Vanguard Real Estate Index Fund |
Vanguard Real Estate II Index Fund |
• | Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The ”Ending Account Value“ shown is derived from the fund’s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. |
• | Based on hypothetical 5% yearly return. This section is intended to help you compare your fund‘s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. |
Six Months Ended July 31, 2020 | |||
Beginning Account Value 1/31/2020 |
Ending Account Value 7/31/2020 |
Expenses Paid During Period | |
Based on Actual Fund Return | |||
Real Estate Index Fund | |||
Investor Shares | $1,000.00 | $881.10 | $1.22 |
ETF Shares | 1,000.00 | 881.30 | 0.56 |
AdmiralTM Shares | 1,000.00 | 881.70 | 0.56 |
Institutional Shares | 1,000.00 | 882.00 | 0.47 |
Real Estate II Index Fund | $1,000.00 | $881.90 | $0.37 |
Based on Hypothetical 5% Yearly Return | |||
Real Estate Index Fund | |||
Investor Shares | $1,000.00 | $1,023.57 | $1.31 |
ETF Shares | 1,000.00 | 1,024.27 | 0.60 |
Admiral Shares | 1,000.00 | 1,024.27 | 0.60 |
Institutional Shares | 1,000.00 | 1,024.37 | 0.50 |
Real Estate II Index Fund | $1,000.00 | $1,024.47 | $0.40 |
Diversified Real Estate Activities | 0.1% |
Diversified REITs | 3.5 |
Health Care REITs | 8.3 |
Hotel & Resort REITs | 2.2 |
Industrial REITs | 11.9 |
Office REITs | 7.9 |
Real Estate Development | 0.2 |
Real Estate Operating Companies | 0.2 |
Real Estate Services | 2.4 |
Residential REITs | 13.6 |
Retail REITs | 8.0 |
Specialized REITs | 41.7 |
Shares | Market Value• ($000) | |||||
Temporary Cash Investments (0.8%) | ||||||
Money Market Fund (0.8%) | ||||||
7,8 | Vanguard Market Liquidity Fund, 0.194% (Cost $435,765) |
4,358,859 | 435,886 | |||
Total Investments (100.3%) (Cost $56,019,890) | 57,669,662 | |||||
Other Assets and Liabilities—Net (-0.3%) | (169,296) | |||||
Net Assets (100%) | 57,500,366 |
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 $198,169,000. |
2 | Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company. |
3 | Security value determined using significant unobservable inputs. |
4 | “Other” represents securities that are not classified by the fund’s benchmark index. |
5 | Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group. |
6 | Represents a wholly owned subsidiary of the fund. See accompanying financial statements for Vanguard Real Estate II Index Fund's Schedule of Investments. |
7 | Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield. |
8 | Collateral of $216,429,000 was received for securities on loan. |
REIT—Real Estate Investment Trust. |
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) |
Digital Realty Trust Inc. | 2/2/21 | GSI | 91,404 | (0.181) | 10,373 | — |
Extra Space Storage Inc. | 2/2/21 | GSI | 24,520 | (0.181) | 1,313 | — |
Hannon Armstrong Sustainable Infrastructure Capital Inc. | 2/2/21 | GSI | 6,682 | (0.181) | 324 | — |
Over-the-Counter Total Return Swaps (continued) | ||||||
Reference Entity | Termination Date |
Counterparty | Notional Amount ($000) |
Floating Interest Rate Received (Paid)1 (%) |
Value
and Unrealized Appreciation ($000) |
Value
and Unrealized (Depreciation) ($000) |
Public Storage | 2/2/21 | GSI | 38,560 | (0.181) | 1,413 | — |
Redfin Corp. | 2/2/21 | GSI | 26,096 | (0.181) | 3,008 | — |
Seritage Growth Properties | 2/2/21 | GSI | 4,261 | (0.181) | — | (574) |
VICI Properties Inc. | 2/2/21 | GSI | 63,570 | (0.181) | 1,555 | — |
17,986 | (574) |
1 Based on 1-month USD London Interbank Offered Rate (LIBOR) as of the most recent payment date. Floating interest payment received/paid monthly. |
GSI—Goldman Sachs International. |
($000s, except shares and per-share amounts) | Amount |
Assets | |
Investments in Securities, at Value | |
Unaffiliated Issuers (Cost $48,710,630) | 50,292,421 |
Affiliated Issuers (Cost $464,603) | 456,958 |
Vanguard Real Estate II Index Fund (Cost $6,844,657) | 6,920,283 |
Total Investments in Securities | 57,669,662 |
Investment in Vanguard | 2,185 |
Cash | 28,790 |
Receivables for Investment Securities Sold | 23,987 |
Receivables for Accrued Income | 21,316 |
Receivables for Capital Shares Issued | 17,924 |
Unrealized Appreciation—Over-the-Counter Swap Contracts | 17,986 |
Total Assets | 57,781,850 |
Liabilities | |
Payables for Investment Securities Purchased | 29,848 |
Collateral for Securities on Loan | 216,429 |
Payables for Capital Shares Redeemed | 31,555 |
Payables to Vanguard | 3,078 |
Unrealized Depreciation—Over-the-Counter Swap Contracts | 574 |
Total Liabilities | 281,484 |
Net Assets | 57,500,366 |
Statement of Assets and Liabilities (continued)
| |
At July 31, 2020, net assets consisted of: | |
($000s, except shares and per-share amounts) | Amount |
Paid-in Capital | 56,918,260 |
Total Distributable Earnings (Loss) | 582,106 |
Net Assets | 57,500,366 |
Investor Shares—Net Assets | |
Applicable to 7,026,537 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 189,974 |
Net Asset Value Per Share—Investor Shares | $27.04 |
ETF Shares—Net Assets | |
Applicable to 358,425,632 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 29,166,021 |
Net Asset Value Per Share—ETF Shares | $81.37 |
Admiral Shares—Net Assets | |
Applicable to 166,680,355 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 19,222,325 |
Net Asset Value Per Share—Admiral Shares | $115.32 |
Institutional Shares—Net Assets | |
Applicable to 499,855,848 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 8,922,046 |
Net Asset Value Per Share—Institutional Shares | $17.85 |
Six
Months Ended July 31, 2020 | |
($000) | |
Investment Income | |
Income | |
Dividends—Unaffiliated Issuers | 720,724 |
Dividends—Affiliated Issuers | 5,368 |
Dividends—Vanguard Real Estate II Index Fund | 104,882 |
Interest—Affiliated Issuers | 549 |
Securities Lending—Net | 4,353 |
Total Income | 835,876 |
Expenses | |
The Vanguard Group—Note B | |
Investment Advisory Services | 1,373 |
Management and Administrative—Investor Shares | 224 |
Management and Administrative—ETF Shares | 14,707 |
Management and Administrative—Admiral Shares | 9,773 |
Management and Administrative—Institutional Shares | 3,636 |
Marketing and Distribution—Investor Shares | 13 |
Marketing and Distribution—ETF Shares | 697 |
Marketing and Distribution—Admiral Shares | 523 |
Marketing and Distribution—Institutional Shares | 132 |
Custodian Fees | 209 |
Shareholders’ Reports—Investor Shares | 7 |
Shareholders’ Reports—ETF Shares | 931 |
Shareholders’ Reports—Admiral Shares | 233 |
Shareholders’ Reports—Institutional Shares | 64 |
Trustees’ Fees and Expenses | 20 |
Total Expenses | 32,542 |
Expenses Paid Indirectly | (124) |
Net Expenses | 32,418 |
Net Investment Income | 803,458 |
Realized Net Gain (Loss) | |
Capital Gain Distributions Received—Unaffiliated Issuers | 93,272 |
Capital Gain Distributions Received—Affiliated Issuers | 795 |
Capital Gain Distributions Received—Vanguard Real Estate II Index Fund | — |
Investment Securities Sold—Unaffiliated Issuers1 | 513,276 |
Investment Securities Sold—Affiliated Issuers1 | (36,067) |
Investment Securities Sold—Vanguard Real Estate II Index Fund | — |
Futures Contracts | (3,901) |
Swap Contracts | (6,284) |
Realized Net Gain (Loss) | 561,091 |
Statement of Operations (continued) | |
Six
Months Ended July 31, 2020 | |
($000) | |
Change in Unrealized Appreciation (Depreciation) | |
Investment Securities—Unaffiliated Issuers | (9,438,525) |
Investment Securities—Affiliated Issuers | (172,756) |
Investment Securities—Vanguard Real Estate II Index Fund | (1,032,220) |
Swap Contracts | 18,863 |
Change in Unrealized Appreciation (Depreciation) | (10,624,638) |
Net Increase (Decrease) in Net Assets Resulting from Operations | (9,260,089) |
1 | Includes $1,333,090,000 of the net gain (loss) resulting from in-kind redemptions. |
Six
Months Ended July 31, 2020 |
Year
Ended January 31, 2020 | ||
($000) | ($000) | ||
Increase (Decrease) in Net Assets | |||
Operations | |||
Net Investment Income | 803,458 | 1,726,391 | |
Realized Net Gain (Loss) | 561,091 | 2,458,391 | |
Change in Unrealized Appreciation (Depreciation) | (10,624,638) | 5,911,672 | |
Net Increase (Decrease) in Net Assets Resulting from Operations | (9,260,089) | 10,096,454 | |
Distributions1 | |||
Investor Shares | (3,308) | (22,650) | |
ETF Shares | (530,941) | (921,879) | |
Admiral Shares | (339,878) | (554,006) | |
Institutional Shares | (151,945) | (244,373) | |
Return of Capital | |||
Investor Shares | — | (7,475) | |
ETF Shares | — | (304,249) | |
Admiral Shares | — | (182,839) | |
Institutional Shares | — | (80,651) | |
Total Distributions | (1,026,072) | (2,318,122) | |
Capital Share Transactions | |||
Investor Shares | (19,424) | (1,748,144) | |
ETF Shares | (2,811,487) | 2,721,882 | |
Admiral Shares | (820,154) | 2,583,346 | |
Institutional Shares | 211,313 | 734,197 | |
Net Increase (Decrease) from Capital Share Transactions | (3,439,752) | 4,291,281 | |
Total Increase (Decrease) | (13,725,913) | 12,069,613 | |
Net Assets | |||
Beginning of Period | 71,226,279 | 59,156,666 | |
End of Period | 57,500,366 | 71,226,279 |
1 | Certain prior period numbers have been reclassed to conform with current period presentation. |
Investor Shares | ||||||
For a Share Outstanding Throughout Each Period |
Six Months Ended July 31, 2020 |
Year Ended January 31, | ||||
2020 | 2019 | 2018 | 2017 | 2016 | ||
Net Asset Value, Beginning of Period | $31.21 | $27.69 | $26.40 | $27.38 | $25.59 | $28.73 |
Investment Operations | ||||||
Net Investment Income | .3461 | .7191 | .7871 | .7611 | .746 | .711 |
Net Realized and Unrealized Gain (Loss) on Investments | (4.070) | 3.801 | 1.639 | (.614) | 2.324 | (2.851) |
Total from Investment Operations | (3.724) | 4.520 | 2.426 | .147 | 3.070 | (2.140) |
Distributions | ||||||
Dividends from Net Investment Income | (.446) | (.752) | (.851) | (.788) | (.752) | (.695) |
Distributions from Realized Capital Gains | — | — | — | (.011) | (.187) | — |
Return of Capital | — | (.248) | (.285) | (.328) | (.341) | (.305) |
Total Distributions | (.446) | (1.000) | (1.136) | (1.127) | (1.280) | (1.000) |
Net Asset Value, End of Period | $27.04 | $31.21 | $27.69 | $26.40 | $27.38 | $25.59 |
Total Return2 | -11.89% | 16.59% | 9.53% | 0.45% | 12.07% | -7.44% |
Ratios/Supplemental Data | ||||||
Net Assets, End of Period (Millions) | $190 | $243 | $1,871 | $2,143 | $2,603 | $2,621 |
Ratio of Total Expenses to Average Net Assets | 0.26% | 0.26% | 0.25% | 0.26% | 0.26% | 0.26% |
Ratio of Net Investment Income to Average Net Assets | 2.63% | 2.48% | 3.02% | 2.87% | 2.60% | 2.66% |
Portfolio Turnover Rate3 | 3% | 6% | 24% | 6% | 7% | 11% |
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 | 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. |
ETF Shares | ||||||
For a Share Outstanding Throughout Each Period |
Six Months Ended July 31, 2020 |
Year Ended January 31, | ||||
2020 | 2019 | 2018 | 2017 | 2016 | ||
Net Asset Value, Beginning of Period | $93.93 | $83.36 | $79.47 | $82.43 | $77.05 | $86.49 |
Investment Operations | ||||||
Net Investment Income | 1.1121 | 2.3351 | 2.4871 | 2.4991 | 2.334 | 2.217 |
Net Realized and Unrealized Gain (Loss) on Investments | (12.265) | 11.379 | 4.934 | (1.945) | 7.022 | (8.533) |
Total from Investment Operations | (11.153) | 13.714 | 7.421 | .554 | 9.356 | (6.316) |
Distributions | ||||||
Dividends from Net Investment Income | (1.407) | (2.364) | (2.646) | (2.458) | (2.353) | (2.170) |
Distributions from Realized Capital Gains | — | — | — | (.034) | (.563) | — |
Return of Capital | — | (.780) | (.885) | (1.022) | (1.060) | (.954) |
Total Distributions | (1.407) | (3.144) | (3.531) | (3.514) | (3.976) | (3.124) |
Net Asset Value, End of Period | $81.37 | $93.93 | $83.36 | $79.47 | $82.43 | $77.05 |
Total Return | -11.87% | 16.70% | 9.70% | 0.59% | 12.25% | -7.31% |
Ratios/Supplemental Data | ||||||
Net Assets, End of Period (Millions) | $29,166 | $37,682 | $30,857 | $32,377 | $33,527 | $27,007 |
Ratio of Total Expenses to Average Net Assets | 0.12% | 0.12% | 0.12% | 0.12% | 0.12% | 0.12% |
Ratio of Net Investment Income to Average Net Assets | 2.80% | 2.60% | 3.15% | 3.01% | 2.74% | 2.80% |
Portfolio Turnover Rate2 | 3% | 6% | 24% | 6% | 7% | 11% |
The expense ratio and net investment income ratio for the current period have been annualized. |
1 | Calculated based on average shares outstanding. |
2 | Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units. |
Admiral Shares | ||||||
For a Share Outstanding Throughout Each Period |
Six Months Ended July 31, 2020 |
Year Ended January 31, | ||||
2020 | 2019 | 2018 | 2017 | 2016 | ||
Net Asset Value, Beginning of Period | $133.12 | $118.14 | $112.63 | $116.83 | $109.19 | $122.58 |
Investment Operations | ||||||
Net Investment Income | 1.5551 | 3.3151 | 3.5071 | 3.5381 | 3.306 | 3.142 |
Net Realized and Unrealized Gain (Loss) on Investments | (17.362) | 16.121 | 7.008 | (2.761) | 9.966 | (12.105) |
Total from Investment Operations | (15.807) | 19.436 | 10.515 | .777 | 13.272 | (8.963) |
Distributions | ||||||
Dividends from Net Investment Income | (1.993) | (3.350) | (3.751) | (3.483) | (3.333) | (3.076) |
Distributions from Realized Capital Gains | — | — | — | (.048) | (.798) | — |
Return of Capital | — | (1.106) | (1.254) | (1.447) | (1.501) | (1.351) |
Total Distributions | (1.993) | (4.456) | (5.005) | (4.978) | (5.632) | (4.427) |
Net Asset Value, End of Period | $115.32 | $133.12 | $118.14 | $112.63 | $116.83 | $109.19 |
Total Return2 | -11.83% | 16.73% | 9.69% | 0.58% | 12.23% | -7.30% |
Ratios/Supplemental Data | ||||||
Net Assets, End of Period (Millions) | $19,222 | $23,274 | $18,223 | $17,757 | $18,337 | $15,029 |
Ratio of Total Expenses to Average Net Assets | 0.12% | 0.12% | 0.11% | 0.12% | 0.12% | 0.12% |
Ratio of Net Investment Income to Average Net Assets | 2.77% | 2.60% | 3.16% | 3.01% | 2.74% | 2.80% |
Portfolio Turnover Rate3 | 3% | 6% | 24% | 6% | 7% | 11% |
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 | 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. |
Institutional Shares | ||||||
For a Share Outstanding Throughout Each Period |
Six Months Ended July 31, 2020 |
Year Ended January 31, | ||||
2020 | 2019 | 2018 | 2017 | 2016 | ||
Net Asset Value, Beginning of Period | $20.60 | $18.28 | $17.43 | $18.08 | $16.90 | $18.97 |
Investment Operations | ||||||
Net Investment Income | .2421 | .5181 | .5431 | .5681 | .515 | .489 |
Net Realized and Unrealized Gain (Loss) on Investments | (2.682) | 2.496 | 1.085 | (.444) | 1.540 | (1.870) |
Total from Investment Operations | (2.440) | 3.014 | 1.628 | .124 | 2.055 | (1.381) |
Distributions | ||||||
Dividends from Net Investment Income | (.310) | (.522) | (.583) | (.542) | (.519) | (.479) |
Distributions from Realized Capital Gains | — | — | — | (.007) | (.123) | — |
Return of Capital | — | (.172) | (.195) | (.225) | (.233) | (.210) |
Total Distributions | (.310) | (.694) | (.778) | (.774) | (.875) | (.689) |
Net Asset Value, End of Period | $17.85 | $20.60 | $18.28 | $17.43 | $18.08 | $16.90 |
Total Return | -11.80% | 16.77% | 9.70% | 0.60% | 12.23% | -7.27% |
Ratios/Supplemental Data | ||||||
Net Assets, End of Period (Millions) | $8,922 | $10,027 | $8,206 | $8,176 | $7,799 | $6,785 |
Ratio of Total Expenses to Average Net Assets | 0.10% | 0.10% | 0.09% | 0.10% | 0.10% | 0.10% |
Ratio of Net Investment Income to Average Net Assets | 2.79% | 2.63% | 3.18% | 3.03% | 2.76% | 2.82% |
Portfolio Turnover Rate2 | 3% | 6% | 24% | 6% | 7% | 11% |
The expense ratio and net investment income ratio for the current period have been annualized. |
1 | Calculated based on average shares outstanding. |
2 | Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units. |
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. |
B. | In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees and are generally settled twice a month. |
C. | The fund’s custodian bank has agreed to reduce its fees when the fund maintains cash on deposit in the non-interest-bearing custody account. For the six months ended July 31, 2020, custodian fee offset arrangements reduced the fund’s expenses by $124,000 (an annual rate of less than 0.01% of average net assets). |
D. | Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities. |
Level
1 ($000) |
Level
2 ($000) |
Level
3 ($000) |
Total ($000) | |
Investments | ||||
Assets | ||||
Common Stocks | 57,232,171 | — | 1,605 | 57,233,776 |
Temporary Cash Investments | 435,886 | — | — | 435,886 |
Total | 57,668,057 | — | 1,605 | 57,669,662 |
Derivative Financial Instruments | ||||
Assets | ||||
Swap Contracts | — | 17,986 | — | 17,986 |
Liabilities | ||||
Swap Contracts | — | 574 | — | 574 |
E. | As of July 31, 2020, 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 | 56,110,995 |
Gross Unrealized Appreciation | 11,388,681 |
Gross Unrealized Depreciation | (9,812,602) |
Net Unrealized Appreciation (Depreciation) | 1,576,079 |
F. | During the six months ended July 31, 2020, the fund purchased $5,773,862,000 of investment securities and sold $9,314,536,000 of investment securities, other than temporary cash investments. Purchases and sales include $3,767,593,000 and $6,607,729,000, respectively, in connection with in-kind purchases and redemptions of the fund’s capital shares. |
G. | Capital share transactions for each class of shares were: |
Six Months Ended July 31, 2020 |
Year Ended January 31, 2020 | ||||
Amount ($000) |
Shares (000) |
Amount ($000) |
Shares (000) | ||
Investor Shares | |||||
Issued | 9,259 | 341 | 395,906 | 13,631 | |
Issued in Lieu of Cash Distributions | 3,308 | 125 | 28,280 | 981 | |
Redeemed1 | (31,991) | (1,233) | (2,172,330) | (74,391) | |
Net Increase (Decrease)—Investor Shares | (19,424) | (767) | (1,748,144) | (59,779) | |
ETF Shares | |||||
Issued | 4,140,510 | 47,351 | 10,501,566 | 118,494 | |
Issued in Lieu of Cash Distributions | — | — | — | — | |
Redeemed | (6,951,997) | (90,100) | (7,779,684) | (87,500) | |
Net Increase (Decrease)—ETF Shares | (2,811,487) | (42,749) | 2,721,882 | 30,994 | |
Admiral Shares | |||||
Issued1 | 1,753,770 | 15,842 | 5,327,904 | 42,120 | |
Issued in Lieu of Cash Distributions | 298,052 | 2,644 | 647,759 | 5,156 | |
Redeemed | (2,871,976) | (26,638) | (3,392,317) | (26,697) | |
Net Increase (Decrease)—Admiral Shares | (820,154) | (8,152) | 2,583,346 | 20,579 | |
Institutional Shares | |||||
Issued | 940,012 | 55,794 | 2,004,257 | 102,367 | |
Issued in Lieu of Cash Distributions | 143,493 | 8,234 | 306,680 | 15,790 | |
Redeemed | (872,192) | (50,829) | (1,576,740) | (80,293) | |
Net Increase (Decrease)—Institutional Shares | 211,313 | 13,199 | 734,197 | 37,864 |
1 | In November 2018, the fund announced changes to the availability and minimum investment criteria of the Investor and Admiral share classes. As a result, all of the outstanding Investor Shares automatically converted to Admiral Shares beginning in April 2019, with the exception of those held by Vanguard funds and certain other institutional investors. Investor Shares—Redeemed and Admiral Shares—Issued include 57,968,000 and 13,589,000 shares, respectively, in the amount of $1,688,895,000 from the conversion during the year ended January 31, 2020. |
H. | Certain of the fund’s investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company or the issuer is another member of The Vanguard Group. Transactions during the period in securities of these companies were as follows: |
Current Period Transactions | ||||||||
Jan.
31, 2020 Market Value ($000) |
Purchases at Cost ($000) |
Proceeds from Securities Sold1 ($000) |
Realized Net Gain (Loss) ($000) |
Change
in Unrealized App. (Dep.) ($000) |
Income ($000) |
Capital
Gain Distributions Received ($000) |
Jul.
31, 2020 Market Value ($000) | |
City Office REIT Inc. | NA2 | 2,129 | 5,161 | (719) | (11,142) | — | — | 21,072 |
Host Hotels & Resorts Inc. | 586,395 | 38,120 | 88,109 | (34,634) | (162,537) | 5,368 | 795 | NA3 |
Vanguard Market Liquidity Fund | 561,293 | NA4 | NA4 | 156 | 53 | 549 | — | 435,886 |
Vanguard Real Estate II Index Fund | 7,847,621 | 104,882 | — | — | (1,032,220) | 104,882 | — | 6,920,283 |
Winthrop Realty Trust | — | — | — | (870) | 870 | — | — | — |
Total | 8,995,309 | 145,131 | 93,270 | (36,067) | (1,204,976) | 110,799 | 795 | 7,377,241 |
1 | Does not include adjustments related to return of capital. |
2 | Not applicable—at January 31, 2020, the issuer was not an affiliated company of the fund. |
3 | Not applicable—at July 31, 2020, the security was still held, but the issuer was no longer an affiliated company of the fund. |
4 | Not applicable—purchases and sales are for temporary cash investment purposes. |
I. | Management has determined that no events or transactions occurred subsequent to July 31, 2020, that would require recognition or disclosure in these financial statements. |
Diversified Real Estate Activities | 0.2% |
Diversified REITs | 3.4 |
Health Care REITs | 8.3 |
Hotel & Resort REITs | 2.2 |
Industrial REITs | 11.8 |
Office REITs | 7.9 |
Real Estate Development | 0.2 |
Real Estate Operating Companies | 0.2 |
Real Estate Services | 2.5 |
Residential REITs | 13.6 |
Retail REITs | 7.9 |
Specialized REITs | 41.8 |
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) |
Digital Realty Trust Inc. | 2/2/21 | GSI | 10,813 | (0.181) | 1,227 | — |
1 Based on 1-month USD London Interbank Offered Rate (LIBOR) as of the most recent payment date. Floating interest payment received/paid monthly. |
GSI—Goldman Sachs International. |
($000s, except shares and per-share amounts) | Amount |
Assets | |
Investments in Securities, at Value | |
Unaffiliated Issuers (Cost $6,762,328) | 6,907,519 |
Affiliated Issuers (Cost $24,920) | 24,925 |
Total Investments in Securities | 6,932,444 |
Investment in Vanguard | 297 |
Receivables for Investment Securities Sold | 1,051 |
Receivables for Accrued Income | 2,905 |
Unrealized Appreciation—Over-the-Counter Swap Contracts | 1,227 |
Total Assets | 6,937,924 |
Liabilities | |
Due to Custodian | 1,007 |
Payables for Investment Securities Purchased | 3,970 |
Collateral for Securities on Loan | 12,400 |
Payables to Vanguard | 264 |
Total Liabilities | 17,641 |
Net Assets | 6,920,283 |
At July 31, 2020, net assets consisted of: | |
Paid-in Capital | 6,843,863 |
Total Distributable Earnings (Loss) | 76,420 |
Net Assets | 6,920,283 |
Net Assets | |
Applicable to 351,958,381 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 6,920,283 |
Net Asset Value Per Share | $19.66 |
Six
Months Ended July 31, 2020 | |
($000) | |
Investment Income | |
Income | |
Dividends | 94,610 |
Interest1 | 51 |
Securities Lending—Net | 530 |
Total Income | 95,191 |
Expenses | |
The Vanguard Group—Note B | |
Investment Advisory Services | 503 |
Management and Administrative | 2,117 |
Marketing and Distribution | 20 |
Custodian Fees | 24 |
Shareholders’ Reports | — |
Trustees’ Fees and Expenses | 2 |
Total Expenses | 2,666 |
Net Investment Income | 92,525 |
Realized Net Gain (Loss) | |
Capital Gain Distributions Received | 12,094 |
Investment Securities Sold1 | (27,251) |
Futures Contracts | (521) |
Swap Contracts | (1,341) |
Realized Net Gain (Loss) | (17,019) |
Change in Unrealized Appreciation (Depreciation) | |
Investment Securities1 | (1,004,132) |
Swap Contracts | 1,288 |
Change in Unrealized Appreciation (Depreciation) | (1,002,844) |
Net Increase (Decrease) in Net Assets Resulting from Operations | (927,338) |
1 | Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $51,000, $38,000, and ($1,000), respectively. Purchases and sales are for temporary cash investment purposes. |
Six
Months Ended July 31, 2020 |
Year
Ended January 31, 2020 | ||
($000) | ($000) | ||
Increase (Decrease) in Net Assets | |||
Operations | |||
Net Investment Income | 92,525 | 193,741 | |
Realized Net Gain (Loss) | (17,019) | 31,455 | |
Change in Unrealized Appreciation (Depreciation) | (1,002,844) | 902,961 | |
Net Increase (Decrease) in Net Assets Resulting from Operations | (927,338) | 1,128,157 | |
Distributions1 | |||
Net Investment Income | (104,882) | (199,690) | |
Return of Capital | — | (65,435) | |
Total Distributions | (104,882) | (265,125) | |
Capital Share Transactions | |||
Issued | — | — | |
Issued in Lieu of Cash Distributions | 104,882 | 265,125 | |
Redeemed | — | — | |
Net Increase (Decrease) from Capital Share Transactions | 104,882 | 265,125 | |
Total Increase (Decrease) | (927,338) | 1,128,157 | |
Net Assets | |||
Beginning of Period | 7,847,621 | 6,719,464 | |
End of Period | 6,920,283 | 7,847,621 |
1 | Certain prior period numbers have been reclassed to conform with current period presentation. |
For a Share Outstanding Throughout Each Period |
Six Months Ended July 31, 2020 |
Year Ended January 31, | September 26, 20171 to January 31, 2018 | |
2020 | 2019 | |||
Net Asset Value, Beginning of Period | $22.64 | $20.10 | $19.17 | $20.00 |
Investment Operations | ||||
Net Investment Income2 | .265 | .571 | .611 | .268 |
Net Realized and Unrealized Gain (Loss) on Investments | (2.943) | 2.752 | 1.176 | (.834) |
Total from Investment Operations | (2.678) | 3.323 | 1.787 | (.566) |
Distributions | ||||
Dividends from Net Investment Income | (.302) | (.590) | (.626) | (.225) |
Distributions from Realized Capital Gains | — | — | — | (.030) |
Return of Capital | — | (.193) | (.231) | (.009) |
Total Distributions | (.302) | (.783) | (.857) | (.264) |
Net Asset Value, End of Period | $19.66 | $22.64 | $20.10 | $19.17 |
Total Return | -11.81% | 16.78% | 9.68% | -2.89% |
Ratios/Supplemental Data | ||||
Net Assets, End of Period (Millions) | $6,920 | $7,848 | $6,719 | $6,126 |
Ratio of Total Expenses to Average Net Assets | 0.08% | 0.08% | 0.08% | 0.08%3 |
Ratio of Net Investment Income to Average Net Assets | 2.78% | 2.63% | 3.22% | 3.84%3 |
Portfolio Turnover Rate | 4% | 3% | 23% | 1% |
The expense ratio and net investment income ratio for the current period have been annualized. |
1 | Inception. |
2 | Calculated based on average shares outstanding. |
3 | Annualized. |
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. |
B. | In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees and are generally settled twice a month. |
C. | Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities. |
Level
1 ($000) |
Level
2 ($000) |
Level
3 ($000) |
Total ($000) | |
Investments | ||||
Assets | ||||
Common Stocks | 6,907,321 | — | 198 | 6,907,519 |
Temporary Cash Investments | 24,925 | — | — | 24,925 |
Total | 6,932,246 | — | 198 | 6,932,444 |
Level
1 ($000) |
Level
2 ($000) |
Level
3 ($000) |
Total ($000) | |
Derivative Financial Instruments | ||||
Assets | ||||
Swap Contracts | — | 1,227 | — | 1,227 |
D. | As of July 31, 2020, 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 | 6,816,419 |
Gross Unrealized Appreciation | 1,467,225 |
Gross Unrealized Depreciation | (1,349,973) |
Net Unrealized Appreciation (Depreciation) | 117,252 |
E. | During the six months ended July 31, 2020, the fund purchased $265,734,000 of investment securities and sold $129,048,000 of investment securities, other than temporary cash investments. |
F. | Capital shares issued and redeemed were: |
Six
Months Ended July 31, 2020 |
Year
Ended January 31, 2020 | ||
Shares (000) |
Shares (000) | ||
Issued | — | — | |
Issued in Lieu of Cash Distributions | 5,384 | 12,285 | |
Redeemed | — | — | |
Net Increase (Decrease) in Shares Outstanding | 5,384 | 12,285 |
G. | Management has determined that no events or transactions occurred subsequent to July 31, 2020, that would require recognition or disclosure in these financial statements. |