Vanguard Specialized Funds
10/01/2026 | Press release | Distributed by Public on 10/01/2026 07:45
Semi-Annual Report by Investment Company (Form N-CSRS)
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
|
Dividend Growth Fund |
|
|
Energy Opportunities Fund |
|
|
Energy Opportunities Fund |
|
|
Health Care Fund |
|
|
Health Care Fund |
|
|
Dividend Appreciation Index Fund |
|
|
Dividend Appreciation Index Fund |
|
Vanguard Dividend Growth Fund
Investor Shares (VDIGX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Dividend Growth 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)
Table Summary
|
Share Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Investor Shares
|
$10
|
0.19%Footnote Reference1
|
| Footnote | Description |
|
Footnote1
|
Annualized. |
Fund Statistics (as of July 31, 2026)
Table Summary
|
Fund Net Assets (in millions)
|
$35,481
|
|
Number of Portfolio Holdings
|
70
|
|
Portfolio Turnover Rate
|
25%
|
Portfolio Composition % of Net Assets (as of July 31, 2026)
Table Summary
|
Communication Services
|
1.5%
|
|
Consumer Discretionary
|
7.7%
|
|
Consumer Staples
|
6.2%
|
|
Energy
|
2.7%
|
|
Financials
|
21.4%
|
|
Health Care
|
17.6%
|
|
Industrials
|
12.9%
|
|
Information Technology
|
24.7%
|
|
Materials
|
2.6%
|
|
Utilities
|
1.7%
|
|
Other Assets and Liabilities-Net
|
1.0%
|
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.
SR57
Vanguard Energy Opportunities Fund
Investor Shares (VGENX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Energy Opportunities Fund (the "Fund") (formerly known as Vanguard Energy 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)
Table Summary
|
Share Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Investor Shares
|
$23
|
0.44%Footnote Reference1
|
| Footnote | Description |
|
Footnote1
|
Annualized. |
Fund Statistics (as of July 31, 2026)
Table Summary
|
Fund Net Assets (in millions)
|
$7,311
|
|
Number of Portfolio Holdings
|
43
|
|
Portfolio Turnover Rate
|
8%
|
Portfolio Composition % of Net Assets (as of July 31, 2026)
Table Summary
|
Asia
|
2.8%
|
|
Europe
|
32.2%
|
|
North America
|
63.4%
|
|
South America
|
1.1%
|
|
Other Assets and Liabilities-Net
|
0.5%
|
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.
SR51
Vanguard Energy Opportunities Fund
Admiral™ Shares (VGELX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Energy Opportunities Fund (the "Fund") (formerly known as Vanguard Energy 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)
Table Summary
|
Share Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Admiral Shares
|
$19
|
0.36%Footnote Reference1
|
| Footnote | Description |
|
Footnote1
|
Annualized. |
Fund Statistics (as of July 31, 2026)
Table Summary
|
Fund Net Assets (in millions)
|
$7,311
|
|
Number of Portfolio Holdings
|
43
|
|
Portfolio Turnover Rate
|
8%
|
Portfolio Composition % of Net Assets (as of July 31, 2026)
Table Summary
|
Asia
|
2.8%
|
|
Europe
|
32.2%
|
|
North America
|
63.4%
|
|
South America
|
1.1%
|
|
Other Assets and Liabilities-Net
|
0.5%
|
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.
SR551
Vanguard Health Care Fund
Investor Shares (VGHCX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Health Care 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)
Table Summary
|
Share Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Investor Shares
|
$17
|
0.34%Footnote Reference1
|
| Footnote | Description |
|
Footnote1
|
Annualized. |
Fund Statistics (as of July 31, 2026)
Table Summary
|
Fund Net Assets (in millions)
|
$38,166
|
|
Number of Portfolio Holdings
|
97
|
|
Portfolio Turnover Rate
|
24%
|
Portfolio Composition % of Net Assets (as of July 31, 2026)
Table Summary
|
Asia
|
5.5%
|
|
Europe
|
18.2%
|
|
North America
|
74.1%
|
|
Other Assets and Liabilities-Net
|
2.2%
|
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.
SR52
Vanguard Health Care Fund
Admiral™ Shares (VGHAX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Health Care 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)
Table Summary
|
Share Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Admiral Shares
|
$14
|
0.28%Footnote Reference1
|
| Footnote | Description |
|
Footnote1
|
Annualized. |
Fund Statistics (as of July 31, 2026)
Table Summary
|
Fund Net Assets (in millions)
|
$38,166
|
|
Number of Portfolio Holdings
|
97
|
|
Portfolio Turnover Rate
|
24%
|
Portfolio Composition % of Net Assets (as of July 31, 2026)
Table Summary
|
Asia
|
5.5%
|
|
Europe
|
18.2%
|
|
North America
|
74.1%
|
|
Other Assets and Liabilities-Net
|
2.2%
|
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.
SR552
Vanguard Dividend Appreciation Index Fund
ETF Shares (VIG) NYSE Arca
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Dividend Appreciation 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)
Table Summary
|
Share Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
ETF Shares
|
$2
|
0.04%Footnote Reference1
|
| Footnote | Description |
|
Footnote1
|
Annualized. |
Fund Statistics (as of July 31, 2026)
Table Summary
|
Fund Net Assets (in millions)
|
$130,900
|
|
Number of Portfolio Holdings
|
340
|
|
Portfolio Turnover Rate
|
4%
|
Portfolio Composition % of Net Assets (as of July 31, 2026)
Table Summary
|
Consumer Discretionary
|
4.2%
|
|
Consumer Staples
|
9.3%
|
|
Energy
|
3.3%
|
|
Financials
|
21.8%
|
|
Health Care
|
17.7%
|
|
Industrials
|
11.9%
|
|
Information Technology
|
25.3%
|
|
Materials
|
3.2%
|
|
Utilities
|
2.9%
|
|
Other Assets and Liabilities-Net
|
0.4%
|
This table reflects the Fund's investments, including short-term investments, derivatives 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.
SR920
Vanguard Dividend Appreciation Index Fund
Admiral™ Shares (VDADX)
Semi-Annual Shareholder Report | July 31, 2026
This semi-annual shareholder report contains important information about Vanguard Dividend Appreciation 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)
Table Summary
|
Share Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Admiral Shares
|
$4
|
0.07%Footnote Reference1
|
| Footnote | Description |
|
Footnote1
|
Annualized. |
Fund Statistics (as of July 31, 2026)
Table Summary
|
Fund Net Assets (in millions)
|
$130,900
|
|
Number of Portfolio Holdings
|
340
|
|
Portfolio Turnover Rate
|
4%
|
Portfolio Composition % of Net Assets (as of July 31, 2026)
Table Summary
|
Consumer Discretionary
|
4.2%
|
|
Consumer Staples
|
9.3%
|
|
Energy
|
3.3%
|
|
Financials
|
21.8%
|
|
Health Care
|
17.7%
|
|
Industrials
|
11.9%
|
|
Information Technology
|
25.3%
|
|
Materials
|
3.2%
|
|
Utilities
|
2.9%
|
|
Other Assets and Liabilities-Net
|
0.4%
|
This table reflects the Fund's investments, including short-term investments, derivatives 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.
SR5702
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 Dividend Growth Fund
Contents
|
Financial Statements
|
1
|
|
|
|
Dividend Growth 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 (99.0%)
|
|||
|
Communication Services (1.5%)
|
|||
|
|
Alphabet Inc. Class A
|
1,489,258
|
530,369
|
|
Consumer Discretionary (7.7%)
|
|||
|
|
Home Depot Inc.
|
2,636,912
|
875,349
|
|
|
TJX Cos. Inc.
|
5,068,526
|
797,482
|
|
|
McDonald's Corp.
|
1,514,980
|
410,014
|
|
|
Marriott International Inc. Class A
|
1,006,301
|
375,179
|
|
|
NIKE Inc. Class B
|
6,852,981
|
285,838
|
|
|
|
|
2,743,862
|
|
Consumer Staples (6.2%)
|
|||
|
|
Coca-Cola Co.
|
7,303,254
|
639,692
|
|
|
Unilever plc
|
7,058,887
|
449,140
|
|
|
Procter & Gamble Co.
|
2,822,324
|
407,798
|
|
|
PepsiCo Inc.
|
1,383,735
|
193,114
|
|
|
Walmart Inc.
|
1,602,004
|
178,143
|
|
*
|
US Foods Holding Corp.
|
1,449,905
|
145,846
|
|
|
Colgate-Palmolive Co.
|
1,345,935
|
122,884
|
|
|
Kroger Co.
|
881,025
|
50,870
|
|
|
|
|
2,187,487
|
|
Energy (2.7%)
|
|||
|
|
ExxonMobil Holdings Corp.
|
4,275,096
|
664,521
|
|
|
TotalEnergies SE (XNYS) ADR
|
3,422,073
|
300,663
|
|
|
|
|
965,184
|
|
Financials (21.4%)
|
|||
|
|
Mastercard Inc. Class A
|
2,466,952
|
1,413,810
|
|
|
Visa Inc. Class A (XNYS)
|
3,355,458
|
1,228,534
|
|
|
Blackrock Inc.
|
970,963
|
1,058,729
|
|
|
Wells Fargo & Co.
|
11,550,584
|
998,548
|
|
|
Marsh & McLennan Cos. Inc.
|
4,623,171
|
876,969
|
|
|
Chubb Ltd.
|
2,121,141
|
743,842
|
|
|
JPMorgan Chase & Co. (XNYS)
|
1,829,631
|
643,646
|
|
|
S&P Global Inc.
|
816,479
|
336,332
|
|
|
UBS Group AG (Registered)
|
5,740,784
|
303,444
|
|
|
|
|
7,603,854
|
|
Health Care (17.6%)
|
|||
|
|
Eli Lilly & Co.
|
1,438,568
|
1,652,684
|
|
|
Merck & Co. Inc.
|
7,319,240
|
952,965
|
|
|
Stryker Corp.
|
2,235,827
|
728,209
|
|
|
Danaher Corp.
|
3,526,208
|
687,540
|
|
|
Johnson & Johnson
|
2,515,972
|
644,969
|
|
|
Amgen Inc.
|
1,359,131
|
523,483
|
|
|
Elevance Health Inc. (XNYS)
|
1,261,543
|
474,138
|
|
|
Cardinal Health Inc.
|
1,476,901
|
339,732
|
|
|
AbbVie Inc.
|
763,096
|
191,491
|
|
|
AstraZeneca plc ADR
|
189,516
|
32,150
|
|
|
|
|
6,227,361
|
|
Industrials (12.9%)
|
|||
|
|
Automatic Data Processing Inc.
|
3,198,960
|
852,395
|
|
|
Northrop Grumman Corp.
|
1,162,288
|
630,518
|
|
|
Trane Technologies plc
|
1,189,724
|
541,265
|
|
|
AMETEK Inc.
|
2,009,236
|
485,652
|
|
|
Honeywell International Inc.
|
1,976,001
|
480,267
|
|
|
Canadian National Railway Co.
|
3,327,692
|
423,127
|
|
*
|
Honeywell Aerospace Inc.
|
1,976,001
|
408,519
|
|
|
Caterpillar Inc. (XNYS)
|
434,270
|
353,848
|
|
|
Deere & Co.
|
596,545
|
353,554
|
|
|
Waste Management Inc.
|
77,639
|
17,589
|
|
|
Rollins Inc.
|
399,038
|
15,152
|
1
Dividend Growth Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
|
CH Robinson Worldwide Inc.
|
94,429
|
13,950
|
|
|
|
|
4,575,836
|
|
Information Technology (24.7%)
|
|||
|
|
Broadcom Inc.
|
5,352,977
|
2,083,807
|
|
|
Microsoft Corp.
|
4,415,608
|
2,052,021
|
|
|
Apple Inc.
|
3,819,120
|
1,179,765
|
|
|
Texas Instruments Inc.
|
3,834,345
|
1,057,282
|
|
|
KLA Corp.
|
3,576,072
|
653,778
|
|
|
Amphenol Corp. Class A
|
3,941,906
|
633,464
|
|
|
International Business Machines Corp.
|
1,534,693
|
343,234
|
|
|
QUALCOMM Inc.
|
2,053,830
|
303,166
|
|
|
ASML Holding NV GDR (Registered)
|
142,807
|
232,633
|
|
|
NVIDIA Corp.
|
1,112,425
|
223,319
|
|
|
|
|
8,762,469
|
|
Materials (2.6%)
|
|||
|
|
Linde plc
|
1,711,385
|
818,692
|
|
*
|
Glencore plc
|
15,353,310
|
113,083
|
|
|
|
|
931,775
|
|
Utilities (1.7%)
|
|||
|
|
American Water Works Co. Inc.
|
2,716,844
|
364,519
|
|
|
Sempra
|
1,947,863
|
172,483
|
|
|
Dominion Energy Inc.
|
774,751
|
53,590
|
|
|
|
|
590,592
|
|
Total Common Stocks (Cost $20,022,285)
|
35,118,789
|
||
|
Temporary Cash Investments (1.1%)
|
|||
|
Money Market Fund (0.0%)
|
|||
|
1
|
Vanguard Market Liquidity Fund, 3.718%
|
262
|
26
|
|
|
|
Face
Amount
($000)
|
|
|
Repurchase Agreements (1.1%)
|
|||
|
|
Bank of America Securities, LLC 3.650%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $20,006, collateralized by U.S. Treasury Obligations 0.000%-4.625%, 8/6/2026-11/15/2055, with a
value of $20,400)
|
20,000
|
20,000
|
|
|
Bank of America Securities, LLC 3.660%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $35,011, collateralized by U.S. Government Agency Obligations 3.000%-6.000%,
12/1/2040-4/1/2056, with a value of $35,700)
|
35,000
|
35,000
|
|
|
Credit Agricole Securities 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $77,323, collateralized by U.S. Treasury and Government Agency Obligations 0.000%-5.400%,
10/31/2026-8/15/2054, with a value of $78,846)
|
77,300
|
77,300
|
|
|
JP Morgan Securities, LLC 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $55,017, collateralized by U.S. Treasury Obligations 4.625%, 6/15/2027, with a value of $56,100)
|
55,000
|
55,000
|
|
|
Natixis SA 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $64,119, collateralized by U.S. Treasury and Government Agency Obligations 0.500%-4.875%,
12/31/2026-11/15/2055, with a value of $65,382)
|
64,100
|
64,100
|
|
|
Nomura International plc 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $75,023, collateralized by U.S. Treasury Obligations 3.750%-4.250%, 7/31/2028-5/31/2031, with a
value of $76,500)
|
75,000
|
75,000
|
|
|
Societe Generale 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $75,723, collateralized by U.S. Treasury Obligations 3.375%-4.625%, 2/15/2040-8/15/2042, with a
value of $77,214)
|
75,700
|
75,700
|
|
|
|
|
402,100
|
|
Total Temporary Cash Investments (Cost $402,126)
|
402,126
|
||
|
Total Investments (100.1%) (Cost $20,424,411)
|
35,520,915
|
||
|
Other Assets and Liabilities-Net (-0.1%)
|
(40,139)
|
||
|
Net Assets (100%)
|
35,480,776
|
||
|
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.
|
|
|
ADR-American Depositary Receipt.
|
|
|
GDR-Global Depositary Receipt.
|
See accompanying Notes, which are an integral part of the Financial Statements.
2
Dividend Growth 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 $20,424,385)
|
35,520,889
|
|
Affiliated Issuers (Cost $26)
|
26
|
|
Total Investments in Securities
|
35,520,915
|
|
Investment in Vanguard
|
763
|
|
Cash
|
40
|
|
Foreign Currency, at Value (Cost $29)
|
29
|
|
Receivables for Investment Securities Sold
|
124,574
|
|
Receivables for Accrued Income
|
23,694
|
|
Receivables for Capital Shares Issued
|
3,185
|
|
Total Assets
|
35,673,200
|
|
Liabilities
|
|
|
Payables for Investment Securities Purchased
|
160,617
|
|
Payables to Investment Advisor
|
4,000
|
|
Payables for Capital Shares Redeemed
|
25,629
|
|
Payables to Vanguard
|
2,178
|
|
Total Liabilities
|
192,424
|
|
Net Assets
|
35,480,776
|
|
At July 31, 2026, net assets consisted of:
|
|
|
|
|
|
Paid-in Capital
|
16,999,515
|
|
Total Distributable Earnings (Loss)
|
18,481,261
|
|
Net Assets
|
35,480,776
|
|
|
|
|
Net Assets
|
|
|
Applicable to 1,112,031,391 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
|
35,480,776
|
|
Net Asset Value Per Share
|
$31.91
|
See accompanying Notes, which are an integral part of the Financial Statements.
3
Dividend Growth Fund
Statement of Operations
|
|
|
|
|
Six Months Ended
July 31, 2026
|
|
|
($000)
|
|
Investment Income
|
|
|
Income
|
|
|
Dividends1
|
272,431
|
|
Interest
|
7,619
|
|
Securities Lending-Net
|
1
|
|
Total Income
|
280,051
|
|
Expenses
|
|
|
Investment Advisory Fees-Note B
|
|
|
Basic Fee
|
24,265
|
|
Performance Adjustment
|
(15,674
)
|
|
The Vanguard Group-Note C
|
|
|
Management and Administrative
|
24,242
|
|
Marketing and Distribution
|
977
|
|
Custodian Fees
|
119
|
|
Shareholders' Reports
|
167
|
|
Trustees' Fees and Expenses
|
9
|
|
Other Expenses
|
73
|
|
Total Expenses
|
34,178
|
|
Expenses Paid Indirectly
|
(44
)
|
|
Net Expenses
|
34,134
|
|
Net Investment Income
|
245,917
|
|
Realized Net Gain (Loss)
|
|
|
Investment Securities Sold2
|
3,404,368
|
|
Foreign Currencies
|
(155
)
|
|
Realized Net Gain (Loss)
|
3,404,213
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
Investment Securities2
|
(2,340,987
)
|
|
Foreign Currencies
|
(81
)
|
|
Change in Unrealized Appreciation (Depreciation)
|
(2,341,068
)
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
1,309,062
|
|
1
|
Dividends are net of foreign withholding taxes of $1,162.
|
|
2
|
Change in unrealized appreciation (depreciation) from an affiliated company of the fund was less than $1. There was no realized net gain (loss) during the period. Purchases and sales are for temporary cash investment
purposes.
|
See accompanying Notes, which are an integral part of the Financial Statements.
4
Dividend Growth 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
|
245,917
|
685,976
|
|
Realized Net Gain (Loss)
|
3,404,213
|
8,742,302
|
|
Change in Unrealized Appreciation (Depreciation)
|
(2,341,068
)
|
(6,632,028
)
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
1,309,062
|
2,796,250
|
|
Distributions
|
||
|
Total Distributions
|
(2,716,738
)
|
(7,277,528
)
|
|
Capital Share Transactions
|
||
|
Issued
|
542,862
|
2,455,621
|
|
Issued in Lieu of Cash Distributions
|
2,382,302
|
6,339,899
|
|
Redeemed
|
(6,376,040
)
|
(14,399,407
)
|
|
Net Increase (Decrease) from Capital Share Transactions
|
(3,450,876
)
|
(5,603,887
)
|
|
Total Increase (Decrease)
|
(4,858,552
)
|
(10,085,165
)
|
|
Net Assets
|
||
|
Beginning of Period
|
40,339,328
|
50,424,493
|
|
End of Period
|
35,480,776
|
40,339,328
|
See accompanying Notes, which are an integral part of the Financial Statements.
5
Dividend Growth 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
|
$33.16
|
$37.14
|
$37.76
|
$35.42
|
$37.85
|
$31.82
|
|
Investment Operations
|
||||||
|
Net Investment Income1
|
.209
|
.540
|
.658
|
.620
|
.596
|
.576
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
.863
|
1.769
|
3.053
|
2.573
|
(.893)
|
7.593
|
|
Total from Investment Operations
|
1.072
|
2.309
|
3.711
|
3.193
|
(.297)
|
8.169
|
|
Distributions
|
||||||
|
Dividends from Net Investment Income
|
(.239)
|
(.577)
|
(.679)
|
(.629)
|
(.590)
|
(.574)
|
|
Distributions from Realized Capital Gains
|
(2.083)
|
(5.712)
|
(3.652)
|
(.224)
|
(1.543)
|
(1.565)
|
|
Total Distributions
|
(2.322)
|
(6.289)
|
(4.331)
|
(.853)
|
(2.133)
|
(2.139)
|
|
Net Asset Value, End of Period
|
$31.91
|
$33.16
|
$37.14
|
$37.76
|
$35.42
|
$37.85
|
|
Total Return2
|
4.08%
|
6.58%
|
10.20%
|
9.11%
|
-0.76%
|
25.66%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
Net Assets, End of Period (Millions)
|
$35,481
|
$40,339
|
$50,424
|
$52,553
|
$53,452
|
$54,186
|
|
Ratio of Total Expenses to Average Net Assets3
|
0.19%4
|
0.20%4
|
0.22%5
|
0.29%5
|
0.30%5
|
0.27%
|
|
Ratio of Net Investment Income to Average Net Assets
|
1.34%
|
1.50%
|
1.68%
|
1.74%
|
1.68%
|
1.56%
|
|
Portfolio Turnover Rate
|
25%
|
40%
|
16%
|
9%
|
11%
|
15%
|
|
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 (0.09%), (0.07%), (0.05%), 0.02%, 0.03%, and (0.00%).
|
|
4
|
The ratio of expenses to average net assets for the period net of reduction from broker commission abatement arrangements was 0.19% and 0.20%, respectively.
|
|
5
|
The ratio of expenses to average net assets for the period net of reduction from custody fee offset and broker commission abatement arrangements was 0.22%, 0.29%, and 0.30%, respectively.
|
See accompanying Notes, which are an integral part of the Financial Statements.
6
Dividend Growth Fund
Notes to Financial Statements
Vanguard Dividend Growth 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. Other temporary cash investments are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services.
2. 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. Repurchase Agreements: The fund enters into repurchase agreements with institutional counterparties. Securities pledged as collateral to the fund under repurchase agreements are held by a custodian bank until the agreements mature, and in the absence of a default, such collateral cannot be repledged, resold, or rehypothecated. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. The fund further mitigates its counterparty risk by entering into repurchase agreements only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master repurchase agreements with its counterparties. The master repurchase agreements provide that, in the event of a counterparty's default (including bankruptcy), the fund may terminate any repurchase agreements with that counterparty, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund. Such action may be subject to legal proceedings, which may delay or limit the disposition of collateral.
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. 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
7
Dividend Growth Fund
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: 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. Premiums and discounts on debt securities are amortized and accreted, respectively, to interest income over the lives of the respective securities, except for premiums on certain callable debt securities that are amortized to the earliest call date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
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 S&P U.S. Dividend Growers Index for the preceding three years. For the six months ended July 31, 2026, the investment advisory fee represented an effective annual basic basic rate of 0.13% of the fund's average net assets, before a net decrease of $15,674,000 (0.09%) 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 $763,000, representing less than 0.01% of the fund's net assets and 0.31% 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 $44,000 (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
|
34,253,122
|
865,667
|
-
|
35,118,789
|
|
Temporary Cash Investments
|
26
|
402,100
|
-
|
402,126
|
|
Total
|
34,253,148
|
1,267,767
|
-
|
35,520,915
|
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
|
20,433,158
|
|
Gross Unrealized Appreciation
|
15,307,570
|
|
Gross Unrealized Depreciation
|
(219,813)
|
|
Net Unrealized Appreciation (Depreciation)
|
15,087,757
|
G.
During the six months ended July 31, 2026, the fund purchased $9,100,905,000 of investment securities and sold $14,633,924,000 of investment securities, other than temporary cash investments.
The fund purchased securities from and sold securities to other funds or accounts managed by its investment advisor or their 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 $8,924,000, resulting in net realized loss of $149,000; these amounts, other than temporary cash investments, are included in the purchases and sales of investment securities noted above.
8
Dividend Growth Fund
H.
Capital shares issued and redeemed were:
|
|
Six Months
Ended
July 31, 2026
|
Year Ended
January 31,
2026
|
|
|
Shares
(000)
|
Shares
(000)
|
|
Issued
|
17,279
|
69,573
|
|
Issued in Lieu of Cash Distributions
|
83,196
|
189,599
|
|
Redeemed
|
(204,906)
|
(400,538)
|
|
Net Increase (Decrease) in Shares Outstanding
|
(104,431)
|
(141,366)
|
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.
Q572 092026
9
Financial Statements
For the six-months ended July 31, 2026
Vanguard Energy Opportunities Fund
(formerly Vanguard Energy Fund)
Contents
|
Financial Statements
|
1
|
|
|
|
Energy Opportunities 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 (99.5%)
|
|||
|
Brazil (1.1%)
|
|||
|
|
Petroleo Brasileiro SA - Petrobras
|
8,559,325
|
82,805
|
|
Canada (0.5%)
|
|||
|
|
Cameco Corp.
|
453,660
|
39,187
|
|
France (11.8%)
|
|||
|
|
Engie SA (XPAR)
|
11,289,219
|
351,897
|
|
|
TotalEnergies SE (TQEX)
|
3,597,462
|
317,154
|
|
|
TotalEnergies SE (XNYS) ADR
|
2,202,526
|
193,514
|
|
|
|
|
862,565
|
|
Germany (2.2%)
|
|||
|
|
E.ON SE
|
7,573,211
|
163,152
|
|
India (1.7%)
|
|||
|
|
Reliance Industries Ltd.
|
5,458,905
|
74,740
|
|
|
Power Grid Corp. of India Ltd.
|
17,220,012
|
51,260
|
|
|
|
|
126,000
|
|
Italy (4.0%)
|
|||
|
|
Enel SpA
|
15,448,382
|
174,465
|
|
|
Tenaris SA ADR
|
1,720,815
|
98,654
|
|
|
Tenaris SA
|
681,309
|
19,547
|
|
|
|
|
292,666
|
|
Japan (1.1%)
|
|||
|
|
Kansai Electric Power Co. Inc.
|
5,108,178
|
77,361
|
|
Norway (1.4%)
|
|||
|
|
Equinor ASA
|
1,944,139
|
79,808
|
|
|
Equinor ASA ADR
|
622,430
|
25,582
|
|
|
|
|
105,390
|
|
Russia (0.0%)
|
|||
|
*,1
|
LUKOIL PJSC ADR
|
1,423,477
|
-
|
|
Spain (1.5%)
|
|||
|
|
Iberdrola SA
|
4,437,206
|
105,399
|
|
United Kingdom (11.3%)
|
|||
|
|
Shell plc (XLON)
|
8,086,763
|
370,145
|
|
|
National Grid plc
|
12,784,719
|
204,630
|
|
|
SSE plc
|
5,389,181
|
170,263
|
|
*
|
Glencore plc
|
11,089,583
|
81,679
|
|
|
|
|
826,717
|
|
United States (62.9%)
|
|||
|
|
ExxonMobil Holdings Corp.
|
4,196,279
|
652,270
|
|
|
Chevron Corp.
|
1,548,721
|
304,835
|
|
|
Targa Resources Corp.
|
1,120,381
|
302,917
|
|
|
Shell plc ADR
|
3,149,741
|
289,713
|
|
|
Williams Cos. Inc.
|
3,773,636
|
269,966
|
|
|
Dominion Energy Inc.
|
3,773,885
|
261,040
|
|
|
Sempra
|
2,916,432
|
258,250
|
|
|
Devon Energy Corp.
|
5,510,351
|
248,682
|
|
|
Diamondback Energy Inc.
|
1,209,971
|
245,564
|
|
|
American Electric Power Co. Inc.
|
1,754,930
|
224,368
|
|
|
Duke Energy Corp.
|
1,771,348
|
222,180
|
|
|
Southern Co.
|
2,316,559
|
219,007
|
|
|
Marathon Petroleum Corp.
|
674,008
|
213,303
|
|
|
Phillips 66
|
960,443
|
203,307
|
|
|
NextEra Energy Inc.
|
2,146,224
|
186,550
|
|
|
Cheniere Energy Inc.
|
576,887
|
152,050
|
1
Energy Opportunities Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
|
Atmos Energy Corp.
|
680,974
|
117,659
|
|
|
Exelon Corp.
|
2,515,096
|
115,242
|
|
|
Constellation Energy Corp.
|
194,178
|
51,020
|
|
|
Vistra Corp.
|
293,794
|
43,537
|
|
|
CMS Energy Corp.
|
188,376
|
13,561
|
|
|
|
|
4,595,021
|
|
Total Common Stocks (Cost $4,699,425)
|
7,276,263
|
||
|
Temporary Cash Investments (0.5%)
|
|||
|
Money Market Fund (0.0%)
|
|||
|
2
|
Vanguard Market Liquidity Fund, 3.718%
|
596
|
59
|
|
|
|
Face
Amount
($000)
|
|
|
Repurchase Agreement (0.5%)
|
|||
|
|
NatWest Markets plc, 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $36,611, collateralized by U.S. Treasury Obligations 3.500%, 10/31/2027, with a value of $37,332)
|
36,600
|
36,600
|
|
Total Temporary Cash Investments (Cost $36,659)
|
36,659
|
||
|
Total Investments (100.0%) (Cost $4,736,084)
|
7,312,922
|
||
|
Other Assets and Liabilities-Net (0.0%)
|
(2,362)
|
||
|
Net Assets (100%)
|
7,310,560
|
||
|
Cost is in $000.
|
|||
|
•
|
See Note A in Notes to Financial Statements.
|
|
*
|
Non-income-producing security.
|
|
1
|
Security value determined using significant unobservable inputs.
|
|
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.
|
|
|
ADR-American Depositary Receipt.
|
See accompanying Notes, which are an integral part of the Financial Statements.
2
Energy Opportunities 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 $4,736,025)
|
7,312,863
|
|
Affiliated Issuers (Cost $59)
|
59
|
|
Total Investments in Securities
|
7,312,922
|
|
Investment in Vanguard
|
148
|
|
Cash
|
3
|
|
Foreign Currency, at Value (Cost $1,310)
|
1,324
|
|
Receivables for Accrued Income
|
7,222
|
|
Receivables for Capital Shares Issued
|
3,031
|
|
Other Assets
|
32
|
|
Total Assets
|
7,324,682
|
|
Liabilities
|
|
|
Payables to Investment Advisor
|
3,453
|
|
Payables for Capital Shares Redeemed
|
4,094
|
|
Payables to Vanguard
|
813
|
|
Deferred Foreign Capital Gains Taxes
|
5,762
|
|
Total Liabilities
|
14,122
|
|
Net Assets
|
7,310,560
|
|
At July 31, 2026, net assets consisted of:
|
|
|
|
|
|
Paid-in Capital
|
4,496,312
|
|
Total Distributable Earnings (Loss)
|
2,814,248
|
|
Net Assets
|
7,310,560
|
|
|
|
|
Investor Shares-Net Assets
|
|
|
Applicable to 32,627,892 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
|
1,939,692
|
|
Net Asset Value Per Share-Investor Shares
|
$59.45
|
|
|
|
|
Admiral™ Shares-Net Assets
|
|
|
Applicable to 48,137,874 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
|
5,370,868
|
|
Net Asset Value Per Share-Admiral Shares
|
$111.57
|
See accompanying Notes, which are an integral part of the Financial Statements.
3
Energy Opportunities Fund
Statement of Operations
|
|
|
|
|
Six Months Ended
July 31, 2026
|
|
|
($000)
|
|
Investment Income
|
|
|
Income
|
|
|
Dividends1
|
128,115
|
|
Interest
|
1,045
|
|
Securities Lending-Net
|
11
|
|
Total Income
|
129,171
|
|
Expenses
|
|
|
Investment Advisory Fees-Note B
|
|
|
Basic Fee
|
5,420
|
|
Performance Adjustment
|
1,506
|
|
The Vanguard Group-Note C
|
|
|
Management and Administrative-Investor Shares
|
2,321
|
|
Management and Administrative-Admiral Shares
|
3,942
|
|
Marketing and Distribution-Investor Shares
|
63
|
|
Marketing and Distribution-Admiral Shares
|
103
|
|
Custodian Fees
|
43
|
|
Shareholders' Reports-Investor Shares
|
31
|
|
Shareholders' Reports-Admiral Shares
|
20
|
|
Trustees' Fees and Expenses
|
2
|
|
Other Expenses
|
198
|
|
Total Expenses
|
13,649
|
|
Expenses Paid Indirectly
|
(15
)
|
|
Net Expenses
|
13,634
|
|
Net Investment Income
|
115,537
|
|
Realized Net Gain (Loss)
|
|
|
Investment Securities Sold2,3
|
133,569
|
|
Foreign Currencies
|
(117
)
|
|
Realized Net Gain (Loss)
|
133,452
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
Investment Securities2,4
|
689,305
|
|
Foreign Currencies
|
(205
)
|
|
Change in Unrealized Appreciation (Depreciation)
|
689,100
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
938,089
|
|
1
|
Dividends are net of foreign withholding taxes of $2,945.
|
|
2
|
Realized net gain (loss) and change in unrealized appreciation (depreciation) from an affiliated company of the fund were ($1) and less than $1, respectively. Purchases and sales are for temporary cash investment
purposes.
|
|
3
|
Realized gain (loss) is net of foreign capital gain taxes of $177.
|
|
4
|
The change in unrealized appreciation (depreciation) is net of the change in deferred foreign capital gains taxes of ($568).
|
See accompanying Notes, which are an integral part of the Financial Statements.
4
Energy Opportunities 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
|
115,537
|
205,123
|
|
Realized Net Gain (Loss)
|
133,452
|
320,986
|
|
Change in Unrealized Appreciation (Depreciation)
|
689,100
|
945,471
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
938,089
|
1,471,580
|
|
Distributions
|
||
|
Investor Shares
|
(68,132
)
|
(81,652
)
|
|
Admiral Shares
|
(159,215
)
|
(199,527
)
|
|
Total Distributions
|
(227,347
)
|
(281,179
)
|
|
Capital Share Transactions
|
||
|
Investor Shares
|
(214,782
)
|
(228,060
)
|
|
Admiral Shares
|
183,693
|
86,706
|
|
Net Increase (Decrease) from Capital Share Transactions
|
(31,089
)
|
(141,354
)
|
|
Total Increase (Decrease)
|
679,653
|
1,049,047
|
|
Net Assets
|
||
|
Beginning of Period
|
6,630,907
|
5,581,860
|
|
End of Period
|
7,310,560
|
6,630,907
|
See accompanying Notes, which are an integral part of the Financial Statements.
5
Energy Opportunities 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
|
$53.66
|
$44.04
|
$45.21
|
$46.43
|
$41.64
|
$31.66
|
|
Investment Operations
|
||||||
|
Net Investment Income1
|
.908
|
1.646
|
1.771
|
1.878
|
2.099
|
1.364
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
6.704
|
10.310
|
5.270
|
.080
|
4.807
|
10.019
|
|
Total from Investment Operations
|
7.612
|
11.956
|
7.041
|
1.958
|
6.906
|
11.383
|
|
Distributions
|
||||||
|
Dividends from Net Investment Income
|
-
|
(1.689)
|
(1.685)
|
(1.952)
|
(2.116)
|
(1.403)
|
|
Distributions from Realized Capital Gains
|
(1.822)
|
(.647)
|
(6.526)
|
(1.226)
|
-
|
-
|
|
Total Distributions
|
(1.822)
|
(2.336)
|
(8.211)
|
(3.178)
|
(2.116)
|
(1.403)
|
|
Net Asset Value, End of Period
|
$59.45
|
$53.66
|
$44.04
|
$45.21
|
$46.43
|
$41.64
|
|
Total Return2
|
14.17%
|
27.60%
|
16.24%
|
4.00%
|
16.72%
|
36.33%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
Net Assets, End of Period (Millions)
|
$1,940
|
$1,954
|
$1,815
|
$1,775
|
$1,950
|
$1,771
|
|
Ratio of Total Expenses to Average Net Assets3
|
0.44%4
|
0.45%4
|
0.45%5
|
0.44%5
|
0.46%5
|
0.41%
|
|
Ratio of Net Investment Income to Average Net Assets
|
3.13%
|
3.41%
|
3.62%
|
4.02%
|
4.70%
|
3.68%
|
|
Portfolio Turnover Rate
|
8%
|
19%
|
36%
|
29%
|
16%
|
14%
|
|
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 0.04%, 0.05%, 0.05%, 0.05%, 0.06%, and 0.02%.
|
|
4
|
The ratio of expenses to average net assets for the period net of reduction from broker commission abatement arrangements was 0.44% and 0.45%, respectively.
|
|
5
|
The ratio of expenses to average net assets for the period net of reduction from custody fee offset and broker commission abatement arrangements was 0.45%, 0.44% and 0.46% respectively.
|
See accompanying Notes, which are an integral part of the Financial Statements.
6
Energy Opportunities 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
|
$100.66
|
$82.62
|
$84.83
|
$87.12
|
$78.12
|
$59.39
|
|
Investment Operations
|
||||||
|
Net Investment Income1
|
1.750
|
3.156
|
3.392
|
3.599
|
4.014
|
2.615
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
12.579
|
19.345
|
9.886
|
.145
|
9.026
|
18.794
|
|
Total from Investment Operations
|
14.329
|
22.501
|
13.278
|
3.744
|
13.040
|
21.409
|
|
Distributions
|
||||||
|
Dividends from Net Investment Income
|
-
|
(3.246)
|
(3.238)
|
(3.733)
|
(4.040)
|
(2.679)
|
|
Distributions from Realized Capital Gains
|
(3.419)
|
(1.215)
|
(12.250)
|
(2.301)
|
-
|
-
|
|
Total Distributions
|
(3.419)
|
(4.461)
|
(15.488)
|
(6.034)
|
(4.040)
|
(2.679)
|
|
Net Asset Value, End of Period
|
$111.57
|
$100.66
|
$82.62
|
$84.83
|
$87.12
|
$78.12
|
|
Total Return2
|
14.22%
|
27.70%
|
16.33%
|
4.09%
|
16.83%
|
36.43%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
Net Assets, End of Period (Millions)
|
$5,371
|
$4,677
|
$3,767
|
$3,625
|
$4,176
|
$3,608
|
|
Ratio of Total Expenses to Average Net Assets3
|
0.36%4
|
0.37%4
|
0.37%5
|
0.36%5
|
0.38%5
|
0.33%
|
|
Ratio of Net Investment Income to Average Net Assets
|
3.22%
|
3.48%
|
3.69%
|
4.11%
|
4.78%
|
3.76%
|
|
Portfolio Turnover Rate
|
8%
|
19%
|
36%
|
29%
|
16%
|
14%
|
|
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 0.04%, 0.05%, 0.05%, 0.05%, 0.06%, and 0.02%.
|
|
4
|
The ratio of expenses to average net assets for the period net of reduction from broker commission abatement arrangements was 0.36% and 0.37%, respectively.
|
|
5
|
The ratio of expenses to average net assets for the period net of reduction from custody fee offset and broker commission abatement arrangements was 0.37%, 0.36%, and 0.38% respectively.
|
See accompanying Notes, which are an integral part of the Financial Statements.
7
Energy Opportunities Fund
Notes to Financial Statements
Vanguard Energy Opportunities 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.
In February 2026, the board of trustees approved changing the fund's name to Vanguard Energy Opportunities Fund to better reflect its existing investment strategy, which became effective in May 2026.
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. Other temporary cash investments are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services.
2. 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. Repurchase Agreements: The fund enters into repurchase agreements with institutional counterparties. Securities pledged as collateral to the fund under repurchase agreements are held by a custodian bank until the agreements mature, and in the absence of a default, such collateral cannot be repledged, resold, or rehypothecated. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. The fund further mitigates its counterparty risk by entering into repurchase agreements only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master repurchase agreements with its counterparties. The master repurchase agreements provide that, in the event of a counterparty's default (including bankruptcy), the fund may terminate any repurchase agreements with that counterparty, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund. Such action may be subject to legal proceedings, which may delay or limit the disposition of collateral.
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. 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
8
Energy Opportunities Fund
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: 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. Foreign capital gains tax, if any, is accrued daily based upon applicable 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.
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 MSCI ACWI Energy + Utilities Index for the preceding three years. For the six months ended July 31, 2026, the investment advisory fee paid represented an effective annual basic rate of 0.15% of the fund's average net assets, before a net increase of $1,506,000 (0.04%) 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 $148,000, representing less than 0.01% of the fund's net assets and 0.06% 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 $15,000 (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
|
4,717,013
|
-
|
-
|
4,717,013
|
|
Common Stocks-Other
|
317,750
|
2,241,500
|
-
|
2,559,250
|
|
Temporary Cash Investments
|
59
|
36,600
|
-
|
36,659
|
|
Total
|
5,034,822
|
2,278,100
|
-
|
7,312,922
|
9
Energy Opportunities Fund
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
|
4,740,542
|
|
Gross Unrealized Appreciation
|
2,666,654
|
|
Gross Unrealized Depreciation
|
(94,274)
|
|
Net Unrealized Appreciation (Depreciation)
|
2,572,380
|
G.
During the six months ended July 31, 2026, the fund purchased $567,188,000 of investment securities and sold $672,862,000 of investment securities, other than temporary cash investments.
H.
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
|
230,111
|
3,946
|
245,956
|
5,073
|
|
Issued in Lieu of Cash Distributions
|
63,230
|
1,058
|
75,412
|
1,526
|
|
Redeemed
|
(508,123)
|
(8,800)
|
(549,428)
|
(11,379)
|
|
Net Increase (Decrease)-Investor Shares
|
(214,782)
|
(3,796)
|
(228,060)
|
(4,780)
|
|
Admiral Shares
|
||||
|
Issued
|
597,929
|
5,506
|
598,680
|
6,585
|
|
Issued in Lieu of Cash Distributions
|
143,354
|
1,279
|
178,110
|
1,921
|
|
Redeemed
|
(557,590)
|
(5,106)
|
(690,084)
|
(7,644)
|
|
Net Increase (Decrease)-Admiral Shares
|
183,693
|
1,679
|
86,706
|
862
|
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.
Q512 092026
10
Financial Statements
For the six-months ended July 31, 2026
Vanguard Health Care Fund
Contents
|
Financial Statements
|
1
|
|
|
|
Health Care 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 (97.8%)
|
|||
|
Belgium (3.4%)
|
|||
|
|
UCB SA
|
2,513,004
|
645,046
|
|
*
|
Argenx SE
|
749,701
|
642,117
|
|
|
|
|
1,287,163
|
|
China (0.8%)
|
|||
|
|
Jiangsu Hengrui Pharmaceuticals Co. Ltd. Class H
|
9,939,973
|
72,450
|
|
*
|
Zai Lab Ltd.
|
36,431,700
|
66,385
|
|
*,1
|
GenFleet Therapeutics Shanghai Inc. Class H
|
18,491,938
|
65,325
|
|
*
|
Duality Biotherapeutics Inc.
|
2,771,377
|
64,436
|
|
|
Shandong Weigao Group Medical Polymer Co. Ltd. Class H
|
77,092,000
|
33,001
|
|
|
|
|
301,597
|
|
Denmark (2.2%)
|
|||
|
*
|
Genmab A/S
|
1,278,865
|
368,107
|
|
*
|
Ascendis Pharma A/S
|
1,099,854
|
268,265
|
|
|
Novo Nordisk A/S Class B
|
4,140,939
|
195,873
|
|
|
|
|
832,245
|
|
Japan (4.7%)
|
|||
|
|
Shionogi & Co. Ltd.
|
21,427,449
|
387,436
|
|
|
Otsuka Holdings Co. Ltd.
|
5,423,000
|
376,028
|
|
|
Daiichi Sankyo Co. Ltd.
|
22,675,166
|
366,465
|
|
|
Chugai Pharmaceutical Co. Ltd.
|
8,264,744
|
358,618
|
|
|
Eisai Co. Ltd.
|
7,339,417
|
220,644
|
|
|
M3 Inc.
|
9,451,653
|
105,888
|
|
|
|
|
1,815,079
|
|
Netherlands (0.1%)
|
|||
|
*
|
Pharvaris NV
|
1,165,414
|
38,016
|
|
Switzerland (4.5%)
|
|||
|
|
Novartis AG (Registered)
|
4,658,547
|
728,558
|
|
|
Galderma Group AG
|
2,410,425
|
524,536
|
|
|
Roche Holding AG
|
1,029,839
|
450,135
|
|
|
|
|
1,703,229
|
|
United Kingdom (8.0%)
|
|||
|
|
AstraZeneca plc
|
10,300,505
|
1,752,222
|
|
|
GSK plc
|
44,047,406
|
1,145,358
|
|
*,1
|
Immunocore Holdings plc ADR
|
4,246,274
|
143,567
|
|
|
|
|
3,041,147
|
|
United States (74.1%)
|
|||
|
|
Eli Lilly & Co.
|
2,861,509
|
3,287,416
|
|
|
Merck & Co. Inc.
|
15,657,269
|
2,038,576
|
|
|
Johnson & Johnson
|
7,191,566
|
1,843,558
|
|
|
UnitedHealth Group Inc.
|
3,730,515
|
1,545,925
|
|
*
|
Edwards Lifesciences Corp.
|
11,357,910
|
977,575
|
|
*
|
Intuitive Surgical Inc.
|
2,725,449
|
962,983
|
|
|
CVS Health Corp.
|
9,210,092
|
961,810
|
|
|
Cencora Inc.
|
3,033,825
|
944,551
|
|
*
|
Vertex Pharmaceuticals Inc.
|
1,890,142
|
901,787
|
|
|
AbbVie Inc.
|
3,506,192
|
879,844
|
|
|
Danaher Corp.
|
4,275,150
|
833,569
|
|
|
Regeneron Pharmaceuticals Inc.
|
1,072,221
|
817,708
|
|
|
Elevance Health Inc. (XNYS)
|
1,858,361
|
698,446
|
|
|
HCA Healthcare Inc.
|
1,594,006
|
641,731
|
|
*
|
Boston Scientific Corp.
|
13,314,532
|
622,188
|
|
|
Agilent Technologies Inc.
|
4,119,810
|
570,058
|
|
*
|
Biogen Inc.
|
2,745,486
|
557,196
|
|
*
|
Alnylam Pharmaceuticals Inc.
|
2,136,580
|
439,110
|
|
*
|
Dexcom Inc.
|
5,155,320
|
430,211
|
|
|
Cardinal Health Inc.
|
1,736,348
|
399,412
|
1
Health Care Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
|
Abbott Laboratories
|
3,719,444
|
393,145
|
|
*
|
Centene Corp.
|
6,149,030
|
382,593
|
|
|
Amgen Inc.
|
984,663
|
379,253
|
|
*
|
Revolution Medicines Inc.
|
1,988,729
|
372,946
|
|
*
|
United Therapeutics Corp.
|
719,385
|
372,433
|
|
|
Medtronic plc
|
4,228,128
|
361,040
|
|
|
Stryker Corp.
|
1,087,087
|
354,064
|
|
*
|
Ionis Pharmaceuticals Inc.
|
6,212,640
|
321,628
|
|
*
|
Incyte Corp.
|
2,386,201
|
285,199
|
|
|
Thermo Fisher Scientific Inc.
|
458,983
|
263,594
|
|
*
|
Madrigal Pharmaceuticals Inc.
|
563,117
|
263,156
|
|
*
|
Cytokinetics Inc.
|
3,341,262
|
257,712
|
|
*
|
Bridgebio Pharma Inc.
|
3,162,851
|
253,313
|
|
|
STERIS plc
|
1,100,961
|
251,460
|
|
|
QIAGEN NV
|
6,045,368
|
250,278
|
|
*
|
CG oncology Inc.
|
2,860,428
|
203,634
|
|
|
Bristol-Myers Squibb Co.
|
3,063,693
|
200,090
|
|
*
|
PTC Therapeutics Inc.
|
2,865,974
|
194,915
|
|
*
|
Kymera Therapeutics Inc.
|
1,796,469
|
185,755
|
|
*
|
Scholar Rock Holding Corp.
|
3,859,866
|
182,552
|
|
*
|
Protagonist Therapeutics Inc.
|
1,243,618
|
169,928
|
|
*
|
Dianthus Therapeutics Inc.
|
1,503,955
|
160,803
|
|
*
|
Structure Therapeutics Inc. ADR
|
3,278,237
|
157,487
|
|
*
|
ICON plc
|
933,744
|
152,728
|
|
*
|
Option Care Health Inc.
|
6,456,359
|
148,690
|
|
*,1
|
HeartFlow Inc.
|
5,795,579
|
146,222
|
|
*
|
Celldex Therapeutics Inc.
|
3,783,994
|
144,019
|
|
|
Encompass Health Corp.
|
1,252,498
|
139,115
|
|
*
|
Moderna Inc.
|
2,345,644
|
128,588
|
|
*
|
Vaxcyte Inc.
|
2,340,735
|
126,587
|
|
*
|
Alignment Healthcare Inc.
|
8,232,279
|
122,249
|
|
*,1
|
Inspire Medical Systems Inc.
|
2,093,826
|
105,131
|
|
*
|
Arcus Biosciences Inc.
|
3,445,827
|
97,138
|
|
*,2
|
Zenas Biopharma Inc.
|
2,937,055
|
92,341
|
|
*
|
Immunome Inc.
|
3,703,461
|
84,291
|
|
*
|
Dyne Therapeutics Inc.
|
2,808,140
|
70,709
|
|
*
|
Stoke Therapeutics Inc.
|
2,260,550
|
65,239
|
|
*,2
|
Kailera Therapeutics Inc.
|
2,191,928
|
37,131
|
|
*,2
|
Aktis Oncology Inc.
|
1,462,244
|
32,272
|
|
*
|
Definium Therapeutics Inc.
|
740,600
|
32,231
|
|
|
|
|
28,295,313
|
|
Total Common Stocks (Cost $22,967,911)
|
37,313,789
|
||
|
Temporary Cash Investments (2.3%)
|
|||
|
Money Market Fund (0.1%)
|
|||
|
3,4
|
Vanguard Market Liquidity Fund, 3.718%
|
546,991
|
54,694
|
|
|
|
Face
Amount
($000)
|
|
|
Repurchase Agreements (2.2%)
|
|||
|
|
Bank of America Securities, LLC, 3.650%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $15,005, collateralized by U.S. Treasury Obligations 1.750%-2.750%, 8/15/2041-8/15/2051, with a
value of $15,300)
|
15,000
|
15,000
|
|
|
Bank of America Securities, LLC, 3.650%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $18,906, collateralized by U.S. Government Agency Obligations 3.000%-5.084%,
11/1/2046-8/1/2056, with a value of $19,278)
|
18,900
|
18,900
|
|
|
Bank of America Securities, LLC, 3.660%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $40,012, collateralized by U.S. Government Agency Obligations 2.000%-6.000%,
10/1/2026-7/1/2056, with a value of $40,800)
|
40,000
|
40,000
|
|
|
Bank of Nova Scotia, 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $63,319, collateralized by U.S. Treasury Obligations 0.000%-4.625%, 9/15/2026-8/15/2043, with a
value of $64,586)
|
63,300
|
63,300
|
|
|
Barclays Capital Inc., 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $59,118, collateralized by U.S. Treasury Obligations 3.750%, 6/30/2030, with a value of $60,282)
|
59,100
|
59,100
|
|
|
BNP Paribas Securities Corp., 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $82,425, collateralized by U.S. Treasury Obligations 1.125%-4.625%, 1/31/2027-11/15/2055, with
a value of $84,048)
|
82,400
|
82,400
|
2
Health Care Fund
|
|
|
Face
Amount
($000)
|
Market
Value•
($000)
|
|
|
BNP Paribas Securities Corp., 3.650%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $60,618, collateralized by U.S. Government Agency Obligations 1.820%-7.000%,
3/1/2029-6/1/2056, with a value of $61,812)
|
60,600
|
60,600
|
|
|
HSBC Bank USA, 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $122,737, collateralized by U.S. Treasury Obligations 0.625%-4.250%, 7/31/2028-2/15/2043, with
a value of $125,154)
|
122,700
|
122,700
|
|
|
HSBC Bank USA, 3.650%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $78,524, collateralized by U.S. Government Agency Obligations 2.000%-7.000%,
2/1/2034-6/1/2056, with a value of $80,070)
|
78,500
|
78,500
|
|
|
JP Morgan Securities, LLC, 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $55,017, collateralized by U.S. Treasury Obligations 0.000%, 10/1/2026, with a value of $56,100)
|
55,000
|
55,000
|
|
|
Natixis SA, 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $149,845, collateralized by U.S. Treasury and Government Agency Obligations 0.375%-6.250%,
1/31/2027-2/15/2055, with a value of $152,796)
|
149,800
|
149,800
|
|
|
Nomura International plc, 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $500, collateralized by U.S. Treasury Obligations 0.000%, 12/31/2026, with a value of $511)
|
500
|
500
|
|
|
Nomura International plc, 3.640%, 8/3/2026
(Dated 7/31/2026, Repurchase Value $85,026, collateralized by U.S. Treasury Obligations 1.625%-4.625%, 3/31/2029-5/15/2031, with a
value of $86,700)
|
85,000
|
85,000
|
|
|
|
|
830,800
|
|
Total Temporary Cash Investments (Cost $885,493)
|
885,494
|
||
|
Total Investments (100.1%) (Cost $23,853,404)
|
38,199,283
|
||
|
Other Assets and Liabilities-Net (-0.1%)
|
(33,257)
|
||
|
Net Assets (100%)
|
38,166,026
|
||
|
Cost is in $000.
|
|||
|
•
|
See Note A in Notes to Financial Statements.
|
|
*
|
Non-income-producing security.
|
|
1
|
Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company.
|
|
2
|
Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $53,202.
|
|
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 $54,641 was received for securities on loan.
|
|
|
ADR-American Depositary Receipt.
|
See accompanying Notes, which are an integral part of the Financial Statements.
3
Health Care 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 $23,201,321)
|
37,684,344
|
|
Affiliated Issuers (Cost $652,083)
|
514,939
|
|
Total Investments in Securities
|
38,199,283
|
|
Investment in Vanguard
|
831
|
|
Cash
|
48
|
|
Foreign Currency, at Value (Cost $2,775)
|
2,945
|
|
Receivables for Investment Securities Sold
|
102,251
|
|
Receivables for Accrued Income
|
114,621
|
|
Receivables for Capital Shares Issued
|
1,859
|
|
Other Assets
|
45
|
|
Total Assets
|
38,421,883
|
|
Liabilities
|
|
|
Payables for Investment Securities Purchased
|
174,903
|
|
Collateral for Securities on Loan
|
54,641
|
|
Payables to Investment Advisor
|
13,722
|
|
Payables for Capital Shares Redeemed
|
10,257
|
|
Payables to Vanguard
|
2,334
|
|
Total Liabilities
|
255,857
|
|
Net Assets
|
38,166,026
|
|
1 Includes $53,202 of securities on loan.
|
|
|
At July 31, 2026, net assets consisted of:
|
|
|
|
|
|
Paid-in Capital
|
21,283,210
|
|
Total Distributable Earnings (Loss)
|
16,882,816
|
|
Net Assets
|
38,166,026
|
|
|
|
|
Investor Shares-Net Assets
|
|
|
Applicable to 26,330,964 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
|
5,348,633
|
|
Net Asset Value Per Share-Investor Shares
|
$203.13
|
|
|
|
|
Admiral™ Shares-Net Assets
|
|
|
Applicable to 383,131,007 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
|
32,817,393
|
|
Net Asset Value Per Share-Admiral Shares
|
$85.66
|
See accompanying Notes, which are an integral part of the Financial Statements.
4
Health Care Fund
Statement of Operations
|
|
|
|
|
Six Months Ended
July 31, 2026
|
|
|
($000)
|
|
Investment Income
|
|
|
Income
|
|
|
Dividends-Unaffiliated Issuers1
|
247,103
|
|
Interest-Unaffiliated Issuers
|
11,460
|
|
Securities Lending-Net
|
126
|
|
Total Income
|
258,689
|
|
Expenses
|
|
|
Investment Advisory Fees-Note B
|
|
|
Basic Fee
|
27,497
|
|
Performance Adjustment
|
1,498
|
|
The Vanguard Group-Note C
|
|
|
Management and Administrative-Investor Shares
|
4,878
|
|
Management and Administrative-Admiral Shares
|
20,143
|
|
Marketing and Distribution-Investor Shares
|
137
|
|
Marketing and Distribution-Admiral Shares
|
426
|
|
Custodian Fees
|
217
|
|
Shareholders' Reports-Investor Shares
|
60
|
|
Shareholders' Reports-Admiral Shares
|
63
|
|
Trustees' Fees and Expenses
|
9
|
|
Other Expenses
|
129
|
|
Total Expenses
|
55,057
|
|
Expenses Paid Indirectly
|
(10
)
|
|
Net Expenses
|
55,047
|
|
Net Investment Income
|
203,642
|
|
Realized Net Gain (Loss)
|
|
|
Investment Securities Sold-Unaffiliated Issuers
|
2,351,725
|
|
Investment Securities Sold-Affiliated Issuers
|
37,673
|
|
Foreign Currencies
|
(1,214
)
|
|
Realized Net Gain (Loss)
|
2,388,184
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
Investment Securities-Unaffiliated Issuers
|
(1,615,938
)
|
|
Investment Securities-Affiliated Issuers
|
249,313
|
|
Foreign Currencies
|
(3,844
)
|
|
Change in Unrealized Appreciation (Depreciation)
|
(1,370,469
)
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
1,221,357
|
|
1
|
Dividends are net of foreign withholding taxes of $8,894.
|
See accompanying Notes, which are an integral part of the Financial Statements.
5
Health Care 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
|
203,642
|
450,050
|
|
Realized Net Gain (Loss)
|
2,388,184
|
2,133,114
|
|
Change in Unrealized Appreciation (Depreciation)
|
(1,370,469
)
|
1,258,174
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
1,221,357
|
3,841,338
|
|
Distributions
|
||
|
Investor Shares
|
(211,056
)
|
(261,878
)
|
|
Admiral Shares
|
(1,241,675
)
|
(1,510,572
)
|
|
Total Distributions
|
(1,452,731
)
|
(1,772,450
)
|
|
Capital Share Transactions
|
||
|
Investor Shares
|
(351,353
)
|
(964,124
)
|
|
Admiral Shares
|
(515,065
)
|
(3,747,907
)
|
|
Net Increase (Decrease) from Capital Share Transactions
|
(866,418
)
|
(4,712,031
)
|
|
Total Increase (Decrease)
|
(1,097,792
)
|
(2,643,143
)
|
|
Net Assets
|
||
|
Beginning of Period
|
39,263,818
|
41,906,961
|
|
End of Period
|
38,166,026
|
39,263,818
|
See accompanying Notes, which are an integral part of the Financial Statements.
6
Health Care 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
|
$204.68
|
$192.16
|
$210.61
|
$212.59
|
$210.54
|
$218.60
|
|
Investment Operations
|
||||||
|
Net Investment Income1
|
1.019
|
2.125
|
1.733
|
1.789
|
1.654
|
1.869
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
5.089
|
19.194
|
3.617
|
11.217
|
11.988
|
8.949
|
|
Total from Investment Operations
|
6.108
|
21.319
|
5.350
|
13.006
|
13.642
|
10.818
|
|
Distributions
|
||||||
|
Dividends from Net Investment Income
|
(.136)
|
(2.117)
|
(1.809)
|
(1.751)
|
(1.659)
|
(1.951)
|
|
Distributions from Realized Capital Gains
|
(7.522)
|
(6.682)
|
(21.991)
|
(13.235)
|
(9.933)
|
(16.927)
|
|
Total Distributions
|
(7.658)
|
(8.799)
|
(23.800)
|
(14.986)
|
(11.592)
|
(18.878)
|
|
Net Asset Value, End of Period
|
$203.13
|
$204.68
|
$192.16
|
$210.61
|
$212.59
|
$210.54
|
|
Total Return2
|
3.35%
|
11.39%
|
2.96%
|
6.43%
|
6.57%
|
4.48%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
Net Assets, End of Period (Millions)
|
$5,349
|
$5,749
|
$6,428
|
$7,297
|
$7,496
|
$7,493
|
|
Ratio of Total Expenses to Average Net Assets3
|
0.34%4
|
0.33%4
|
0.37%5
|
0.35%5
|
0.34%5
|
0.30%
|
|
Ratio of Net Investment Income to Average Net Assets
|
1.04%
|
1.15%
|
0.81%
|
0.86%
|
0.80%
|
0.82%
|
|
Portfolio Turnover Rate
|
24%
|
47%
|
29%
|
16%
|
19%
|
15%
|
|
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 0.01%, (0.01%), 0.04%, 0.02%, 0.00%, and (0.04%).
|
|
4
|
The ratio of expenses to average net assets for the period net of reduction from broker commission abatement arrangements was 0.34%, and 0.33% respectively.
|
|
5
|
The ratio of expenses to average net assets for the period net of reduction from custody fee offset and broker commission abatement arrangements was 0.37%, 0.35% and 0.34% respectively.
|
See accompanying Notes, which are an integral part of the Financial Statements.
7
Health Care 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
|
$86.30
|
$81.02
|
$88.81
|
$89.64
|
$88.77
|
$92.17
|
|
Investment Operations
|
||||||
|
Net Investment Income1
|
.453
|
.940
|
.772
|
.796
|
.750
|
.830
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
2.150
|
8.099
|
1.523
|
4.738
|
5.052
|
3.780
|
|
Total from Investment Operations
|
2.603
|
9.039
|
2.295
|
5.534
|
5.802
|
4.610
|
|
Distributions
|
||||||
|
Dividends from Net Investment Income
|
(.072)
|
(.941)
|
(.810)
|
(.782)
|
(.743)
|
(.870)
|
|
Distributions from Realized Capital Gains
|
(3.171)
|
(2.818)
|
(9.275)
|
(5.582)
|
(4.189)
|
(7.140)
|
|
Total Distributions
|
(3.243)
|
(3.759)
|
(10.085)
|
(6.364)
|
(4.932)
|
(8.010)
|
|
Net Asset Value, End of Period
|
$85.66
|
$86.30
|
$81.02
|
$88.81
|
$89.64
|
$88.77
|
|
Total Return2
|
3.38%
|
11.46%
|
3.01%
|
6.48%
|
6.63%
|
4.53%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
Net Assets, End of Period (Millions)
|
$32,817
|
$33,515
|
$35,479
|
$38,997
|
$39,981
|
$39,934
|
|
Ratio of Total Expenses to Average Net Assets3
|
0.28%4
|
0.27%4
|
0.32%5
|
0.30%5
|
0.29%5
|
0.25%
|
|
Ratio of Net Investment Income to Average Net Assets
|
1.09%
|
1.20%
|
0.85%
|
0.90%
|
0.86%
|
0.86%
|
|
Portfolio Turnover Rate
|
24%
|
47%
|
29%
|
16%
|
19%
|
15%
|
|
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 0.01%, (0.01%), 0.04%, 0.02%, 0.00%, and (0.04%).
|
|
4
|
The ratio of expenses to average net assets for the period net of reduction from broker commission abatement arrangements was 0.28%, and 0.27% respectively.
|
|
5
|
The ratio of expenses to average net assets for the period net of reduction from custody fee offset and broker commission abatement arrangements was 0.32%, 0.30%, and 0.29% respectively.
|
See accompanying Notes, which are an integral part of the Financial Statements.
8
Health Care Fund
Notes to Financial Statements
Vanguard Health Care 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. Other temporary cash investments are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services.
2. 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. Repurchase Agreements: The fund enters into repurchase agreements with institutional counterparties. Securities pledged as collateral to the fund under repurchase agreements are held by a custodian bank until the agreements mature, and in the absence of a default, such collateral cannot be repledged, resold, or rehypothecated. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. The fund further mitigates its counterparty risk by entering into repurchase agreements only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master repurchase agreements with its counterparties. The master repurchase agreements provide that, in the event of a counterparty's default (including bankruptcy), the fund may terminate any repurchase agreements with that counterparty, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund. Such action may be subject to legal proceedings, which may delay or limit the disposition of collateral.
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. 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.
9
Health Care Fund
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: 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. Premiums and discounts on debt securities are amortized and accreted, respectively, to interest income over the lives of the respective securities, except for premiums on certain callable debt securities that are amortized to the earliest call date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
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.
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 MSCI All Country World Health
Care Index for the preceding three years. For the six months ended July 31, 2026, the investment advisory fee represented an effective annual basic rate of 0.15% of the fund's average net assets, before a net increase of $1,498,000 (0.01%) 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 $831,000, representing less than 0.01% of the fund's net assets and 0.33% 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 $10,000 (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
|
28,295,313
|
-
|
-
|
28,295,313
|
|
Common Stocks-Other
|
449,848
|
8,568,628
|
-
|
9,018,476
|
|
Temporary Cash Investments
|
54,694
|
830,800
|
-
|
885,494
|
|
Total
|
28,799,855
|
9,399,428
|
-
|
38,199,283
|
10
Health Care Fund
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
|
24,032,707
|
|
Gross Unrealized Appreciation
|
15,117,326
|
|
Gross Unrealized Depreciation
|
(950,750)
|
|
Net Unrealized Appreciation (Depreciation)
|
14,166,576
|
G.
During the six months ended July 31, 2026, the fund purchased $8,801,804,000 of investment securities and sold $10,795,063,000 of investment securities, other than temporary cash investments.
The fund purchased securities from and sold securities to other funds or accounts managed by its investment advisor or their 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 $20,274,000 and sales were $0, resulting in net realized gain (loss) of $0; these amounts, other than temporary cash investments, are included in the purchases and sales of investment securities noted above.
H.
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
|
72,802
|
368
|
263,438
|
1,377
|
|
Issued in Lieu of Cash Distributions
|
198,557
|
1,074
|
246,441
|
1,274
|
|
Redeemed
|
(622,712)
|
(3,199)
|
(1,474,003)
|
(8,017)
|
|
Net Increase (Decrease)-Investor Shares
|
(351,353)
|
(1,757)
|
(964,124)
|
(5,366)
|
|
Admiral Shares
|
||||
|
Issued
|
348,487
|
4,280
|
667,798
|
8,521
|
|
Issued in Lieu of Cash Distributions
|
1,071,689
|
13,755
|
1,309,382
|
16,039
|
|
Redeemed
|
(1,935,241)
|
(23,267)
|
(5,725,087)
|
(74,113)
|
|
Net Increase (Decrease)-Admiral Shares
|
(515,065)
|
(5,232)
|
(3,747,907)
|
(49,553)
|
I.
Certain of the fund's investments were in companies that were considered to be affiliated companies of the fund because the fund owned more
than 5% of the outstanding voting securities of the company or the issuer was another member of The Vanguard Group. Transactions during the
period in securities of these companies were as follows:
|
|
|
Current Period Transactions
|
|
|||||
|
|
Jan. 31,
2026
Market
Value
($000)
|
Purchases
at Cost
($000)
|
Proceeds
from
Securities
Sold
($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)
|
|
Acadia Healthcare Co. Inc.
|
118,483
|
-
|
241,515
|
(141,271
)
|
264,303
|
-
|
-
|
-
|
|
Apellis Pharmaceuticals Inc.
|
172,343
|
18,957
|
350,318
|
171,666
|
(12,648
)
|
-
|
-
|
-
|
|
Celldex Therapeutics Inc.
|
117,212
|
2,428
|
36,000
|
9,127
|
51,252
|
-
|
-
|
NA1
|
|
GenFleet Therapeutics Shanghai Inc. Class H
|
NA2
|
60,436
|
-
|
-
|
(2,904
)
|
-
|
-
|
65,325
|
|
HeartFlow Inc.
|
NA2
|
116,431
|
17,559
|
(1,848
)
|
(18,205
)
|
-
|
-
|
146,222
|
|
Immunocore Holdings plc ADR
|
119,062
|
18,716
|
-
|
-
|
5,789
|
-
|
-
|
143,567
|
|
Inspire Medical Systems Inc.
|
NA2
|
60,500
|
-
|
-
|
(38,274
)
|
-
|
-
|
105,131
|
|
Vanguard Market Liquidity Fund
|
58,780
|
NA3
|
NA3
|
(1
)
|
-
|
-
|
-
|
54,694
|
|
Total
|
585,880
|
277,468
|
645,392
|
37,673
|
249,313
|
-
|
-
|
514,939
|
|
1
|
Not applicable-at July 31, 2026, the issuer was not an affiliated company of the fund.
|
|
2
|
Not applicable-at January 31, 2026, the issuer was not an affiliated company of the fund.
|
|
3
|
Not applicable-purchases and sales are for temporary cash investment purposes.
|
J.
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.
11
Health Care Fund
K.
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.
L.
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.
Q522 092026
12
Financial Statements
For the six-months ended July 31, 2026
Vanguard Dividend Appreciation Index Fund
Contents
|
Financial Statements
|
1
|
|
|
|
Dividend Appreciation 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)
|
|
Common Stocks (99.6%)
|
|||
|
Consumer Discretionary (4.2%)
|
|||
|
|
Home Depot Inc.
|
5,635,483
|
1,870,755
|
|
|
McDonald's Corp.
|
4,020,007
|
1,087,975
|
|
|
Starbucks Corp.
|
6,448,365
|
678,690
|
|
|
Lowe's Cos. Inc.
|
3,168,810
|
658,510
|
|
|
NIKE Inc. Class B
|
6,786,699
|
283,073
|
|
|
DR Horton Inc.
|
1,492,167
|
213,469
|
|
|
Williams-Sonoma Inc.
|
666,181
|
152,329
|
|
|
Tractor Supply Co.
|
2,967,328
|
91,305
|
|
|
Dick's Sporting Goods Inc.
|
372,736
|
73,023
|
|
|
Service Corp. International
|
780,632
|
67,283
|
|
|
Domino's Pizza Inc.
|
173,140
|
60,156
|
|
|
Lithia Motors Inc.
|
129,037
|
49,733
|
|
|
Pool Corp.
|
181,450
|
33,697
|
|
|
Churchill Downs Inc.
|
374,632
|
31,581
|
|
|
Brunswick Corp.
|
367,639
|
29,044
|
|
|
Graham Holdings Co. Class B
|
18,918
|
22,769
|
|
|
Thor Industries Inc.
|
297,629
|
22,313
|
|
|
Dillard's Inc. Class A
|
17,106
|
10,064
|
|
|
Shoe Station Group Inc.
|
101,061
|
1,536
|
|
|
|
|
5,437,305
|
|
Consumer Staples (9.3%)
|
|||
|
|
Walmart Inc.
|
24,804,699
|
2,758,282
|
|
|
Costco Wholesale Corp.
|
2,510,169
|
2,389,405
|
|
|
Coca-Cola Co.
|
21,908,953
|
1,919,005
|
|
|
Procter & Gamble Co.
|
13,175,110
|
1,903,672
|
|
|
PepsiCo Inc.
|
7,733,128
|
1,079,235
|
|
|
Mondelez International Inc. Class A
|
7,262,857
|
452,549
|
|
|
Colgate-Palmolive Co.
|
4,527,448
|
413,356
|
|
|
Sysco Corp.
|
2,705,553
|
230,621
|
|
|
Archer-Daniels-Midland Co.
|
2,726,900
|
216,161
|
|
|
Casey's General Stores Inc.
|
209,118
|
182,142
|
|
|
Church & Dwight Co. Inc.
|
1,340,643
|
132,469
|
|
|
Kroger Co.
|
2,209,425
|
127,572
|
|
|
Constellation Brands Inc. Class A
|
789,072
|
102,761
|
|
|
Tyson Foods Inc. Class A
|
1,596,232
|
92,518
|
|
|
McCormick & Co. Inc.
|
1,437,065
|
73,147
|
|
|
Ingredion Inc.
|
356,787
|
35,486
|
|
|
Brown-Forman Corp. Class B
|
1,020,870
|
29,330
|
|
|
WD-40 Co.
|
76,102
|
17,286
|
|
|
Andersons Inc.
|
190,829
|
13,507
|
|
|
Marzetti Co.
|
114,776
|
12,266
|
|
|
Brown-Forman Corp. Class A
|
246,899
|
7,214
|
|
|
Oil-Dri Corp. of America
|
57,966
|
5,751
|
|
|
Tootsie Roll Industries Inc.
|
114,541
|
4,469
|
|
|
|
|
12,198,204
|
|
Energy (3.3%)
|
|||
|
|
ExxonMobil Holdings Corp.
|
23,451,892
|
3,645,362
|
|
|
Phillips 66
|
2,268,474
|
480,191
|
|
|
Texas Pacific Land Corp.
|
327,812
|
131,970
|
|
|
DT Midstream Inc.
|
577,186
|
79,652
|
|
|
|
|
4,337,175
|
|
Financials (21.8%)
|
|||
|
|
JPMorgan Chase & Co. (XNYS)
|
15,160,531
|
5,333,323
|
|
|
Visa Inc. Class A (XNYS)
|
8,745,550
|
3,202,008
|
|
|
Mastercard Inc. Class A
|
4,565,250
|
2,616,345
|
|
|
Bank of America Corp. (XNYS)
|
36,939,952
|
2,288,430
|
|
|
Goldman Sachs Group Inc. (XNYS)
|
1,587,953
|
1,617,140
|
|
|
Morgan Stanley
|
6,782,381
|
1,427,149
|
1
Dividend Appreciation Index Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
|
Blackrock Inc.
|
816,820
|
890,652
|
|
|
Chubb Ltd.
|
2,040,872
|
715,693
|
|
|
S&P Global Inc.
|
1,715,485
|
706,660
|
|
|
Bank of New York Mellon Corp.
|
3,883,487
|
607,105
|
|
|
CME Group Inc.
|
2,050,196
|
549,022
|
|
|
PNC Financial Services Group Inc.
|
2,193,847
|
548,177
|
|
|
Marsh & McLennan Cos. Inc.
|
2,725,977
|
517,091
|
|
|
Intercontinental Exchange Inc.
|
3,199,633
|
487,880
|
|
|
Travelers Cos. Inc.
|
1,203,132
|
450,404
|
|
|
Aon plc Class A (XNYS)
|
1,208,405
|
435,690
|
|
|
Moody's Corp.
|
850,062
|
406,653
|
|
|
Allstate Corp.
|
1,456,479
|
384,627
|
|
|
Arthur J Gallagher & Co.
|
1,453,523
|
362,538
|
|
|
Aflac Inc.
|
2,591,821
|
330,405
|
|
|
MetLife Inc.
|
3,058,044
|
293,970
|
|
|
Fifth Third Bancorp
|
5,127,894
|
289,726
|
|
|
State Street Corp.
|
1,565,937
|
288,383
|
|
|
Ameriprise Financial Inc.
|
508,629
|
277,630
|
|
|
Nasdaq Inc.
|
2,527,847
|
238,098
|
|
|
MSCI Inc.
|
411,900
|
235,706
|
|
|
Hartford Insurance Group Inc.
|
1,551,020
|
220,105
|
|
|
Cboe Global Markets Inc.
|
592,127
|
183,696
|
|
|
Raymond James Financial Inc.
|
932,874
|
164,167
|
|
|
Cincinnati Financial Corp.
|
875,211
|
155,507
|
|
|
Principal Financial Group Inc.
|
1,112,190
|
126,456
|
|
|
W R Berkley Corp.
|
1,664,001
|
120,707
|
|
|
Brown & Brown Inc.
|
1,649,263
|
116,108
|
|
|
Reinsurance Group of America Inc.
|
370,668
|
87,793
|
|
|
Globe Life Inc.
|
439,309
|
80,064
|
|
|
Assurant Inc.
|
280,342
|
78,269
|
|
|
RenaissanceRe Holdings Ltd.
|
241,217
|
77,185
|
|
|
Unum Group
|
831,683
|
71,616
|
|
|
Evercore Inc. Class A
|
218,860
|
70,158
|
|
|
Jack Henry & Associates Inc.
|
402,008
|
61,925
|
|
|
Wintrust Financial Corp.
|
381,626
|
60,885
|
|
|
Cullen / Frost Bankers Inc.
|
355,312
|
59,103
|
|
|
UMB Financial Corp.
|
404,099
|
58,889
|
|
|
Southstate Bank Corp.
|
552,625
|
58,075
|
|
|
Zions Bancorp NA
|
832,263
|
58,009
|
|
|
Primerica Inc.
|
176,436
|
56,452
|
|
|
American Financial Group Inc.
|
390,182
|
55,297
|
|
|
Old Republic International Corp.
|
1,267,785
|
54,781
|
|
|
FactSet Research Systems Inc.
|
206,121
|
54,251
|
|
|
SEI Investments Co.
|
517,183
|
53,259
|
|
|
Prosperity Bancshares Inc.
|
666,613
|
49,909
|
|
|
Hanover Insurance Group Inc.
|
197,954
|
46,050
|
|
|
Commerce Bancshares Inc.
|
767,095
|
45,466
|
|
|
First American Financial Corp.
|
576,542
|
43,235
|
|
|
Houlihan Lokey Inc.
|
306,771
|
38,497
|
|
|
Erie Indemnity Co. Class A
|
143,742
|
34,791
|
|
|
Home BancShares Inc.
|
1,059,885
|
32,931
|
|
|
MarketAxess Holdings Inc.
|
201,100
|
32,638
|
|
|
Selective Insurance Group Inc.
|
338,745
|
32,110
|
|
|
RLI Corp.
|
520,201
|
31,857
|
|
|
CNO Financial Group Inc.
|
528,197
|
29,098
|
|
|
First Financial Bankshares Inc.
|
737,806
|
25,926
|
|
|
ServisFirst Bancshares Inc.
|
284,568
|
25,469
|
|
|
Morningstar Inc.
|
124,816
|
24,036
|
|
|
United Community Banks Inc.
|
677,281
|
24,003
|
|
|
International Bancshares Corp.
|
306,121
|
23,430
|
|
|
Independent Bank Corp. (XNGS)
|
273,463
|
22,924
|
|
|
Assured Guaranty Ltd.
|
235,439
|
19,475
|
|
|
Community Financial System Inc.
|
297,416
|
19,275
|
|
|
Towne Bank
|
486,216
|
18,432
|
|
|
BOK Financial Corp.
|
120,354
|
17,005
|
|
|
NBT Bancorp Inc.
|
294,165
|
15,488
|
|
|
First Merchants Corp.
|
349,576
|
15,081
|
|
|
Enterprise Financial Services Corp.
|
206,927
|
13,721
|
|
|
BancFirst Corp.
|
117,777
|
13,288
|
|
|
Stock Yards Bancorp Inc.
|
155,250
|
13,212
|
2
Dividend Appreciation Index Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
|
Horace Mann Educators Corp.
|
228,394
|
11,902
|
|
|
City Holding Co.
|
79,812
|
11,581
|
|
|
National Bank Holdings Corp. Class A
|
253,337
|
10,942
|
|
|
German American Bancorp Inc.
|
212,453
|
10,810
|
|
|
Nelnet Inc. Class A
|
78,760
|
10,701
|
|
|
TriCo Bancshares
|
180,486
|
10,385
|
|
|
1st Source Corp.
|
102,098
|
9,162
|
|
|
Lakeland Financial Corp.
|
140,911
|
8,828
|
|
|
Bank First Corp.
|
57,458
|
8,776
|
|
|
Westamerica BanCorp
|
132,844
|
7,991
|
|
|
First Mid Bancshares Inc.
|
136,991
|
7,136
|
|
|
Mercantile Bank Corp.
|
97,713
|
5,871
|
|
|
Republic Bancorp Inc. Class A
|
54,402
|
5,415
|
|
|
First Community Bankshares Inc.
|
106,753
|
5,094
|
|
|
Independent Bank Corp.
|
116,599
|
4,454
|
|
|
Capital City Bank Group Inc.
|
78,306
|
4,062
|
|
|
Southern Missouri Bancorp Inc.
|
52,346
|
4,052
|
|
|
Cass Information Systems Inc.
|
64,752
|
3,621
|
|
|
Civista Bancshares Inc.
|
117,595
|
3,417
|
|
|
Northrim BanCorp Inc.
|
125,912
|
3,338
|
|
|
First Business Financial Services Inc.
|
47,305
|
3,321
|
|
|
Home Bancorp Inc.
|
39,080
|
2,788
|
|
|
Unity Bancorp Inc.
|
37,513
|
2,209
|
|
|
Investar Holding Corp.
|
68,648
|
2,068
|
|
|
|
|
28,548,533
|
|
Health Care (17.7%)
|
|||
|
|
Eli Lilly & Co.
|
4,475,796
|
5,141,974
|
|
|
Johnson & Johnson
|
13,619,903
|
3,491,462
|
|
|
AbbVie Inc.
|
9,996,424
|
2,508,503
|
|
|
UnitedHealth Group Inc.
|
5,138,234
|
2,129,284
|
|
|
Merck & Co. Inc.
|
13,974,148
|
1,819,434
|
|
|
Amgen Inc.
|
3,053,644
|
1,176,142
|
|
|
Abbott Laboratories
|
9,855,078
|
1,041,682
|
|
|
Gilead Sciences Inc.
|
7,024,740
|
914,691
|
|
|
Danaher Corp.
|
3,564,034
|
694,915
|
|
|
Stryker Corp.
|
1,952,131
|
635,809
|
|
|
Medtronic plc
|
7,264,159
|
620,287
|
|
|
McKesson Corp.
|
680,107
|
582,301
|
|
|
Elevance Health Inc. (XNYS)
|
1,201,951
|
451,741
|
|
|
Cencora Inc.
|
1,100,813
|
342,727
|
|
|
Cardinal Health Inc.
|
1,325,132
|
304,820
|
|
|
Becton Dickinson & Co.
|
1,558,991
|
258,200
|
|
|
Agilent Technologies Inc.
|
1,598,947
|
221,246
|
|
|
Zoetis Inc.
|
2,371,968
|
183,329
|
|
|
ResMed Inc.
|
820,726
|
173,157
|
|
|
Quest Diagnostics Inc.
|
626,318
|
145,938
|
|
|
West Pharmaceutical Services Inc.
|
399,720
|
136,289
|
|
|
STERIS plc
|
554,901
|
126,739
|
|
|
Ensign Group Inc.
|
327,932
|
58,424
|
|
|
Chemed Corp.
|
75,100
|
39,972
|
|
|
National HealthCare Corp.
|
70,684
|
15,977
|
|
|
LeMaitre Vascular Inc.
|
118,907
|
12,048
|
|
|
|
|
23,227,091
|
|
Industrials (11.9%)
|
|||
|
|
Caterpillar Inc. (XNYS)
|
2,606,004
|
2,123,398
|
|
|
Union Pacific Corp.
|
3,359,190
|
981,320
|
|
|
Eaton Corp. plc
|
2,196,975
|
912,184
|
|
|
Lockheed Martin Corp.
|
1,147,972
|
668,969
|
|
|
Automatic Data Processing Inc.
|
2,261,663
|
602,643
|
|
|
General Dynamics Corp.
|
1,436,113
|
550,634
|
|
|
CSX Corp.
|
10,513,241
|
529,867
|
|
|
Cummins Inc.
|
780,738
|
495,144
|
|
|
Emerson Electric Co.
|
3,169,015
|
474,782
|
|
|
Waste Management Inc.
|
2,090,338
|
473,566
|
|
|
Honeywell International Inc.
|
1,792,588
|
435,689
|
|
|
Illinois Tool Works Inc.
|
1,481,291
|
425,056
|
|
|
Northrop Grumman Corp.
|
755,404
|
409,792
|
|
|
Cintas Corp.
|
1,924,123
|
393,733
|
|
*
|
Honeywell Aerospace Inc.
|
1,792,588
|
370,600
|
3
Dividend Appreciation Index Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
|
Comfort Systems USA Inc.
|
198,842
|
343,935
|
|
|
WW Grainger Inc.
|
245,756
|
339,689
|
|
|
Fastenal Co.
|
6,495,538
|
309,902
|
|
|
Rockwell Automation Inc.
|
629,584
|
302,251
|
|
|
L3Harris Technologies Inc.
|
1,054,046
|
292,034
|
|
|
Republic Services Inc.
|
1,131,494
|
238,236
|
|
|
Sunbelt Rentals Holdings Inc.
|
2,321,210
|
166,941
|
|
|
Xylem Inc.
|
1,344,847
|
157,307
|
|
|
Dover Corp.
|
761,907
|
155,901
|
|
|
Hubbell Inc.
|
298,981
|
141,284
|
|
|
Veralto Corp.
|
1,389,581
|
130,857
|
|
|
Expeditors International of Washington Inc.
|
740,010
|
124,240
|
|
|
Snap-on Inc.
|
293,089
|
120,287
|
|
|
RB Global Inc. (XTSE)
|
1,054,076
|
115,674
|
|
|
JB Hunt Transport Services Inc.
|
421,496
|
114,542
|
|
|
HEICO Corp. Class A
|
439,066
|
112,963
|
|
|
Broadridge Financial Solutions Inc.
|
654,383
|
100,742
|
|
|
ITT Inc.
|
505,819
|
99,130
|
|
|
CH Robinson Worldwide Inc.
|
666,913
|
98,523
|
|
|
IDEX Corp.
|
418,772
|
96,506
|
|
|
Nordson Corp.
|
299,846
|
89,288
|
|
|
BWX Technologies Inc.
|
518,356
|
87,447
|
|
|
Carlisle Cos. Inc.
|
228,413
|
82,210
|
|
|
Masco Corp.
|
1,141,390
|
81,587
|
|
1
|
HEICO Corp.
|
227,851
|
81,197
|
|
|
Lincoln Electric Holdings Inc.
|
309,980
|
81,001
|
|
|
Allegion plc
|
486,215
|
76,530
|
|
|
Graco Inc.
|
939,038
|
74,541
|
|
|
Lennox International Inc.
|
179,173
|
74,514
|
|
|
Huntington Ingalls Industries Inc.
|
222,944
|
72,780
|
|
|
Applied Industrial Technologies Inc.
|
209,124
|
72,192
|
|
|
Owens Corning
|
455,622
|
63,286
|
|
|
Donaldson Co. Inc.
|
655,274
|
61,753
|
|
|
Watsco Inc.
|
198,052
|
61,258
|
|
|
Pentair plc
|
914,357
|
59,836
|
|
|
Advanced Drainage Systems Inc.
|
405,477
|
56,150
|
|
|
Ryder System Inc.
|
218,912
|
56,133
|
|
|
Watts Water Technologies Inc. Class A
|
155,452
|
53,754
|
|
|
Toro Co.
|
548,441
|
50,385
|
|
|
Oshkosh Corp.
|
352,777
|
50,239
|
|
|
Timken Co.
|
357,809
|
49,217
|
|
|
Tetra Tech Inc.
|
1,468,390
|
48,692
|
|
|
Booz Allen Hamilton Holding Corp.
|
682,309
|
47,571
|
|
|
Simpson Manufacturing Co. Inc.
|
232,758
|
43,698
|
|
|
MSA Safety Inc.
|
205,312
|
39,065
|
|
|
A O Smith Corp.
|
633,488
|
38,092
|
|
|
Enpro Inc.
|
119,531
|
37,523
|
|
|
GATX Corp.
|
200,857
|
35,927
|
|
*
|
Mobility Global Inc.
|
1,715,482
|
34,962
|
|
|
Matson Inc.
|
171,227
|
34,689
|
|
|
Landstar System Inc.
|
191,967
|
33,550
|
|
|
UFP Industries Inc.
|
319,581
|
27,720
|
|
|
Brady Corp. Class A
|
247,220
|
23,305
|
|
|
Franklin Electric Co. Inc.
|
215,013
|
22,516
|
|
|
Mueller Water Products Inc. Class A
|
885,430
|
22,348
|
|
|
Kadant Inc.
|
66,821
|
20,547
|
|
|
Standex International Corp.
|
68,557
|
20,327
|
|
|
Griffon Corp.
|
218,035
|
18,788
|
|
|
Exponent Inc.
|
274,562
|
18,355
|
|
|
HNI Corp.
|
394,990
|
17,779
|
|
|
McGrath RentCorp.
|
138,933
|
15,998
|
|
|
ABM Industries Inc.
|
331,071
|
15,862
|
|
|
Worthington Enterprises Inc.
|
175,507
|
9,865
|
|
|
Alamo Group Inc.
|
61,255
|
9,744
|
|
|
Gorman-Rupp Co.
|
118,006
|
9,581
|
|
|
Tennant Co.
|
96,373
|
8,098
|
|
|
Lindsay Corp.
|
58,807
|
6,517
|
|
|
Apogee Enterprises Inc.
|
120,061
|
4,754
|
|
|
|
|
15,509,492
|
4
Dividend Appreciation Index Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
Information Technology (25.3%)
|
|||
|
|
Broadcom Inc.
|
15,566,653
|
6,059,787
|
|
|
Apple Inc.
|
18,862,838
|
5,826,919
|
|
|
Microsoft Corp.
|
12,220,245
|
5,678,992
|
|
|
Cisco Systems Inc.
|
22,348,281
|
2,592,177
|
|
|
Lam Research Corp.
|
7,075,661
|
2,073,310
|
|
|
Texas Instruments Inc.
|
5,149,253
|
1,419,855
|
|
|
KLA Corp.
|
7,390,866
|
1,351,198
|
|
|
Oracle Corp.
|
9,600,785
|
1,246,854
|
|
|
International Business Machines Corp.
|
5,317,817
|
1,189,330
|
|
|
Amphenol Corp. Class A
|
6,960,596
|
1,118,568
|
|
|
Analog Devices Inc.
|
2,762,229
|
1,014,871
|
|
|
QUALCOMM Inc.
|
5,963,470
|
880,268
|
|
|
Accenture plc Class A
|
3,473,634
|
576,345
|
|
|
Intuit Inc.
|
1,564,701
|
494,555
|
|
|
Motorola Solutions Inc.
|
939,196
|
409,255
|
|
|
TE Connectivity plc
|
1,651,525
|
339,702
|
|
|
Microchip Technology Inc.
|
3,061,711
|
227,455
|
|
|
Roper Technologies Inc.
|
570,981
|
223,807
|
|
|
CDW Corp.
|
722,818
|
106,840
|
|
|
Littelfuse Inc.
|
143,088
|
63,263
|
|
|
Cognex Corp.
|
941,590
|
61,429
|
|
|
Avnet Inc.
|
464,084
|
41,229
|
|
|
Amdocs Ltd.
|
608,646
|
33,914
|
|
|
Badger Meter Inc.
|
165,165
|
22,190
|
|
|
Dolby Laboratories Inc. Class A
|
341,534
|
20,086
|
|
|
Power Integrations Inc.
|
315,298
|
19,142
|
|
|
|
|
33,091,341
|
|
Materials (3.2%)
|
|||
|
|
Linde plc
|
2,615,941
|
1,251,414
|
|
|
Sherwin-Williams Co.
|
1,297,768
|
442,344
|
|
|
Ecolab Inc.
|
1,433,122
|
397,878
|
|
|
Air Products & Chemicals Inc.
|
1,259,923
|
371,539
|
|
|
Nucor Corp.
|
1,288,546
|
331,530
|
|
|
Vulcan Materials Co.
|
734,152
|
197,171
|
|
|
Steel Dynamics Inc.
|
766,991
|
192,714
|
|
|
Martin Marietta Materials Inc.
|
339,743
|
178,413
|
|
|
PPG Industries Inc.
|
1,261,170
|
139,385
|
|
|
Reliance Inc.
|
288,829
|
117,294
|
|
|
Royal Gold Inc.
|
460,965
|
91,432
|
|
|
Albemarle Corp.
|
667,262
|
78,497
|
|
|
RPM International Inc.
|
722,111
|
77,316
|
|
|
Avery Dennison Corp.
|
432,775
|
73,455
|
|
|
Solstice Advanced Materials Inc.
|
898,510
|
54,063
|
|
|
AptarGroup Inc.
|
361,094
|
48,372
|
|
|
Balchem Corp.
|
181,797
|
30,461
|
|
|
Cabot Corp.
|
292,091
|
25,710
|
|
|
Materion Corp.
|
117,694
|
24,815
|
|
|
Silgan Holdings Inc.
|
496,353
|
19,844
|
|
|
Avient Corp.
|
519,005
|
18,850
|
|
|
HB Fuller Co.
|
308,371
|
17,053
|
|
|
Hawkins Inc.
|
118,034
|
15,112
|
|
|
Westlake Corp.
|
188,422
|
13,284
|
|
|
Quaker Chemical Corp.
|
77,600
|
12,456
|
|
|
Innospec Inc.
|
139,314
|
11,978
|
|
|
Stepan Co.
|
122,050
|
7,828
|
|
|
|
|
4,240,208
|
|
Utilities (2.9%)
|
|||
|
|
NextEra Energy Inc.
|
11,798,735
|
1,025,546
|
|
|
American Electric Power Co. Inc.
|
3,078,512
|
393,588
|
|
|
Sempra
|
3,698,536
|
327,505
|
|
|
Entergy Corp.
|
2,590,686
|
278,810
|
|
|
Xcel Energy Inc.
|
3,532,066
|
276,208
|
|
|
Public Service Enterprise Group Inc.
|
2,819,470
|
216,197
|
|
|
Ameren Corp.
|
1,565,855
|
171,633
|
|
|
DTE Energy Co.
|
1,177,011
|
166,983
|
|
|
Atmos Energy Corp.
|
944,417
|
163,176
|
|
|
American Water Works Co. Inc.
|
1,104,881
|
148,242
|
|
|
CMS Energy Corp.
|
1,747,845
|
125,827
|
5
Dividend Appreciation Index Fund
|
|
|
Shares
|
Market
Value•
($000)
|
|
|
NiSource Inc.
|
2,712,618
|
120,522
|
|
|
Alliant Energy Corp.
|
1,461,303
|
103,431
|
|
|
Essential Utilities Inc.
|
1,604,755
|
63,949
|
|
|
IDACORP Inc.
|
313,490
|
44,801
|
|
|
National Fuel Gas Co.
|
537,705
|
44,258
|
|
|
TXNM Energy Inc.
|
563,742
|
32,652
|
|
|
Otter Tail Corp.
|
237,579
|
21,007
|
|
|
American States Water Co.
|
221,795
|
18,995
|
|
|
Chesapeake Utilities Corp.
|
135,851
|
18,038
|
|
|
MGE Energy Inc.
|
213,626
|
16,990
|
|
|
California Water Service Group
|
338,733
|
16,974
|
|
|
H2O America
|
222,451
|
13,643
|
|
|
Middlesex Water Co.
|
105,361
|
6,037
|
|
|
York Water Co.
|
91,703
|
2,840
|
|
|
|
|
3,817,852
|
|
Total Common Stocks (Cost $77,778,461)
|
130,407,201
|
||
|
Temporary Cash Investments (0.3%)
|
|||
|
Money Market Fund (0.3%)
|
|||
|
2,3
|
Vanguard Market Liquidity Fund, 3.718% (Cost $394,859)
|
3,949,257
|
394,886
|
|
Total Investments (99.9%) (Cost $78,173,320)
|
130,802,087
|
||
|
Other Assets and Liabilities-Net (0.1%)
|
97,778
|
||
|
Net Assets (100%)
|
130,899,865
|
||
|
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 $7,721.
|
|
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 $7,892 was received for securities on loan.
|
Derivative Financial Instruments Outstanding as of Period End
|
Futures Contracts
|
||||
|
|
|
|
($000)
|
|
|
|
Expiration
|
Number of
Long (Short)
Contracts
|
Notional
Amount
|
Value and
Unrealized
Appreciation
(Depreciation)
|
|
Long Futures Contracts
|
||||
|
E-mini S&P 500 Index
|
September 2026
|
262
|
98,502
|
(547)
|
|
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)
|
|
Elevance Health Inc.
|
2/1/2027
|
CITNA
|
10,221
|
(4.130
)
|
-
|
(186)
|
|
Goldman Sachs Group Inc.
|
8/31/2027
|
BANA
|
85,092
|
(4.445
)
|
-
|
(2,486)
|
|
Kroger Co.
|
2/1/2027
|
GSI
|
56,560
|
(3.630
)
|
1,089
|
-
|
|
Raymond James Financial Inc.
|
2/1/2027
|
CITNA
|
8,143
|
(4.183
)
|
375
|
-
|
|
Visa Inc. Class A
|
8/31/2026
|
BANA
|
233,832
|
(3.620
)
|
2,181
|
-
|
|
|
3,645
|
(2,672)
|
||||
|
1
|
Based 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 $1,356 and cash of $440 in connection with open over-the-counter swap contracts.
See accompanying Notes, which are an integral part of the Financial Statements.
6
Dividend Appreciation 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 $77,778,461)
|
130,407,201
|
|
Affiliated Issuers (Cost $394,859)
|
394,886
|
|
Total Investments in Securities
|
130,802,087
|
|
Investment in Vanguard
|
2,771
|
|
Cash
|
73
|
|
Cash Collateral Pledged-Futures Contracts
|
5,580
|
|
Receivables for Accrued Income
|
101,592
|
|
Receivables for Capital Shares Issued
|
4,947
|
|
Variation Margin Receivable-Futures Contracts
|
521
|
|
Unrealized Appreciation-Over-the-Counter Swap Contracts
|
3,645
|
|
Other Assets
|
20
|
|
Total Assets
|
130,921,236
|
|
Liabilities
|
|
|
Payables for Investment Securities Purchased
|
1,771
|
|
Collateral for Securities on Loan
|
7,892
|
|
Payables for Capital Shares Redeemed
|
6,492
|
|
Payables to Vanguard
|
2,544
|
|
Unrealized Depreciation-Over-the-Counter Swap Contracts
|
2,672
|
|
Total Liabilities
|
21,371
|
|
Net Assets
|
130,899,865
|
|
1 Includes $7,721 of securities on loan.
|
|
|
At July 31, 2026, net assets consisted of:
|
|
|
|
|
|
Paid-in Capital
|
80,311,266
|
|
Total Distributable Earnings (Loss)
|
50,588,599
|
|
Net Assets
|
130,899,865
|
|
|
|
|
ETF Shares-Net Assets
|
|
|
Applicable to 465,695,866 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
|
111,359,571
|
|
Net Asset Value Per Share-ETF Shares
|
$239.13
|
|
|
|
|
Admiral™ Shares-Net Assets
|
|
|
Applicable to 301,114,889 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
|
19,540,294
|
|
Net Asset Value Per Share-Admiral Shares
|
$64.89
|
See accompanying Notes, which are an integral part of the Financial Statements.
7
Dividend Appreciation Index Fund
Statement of Operations
|
|
|
|
|
Six Months Ended
July 31, 2026
|
|
|
($000)
|
|
Investment Income
|
|
|
Income
|
|
|
Dividends1
|
1,027,476
|
|
Interest2
|
12,519
|
|
Securities Lending-Net
|
12
|
|
Total Income
|
1,040,007
|
|
Expenses
|
|
|
The Vanguard Group-Note C
|
|
|
Investment Advisory Services
|
348
|
|
Management and Administrative-ETF Shares
|
18,097
|
|
Management and Administrative-Admiral Shares
|
5,946
|
|
Marketing and Distribution-ETF Shares
|
1,526
|
|
Marketing and Distribution-Admiral Shares
|
398
|
|
Custodian Fees
|
184
|
|
Shareholders' Reports-ETF Shares
|
812
|
|
Shareholders' Reports-Admiral Shares
|
105
|
|
Trustees' Fees and Expenses
|
30
|
|
Other Expenses
|
72
|
|
Total Expenses
|
27,518
|
|
Net Investment Income
|
1,012,489
|
|
Realized Net Gain (Loss)
|
|
|
Investment Securities Sold2,3
|
2,286,712
|
|
Futures Contracts
|
2,140
|
|
Swap Contracts
|
45,788
|
|
Realized Net Gain (Loss)
|
2,334,640
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
Investment Securities2
|
5,866,769
|
|
Futures Contracts
|
(1,218
)
|
|
Swap Contracts
|
1,519
|
|
Change in Unrealized Appreciation (Depreciation)
|
5,867,070
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
9,214,199
|
|
1
|
Dividends are net of foreign withholding taxes of $96.
|
|
2
|
Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $12,313, ($55), and ($23), respectively. Purchases and sales are for temporary
cash investment purposes.
|
|
3
|
Includes $2,800,484 of net gain (loss) resulting from in-kind redemptions.
|
See accompanying Notes, which are an integral part of the Financial Statements.
8
Dividend Appreciation 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
|
1,012,489
|
1,897,675
|
|
Realized Net Gain (Loss)
|
2,334,640
|
2,891,280
|
|
Change in Unrealized Appreciation (Depreciation)
|
5,867,070
|
8,903,547
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
9,214,199
|
13,692,502
|
|
Distributions
|
||
|
ETF Shares
|
(848,825
)
|
(1,611,638
)
|
|
Admiral Shares
|
(147,622
)
|
(284,573
)
|
|
Total Distributions
|
(996,447
)
|
(1,896,211
)
|
|
Capital Share Transactions
|
||
|
ETF Shares
|
1,302,849
|
3,637,560
|
|
Admiral Shares
|
(134,296
)
|
352,495
|
|
Net Increase (Decrease) from Capital Share Transactions
|
1,168,553
|
3,990,055
|
|
Total Increase (Decrease)
|
9,386,305
|
15,786,346
|
|
Net Assets
|
||
|
Beginning of Period
|
121,513,560
|
105,727,214
|
|
End of Period
|
130,899,865
|
121,513,560
|
See accompanying Notes, which are an integral part of the Financial Statements.
9
Dividend Appreciation 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
|
$224.01
|
$202.26
|
$172.53
|
$156.26
|
$162.69
|
$137.11
|
|
Investment Operations
|
||||||
|
Net Investment Income1
|
1.863
|
3.560
|
3.381
|
3.185
|
2.982
|
2.736
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
15.089
|
21.748
|
29.728
|
16.293
|
(6.439)
|
25.504
|
|
Total from Investment Operations
|
16.952
|
25.308
|
33.109
|
19.478
|
(3.457)
|
28.240
|
|
Distributions
|
||||||
|
Dividends from Net Investment Income
|
(1.832)
|
(3.558)
|
(3.379)
|
(3.208)
|
(2.973)
|
(2.660)
|
|
Distributions from Realized Capital Gains
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Total Distributions
|
(1.832)
|
(3.558)
|
(3.379)
|
(3.208)
|
(2.973)
|
(2.660)
|
|
Net Asset Value, End of Period
|
$239.13
|
$224.01
|
$202.26
|
$172.53
|
$156.26
|
$162.69
|
|
Total Return
|
7.63%
|
12.66%
|
19.34%
|
12.66%
|
-2.02%
|
20.71%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
Net Assets, End of Period (Millions)
|
$111,360
|
$103,085
|
$89,405
|
$73,991
|
$66,062
|
$65,589
|
|
Ratio of Total Expenses to Average Net Assets
|
0.04%
|
0.05%
|
0.06%2
|
0.06%2
|
0.06%2
|
0.06%
|
|
Ratio of Net Investment Income to Average Net Assets
|
1.64%
|
1.72%
|
1.78%
|
1.99%
|
1.96%
|
1.74%
|
|
Portfolio Turnover Rate3
|
4%
|
8%
|
11%
|
13%
|
12%
|
26%
|
|
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 0.06%.
|
|
3
|
Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares, including ETF Creation Units.
|
See accompanying Notes, which are an integral part of the Financial Statements.
10
Dividend Appreciation 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
|
$60.79
|
$54.89
|
$46.82
|
$42.41
|
$44.15
|
$37.21
|
|
Investment Operations
|
||||||
|
Net Investment Income1
|
.497
|
.955
|
.907
|
.856
|
.801
|
.734
|
|
Net Realized and Unrealized Gain (Loss) on Investments
|
4.091
|
5.900
|
8.070
|
4.416
|
(1.743)
|
6.920
|
|
Total from Investment Operations
|
4.588
|
6.855
|
8.977
|
5.272
|
(.942)
|
7.654
|
|
Distributions
|
||||||
|
Dividends from Net Investment Income
|
(.488)
|
(.955)
|
(.907)
|
(.862)
|
(.798)
|
(.714)
|
|
Distributions from Realized Capital Gains
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Total Distributions
|
(.488)
|
(.955)
|
(.907)
|
(.862)
|
(.798)
|
(.714)
|
|
Net Asset Value, End of Period
|
$64.89
|
$60.79
|
$54.89
|
$46.82
|
$42.41
|
$44.15
|
|
Total Return2
|
7.61%
|
12.63%
|
19.32%
|
12.64%
|
-2.02%
|
20.67%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
Net Assets, End of Period (Millions)
|
$19,540
|
$18,428
|
$16,322
|
$13,962
|
$12,471
|
$12,903
|
|
Ratio of Total Expenses to Average Net Assets
|
0.07%
|
0.07%
|
0.08%3
|
0.08%3
|
0.08%3
|
0.08%
|
|
Ratio of Net Investment Income to Average Net Assets
|
1.61%
|
1.70%
|
1.77%
|
1.97%
|
1.94%
|
1.72%
|
|
Portfolio Turnover Rate4
|
4%
|
8%
|
11%
|
13%
|
12%
|
26%
|
|
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
|
The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.08%.
|
|
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
Dividend Appreciation Index Fund
Notes to Financial Statements
Vanguard Dividend Appreciation Index 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: ETF Shares and Admiral Shares. Each of the share classes has different eligibility and minimum purchase requirements, and is designed for different types of investors. ETF Shares are listed for trading on NYSE Arca; they can be purchased and sold through a broker.
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. 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.
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.
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. 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.
12
Dividend Appreciation Index Fund
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: 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 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 $2,771,000, representing less than 0.01% of the fund's net assets and 1.11% 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.
13
Dividend Appreciation Index Fund
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
|
130,407,201
|
-
|
-
|
130,407,201
|
|
Temporary Cash Investments
|
394,886
|
-
|
-
|
394,886
|
|
Total
|
130,802,087
|
-
|
-
|
130,802,087
|
|
Derivative Financial Instruments
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Swap Contracts
|
-
|
3,645
|
-
|
3,645
|
|
Liabilities
|
|
|
|
|
|
Futures Contracts1
|
(547)
|
-
|
-
|
(547)
|
|
Swap Contracts
|
-
|
(2,672)
|
-
|
(2,672)
|
|
Total
|
(547)
|
(2,672)
|
-
|
(3,219)
|
|
1
|
Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day's variation margin is reported within the Statement
of Assets and Liabilities.
|
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
|
78,264,527
|
|
Gross Unrealized Appreciation
|
54,103,034
|
|
Gross Unrealized Depreciation
|
(1,566,021)
|
|
Net Unrealized Appreciation (Depreciation)
|
52,537,013
|
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 $4,465,404,000 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 $4,682,955,000 of investment securities and sold $4,350,510,000 of investment securities, other than temporary cash investments. In addition, the fund purchased and sold investment securities of $5,246,671,000 and $4,141,098,000, 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 $594,678,000 and sales were $578,460,000, resulting in net realized loss of $69,783,000; 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)
|
|
ETF Shares
|
||||
|
Issued
|
5,542,414
|
24,694
|
11,071,909
|
54,943
|
|
Issued in Lieu of Cash Distributions
|
-
|
-
|
-
|
-
|
|
Redeemed
|
(4,239,565)
|
(19,175)
|
(7,434,349)
|
(36,800)
|
|
Net Increase (Decrease)-ETF Shares
|
1,302,849
|
5,519
|
3,637,560
|
18,143
|
|
Admiral Shares
|
||||
|
Issued
|
1,040,304
|
16,850
|
2,704,097
|
47,722
|
|
Issued in Lieu of Cash Distributions
|
123,018
|
2,032
|
239,326
|
4,241
|
|
Redeemed
|
(1,297,618)
|
(20,901)
|
(2,590,928)
|
(46,202)
|
|
Net Increase (Decrease)-Admiral Shares
|
(134,296)
|
(2,019)
|
352,495
|
5,761
|
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.
14
Dividend Appreciation Index Fund
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.
Q6022 092026
15
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 - Dividend Appreciation Index Fund
A majority of independent trustees of the board of Vanguard Dividend Appreciation Index Fund (Trustees) have renewed the fund's investment advisory arrangement with The Vanguard Group, Inc. (Vanguard), which provides investment advisory services to the fund through its subsidiary, Vanguard Portfolio Management LLC (VPM). The trustees determined that continuing the advisory arrangement was in the best interests of the 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 arrangement. 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 the 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 arrangement.
Investment performance
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 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 the 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 arrangement again within a one-year period.
Trustees Approve Advisory Arrangement - Energy Opportunities Fund
A majority of independent trustees of the board of Vanguard Energy Opportunities 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 fund's investment management services over both the short and long term and took into account the organizational depth and stability of the advisor. The board considered that Wellington Management, founded in 1928, is among the nation's oldest and most respected institutional investment managers. The investment team uses a bottom-up approach in which stocks are selected based on the advisor's estimates of fundamental investment value. Fundamental research focuses on the quality of a company's assets, the company's internal reinvestment opportunities, and management quality. The firm has advised the fund since its inception in 1984.
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, 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 Arrangement - Health Care Fund
A majority of independent trustees of the board of Vanguard Health Care 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 fund's investment management services over both the short and long term and took into account the organizational depth and stability of the advisor. The board considered that Wellington Management, founded in 1928, is among the nation's oldest and most respected institutional investment managers. The portfolio manager is aided by a team of experienced Global Industry Analysts who cover health care industries. This health care team uses intensive fundamental analysis and deep knowledge of health care science and technology to identify companies with high-quality balance sheets, strong management, and the potential for new products that will lead to above-average growth in revenue and earnings. The advisor invests in stocks broadly representing the health care industry, seeking to maintain exposure across five primary subsectors: large-cap biotech/pharmaceuticals, mid-cap biotech/pharmaceuticals, small-cap biotech/pharmaceuticals, health care services, and medical technology. Wellington Management has advised the fund since its inception in 1984.
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, 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.
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.
Vanguard Specialized Funds published this content on October 01, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 01, 2026 at 13:46 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]