year Ended
January 31, 2026
 
Amount
($000)
Shares
(000)
Amount
($000)
Shares
(000)
ETF Shares
Issued
2,876,462
30,078
5,317,954
58,940
Issued in Lieu of Cash Distributions
—
—
—
—
Redeemed
(1,673,725)
(17,700)
(5,557,137)
(62,000)
Net Increase (Decrease)—ETF Shares
1,202,737
12,378
(239,183)
(3,060)
Admiral Shares
Issued
1,262,894
9,402
2,513,223
19,732
Issued in Lieu of Cash Distributions
354,883
2,723
689,253
5,454
Redeemed
(1,867,399)
(13,865)
(3,398,272)
(26,679)
Net Increase (Decrease)—Admiral Shares
(249,622)
(1,740)
(195,796)
(1,493)
Institutional Shares
Issued
980,202
47,312
1,564,689
79,308
Issued in Lieu of Cash Distributions
207,694
10,289
380,478
19,453
Redeemed
(677,690)
(32,399)
(1,712,641)
(87,009)
Net Increase (Decrease)—Institutional Shares
510,206
25,202
232,526
11,752
H. Transactions during the period in investments where the issuer is another member of The Vanguard Group were as follows: 
 
 
Current Period Transactions
 
 
Jan. 31, 2026
Market Value
($000)
Purchases
at Cost
($000)
Proceeds
from
Securities
Sold1
($000)
Realized
Net Gain
(Loss)
($000)
Change in
Unrealized
App. (Dep.)
($000)
Income
($000)
Capital Gain
Distributions
Received
($000)
Jul. 31, 2026
Market Value
($000)
Vanguard Market Liquidity Fund
221,837
NA2
NA2
(20
)
(8
)
1,942
—
433,723
Vanguard Real Estate II Index Fund
9,546,283
197,075
—
—
857,189
197,075
—
10,600,547
Total
9,768,120
197,075
—
(20
)
857,181
199,017
—
11,034,270
 
1
Does not include adjustments related to return of capital.
2
Not applicable—purchases and sales are for temporary cash investment purposes.
I. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, political or regulatory conditions, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund’s investments and fund performance.
To the extent the fund’s investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund’s use of derivative(s) and the specific risks associated is described under significant accounting policies.
J. Operating segments are components of an entity that engage in business activities, have discrete financial information available, and have their operating results regularly reviewed by a chief operating decision maker (“CODM”). The fund is considered a single segment. Vanguard’s chief executive officer, chief investment officer, and chief financial officer, who are also officers of the fund, as well as the fund’s chief financial officer collectively act as the CODM. Vanguard has established various management committees to assist the CODM with overseeing aspects of the fund’s daily operations. Through these committees, the CODM manages the fund’s operations to achieve a single investment objective, as detailed in its prospectus, through the execution of the fund’s investment strategies. When assessing segment performance and making decisions about segment resources, the CODM relies on the fund’s portfolio composition, total returns, expense ratios and changes in net assets which are consistent with the information contained in the fund’s financial statements. Segment assets, liabilities, income, and expenses are also detailed in the accompanying financial statements.
K. Management has determined that no subsequent events or transactions occurred through the date the financial statements were issued that would require recognition or disclosure in these financial statements.
15
Real Estate II Index Fund
Financial Statements (unaudited)
Schedule of Investments
As of July 31, 2026
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at www.sec.gov. 
 
 
 
 
 
Shares
Market
Value•
($000)
Equity Real Estate Investment Trusts (REITs) (93.1%)
Data Center REITs (10.1%)
 
Equinix Inc.
658,449
671,144
 
Digital Realty Trust Inc.
2,294,114
432,486
 
 
 
 
 
1,103,630
Diversified REITs (1.9%)
 
WP Carey Inc.
1,464,034
107,753
 
Essential Properties Realty Trust Inc.
1,404,219
43,938
 
Broadstone Net Lease Inc.
1,278,893
27,381
 
Global Net Lease Inc.
1,288,104
11,232
 
American Assets Trust Inc.
327,575
7,728
 
CTO Realty Growth Inc.
207,025
4,548
 
Gladstone Commercial Corp.
322,604
4,033
 
AH Realty Trust Inc.
524,462
3,650
 
 
 
 
 
210,263
Health Care REITs (17.7%)
 
Welltower Inc.
4,703,726
1,102,742
 
Ventas Inc.
3,174,396
296,838
 
Healthpeak Properties Inc.
4,641,687
101,328
 
Omega Healthcare Investors Inc.
1,973,317
99,909
 
American Healthcare REIT Inc.
1,281,010
71,224
 
CareTrust REIT Inc.
1,490,421
62,508
 
Alexandria Real Estate Equities Inc.
1,040,215
53,519
 
Healthcare Realty Trust Inc. Class A
2,212,467
46,484
 
Sabra Health Care REIT Inc.
1,683,291
35,635
 
National Health Investors Inc.
307,320
23,556
 
Medical Properties Trust Inc.
3,290,997
15,237
 
LTC Properties Inc.
330,702
13,308
 
Diversified Healthcare Trust
1,334,253
11,875
 
Universal Health Realty Income Trust
86,090
3,738
 
Community Healthcare Trust Inc.
182,383
3,339
 
Chiron Real Estate Inc.
84,558
3,002
 
 
 
 
 
1,944,242
Hotel & Resort REITs (2.7%)
 
Host Hotels & Resorts Inc.
4,592,025
115,398
 
Ryman Hospitality Properties Inc.
400,261
53,495
 
Apple Hospitality REIT Inc.
1,494,328
24,671
 
DiamondRock Hospitality Co.
1,359,690
18,002
 
Pebblebrook Hotel Trust
756,989
14,458
 
Sunstone Hotel Investors Inc.
1,198,810
14,110
 
Park Hotels & Resorts Inc.
909,791
13,701
 
Xenia Hotels & Resorts Inc.
616,241
12,682
 
RLJ Lodging Trust
810,926
9,934
 
Service Properties Trust
799,320
6,419
 
Summit Hotel Properties Inc.
690,866
4,753
 
Chatham Lodging Trust
299,518
3,993
 
 
 
 
 
291,616
Industrial REITs (11.6%)
 
Prologis Inc.
6,223,943
900,044
 
EastGroup Properties Inc.
358,903
75,014
 
First Industrial Realty Trust Inc.
885,077
58,273
 
Rexford Industrial Realty Inc.
1,498,915
56,614
 
Terreno Realty Corp.
709,415
50,830
 
STAG Industrial Inc.
1,276,274
48,830
 
Americold Realty Trust Inc.
1,901,839
26,797
 
LXP Industrial Trust
394,327
23,869
 
Lineage Inc.
454,759
19,268
 
Innovative Industrial Properties Inc.
187,787
11,044
 
Industrial Logistics Properties Trust
369,279
3,180
16
Real Estate II Index Fund
 
 
 
 
 
Shares
Market
Value•
($000)
 
One Liberty Properties Inc.
105,114
2,555
 
 
 
 
 
1,276,318
Multi-Family Residential REITs (6.7%)
 
AvalonBay Communities Inc.
928,760
172,387
 
Equity Residential
2,251,316
149,600
 
Essex Property Trust Inc.
430,478
122,316
 
Mid-America Apartment Communities Inc.
776,785
102,800
 
UDR Inc.
1,958,228
74,726
 
Camden Property Trust
646,753
71,667
 
Independence Realty Trust Inc.
1,572,988
26,159
 
Centerspace
111,885
6,136
 
NexPoint Residential Trust Inc.
136,710
3,569
 
Apartment Investment & Management Co. Class A
862,696
2,320
 
 
 
 
 
731,680
Office REITs (2.7%)
 
BXP Inc.
1,006,071
70,546
 
Vornado Realty Trust
1,069,944
42,145
 
Cousins Properties Inc.
1,109,107
34,992
 
COPT Defense Properties
756,862
28,731
 
Kilroy Realty Corp.
711,941
27,638
 
SL Green Realty Corp.
474,161
25,097
 
Highwoods Properties Inc.
735,994
24,383
 
Douglas Emmett Inc.
1,062,263
12,556
*
Piedmont Realty Trust Inc.
834,073
8,082
 
Easterly Government Properties Inc. Class A
293,341
7,146
 
JBG SMITH Properties
394,375
5,541
*
Hudson Pacific Properties Inc.
353,073
4,862
 
Empire State Realty Trust Inc. Class A
938,671
4,750
 
Brandywine Realty Trust
1,107,338
3,366
 
 
 
 
 
299,835
Other Specialized REITs (6.5%)
 
Iron Mountain Inc.
1,986,067
242,936
 
VICI Properties Inc. Class A
6,683,768
176,117
 
Lamar Advertising Co. Class A
580,244
92,816
 
Gaming & Leisure Properties Inc.
1,796,322
80,457
 
Outfront Media Inc.
1,028,387
32,775
 
EPR Properties
510,698
31,699
 
Millrose Properties Inc.
1,029,281
28,799
 
Four Corners Property Trust Inc.
732,476
18,751
 
Safehold Inc.
312,574
5,058
 
Farmland Partners Inc.
268,944
2,515
 
Gladstone Land Corp.
265,479
2,153
 
 
 
 
 
714,076
Retail REITs (14.7%)
 
Simon Property Group Inc.
2,168,746
497,445
 
Realty Income Corp.
6,225,453
397,620
 
Kimco Realty Corp.
4,500,307
114,668
 
Regency Centers Corp.
1,100,144
88,330
 
Federal Realty Investment Trust
518,423
64,331
 
Agree Realty Corp.
801,870
62,385
 
Brixmor Property Group Inc.
1,946,108
61,322
 
NNN REIT Inc.
1,270,203
60,360
 
Macerich Co.
1,713,537
44,278
 
Kite Realty Group Trust
1,355,631
38,798
 
Phillips Edison & Co. Inc.
840,947
35,732
 
Tanger Inc.
764,605
31,089
 
Acadia Realty Trust
874,697
19,654
 
Urban Edge Properties
841,013
19,057
 
Curbline Properties Corp.
616,374
18,886
 
InvenTrust Properties Corp.
518,683
18,367
1
NETSTREIT Corp.
649,002
13,921
 
Getty Realty Corp.
379,473
12,955
 
CBL & Associates Properties Inc.
103,487
6,076
 
Alexander's Inc.
14,540
3,708
 
Saul Centers Inc.
89,654
3,054
 
SITE Centers Corp.
314,863
1,348
 
 
 
 
 
1,613,384
17
Real Estate II Index Fund
 
 
 
 
 
Shares
Market
Value•
($000)
Self-Storage REITs (5.5%)
 
Public Storage
999,655
324,058
 
Extra Space Storage Inc.
1,410,025
208,740
 
CubeSmart
1,516,126
62,858
 
Smartstop Self Storage REIT Inc.
369,491
12,393
 
 
 
 
 
608,049
Single-Family Residential REITs (3.4%)
 
Invitation Homes Inc.
3,601,924
107,049
 
Sun Communities Inc.
822,717
101,589
 
Equity LifeStyle Properties Inc.
1,230,026
80,038
 
American Homes 4 Rent Class A
2,121,507
70,901
 
UMH Properties Inc.
538,832
8,142
 
 
 
 
 
367,719
Telecom Tower REITs (8.1%)
 
American Tower Corp.
3,111,747
539,453
 
Crown Castle Inc.
2,911,340
222,135
 
SBA Communications Corp.
706,277
127,822
 
 
 
 
 
889,410
Timber REITs (1.5%)
 
Weyerhaeuser Co.
4,813,899
120,492
 
Rayonier Inc.
1,816,343
39,560
 
 
 
 
 
160,052
Total Equity Real Estate Investment Trusts (REITs) (Cost $7,637,991)
10,210,274
Real Estate Management & Development (6.3%)
Diversified Real Estate Activities (0.2%)
 
St. Joe Co.
249,689
15,541
*
Tejon Ranch Co.
135,020
2,286
 
RMR Group Inc. Class A
104,323
1,986
 
 
 
 
 
19,813
Real Estate Development (0.1%)
*
Howard Hughes Holdings Inc.
209,015
13,360
*
Forestar Group Inc.
127,875
3,600
 
 
 
 
 
16,960
Real Estate Operating Companies (0.1%)
1
Landbridge Co. LLC Class A
185,824
14,405
*
Seaport Entertainment Group Inc.
49,046
1,287
 
 
 
 
 
15,692
Real Estate Services (5.9%)
*
CBRE Group Inc. Class A
1,970,600
289,304
*
Jones Lang LaSalle Inc.
312,797
111,052
*
CoStar Group Inc.
2,802,697
80,605
*
Compass Inc. Class A
4,545,339
51,771
*
Zillow Group Inc. Class C
1,022,888
34,839
*
Opendoor Technologies Inc.
6,078,155
22,915
*
Cushman & Wakefield Ltd.
1,547,443
20,767
 
Newmark Group Inc. Class A
1,034,485
15,512
*
Zillow Group Inc. Class A
263,091
9,127
 
Marcus & Millichap Inc.
152,835
4,700
 
AGNT Inc.
637,516
2,582
 
 
 
 
 
643,174
Total Real Estate Management & Development (Cost $683,347)
695,639
18
Real Estate II Index Fund
 
 
 
 
 
Shares
Market
Value•
($000)
Temporary Cash Investments (0.7%)
Money Market Fund (0.7%)
2,3
Vanguard Market Liquidity Fund, 3.718% (Cost $75,775)
757,848
75,777
Total Investments (100.1%) (Cost $8,397,113)
10,981,690
Other Assets and Liabilities—Net (-0.1%)
(14,694
)
Net Assets (100%)
10,966,996
 
Cost is in $000.
 
•
See Note A in Notes to Financial Statements.
 
*
Non-income-producing security.
1
Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $18,500.
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
Collateral of $19,292 was received for securities on loan.
 
 
REIT—Real Estate Investment Trust.
Derivative Financial Instruments Outstanding as of Period End
 
Over-the-Counter Total Return Swaps
Reference Entity
Termination
Date
Counterparty
Notional
Amount
($000)
Floating
Interest
Rate
Received
(Paid)1
(%)
Value and
Unrealized
Appreciation
($000)
Value and
Unrealized
(Depreciation)
($000)
Park Hotels & Resorts Inc.
2/1/2027
GSI
5,820
(3.630
)
195
—
Public Storage
8/31/2026
BANA
38,882
(3.630
)
6
—
VICI Properties Inc. Class A
3/12/2027
CITNA
1,089
(4.292
)
—
(21
)
VICI Properties Inc. Class A
8/31/2027
BANA
15,223
(4.341
)
—
(233
)
 
 
201
(254
)
 
1Based on Overnight Bank Funding Rate as of the most recent reset date. Floating interest payment received/(paid) monthly.
BANA—Bank of America, N.A.
CITNA—Citibank, N.A.
GSI—Goldman Sachs International.
At July 31, 2026, the counterparties had deposited in segregated accounts securities with a value of $216 in connection with open over-the-counter swap contracts.
See accompanying Notes, which are an integral part of the Financial Statements.
19
Real Estate II Index Fund
Statement of Assets and Liabilities
As of July 31, 2026
 
 
($000s, except shares and per-share amounts)
Amount
Assets
Investments in Securities, at Value1
Unaffiliated Issuers (Cost $8,321,338)
10,905,913
Affiliated Issuers (Cost $75,775)
75,777
Total Investments in Securities
10,981,690
Investment in Vanguard
229
Cash Collateral Pledged—Over-the-Counter Swap Contracts
1,060
Receivables for Accrued Income
4,130
Receivables for Capital Shares Issued
57
Unrealized Appreciation—Over-the-Counter Swap Contracts
201
Total Assets
10,987,367
Liabilities
Due to Custodian
315
Payables for Investment Securities Purchased
121
Collateral for Securities on Loan
19,292
Payables to Vanguard
389
Unrealized Depreciation—Over-the-Counter Swap Contracts
254
Total Liabilities
20,371
Net Assets
10,966,996
1 Includes $18,500 of securities on loan.
 
 
At July 31, 2026, net assets consisted of:
 
Paid-in Capital
8,636,089
Total Distributable Earnings (Loss)
2,330,907
Net Assets
10,966,996

 
Net Assets
Applicable to 460,956,195 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
10,966,996
Net Asset Value Per Share
$23.79
See accompanying Notes, which are an integral part of the Financial Statements.
20
Real Estate II Index Fund
Statement of Operations
 
 
 
Six Months Ended
July 31, 2026
 
($000)
Investment Income
Income
Dividends
149,683
Interest1
611
Securities Lending—Net
57
Total Income
150,351
Expenses
The Vanguard Group—Note C
Investment Advisory Services
23
Management and Administrative
4,030
Marketing and Distribution
67
Custodian Fees
6
Shareholders’ Reports
8
Trustees’ Fees and Expenses
3
Other Expenses
5
Total Expenses
4,142
Net Investment Income
146,209
Realized Net Gain (Loss)
Capital Gain Distributions Received
17,409
Investment Securities Sold1
(45,660
)
Swap Contracts
3,554
Realized Net Gain (Loss)
(24,697
)
Change in Unrealized Appreciation (Depreciation)
Investment Securities1
969,596
Swap Contracts
126
Change in Unrealized Appreciation (Depreciation)
969,722
Net Increase (Decrease) in Net Assets Resulting from Operations
1,091,234
 
1
Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $596, ($5), and ($1), respectively.
Purchases and sales are for temporary cash investment purposes.
See accompanying Notes, which are an integral part of the Financial Statements.
21
Real Estate II Index Fund
Statement of Changes in Net Assets
 
 
 
Six Months Ended
July 31,
2026
Year Ended
January 31,
2026
 
($000)
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income
146,209
278,622
Realized Net Gain (Loss)
(24,697
)
(56,886
)
Change in Unrealized Appreciation (Depreciation)
969,722
179,940
Net Increase (Decrease) in Net Assets Resulting from Operations
1,091,234
401,676
Distributions
Net Investment Income and/or Realized Capital Gains
(203,946
)
(268,452
)
Return of Capital
—
(88,975
)
Total Distributions
(203,946
)
(357,427
)
Capital Share Transactions
Issued
9,622
41,919
Issued in Lieu of Cash Distributions
203,946
357,427
Redeemed
(16,131
)
(6,572
)
Net Increase (Decrease) from Capital Share Transactions
197,437
392,774
Total Increase (Decrease)
1,084,725
437,023
Net Assets
Beginning of Period
9,882,271
9,445,248
End of Period
10,966,996
9,882,271
See accompanying Notes, which are an integral part of the Financial Statements.
22
Real Estate II Index Fund
Financial Highlights
 
 
  
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$21.86
$21.78
$20.16
$21.86
$25.69
$20.50
Investment Operations
Net Investment Income1
.320
.630
.599
.620
.558
.484
Net Realized and Unrealized Gain (Loss) on Investments
2.059
.261
1.836
(1.476
)
(3.493
)
5.427
Total from Investment Operations
2.379
.891
2.435
(.856
)
(2.935
)
5.911
Distributions
Dividends from Net Investment Income
(.449
)
(.609
)
(.618
)
(.625
)
(.528
)
(.477
)
Distributions from Realized Capital Gains
—
—
—
—
(.238
)
(.034
)
Return of Capital
—
(.202
)
(.197
)
(.219
)
(.129
)
(.210
)
Total Distributions
(.449
)
(.811
)
(.815
)
(.844
)
(.895
)
(.721
)
Net Asset Value, End of Period
$23.79
$21.86
$21.78
$20.16
$21.86
$25.69
Total Return
11.04%
4.22%
12.26%
-3.68%
-11.23%
28.96%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$10,967
$9,882
$9,445
$8,426
$8,690
$9,542
Ratio of Total Expenses to Average Net Assets
0.08%
0.08%
0.08%
0.08%
0.08%2
0.08%
Ratio of Net Investment Income to Average Net Assets
2.82%
2.91%
2.80%
3.14%
2.47%
1.95%
Portfolio Turnover Rate
2%
3%
4%
6%
5%3
6%
The expense ratio and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.08%.
3
Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
23
Real Estate II Index Fund
Notes to Financial Statements
Vanguard Real Estate II Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund is a wholly owned subsidiary of Vanguard Real Estate Index Fund (“Real Estate Index Fund”), and at July 31, 2026, the Real Estate Index Fund was the record and beneficial owner of 96.7% of the fund’s net assets. As part of the Real Estate Index Fund’s principal investment strategy, it attempts to replicate the benchmark index by investing all, or substantially all, of its assets—either directly or indirectly through the fund—in the stocks that make up the index.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation
date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been 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 valuation designee to represent fair value and subject to oversight by the board of trustees.
Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value.
2. Swap Contracts: The fund has entered into equity swap contracts to earn the total return on selected reference stocks or indexes 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 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.
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's 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.
The notional amounts of swap contracts are not recorded in the Statement of Assets and Liabilities. Swaps are valued daily based on market quotations received from independent pricing services or recognized dealers and the change in value is recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until periodic payments are made or the termination of the swap, at which time realized gain (loss) is recorded.
During the six months ended July 31, 2026, the fund’s average amounts of investments in total return swaps represented 1% of net assets, based on the average of notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund’s tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund’s tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund’s financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. The portion of distributions that exceed a fund's current and accumulated earnings and profits, as measured on a tax basis, constitute a non-taxable return of capital. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are subject to termination by the fund at any time, and are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled before the opening of the market on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the event of a default, the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the Statement of Assets and Liabilities for the return of the collateral, during the period the securities are on loan. Collateral investments in Vanguard Market Liquidity Fund are subject to market appreciation or depreciation. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan. During the term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
24
Real Estate II Index Fund
6. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund’s regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under either facility bear interest at the higher of the effective federal funds rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the “Order”) from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund’s investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day’s notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the six months ended July 31, 2026, the fund did not utilize the credit facilities or the Interfund Lending Program.
7. Other: Distributions received from investment securities are recorded on the ex-dividend date. Non-cash dividends included in income, if any, are recorded at the fair value of the securities received. Each investment security reports annually the tax character of its distributions. Dividend income, capital gain distributions received, and unrealized appreciation (depreciation) reflect the amounts of taxable income, capital gain, and return of capital
reported by the REITs, and management’s estimates of such amounts for REIT distributions for which actual information has not been reported. Interest
income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. Vanguard provides investment advisory services to the fund through its wholly owned subsidiary Vanguard Portfolio Management, LLC.
C. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees and are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At July 31, 2026, the fund had contributed to Vanguard capital in the amount of $229,000, representing less than 0.01% of the fund’s net assets and 0.09% of Vanguard’s capital received pursuant to the FSA. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
D. Various inputs may be used to determine the value of the fund’s investments and derivatives. 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 and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
The following table summarizes the market value of the fund's investments and derivatives as of July 31, 2026, based on the inputs used to value them: 
 
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
Investments
 
 
 
 
Assets
Common Stocks
10,905,913
—
—
10,905,913
Temporary Cash Investments
75,777
—
—
75,777
Total
10,981,690
—
—
10,981,690
 
 
 
 
 
Derivative Financial Instruments
 
 
 
 
Assets
Swap Contracts
—
201
—
201
Liabilities
Swap Contracts
—
(254
)
—
(254
)
 
 
 
25
Real Estate II Index Fund
E. As of July 31, 2026, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows: 
 
Amount
($000)
Tax Cost
8,443,508
Gross Unrealized Appreciation
3,524,181
Gross Unrealized Depreciation
(986,052
)
Net Unrealized Appreciation (Depreciation)
2,538,129
The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at January 31, 2026, the fund had available capital losses totaling $145,048,000 that may be carried forward indefinitely to offset future net capital gains. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending January 31, 2027; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.
F. During the six months ended July 31, 2026, the fund purchased $426,683,000 of investment securities and sold $254,205,000 of investment securities, other than temporary cash investments.
The fund purchased securities from and sold securities to other Vanguard funds or accounts managed by Vanguard or its affiliates, in accordance with procedures adopted by the board of trustees in compliance with Rule 17a-7 of the Investment Company Act of 1940. For the six months ended July 31, 2026, such purchases were $92,000 and sales were $1,000, resulting in net realized gain of less than $500; these amounts, other than temporary cash investments, are included in the purchases and sales of investment securities noted above.
G. Capital shares issued and redeemed were: 
 
Six Months Ended
July 31, 2026
Year Ended
January 31, 2026
 
Shares
(000)
Shares
(000)
Issued
425
1,947
Issued in Lieu of Cash Distributions
9,197
16,666
Redeemed
(700)
(303)
Net Increase (Decrease) in Shares Outstanding
8,922
18,310
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, political or regulatory conditions, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund’s investments and fund performance.
To the extent the fund’s investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund’s use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Operating segments are components of an entity that engage in business activities, have discrete financial information available, and have their operating results regularly reviewed by a chief operating decision maker (“CODM”). The fund is considered a single segment. Vanguard’s chief executive officer, chief investment officer, and chief financial officer, who are also officers of the fund, as well as the fund’s chief financial officer collectively act as the CODM. Vanguard has established various management committees to assist the CODM with overseeing aspects of the fund’s daily operations. Through these committees, the CODM manages the fund’s operations to achieve a single investment objective, as detailed in its prospectus, through the execution of the fund’s investment strategies. When assessing segment performance and making decisions about segment resources, the CODM relies on the fund’s portfolio composition, total returns, expense ratios and changes in net assets which are consistent with the information contained in the fund’s financial statements. Segment assets, liabilities, income, and expenses are also detailed in the accompanying financial statements.
J. Management has determined that no subsequent events or transactions occurred through the date the financial statements were issued that would require recognition or disclosure in these financial statements.
Q1232 092026
26
 
Financial Statements
For the six-months ended July 31, 2026
Vanguard Global Capital Cycles Fund
Global Capital Cycles Fund
Financial Statements (unaudited)
Schedule of Investments
As of July 31, 2026
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at www.sec.gov. 
 
 
 
 
 
Shares
Market
Value•
($000)
Common Stocks (99.3%)
Australia (2.8%)
 
BHP Group Ltd. ADR
602,148
50,876
 
BHP Group Ltd.
877,661
36,994
*
Bellevue Gold Ltd.
19,770,189
17,310
 
 
 
 
 
105,180
Brazil (5.6%)
 
Banco Bradesco SA ADR
15,470,976
55,850
 
Ambev SA
17,170,642
54,163
 
Lojas Renner SA
17,873,492
47,953
 
Suzano SA
4,176,321
35,690
*
Natura Cosmeticos SA
9,974,616
16,489
 
 
 
 
 
210,145
Canada (10.3%)
 
Teck Resources Ltd. Class B
2,119,050
127,519
 
Nutrien Ltd.
1,082,729
74,784
 
Eldorado Gold Corp.
1,825,084
55,084
 
Barrick Mining Corp.
979,570
35,979
*
Hemlo Mining Corp.
7,952,942
28,820
 
Lundin Mining Corp.
851,737
21,089
*
LunR Royalties Corp.
1,338,423
17,711
 
B2Gold Corp.
3,816,445
14,312
*,1
Abaxx Technologies Inc.
500,000
8,778
 
 
 
 
 
384,076
China (10.5%)
*
Baidu Inc. Class A
5,700,700
78,969
 
Zijin Mining Group Co. Ltd. Class H
17,028,696
72,304
 
JD.com Inc. Class A
3,391,519
55,790
 
Tencent Holdings Ltd.
852,496
52,090
 
China Mengniu Dairy Co. Ltd.
13,482,713
32,531
 
ENN Energy Holdings Ltd.
5,225,790
31,271
 
Alibaba Group Holding Ltd.
1,929,575
29,394
*,1
DiDi Global Inc. ADR
6,020,236
21,312
 
Shenzhou International Group Holdings Ltd.
1,821,151
10,350
 
Shandong Weigao Group Medical Polymer Co. Ltd. Class H
18,413,764
7,883
 
 
 
 
 
391,894
Finland (0.5%)
 
Stora Enso OYJ
1,540,829
17,719
France (6.6%)
 
Societe Generale SA
674,921
63,440
 
Arkema SA
554,715
37,783
 
Engie SA
1,195,504
37,265
 
Sanofi SA
385,811
33,223
 
Valeo SE
1,380,489
23,885
 
IPSOS SA
504,614
20,848
 
APERAM SA
278,928
14,734
 
Sopra Steria Group
66,813
14,182
 
 
 
 
 
245,360
Germany (3.5%)
 
Brenntag SE
944,016
66,569
*,2
Zalando SE
1,036,296
33,799
*
Wacker Chemie AG
284,874
29,178
 
 
 
 
 
129,546
Hong Kong (0.2%)
 
ASMPT Ltd.
379,802
7,288
Indonesia (0.3%)
 
Bank Negara Indonesia Persero Tbk. PT
33,178,781
6,496
1
Global Capital Cycles Fund
 
 
 
 
 
Shares
Market
Value•
($000)
 
Telkom Indonesia Persero Tbk. PT
41,563,000
6,068
 
 
 
 
 
12,564
Japan (1.0%)
 
SUMCO Corp.
1,231,940
25,045
 
Mitsubishi Estate Co. Ltd.
526,440
12,781
 
 
 
 
 
37,826
Mexico (2.6%)
 
America Movil SAB de CV Class B
50,956,564
64,933
*
Esentia Energy Development SAB de CV
5,636,331
17,209
 
Cemex SAB de CV ADR
1,316,626
15,563
 
 
 
 
 
97,705
Netherlands (2.3%)
 
Heineken NV
934,327
84,594
South Africa (4.0%)
 
Anglogold Ashanti plc
1,300,051
103,121
 
Valterra Platinum Ltd. (XLON)
320,867
24,294
 
Valterra Platinum Ltd.
311,594
23,332
 
 
 
 
 
150,747
South Korea (3.5%)
 
Samsung Electronics Co. Ltd.
733,514
127,672
 
LG Uplus Corp.
385,378
3,951
 
 
 
 
 
131,623
Switzerland (1.2%)
 
Swatch Group AG
141,261
31,582
 
Adecco Group AG (Registered)
543,184
15,183
 
 
 
 
 
46,765
Taiwan (2.1%)
 
Taiwan Semiconductor Manufacturing Co. Ltd. ADR
189,689
76,682
United Kingdom (26.3%)
 
Anglo American plc
3,235,288
163,775
 
Glencore plc
16,722,680
123,168
 
GSK plc
3,151,409
81,946
 
Prudential plc
4,785,948
71,926
 
Rio Tinto plc
676,445
65,730
 
British American Tobacco plc
947,003
57,446
 
Hikma Pharmaceuticals plc
2,567,787
54,817
 
Rio Tinto plc ADR
563,492
54,574
 
Derwent London plc
1,727,191
49,014
 
Unilever plc
761,160
48,431
 
Haleon plc
9,152,077
44,805
 
Hammerson plc
6,645,069
34,389
 
Serco Group plc
7,755,674
25,302
 
Shell plc
549,283
25,142
 
Domino's Pizza Group plc
6,473,380
17,651
 
Hays plc
19,724,846
15,062
 
Michael Page plc
4,709,971
11,577
 
Travis Perkins plc
1,418,842
10,630
 
UNITE Group plc
1,439,021
10,453
 
Mondi plc
815,162
9,828
 
Reckitt Benckiser Group plc
130,416
9,204
 
 
 
 
 
984,870
United States (16.0%)
 
American Water Works Co. Inc.
745,010
99,958
*
Molina Healthcare Inc.
485,957
95,063
 
Merck & Co. Inc.
513,297
66,831
 
Diamondback Energy Inc.
322,469
65,445
 
Pfizer Inc.
1,516,450
37,926
*
Centene Corp.
560,824
34,894
 
Viper Energy Inc. Class A
751,964
33,545
 
Mosaic Co.
1,255,230
27,766
 
Royal Gold Inc.
115,783
22,966
*
First Solar Inc.
101,193
21,355
 
Voya Financial Inc.
204,517
20,335
 
American Electric Power Co. Inc.
150,796
19,279
*
Antero Resources Corp.
448,770
16,219
2
Global Capital Cycles Fund
 
 
 
 
 
Shares
Market
Value•
($000)
 
Archer-Daniels-Midland Co.
183,060
14,511
 
CVS Health Corp.
124,793
13,032
 
Pilgrim's Pride Corp.
340,597
9,319
 
 
 
 
 
598,444
Total Common Stocks (Cost $2,988,241)
3,713,028
Temporary Cash Investments (1.8%)
Money Market Fund (1.8%)
3,4
Vanguard Market Liquidity Fund, 3.718% (Cost $66,391)
663,979
66,391
Total Investments (101.1%) (Cost $3,054,632)
3,779,419
Other Assets and Liabilities—Net (-1.1%)
(40,458
)
Net Assets (100%)
3,738,961
 
Cost is in $000.
 
•
See Note A in Notes to Financial Statements.
 
*
Non-income-producing security.
1
Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $11,328.
2
Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration, normally to qualified
institutional buyers. At July 31, 2026, the aggregate value was $33,799, representing 0.9% of net assets.
3
Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
4
Collateral of $12,436 was received for securities on loan.
 
 
ADR—American Depositary Receipt.
See accompanying Notes, which are an integral part of the Financial Statements.
3
Global Capital Cycles Fund
Statement of Assets and Liabilities
As of July 31, 2026
 
 
($000s, except shares and per-share amounts)
Amount
Assets
Investments in Securities, at Value1
Unaffiliated Issuers (Cost $2,988,241)
3,713,028
Affiliated Issuers (Cost $66,391)
66,391
Total Investments in Securities
3,779,419
Investment in Vanguard
78
Foreign Currency, at Value (Cost $1,998)
1,999
Receivables for Investment Securities Sold
2,385
Receivables for Accrued Income
7,540
Receivables for Capital Shares Issued
2,154
Other Assets
48
Total Assets
3,793,623
Liabilities
Payables for Investment Securities Purchased
38,022
Collateral for Securities on Loan
12,436
Payables for Capital Shares Redeemed
2,223
Payables to Investment Advisor
1,611
Payables to Vanguard
370
Total Liabilities
54,662
Net Assets
3,738,961
1 Includes $11,328 of securities on loan.
 
 
At July 31, 2026, net assets consisted of:
 
Paid-in Capital
4,172,037
Total Distributable Earnings (Loss)
(433,076
)
Net Assets
3,738,961

 
Net Assets
Applicable to 159,300,564 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
3,738,961
Net Asset Value Per Share
$23.47
See accompanying Notes, which are an integral part of the Financial Statements.
4
Global Capital Cycles Fund
Statement of Operations
 
 
 
Six Months Ended
July 31, 2026
 
($000)
Investment Income
Income
Dividends1
55,584
Interest2
1,328
Securities Lending—Net
304
Total Income
57,216
Expenses
Investment Advisory Fees—Note B
Basic Fee
2,572
Performance Adjustment
622
The Vanguard Group—Note C
Management and Administrative
4,031
Marketing and Distribution
149
Custodian Fees
64
Shareholders’ Reports
31
Trustees’ Fees and Expenses
1
Other Expenses
39
Total Expenses
7,509
Expenses Paid Indirectly
(1
)
Net Expenses
7,508
Net Investment Income
49,708
Realized Net Gain (Loss)
Investment Securities Sold2
418,718
Foreign Currencies
(560
)
Realized Net Gain (Loss)
418,158
Change in Unrealized Appreciation (Depreciation)
Investment Securities2
(259,429
)
Foreign Currencies
(209
)
Change in Unrealized Appreciation (Depreciation)
(259,638
)
Net Increase (Decrease) in Net Assets Resulting from Operations
208,228
 
1
Dividends are net of foreign withholding taxes of $2,489.
2
Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $1,284, ($23), and less than $1,
respectively. Purchases and sales are for temporary cash investment purposes.
See accompanying Notes, which are an integral part of the Financial Statements.
5
Global Capital Cycles Fund
Statement of Changes in Net Assets
 
 
 
Six Months Ended
July 31,
2026
Year Ended
January 31,
2026
 
($000)
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income
49,708
54,896
Realized Net Gain (Loss)
418,158
351,395
Change in Unrealized Appreciation (Depreciation)
(259,638
)
840,574
Net Increase (Decrease) in Net Assets Resulting from Operations
208,228
1,246,865
Distributions
Total Distributions
(43,927
)
(72,262
)
Capital Share Transactions
Issued
691,115
1,349,557
Issued in Lieu of Cash Distributions
38,258
61,185
Redeemed
(741,131
)
(430,134
)
Net Increase (Decrease) from Capital Share Transactions
(11,758
)
980,608
Total Increase (Decrease)
152,543
2,155,211
Net Assets
Beginning of Period
3,586,418
1,431,207
End of Period
3,738,961
3,586,418
See accompanying Notes, which are an integral part of the Financial Statements.
6
Global Capital Cycles Fund
Financial Highlights
 
 
 
  
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$22.42
$13.12
$11.74
$12.43
$11.28
$9.57
Investment Operations
Net Investment Income1
.301
.447
.284
.377
.392
.356
Net Realized and Unrealized Gain (Loss) on Investments
1.014
9.383
1.435
(.672
)
1.134
1.715
Total from Investment Operations
1.315
9.830
1.719
(.295
)
1.526
2.071
Distributions
Dividends from Net Investment Income
(.265
)
(.530
)
(.339
)
(.395
)
(.376
)
(.361
)
Distributions from Realized Capital Gains
—
—
—
—
—
—
Total Distributions
(.265
)
(.530
)
(.339
)
(.395
)
(.376
)
(.361
)
Net Asset Value, End of Period
$23.47
$22.42
$13.12
$11.74
$12.43
$11.28
Total Return2
6.00%
75.37%
14.76%
-2.52%
13.81%
21.74%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$3,739
$3,586
$1,431
$1,327
$1,520
$1,359
Ratio of Total Expenses to Average Net Assets3
0.40%4
0.42%4
0.44%
0.44%
0.43%4
0.36%
Ratio of Net Investment Income to Average Net Assets
2.65%
2.62%
2.16%
3.14%
3.45%
3.28%
Portfolio Turnover Rate
33%
50%
32%
67%
63%
57%
The expense ratio and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service
fees.
3
Includes performance-based investment advisory fee increases (decreases) of 0.03%, 0.05%, 0.07%, 0.06%, 0.05%, and (0.01%).
4
The ratio of expenses to average net assets for the period net of reduction from custody fee offset and/or broker commission abatement arrangements was 0.40%, 0.42%,
and 0.43%, respectively.
See accompanying Notes, which are an integral part of the Financial Statements.
7
Global Capital Cycles Fund
Notes to Financial Statements
Vanguard Global Capital Cycles Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation
date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades;
such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been 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 valuation designee to represent fair value and subject to oversight 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.
2. 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).
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund’s tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund’s tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund’s financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are subject to termination by the fund at any time, and are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled before the opening of the market on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the event of a default, the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the Statement of Assets and Liabilities for the return of the collateral, during the period the securities are on loan. Collateral investments in Vanguard Market Liquidity Fund are subject to market appreciation or depreciation. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan. During the term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
6. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund’s regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under either facility bear interest at the higher of the effective federal funds rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the “Order”) from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund’s investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day’s notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the six months ended July 31, 2026, the fund did not utilize the credit facilities or the Interfund Lending Program.
7. Other: Dividend income is recorded on the ex-dividend date. Non-cash dividends included in income, if any, are recorded at the fair value of the
securities received. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
8
Global Capital Cycles Fund
Taxes on foreign dividends and capital gains have been provided for in accordance with the applicable countries’ tax rules and rates. Deferred foreign capital gains tax, if any, is accrued daily based upon net unrealized gains. The fund has filed tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Amounts related to these reclaims are recorded when there are no significant uncertainties as to the ‎ultimate resolution of proceedings, the likelihood of receipt of these reclaims, and the potential timing of ‎payment. Such tax reclaims and related professional fees, if any, are included in dividend income and other expenses, respectively.
B. Wellington Management Company llp provides investment advisory services to the fund for a basic fee calculated at an annual percentage rate of average net assets. The basic fee is subject to quarterly adjustments based on the fund's performance relative to the Custom Global Capital Cycles Index for the preceding five years. For the six months ended July 31, 2026, the investment advisory fee represented an effective annual basic rate of 0.14% of the fund’s average net assets, before a net increase of $622,000 (0.03%) based on performance.
C. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees and are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At July 31, 2026, the fund had contributed to Vanguard capital in the amount of $78,000, representing less than 0.01% of the fund’s net assets and 0.03% of Vanguard’s capital received pursuant to the FSA. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
D. The fund has asked its investment advisor to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the fund part of the commissions generated. Such rebates are used solely to reduce the fund’s management and administrative expenses. For the six months ended July 31, 2026, these arrangements reduced the fund’s expenses by $1,000 (an annual rate of less than 0.01% of average net assets).
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 July 31, 2026, based on the inputs used to value them: 
 
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
Investments
 
 
 
 
Assets
Common Stocks—North and South America
1,290,370
—
—
1,290,370
Common Stocks—Other
306,565
2,116,093
—
2,422,658
Temporary Cash Investments
66,391
—
—
66,391
Total
1,663,326
2,116,093
—
3,779,419
 
 
 
F. As of July 31, 2026, gross unrealized appreciation and depreciation for investments based on cost for U.S. federal income tax purposes were as follows: 
 
Amount
($000)
Tax Cost
3,114,631
Gross Unrealized Appreciation
788,327
Gross Unrealized Depreciation
(123,539
)
Net Unrealized Appreciation (Depreciation)
664,788
The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at January 31, 2026, the fund had available capital losses totaling $1,564,720,000 that may be carried forward indefinitely to offset future net capital gains. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending January 31, 2027; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.
G. During the six months ended July 31, 2026, the fund purchased $1,372,415,000 of investment securities and sold $1,213,070,000 of investment securities, other than temporary cash investments.
9
Global Capital Cycles Fund
H. Capital shares issued and redeemed were: 
 
Six Months Ended
July 31, 2026
Year Ended
January 31, 2026
 
Shares
(000)
Shares
(000)
Issued
30,086
72,932
Issued in Lieu of Cash Distributions
1,815
3,027
Redeemed
(32,544)
(25,089)
Net Increase (Decrease) in Shares Outstanding
(643)
50,870
I. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, political or regulatory conditions, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund’s investments and fund performance.
To the extent the fund’s investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
J. Operating segments are components of an entity that engage in business activities, have discrete financial information available, and have their operating results regularly reviewed by a chief operating decision maker (“CODM”). The fund is considered a single segment. Vanguard’s chief executive officer, chief investment officer, and chief financial officer, who are also officers of the fund, as well as the fund’s chief financial officer collectively act as the CODM. Vanguard has established various management committees to assist the CODM with overseeing aspects of the fund’s daily operations. Through these committees, the CODM manages the fund’s operations to achieve a single investment objective, as detailed in its prospectus, through the execution of the fund’s investment strategies. When assessing segment performance and making decisions about segment resources, the CODM relies on the fund’s portfolio composition, total returns, expense ratios and changes in net assets which are consistent with the information contained in the fund’s financial statements. Segment assets, liabilities, income, and expenses are also detailed in the accompanying financial statements.
K. Management has determined that no subsequent events or transactions occurred through the date the financial statements were issued that would require recognition or disclosure in these financial statements.
Q532 092026
10
 
Financial Statements
For the six-months ended July 31, 2026
Vanguard Global ESG Select Stock Fund
Global ESG Select Stock Fund
Financial Statements (unaudited)
Schedule of Investments
As of July 31, 2026
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at www.sec.gov. 
 
 
 
 
 
Shares
Market
Value•
($000)
Common Stocks (99.3%)
Finland (1.0%)
 
Metso OYJ
875,755
16,393
France (9.2%)
 
L'Oreal SA
91,889
40,927
 
Schneider Electric SE
120,683
40,548
 
Cie Generale des Etablissements Michelin SCA
983,264
39,744
 
Air Liquide SA Loyalty Shares 2027
139,596
27,501
 
 
 
 
 
148,720
Hong Kong (3.1%)
 
AIA Group Ltd.
4,951,916
49,920
Japan (3.8%)
 
Recruit Holdings Co. Ltd.
441,769
34,935
 
Mitsubishi UFJ Financial Group Inc.
1,181,228
26,385
 
 
 
 
 
61,320
Netherlands (7.7%)
 
ASML Holding NV
28,930
47,675
 
DSM-Firmenich AG
360,417
38,856
 
ING Groep NV
1,067,020
37,497
 
 
 
 
 
124,028
Singapore (1.9%)
 
DBS Group Holdings Ltd.
541,284
31,230
Spain (3.2%)
 
Industria de Diseno Textil SA
794,720
51,866
Taiwan (5.7%)
 
Taiwan Semiconductor Manufacturing Co. Ltd.
1,232,816
91,186
United Kingdom (7.4%)
 
Compass Group plc
1,615,613
51,305
 
Ferguson Enterprises Inc.
164,195
38,476
 
National Grid plc
1,776,445
28,433
 
 
 
 
 
118,214
United States (56.3%)
 
Microsoft Corp.
247,631
115,079
 
Visa Inc. Class A
178,372
65,307
*
Advanced Micro Devices Inc.
111,656
53,165
 
Amphenol Corp. Class A
330,424
53,099
 
Texas Instruments Inc.
181,328
49,999
 
Automatic Data Processing Inc.
187,008
49,830
 
Danaher Corp.
237,849
46,376
 
Weyerhaeuser Co.
1,833,703
45,898
*
Edwards Lifesciences Corp.
506,643
43,607
 
M&T Bank Corp.
170,382
41,963
*
Mettler-Toledo International Inc.
29,404
41,645
*
Cadence Design Systems Inc.
116,181
39,504
 
Northern Trust Corp.
214,950
39,162
*
Arista Networks Inc.
215,772
38,915
 
Merck & Co. Inc.
257,823
33,569
 
Prologis Inc.
228,313
33,016
 
Procter & Gamble Co.
221,124
31,950
 
Deere & Co.
40,632
24,081
 
Marriott International Inc. Class A
58,346
21,753
 
Trane Technologies plc
44,069
20,049
1
Global ESG Select Stock Fund
 
 
 
 
 
Shares
Market
Value•
($000)
 
Progressive Corp.
85,307
18,036
 
 
 
 
 
906,003
Total Common Stocks (Cost $1,070,513)
1,598,880
Temporary Cash Investments (0.9%)
Money Market Fund (0.9%)
1
Vanguard Market Liquidity Fund, 3.718% (Cost $15,138)
151,400
15,138
Total Investments (100.2%) (Cost $1,085,651)
1,614,018
Other Assets and Liabilities—Net (-0.2%)
(3,425
)
Net Assets (100%)
1,610,593
 
Cost is in $000.
 
•
See Note A in Notes to Financial Statements.
 
*
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.
See accompanying Notes, which are an integral part of the Financial Statements.
2
Global ESG Select Stock Fund
Statement of Assets and Liabilities
As of July 31, 2026
 
 
($000s, except shares and per-share amounts)
Amount
Assets
Investments in Securities, at Value
Unaffiliated Issuers (Cost $1,070,513)
1,598,880
Affiliated Issuers (Cost $15,138)
15,138
Total Investments in Securities
1,614,018
Investment in Vanguard
34
Foreign Currency, at Value (Cost $1,647)
1,648
Receivables for Investment Securities Sold
17,197
Receivables for Accrued Income
1,884
Receivables for Capital Shares Issued
762
Total Assets
1,635,543
Liabilities
Payables for Investment Securities Purchased
19,019
Payables for Capital Shares Redeemed
4,976
Payables to Investment Advisor
789
Payables to Vanguard
166
Total Liabilities
24,950
Net Assets
1,610,593
 
 
At July 31, 2026, net assets consisted of:
 
Paid-in Capital
1,023,541
Total Distributable Earnings (Loss)
587,052
Net Assets
1,610,593
 
Investor Shares—Net Assets
Applicable to 5,959,812 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
261,418
Net Asset Value Per Share—Investor Shares
$43.86
 
Admiral™ Shares—Net Assets
Applicable to 24,592,597 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
1,349,175
Net Asset Value Per Share—Admiral Shares
$54.86
See accompanying Notes, which are an integral part of the Financial Statements.
3
Global ESG Select Stock Fund
Statement of Operations
 
 
 
Six Months Ended
July 31, 2026
 
($000)
Investment Income
Income
Dividends1
15,834
Interest2
191
Total Income
16,025
Expenses
Investment Advisory Fees—Note B
Basic Fee
1,624
Performance Adjustment
(219
)
The Vanguard Group—Note C
Management and Administrative—Investor Shares
380
Management and Administrative—Admiral Shares
1,338
Marketing and Distribution—Investor Shares
9
Marketing and Distribution—Admiral Shares
31
Custodian Fees
11
Shareholders’ Reports—Investor Shares
5
Shareholders’ Reports—Admiral Shares
10
Trustees’ Fees and Expenses
—
Other Expenses
10
Total Expenses
3,199
Net Investment Income
12,826
Realized Net Gain (Loss)
Investment Securities Sold2
47,397
Foreign Currencies
(56
)
Realized Net Gain (Loss)
47,341
Change in Unrealized Appreciation (Depreciation)
Investment Securities2
115,907
Foreign Currencies
(102
)
Change in Unrealized Appreciation (Depreciation)
115,805
Net Increase (Decrease) in Net Assets Resulting from Operations
175,972
 
1
Dividends are net of foreign withholding taxes of $543.
2
Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $172, ($2), and less than $1,
respectively. Purchases and sales are for temporary cash investment purposes.
See accompanying Notes, which are an integral part of the Financial Statements.
4
Global ESG Select Stock Fund
Statement of Changes in Net Assets
 
 
 
Six Months Ended
July 31,
2026
Year Ended
January 31,
2026
 
($000)
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income
12,826
25,946
Realized Net Gain (Loss)
47,341
40,513
Change in Unrealized Appreciation (Depreciation)
115,805
102,562
Net Increase (Decrease) in Net Assets Resulting from Operations
175,972
169,021
Distributions
Investor Shares
(4,720
)
(11,803
)
Admiral Shares
(23,802
)
(55,295
)
Total Distributions
(28,522
)
(67,098
)
Capital Share Transactions
Investor Shares
(15,159
)
(30,580
)
Admiral Shares
(39,822
)
39,087
Net Increase (Decrease) from Capital Share Transactions
(54,981
)
8,507
Total Increase (Decrease)
92,469
110,430
Net Assets
Beginning of Period
1,518,124
1,407,694
End of Period
1,610,593
1,518,124
See accompanying Notes, which are an integral part of the Financial Statements.
5
Global ESG Select Stock Fund
Financial Highlights
 
 
 
  
Investor Shares
 
 
 
 
 
 
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$39.89
$37.26
$32.76
$29.61
$30.97
$26.32
Investment Operations
Net Investment Income1
.324
.647
.639
.598
.524
.487
Net Realized and Unrealized Gain (Loss) on Investments
4.397
3.734
4.765
3.111
(1.298
)
5.004
Total from Investment Operations
4.721
4.381
5.404
3.709
(.774
)
5.491
Distributions
Dividends from Net Investment Income
(.053
)
(.584
)
(.605
)
(.559
)
(.467
)
(.386
)
Distributions from Realized Capital Gains
(.698
)
(1.167
)
(.299
)
—
(.119
)
(.455
)
Total Distributions
(.751
)
(1.751
)
(.904
)
(.559
)
(.586
)
(.841
)
Net Asset Value, End of Period
$43.86
$39.89
$37.26
$32.76
$29.61
$30.97
Total Return2
12.27%
12.25%
16.60%
12.59%
-2.39%
20.86%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$261
$253
$267
$218
$178
$169
Ratio of Total Expenses to Average Net Assets3
0.51%
0.54%4
0.58%
0.58%
0.57%
0.56%
Ratio of Net Investment Income to Average Net Assets
1.71%
1.72%
1.77%
1.97%
1.88%
1.61%
Portfolio Turnover Rate
32%
47%
33%
25%
38%
19%
The expense ratio and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service
fees.
3
Includes performance-based investment advisory fee increases (decreases) of (0.03%), (0.00%), 0.03%, 0.03%, 0.02%, and 0.01%.
4
The ratio of expenses to average net assets for the period net of reduction from broker commission abatement arrangements was 0.54%.
See accompanying Notes, which are an integral part of the Financial Statements.
6
Global ESG Select Stock Fund
Financial Highlights
  
Admiral Shares
 
 
 
 
 
 
For a Share Outstanding
Throughout Each Period
Six Months
Ended
July 31,
2026
Year Ended January 31,
2026
2025
2024
2023
2022
Net Asset Value, Beginning of Period
$49.88
$46.59
$40.96
$37.03
$38.73
$32.91
Investment Operations
Net Investment Income1
.434
.854
.838
.787
.684
.649
Net Realized and Unrealized Gain (Loss) on Investments
5.498
4.676
5.967
3.880
(1.609
)
6.258
Total from Investment Operations
5.932
5.530
6.805
4.667
(.925
)
6.907
Distributions
Dividends from Net Investment Income
(.080
)
(.780
)
(.801
)
(.737
)
(.626
)
(.517
)
Distributions from Realized Capital Gains
(.872
)
(1.460
)
(.374
)
—
(.149
)
(.570
)
Total Distributions
(.952
)
(2.240
)
(1.175
)
(.737
)
(.775
)
(1.087
)
Net Asset Value, End of Period
$54.86
$49.88
$46.59
$40.96
$37.03
$38.73
Total Return2
12.34%
12.37%
16.72%
12.67%
-2.27%
20.99%
Ratios/Supplemental Data
 
 
 
 
 
 
Net Assets, End of Period (Millions)
$1,349
$1,266
$1,141
$911
$691
$606
Ratio of Total Expenses to Average Net Assets3
0.41%
0.44%4
0.48%
0.48%
0.47%
0.46%
Ratio of Net Investment Income to Average Net Assets
1.82%
1.81%
1.86%
2.07%
1.97%
1.71%
Portfolio Turnover Rate
32%
47%
33%
25%
38%
19%
The expense ratio and net investment income ratio for the current period have been annualized.
 
1
Calculated based on average shares outstanding.
2
Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service
fees.
3
Includes performance-based investment advisory fee increases (decreases) of (0.03%), (0.00%), 0.03%, 0.03%, 0.02%, and 0.01%.
4
The ratio of expenses to average net assets for the period net of reduction from broker commission abatement arrangements was 0.44%.
See accompanying Notes, which are an integral part of the Financial Statements.
7
Global ESG Select Stock Fund
Notes to Financial Statements
Vanguard Global ESG Select Stock Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund offers two classes of shares: Investor Shares and Admiral Shares. Each of the share classes has different eligibility and minimum purchase requirements, and is designed for different types of investors.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation
date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been 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 valuation designee to represent fair value and subject to oversight 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.
2. 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).
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund’s tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund’s tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund’s financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund’s regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under either facility bear interest at the higher of the effective federal funds rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the “Order”) from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund’s investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day’s notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the six months ended July 31, 2026, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Dividend income is recorded on the ex-dividend date. Non-cash dividends included in income, if any, are recorded at the fair value of the
securities received. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
Taxes on foreign dividends and capital gains have been provided for in accordance with the applicable countries’ tax rules and rates. Deferred foreign capital gains tax, if any, is accrued daily based upon net unrealized gains. The fund has filed tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Amounts related to these reclaims are recorded when there are no significant uncertainties as to the ‎ultimate resolution of proceedings, the likelihood of receipt of these reclaims, and the potential timing of ‎payment. Such tax reclaims and related professional fees, if any, are included in dividend income and other expenses, respectively.
Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses) and shareholder reporting. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.
8
Global ESG Select Stock Fund
B. Wellington Management Company llp provides investment advisory services to the fund for a basic fee calculated at an annual percentage rate of average net assets. The basic fee is subject to quarterly adjustments based on the fund's performance relative to the FTSE All-World Index for the preceding five years. For the six months ended July 31, 2026, the investment advisory fee represented an effective annual basic rate of 0.22% of the fund’s average net assets, before a net decrease of $219,000 (0.03%) based on performance.
C. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees and are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At July 31, 2026, the fund had contributed to Vanguard capital in the amount of $34,000, representing less than 0.01% of the fund’s net assets and 0.01% of Vanguard’s capital received pursuant to the FSA. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
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 July 31, 2026, based on the inputs used to value them: 
 
Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
Investments
 
 
 
 
Assets
Common Stocks—North and South America
906,003
—
—
906,003
Common Stocks—Other
38,476
654,401
—
692,877
Temporary Cash Investments
15,138
—
—
15,138
Total
959,617
654,401
—
1,614,018
 
 
 
E. As of July 31, 2026, gross unrealized appreciation and depreciation for investments based on cost for U.S. federal income tax purposes were as follows: 
 
Amount
($000)
Tax Cost
1,087,095
Gross Unrealized Appreciation
540,958
Gross Unrealized Depreciation
(14,035
)
Net Unrealized Appreciation (Depreciation)
526,923
F. During the six months ended July 31, 2026, the fund purchased $474,633,000 of investment securities and sold $537,864,000 of investment securities, other than temporary cash investments.
G. Capital share transactions for each class of shares were: 
 
Six Months Ended
July 31, 2026
Year Ended
January 31, 2026
 
Amount
($000)
Shares
(000)
Amount
($000)
Shares
(000)
Investor Shares
Issued
15,839
395
57,450
1,534
Issued in Lieu of Cash Distributions
4,293
121
10,471
288
Redeemed
(35,291)
(889)
(98,501)
(2,644)
Net Increase (Decrease)—Investor Shares
(15,159)
(373)
(30,580)
(822)
Admiral Shares
Issued
68,449
1,359
283,390
6,034
Issued in Lieu of Cash Distributions
21,481
483
47,012
1,027
Redeemed
(129,752)
(2,620)
(291,315)
(6,182)
Net Increase (Decrease)—Admiral Shares
(39,822)
(778)
39,087
879
9
Global ESG Select Stock Fund
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, political or regulatory conditions, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund’s investments and fund performance.
To the extent the fund’s investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
I. Operating segments are components of an entity that engage in business activities, have discrete financial information available, and have their operating results regularly reviewed by a chief operating decision maker (“CODM”). The fund is considered a single segment. Vanguard’s chief executive officer, chief investment officer, and chief financial officer, who are also officers of the fund, as well as the fund’s chief financial officer collectively act as the CODM. Vanguard has established various management committees to assist the CODM with overseeing aspects of the fund’s daily operations. Through these committees, the CODM manages the fund’s operations to achieve a single investment objective, as detailed in its prospectus, through the execution of the fund’s investment strategies. When assessing segment performance and making decisions about segment resources, the CODM relies on the fund’s portfolio composition, total returns, expense ratios and changes in net assets which are consistent with the information contained in the fund’s financial statements. Segment assets, liabilities, income, and expenses are also detailed in the accompanying financial statements.
J. Management has determined that no subsequent events or transactions occurred through the date the financial statements were issued that would require recognition or disclosure in these financial statements.
Q5472 092026
10

 

Item 8: Changes in and Disagreements with Accountants for Open-End Management Investment Companies.

 

Not applicable.

 

Item 9: Proxy Disclosures for Open-End Management Investment Companies.

 

Not applicable.

 

Item 10: Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.

 

Not applicable. The Trustees’ Fees and Expenses are included in the financial statements filed under Item 7 of this Form.

 

 

 

 

Item 11: Statement Regarding Basis for Approval of Investment Advisory Contracts.

 

Trustees Approve Advisory Arrangement – Global Capital Cycles

 

A majority of independent trustees of the board of Vanguard Global Capital Cycles Fund (Trustees) has renewed the fund’s investment advisory arrangement with Wellington Management Company, LLP (Wellington Management). The Trustees determined that renewing the fund’s advisory arrangement was in the best interests of the fund and its shareholders.

 

The Trustees based their decision upon an evaluation of the advisor’s investment staff, portfolio management process, and performance. This evaluation included information provided to the Trustees by Vanguard’s Oversight and Manager Search team (OMS), which is responsible for fund and advisor oversight and product management. OMS met regularly with the advisor and made presentations to the Trustees during the fiscal year that directed their focus to relevant information and topics.

 

The Trustees also received information throughout the year during advisor presentations conducted by the Oversight and Manager Search team. For each advisor presentation, the Trustees were provided with letters and reports that included information about, among other things, the advisory firm and the advisor’s assessment of the investment environment, portfolio performance, and portfolio characteristics.

 

In addition, the Trustees received periodic reports throughout the year, which included information about each fund’s performance relative to its peers and benchmark, as applicable, and updates, as needed, on the Oversight and Manager Search team’s ongoing assessment of the advisor.

 

Prior to their meeting, the Trustees were provided with a memo and materials that summarized the information they received over the course of the year. They also considered the factors discussed below, among others. However, no single factor determined whether the Trustees approved the arrangement. Rather, it was the totality of the circumstances that drove the Trustees’ decision.

 

Nature, extent, and quality of services

 

The Trustees reviewed the quality of the investment management services provided to the fund since Wellington Management began managing the fund in September 2018; it also took into account the organizational depth and stability of the advisor. The board considered that Wellington Management, founded in 1928, is among the nation’s oldest and most respected institutional investment managers. The advisor follows a global equity strategy that seeks to provide investors with uncorrelated returns to other asset classes through a blend of capital cycle and enduring assets. Identification of potential investments begins with the capital cycles framework, which seeks companies that are positioned to succeed through unique and superior business models and healthy balance sheets in sectors and industries where there is capital destruction, consolidation, or retrenchment of investment. Valuation and quality factors such as discount to intrinsic value, cash generation, capital expenditure, and future capital deployment opportunities are considered.

 

 

 

 

The Trustees concluded that the advisor’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangement.

 

Investment performance

 

The Trustees considered the fund’s short- and long-term performance of Wellington Management since it began managing the fund in 2018, including any periods of outperformance or underperformance compared with a relevant benchmark index and peer group. The Trustees concluded the performance was such that the advisory arrangement should continue.

 

The Trustees considered the fund’s short- and long-term performance, including any periods of outperformance or underperformance compared with a relevant benchmark index and peer group. The Trustees concluded the performance was such that the advisory arrangement should continue.

 

Cost

 

The Trustees concluded that the fund’s expense ratio was below the average expense ratio charged by funds in its peer group and that the fund’s advisory fee rate was also below the peer-group average.

 

The Trustees did not consider the profitability of Wellington Management in determining whether to approve the advisory fee, because Wellington Management is independent of Vanguard and the advisory fee is the result of arm’s-length negotiations.

 

The benefit of economies of scale

 

The Trustees concluded that the fund’s shareholders benefit from economies of scale because of breakpoints in the fund’s advisory fee schedule. The breakpoints reduce the effective rate of the fee as the fund’s assets increase.

 

The Trustees will consider whether to renew the advisory arrangement again within a one-year period.

 

Trustees Approve Advisory Arrangements Real Estate Index Fund and Real Estate II Index Fund

 

A majority of independent trustees of the board of Vanguard Real Estate Index Fund and Vanguard Real Estate II Index Fund (Trustees) have renewed each fund’s investment advisory arrangement with The Vanguard Group, Inc. (Vanguard), which provides investment advisory services to each fund through its subsidiary, Vanguard Portfolio Management LLC (VPM). The trustees determined that continuing the advisory arrangements was in the best interests of each fund and its shareholders.

 

The Trustees based their decisions upon an evaluation of VPM’s investment staff, portfolio management process, and performance. This evaluation included information provided by Vanguard’s Oversight and Manager Search team, which is responsible for fund and advisor oversight and product management.

 

 

 

 

The Oversight and Manager Search team met regularly with the advisor and made presentations to the Trustees during the fiscal year that directed the Trustees’ focus to relevant information and topics.

 

The board, or an investment committee made up of Trustees, also received information throughout the year during advisor presentations conducted by the Oversight and Manager Search team. For each advisor presentation, the Trustees were provided with letters and reports that included information about, among other things, the advisory firm and the advisor’s assessment of the investment environment, portfolio performance, and portfolio characteristics.

 

In addition, the Trustees received periodic reports throughout the year, which included information about the fund’s performance relative to its peers and benchmark, as applicable, and updates, as needed, on the Oversight and Manager Search team’s ongoing assessment of the advisor.

 

Prior to their meeting, the trustees were provided with a memo and materials that summarized the information they received over the course of the year. The Trustees considered the factors discussed below, among others. However, no single factor determined whether to approve the arrangements. Rather, it was the totality of the circumstances that drove the Trustee’s decisions.

 

Nature, extent, and quality of services

 

The Trustees considered the quality of each fund’s investment management services over both the short and long term and took into account the organizational depth and stability of Vanguard and VPM. The Trustees considered that Vanguard has been managing investments for more than four decades. The Strategic Equity Index Management team (SE), now within VPM, adheres to the same sound, disciplined investment management process and has considerable experience, stability and depth. In its management of other Vanguard passive and active equity funds and portfolios, the team has a track record of consistent performance as a result of its disciplined investment processes. SE has specific expertise and experience managing U.S. style-box, sector, and smart-beta index strategies, effectively navigating index reconstitutions and mitigating transactions costs to deliver tight tracking error while opportunistically seeking to add excess returns through sophisticated trading strategies and superior access to corporate actions.

 

The Trustees concluded that VPM’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangements.

 

Investment performance

 

The Trustees considered each fund’s short- and long-term performance, including any periods of outperformance or underperformance compared with a relevant benchmark index and peer group. The Trustees concluded the performance was such that the advisory arrangement should continue.

 

 

 

 

Cost

 

The Trustees concluded that each fund’s expense ratio was below the average expense ratio charged by funds in its peer group and that each fund’s advisory expenses were also below the peer-group average.

 

The Trustees do not conduct a profitability analysis of Vanguard in providing investment advisory services through VPM because of Vanguard’s unique structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees.

 

The benefit of economies of scale

 

The Trustees concluded that each fund’s arrangement with Vanguard, and services rendered through VPM, ensure that the fund will realize economies of scale as it grows, with the cost to shareholders declining as fund assets increase.

 

The Trustees will consider whether to renew the advisory arrangements again within a one-year period.

 

 

 

 

 

Item 12: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable.

 

Item 13: Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable.

 

Item 14: Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not applicable.

 

Item 15: Submission of Matters to a Vote of Security Holders.

 

Not applicable.

 

Item 16: 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. There were no changes in the Registrant’s Internal Control Over Financial Reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

 

 

 

Item 17: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

Not applicable.

 

Item 18: Recovery of Erroneously Awarded Compensation

 

Not applicable.

 

Item 19: Exhibits.

 

(a)(1) Not applicable.
(a)(2) Certifications filed herewith.
(a)(2) Certifications filed herewith.

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 VANGUARD SPECIALIZED FUNDS  
    
BY:/s/ SALIM RAMJI*
    SALIM RAMJI  
CHIEF EXECUTIVE OFFICER  

 

Date: September 21, 2026

 

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/ SALIM RAMJI*
    SALIM RAMJI  
CHIEF EXECUTIVE OFFICER  

 

Date: September 21, 2026

 

 VANGUARD SPECIALIZED FUNDS  
    
BY:/s/ CHRISTINE BUCHANAN*
    CHRISTINE BUCHANAN  
CHIEF FINANCIAL OFFICER  

 

Date: September 21, 2026

 

* By: /s/ Natalie Lamarque  

 

Natalie Lamarque, pursuant to a Power of Attorney  filed on December 19, 2025 (see File Number 33-49023), and to a Power of Attorney  filed on February 27, 2026 (see File Number 333-177613), Incorporated by Reference.

 

 

 

ATTACHMENTS / EXHIBITS

ATTACHMENTS / EXHIBITS

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