Vanguard
International Dividend Appreciation ETF
Prospectus
February
25, 2022
Exchange-traded
fund shares that are not individually redeemable and are listed on
Nasdaq
Vanguard
International Dividend Appreciation Index Fund ETF Shares
(VIGI)
This prospectus contains financial data for the Fund through the fiscal year ended October 31, 2021.
The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is
a
criminal offense.
(Fees paid directly from your investment)
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Transaction
Fee on Purchases and Sales |
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Transaction
Fee on Reinvested Dividends |
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Transaction
Fee on Conversion to ETF Shares |
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*
(Expenses that you pay each year as a percentage of the value of your investment)
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Management
Fees |
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12b-1
Distribution Fee |
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Other
Expenses |
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Total Annual
Fund Operating Expenses |
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1
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1
Year |
3
Years |
5
Years |
10
Years |
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$ |
$ |
$ |
$ |
2
3
4
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Total
Return |
Quarter |
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- |
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5
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1
Year |
5
Years |
Since
Fund
Inception |
Fund
Inception
Date |
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Vanguard
International Dividend
Appreciation
Index Fund ETF Shares |
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Based
on NAV |
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Return Before
Taxes |
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Return After
Taxes on Distributions |
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Return After
Taxes on Distributions and Sale of
Fund
Shares |
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Based
on Market Price |
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Return Before
Taxes |
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NASDAQ
International Dividend Achievers
Select
Index
(reflects no
deduction for fees, expenses,
or
taxes) |
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Spliced
S&P Global Ex-US Dividend Growers
Index
(reflects no
deduction for fees or expenses) |
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S&P
Global Ex-US Dividend Growers Index
(reflects no
deduction for fees or expenses) |
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6
Investment
Advisor
The Vanguard Group,
Inc. (Vanguard)
Portfolio
Managers
Scott E. Geiger, CFA, Portfolio
Manager at Vanguard. He has co-managed the Fund since 2021.
Michael Perre,
Principal of Vanguard. He has co-managed the Fund since its inception in
2016.
Purchase
and Sale of Fund Shares
ETF Shares may only
be bought and sold in the secondary market through a brokerage firm. The price
you pay or receive for ETF Shares will be the prevailing market price, which may
be more (premium) or less (discount) than the NAV of the shares. The brokerage
firm may charge you a commission to execute the transaction. Unless imposed by
your brokerage firm, there is no minimum dollar amount you must invest and no
minimum number of shares you must buy. ETF Shares of the Fund cannot be directly
purchased from or redeemed with the Fund, except by certain authorized
broker-dealers. These broker-dealers may purchase and redeem ETF Shares only in
large blocks (Creation Units), typically in exchange for baskets of
securities.
An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase ETF Shares (bid) and the lowest price a seller is willing to accept for ETF Shares (ask) when buying or selling shares in the secondary market (bid-ask spread). Recent information, including information on the Fund's NAV, market price, premiums and discounts, and bid-ask spreads, is available online at vanguard.com.
An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase ETF Shares (bid) and the lowest price a seller is willing to accept for ETF Shares (ask) when buying or selling shares in the secondary market (bid-ask spread). Recent information, including information on the Fund's NAV, market price, premiums and discounts, and bid-ask spreads, is available online at vanguard.com.
Tax
Information
The Fund’s
distributions may be taxable as ordinary income or capital gain. If you are
investing through a tax-advantaged account, such as an IRA or an
employer-sponsored retirement or savings plan, special tax rules
apply.
Payments
to Financial Intermediaries
The Fund and its
investment advisor do not pay financial intermediaries for sales of Fund
shares.
7
Investing
in Vanguard ETF®
Shares
What
Are Vanguard ETF Shares?
Vanguard ETF Shares are an
exchange-traded class of shares issued by certain Vanguard funds. ETF Shares
represent an interest in the portfolio of stocks or bonds held by the issuing
fund. This prospectus describes Vanguard International Dividend Appreciation
ETF, a class of shares issued by Vanguard International Dividend Appreciation
Index Fund. In addition to ETF Shares, the Fund offers one conventional (i.e.,
not exchange-traded) class of shares. This prospectus, however, relates only to
ETF Shares.
How
Are Vanguard ETF Shares Different From Conventional Mutual Fund
Shares?
Conventional mutual
fund shares can be directly purchased from and redeemed with the issuing fund
for cash at the net asset value (NAV), typically calculated once a day. ETF
Shares, by contrast, cannot be purchased directly from or redeemed directly with
the issuing fund by an individual investor. Rather, ETF Shares can only be
purchased or redeemed directly from the issuing fund by certain authorized
broker-dealers. These broker-dealers may purchase and redeem ETF Shares only in
large blocks (Creation Units), usually in exchange for baskets of securities and
not for cash (although some funds issue and redeem Creation Units in exchange
for cash or a combination of cash and securities).
An organized
secondary trading market is expected to exist for ETF Shares, unlike
conventional mutual fund shares, because ETF Shares are listed for trading on a
national securities exchange. Individual investors can purchase and sell ETF
Shares on the secondary market through a broker. Secondary-market transactions
occur not at NAV, but at market prices that are subject to change throughout the
day based on the supply of and demand for ETF Shares, changes in the prices of
the fund’s portfolio holdings, and other factors.
The market price of
a fund's ETF Shares typically will differ somewhat from the NAV of those shares.
The difference between market price and NAV is expected to be small most of the
time, but in times of market disruption or extreme market volatility, the
difference may become significant.
8
How
Do I Buy and Sell Vanguard ETF Shares?
ETF Shares of the
Fund are listed for trading on Nasdaq. You can buy and sell ETF Shares on the
secondary market in the same way you buy and sell any other exchange-traded
security—through a broker. Your broker may charge a commission to execute a
transaction. You will also incur the cost of the “bid-ask spread,” which is the
difference between the highest price a buyer is willing to pay to purchase ETF
Shares (bid) and the lowest price a seller is willing to accept for ETF Shares
(ask) when buying or selling shares in the secondary market. Because
secondary-market transactions occur at market prices, you may pay more (premium)
or less (discount) than NAV when you buy ETF Shares and receive more or less
than NAV when you sell those shares. In times of severe market disruption, the
bid-ask spread and premiums/discounts can increase significantly. Unless imposed
by your broker, there is no minimum dollar amount you must invest and no minimum
number of ETF Shares you must buy.
Your ownership of
ETF Shares will be shown on the records of the broker through which you hold the
shares. Vanguard will not have any record of your ownership. Your account
information will be maintained by your broker, which will provide you with
account statements, confirmations of your purchases and sales of ETF Shares, and
tax information. Your broker also will be responsible for ensuring that you
receive income and capital gains distributions, as well as shareholder reports
and other communications from the fund whose ETF Shares you own. You will
receive other services (e.g., dividend reinvestment and average cost
information) only if your broker offers these services.
9
Investing
in Index Funds
What
Is Indexing?
Indexing is an
investment strategy for tracking the performance of a specified market
benchmark, or “index.” An index is a group of securities whose overall
performance is used as a standard to measure the investment performance of a
particular market. There are many types of indexes. Some represent entire
markets—such as the U.S. stock market or the U.S. bond market. Other indexes
cover market segments—such as small-capitalization stocks or short-term bonds.
One cannot invest directly in an index.
The index sponsor
determines the securities to include in the index and the weighting of each
security in the index. Under normal circumstances, the index sponsor will
rebalance an index on a regular schedule. An index sponsor may carry out
additional ad hoc index rebalances or delay or cancel a scheduled rebalance.
Generally, the index sponsor does not provide any warranty, or accept any
liability, with respect to the quality, accuracy, or completeness of either the
target index or its related data. Errors made by the index sponsor may occur
from time to time and may not be identified by the index sponsor for a period of
time or at all. Vanguard does not provide any warranty or guarantee against such
errors. Therefore, the gains, losses, or costs associated with the index
sponsor’s errors will generally be borne by the index fund and its
shareholders.
An index fund seeks to hold all, or
a representative sample, of the securities that make up its target index. Index
funds attempt to mirror the performance of the target index, for better or
worse. However, an index fund generally does not perform exactly like its target index. For
example, index funds have operating expenses and transaction costs. Market
indexes do not, and therefore they will usually have a slight performance
advantage over funds that track them. The ability of an index fund to match its
performance to that of its target index can also be impacted by, among other
things, the timing and size of cash flows, asset valuation differences, and
the size of the fund. Market disruptions and regulatory or policy restrictions
could also have an adverse effect on a fund’s ability to adjust its exposure to
the required levels in order to track the index. The risk that a fund may not
track the performance of its target index may be heightened during times of
increased market volatility or other unusual market conditions.
Index funds
typically have the following characteristics:
• Variety
of investments. Depending on a
fund’s benchmark index, the fund may invest in the securities of a variety of
companies, industries, and/or governments or government agencies.
• Relative
performance consistency. Because they seek
to track market benchmarks, index funds usually do not perform dramatically
better or worse than their benchmarks.
• Low
cost.
Index funds are generally inexpensive to run compared with actively managed
funds. They have low or no research costs and typically keep trading
activity—and thus brokerage commissions and other transaction costs—to a minimum
compared with actively managed funds.
10
More
on the Fund and ETF Shares
This prospectus
describes the principal risks you would face as a Fund shareholder. It is
important to keep in mind one of the main principles of investing: generally,
the higher the risk of losing money, the higher the potential reward. The
reverse, also, is generally true: the lower the risk, the lower the potential
reward. As you consider an investment in any fund, you should take into account
your personal tolerance for fluctuations in the securities markets. Look for
this
symbol throughout
the prospectus. It is used to mark detailed information about the more
significant risks that you would confront as a Fund shareholder. To highlight
terms and concepts important to fund investors, we have provided Plain
Talk® explanations along
the way. Reading the prospectus will help you decide whether the Fund is the
right investment for you. We suggest that you keep this prospectus for future
reference.
symbol throughout
the prospectus. It is used to mark detailed information about the more
significant risks that you would confront as a Fund shareholder. To highlight
terms and concepts important to fund investors, we have provided Plain
Talk® explanations along
the way. Reading the prospectus will help you decide whether the Fund is the
right investment for you. We suggest that you keep this prospectus for future
reference.Share
Class Overview
This prospectus
offers the Fund’s ETF Shares, an exchange-traded class of shares. A separate
prospectus offers the Fund’s Admiral™ Shares, which generally have an investment
minimum of $3,000.
Both share classes
offered by the Fund have the same investment objective, strategies, and
policies. However, different share classes have different expenses; as a result,
their investment returns will differ.
A
Note to Investors
Vanguard ETF Shares
can be purchased directly from the issuing Fund only by certain authorized
broker-dealers in exchange for a basket of securities (or, in some cases, for
cash or a combination of cash and securities). Individual investors generally
will not be able to purchase ETF Shares directly from the Fund. Instead, these
investors will purchase ETF Shares on the secondary market through a
broker.
|
Plain
Talk About Fund Expenses |
|
All funds
have operating expenses. These expenses, which are deducted
from a
fund’s gross income, are expressed as a percentage of the net assets
of the
fund. Assuming that operating expenses remain as stated in the Fees
and
Expenses section, Vanguard International Dividend Appreciation Index
Fund ETF
Shares’ expense ratio would be 0.15%, or $1.50 per $1,000 of
average
net assets. The average expense ratio for international equity income
funds in
2020 was 1.05%, or $10.50 per $1,000 of average net assets
(derived
from data provided by Lipper, a Thomson Reuters Company, which
reports on
the fund industry). |
11
|
Plain
Talk About Costs of Investing |
|
Costs
are an important consideration in choosing an ETF. That is because
you,
as a shareholder, pay a proportionate share of the costs of operating a
fund
and any transaction costs incurred when the fund buys or sells
securities.
These costs can erode a substantial portion of the gross income
or
the capital appreciation a fund achieves. Even seemingly small differences
in
expenses can, over time, have a dramatic effect on a fund’s
performance. |
The following
sections explain the principal investment strategies and policies that the Fund
uses in pursuit of its investment objective. The Fund's board of trustees, which
oversees the Fund's management, may change investment strategies or policies in
the interest of shareholders without a shareholder vote, unless those strategies
or policies are designated as fundamental. Note that the Fund’s investment
objective is not fundamental and may be changed without a shareholder vote.
Under normal circumstances, the Fund will invest at least 80% of its assets in
the stocks that make up its target index. The Fund may change its 80% policy
only upon 60 days' notice to shareholders.
Market
Exposure
The Fund invests
mainly in stocks of companies located in developed and emerging markets outside
of the United States that have a record of increasing dividends over time.
Stocks purchased by the Fund are expected to have increasing dividends over time
and also to have the potential for long-term capital appreciation. The Fund may
purchase stocks that have relatively low dividend yields if the company issuing
the stock has increased dividends in recent years.
The
Fund is subject to stock market risk, which is the chance that stock prices
overall will decline. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. The Fund‘s investments in foreign
stocks can be riskier than U.S. stock investments. Foreign stocks may be more
volatile and less liquid than U.S. stocks. The prices of foreign stocks and the
prices of U.S. stocks may move in opposite directions. In addition, the Fund‘s
target index may, at times, become focused in stocks of a particular market
sector, which would subject the Fund to proportionately higher exposure to the
risks of that sector.
12
The
Fund is subject to country/regional risk and currency risk. Country/regional
risk is the chance that world events—such as political upheaval, financial
troubles, or natural disasters—will adversely affect the value of securities
issued by companies in foreign countries or regions. Because the Fund may invest
a large portion of its assets in securities of companies located in any one
country or region, the Fund‘s performance may be hurt disproportionately by the
poor performance of its investments in that area. Currency risk is the chance
that the value of a foreign investment, measured in U.S. dollars, will decrease
because of unfavorable changes in currency exchange rates. Country/regional risk
and currency risk are especially high in emerging markets.
The
Fund is subject to emerging markets risk, which is the chance that the stocks of
companies located in emerging markets will be substantially more volatile, and
substantially less liquid, than the stocks of companies located in more
developed foreign markets because, among other factors, emerging markets can
have greater custodial and operational risks; less developed legal, tax,
regulatory, financial reporting, accounting, and recordkeeping systems; and
greater political, social, and economic instability than developed markets.
Additionally, information regarding companies located in emerging markets may be
less available and less reliable, which can impede the ability to evaluate such
companies.
|
Plain
Talk About International Investing |
|
U.S.
investors who invest in foreign securities will encounter risks not
typically
associated with U.S. companies because foreign stock and bond
markets
operate differently from the U.S. markets. For instance, foreign
companies
and governments may not be subject to the same or similar
accounting,
auditing, legal, tax, and financial reporting standards and
practices
as U.S. companies and the U.S. government, and their stocks and
bonds
may not be as liquid as those of similar U.S. entities. In addition,
foreign
stock exchanges, brokers, companies, bond markets, and dealers
may
be subject to less government supervision and regulation than their
counterparts
in the United States. These factors, among others, could
negatively
affect the returns U.S. investors receive from foreign
investments. |
The
Fund is subject to investment style risk, which is the chance that returns from
dividend-paying stocks will trail returns from global stock markets.
Dividend-paying stocks tend to go through cycles of doing better—or worse— than
the global markets in general. These periods have, in the past, lasted for as
long as several years.
13
Market disruptions
can adversely affect local and global markets as well as normal market
conditions and operations. Any such disruptions could have an adverse impact on
the value of the Fund's investments and Fund performance.
Security
Selection
The Fund attempts to track the
performance of a benchmark index that measures the investment return of non-U.S.
companies that have a record of increasing dividends over time. The companies in
which the Fund invests will be within the capitalization range of the companies
included in the S&P Global Ex-U.S. Dividend Growers Index ($150 million to
$586 billion as of October 31, 2021). In the future, the Index’s market
capitalization range may be higher or lower, and the Fund’s investments may
track another index. Such changes may occur at any time and without notice to
Fund shareholders. As of October 31, 2021, the Index included 349
constituents.
The Fund uses the replication method of indexing, meaning that the Fund generally holds the same stocks as those in its target index, and in approximately the same proportions.
The Fund's index is rebalanced on an annual basis as a modified market-capitalization-weighted index. New securities are added to and removed from the index during the annual reconstitution in March. Additionally, at its discretion on a monthly basis, the index provider reviews the index constituents and may remove any securities that no longer qualify as of the first business day of the following month.
The Fund uses the replication method of indexing, meaning that the Fund generally holds the same stocks as those in its target index, and in approximately the same proportions.
The Fund's index is rebalanced on an annual basis as a modified market-capitalization-weighted index. New securities are added to and removed from the index during the annual reconstitution in March. Additionally, at its discretion on a monthly basis, the index provider reviews the index constituents and may remove any securities that no longer qualify as of the first business day of the following month.
The
Fund is subject to asset concentration risk, which is the chance that, because
the Fund’s target index (and therefore the Fund) tends to be heavily weighted in
its ten largest holdings, the Fund’s performance may be hurt disproportionately
by the poor performance of relatively few stocks.
Depositary
receipts. The Fund, in most
cases, will obtain economic exposure to stocks of its target index (component
securities) by investing directly in the component securities. However, the Fund
reserves the right to obtain economic exposure to component securities
indirectly by purchasing depositary receipts (also sold as participatory notes)
of the component securities. Depositary receipts are securities that are listed
on exchanges or quoted in over-the-counter markets in one country but represent
shares of issuers domiciled in another country. Generally, the Fund will hold
depositary receipts only when the advisor believes that the Fund would benefit
from holding the depositary receipt, rather than the underlying component
security. For example, the Fund might opt to hold depositary receipts if the
foreign market in which a stock trades does not
14
provide adequate
protection to the rights of foreign investors or if government regulators place
restrictions on the free flow of capital or currency. The Fund treats depositary
receipts that represent interests in component securities as component
securities for purposes of any requirements related to the percentage of
component securities held in the Fund’s portfolio.
Other
Investment Policies and Risks
The Fund reserves
the right to substitute a different index for the index it currently tracks if
the current index is discontinued, if the Fund's agreement with the sponsor of
its target index is terminated, or for any other reason determined in good faith
by the Fund’s board of trustees. In any such instance, the substitute index
would represent the same market segment as the current index.
To track its target
index as closely as possible, the Fund attempts to remain fully invested in
stocks. To help stay fully invested and to reduce transaction costs, the Fund
may invest, to a limited extent, in derivatives, including equity futures. The
Fund may also use derivatives such as total return swaps to obtain exposure to a
stock, a basket of stocks, or an index. Generally speaking, a derivative is a
financial contract whose value is based on the value of a financial asset (such
as a stock, a bond, or a currency), a physical asset (such as gold, oil, or
wheat), a market index, or a reference rate. Investments in derivatives may
subject the Fund to risks different from, and possibly greater than, those of
investments directly in the underlying securities or assets. The Fund will not
use derivatives for speculation or for the purpose of leveraging (magnifying)
investment returns.
The Fund may enter
into foreign currency exchange forward contracts, which are a type of
derivative, in order to maintain the same currency exposure as its index. A
foreign currency exchange forward contract is an agreement to buy or sell a
currency at a specific price on a specific date, usually 30, 60, or 90 days in
the future. In other words, the contract guarantees an exchange rate on a given
date. These contracts, however, would not prevent the Fund’s securities from
falling in value as a result of risks other than unfavorable currency exchange
movements. The Fund may use these contracts to gain currency exposure when
investing in equity futures and to settle trades in a foreign
currency.
15
|
Plain
Talk About Derivatives |
|
Derivatives
can take many forms. Some forms of derivatives—such as
exchange-traded
futures and options on securities, commodities, or
indexes—have
been trading on regulated exchanges for decades. These
types
of derivatives are standardized contracts that can easily be bought and
sold
and whose market values are determined and published daily. On the
other
hand, non-exchange-traded derivatives—such as certain swap
agreements
and foreign currency exchange forward contracts—tend to be
more
specialized or complex and may be more difficult to accurately
value. |
Cash
Management
The Fund's daily
cash balance may be invested in Vanguard Market Liquidity Fund and/or Vanguard
Municipal Cash Management Fund (each, a CMT Fund), which are low-cost money
market funds. When investing in a CMT Fund, the Fund bears its proportionate
share of the expenses of the CMT Fund in which it invests. Vanguard receives no
additional revenue from Fund assets invested in a CMT Fund.
Methods
Used to Meet Redemption Requests
Redemptions of ETF
Shares are typically met through a combination of cash and securities held by
the Fund; see “How Are Vanguard ETF Shares Different From Conventional Mutual
Fund Shares?” If cash is used to meet redemptions, the Fund typically obtains
such cash through positive cash flows or the sale of Fund holdings consistent
with the Fund’s investment objective and strategy. Please consult the Fund's
Statement
of Additional Information for further
information on redemptions of ETF Shares.
Under certain
circumstances, the Fund may borrow money (subject to certain regulatory
conditions and if available under board-approved procedures) through an
interfund lending facility; through a bank line-of-credit, including a joint
committed credit facility; or through an uncommitted line-of-credit from
Vanguard in order to meet redemption requests.
Temporary
Investment Measures
The Fund may
temporarily depart from its normal investment policies and strategies when the
advisor believes that doing so is in the Fund's best interest, so long as the
strategy or policy employed is consistent with the Fund's investment objective.
For instance, the Fund may invest beyond its normal limits in derivatives or
exchange-traded funds that are consistent with the Fund's
16
investment
objective when those instruments are more favorably priced or provide needed
liquidity, as might be the case when the Fund receives large cash flows that it
cannot prudently invest immediately.
Special
Risks of Exchange-Traded Shares
ETF
Shares are not individually redeemable. They can be redeemed with the issuing
Fund at NAV only by certain authorized broker-dealers and only in large blocks
known as Creation Units. Consequently, if you want to liquidate some or all of
your ETF Shares, you must sell them on the secondary market at prevailing market
prices.
The
market price of ETF Shares may differ from NAV. Although it is expected that the
market price of an ETF Share typically will approximate its NAV, there may be
times when the market price and the NAV differ significantly. Thus, you may pay
more (premium) or less (discount) than NAV when you buy ETF Shares on the
secondary market, and you may receive more or less than NAV when you sell those
shares. These discounts and premiums are likely to be greatest during times of
market disruption or extreme market volatility.
Vanguard’s website
at vanguard.com shows the previous
day’s closing NAV and closing market price for the Fund’s ETF Shares. The
website also discloses, in the Premium/Discount
Analysis section of the ETF
Shares’ Price & Performance page, how frequently the Fund’s ETF Shares
traded at a premium or discount to NAV (based on closing NAVs and market prices)
and the magnitudes of such premiums and discounts.
An
active trading market may not exist. Although Vanguard ETF Shares are listed on
a national securities exchange, it is possible that an active trading market may
not be maintained. Although this could happen at any time, it is more likely to
occur during times of severe market disruption. If you attempt to sell your ETF
Shares when an active trading market is not functioning, you may have to sell at
a significant discount to NAV. In extreme cases, you may not be able to sell
your shares at all.
Trading
may be halted. Trading of Vanguard ETF Shares on an exchange may be halted by
the activation of individual or marketwide trading halts (which halt trading for
a specific period of time when the price of a particular security or overall
market prices decline by a specified percentage). Trading of ETF Shares may also
be halted if (1) the shares are delisted from the listing exchange without first
being listed on another exchange or (2) exchange officials determine that such
action is appropriate in the interest of a fair and orderly market or for the
protection of investors.
17
Conversion
Privilege
Owners of
conventional shares issued by the Fund may convert those shares to ETF Shares of
equivalent value of the same fund. Please note that investors who own
conventional shares through a 401(k) plan or other employer-sponsored retirement
or benefit plan generally may not convert those shares to ETF Shares and should
check with their plan sponsor or recordkeeper. ETF Shares, whether acquired
through a conversion or purchased on the secondary market, cannot be converted
to conventional shares by a shareholder. Also, ETF Shares of one fund cannot be
exchanged for ETF Shares of another fund.
You must hold ETF
Shares in a brokerage account. Thus, before converting conventional shares to
ETF Shares, you must have an existing, or open a new, brokerage account. This
account may be with Vanguard Brokerage Services® or with any other
brokerage firm. To initiate a conversion of conventional shares to ETF Shares,
please contact your broker.
Vanguard Brokerage
Services does not impose a fee on conversions from Vanguard conventional shares
to Vanguard ETF Shares. However, other brokerage firms may charge a fee to
process a conversion. Vanguard reserves the right, in the future, to impose a
transaction fee on conversions or to limit, temporarily suspend, or terminate
the conversion privilege.
Converting
conventional shares to ETF Shares is generally accomplished as follows. First,
after your broker notifies Vanguard of your request to convert, Vanguard will
transfer your conventional shares from your account to the broker’s omnibus
account with Vanguard (an account maintained by the broker on behalf of all its
customers who hold conventional Vanguard fund shares through the broker). After
the transfer, Vanguard’s records will reflect your broker, not you, as the owner
of the shares. Next, your broker will instruct Vanguard to convert the
appropriate number or dollar amount of conventional shares in its omnibus
account to ETF Shares of equivalent value, based on the respective NAVs of the
two share classes.
Your Fund’s
transfer agent will reflect ownership of all ETF Shares in the name of the
Depository Trust Company (DTC). The DTC will keep track of which ETF Shares
belong to your broker, and your broker, in turn, will keep track of which ETF
Shares belong to you.
Because the DTC is
unable to handle fractional shares, only whole shares can be converted. For
example, if you owned 300.25 conventional shares, and this was equivalent in
value to 90.75 ETF Shares, the DTC account would receive 90 ETF Shares.
Conventional shares with a value equal to 0.75 ETF Shares (in this example, that
would be 2.481 conventional shares) would remain in the broker’s omnibus account
with Vanguard. Your broker then could either (1) credit your
18
account with 0.75
ETF Shares or (2) redeem the 2.481 conventional shares for cash at NAV and
deliver that cash to your account. If your broker chose to redeem your
conventional shares, you would realize a gain or loss on the redemption that
must be reported on your tax return (unless you hold the shares in an IRA or
other tax-deferred account). Please consult your broker for information on how
it will handle the conversion process, including whether it will impose a fee to
process a conversion.
If you convert your
conventional shares to ETF Shares through Vanguard Brokerage Services,
all conventional
shares for which you request conversion will be converted to ETF Shares of
equivalent value. Because no fractional shares will have to be sold, the
transaction will not be taxable.
Here are some
important points to keep in mind when converting conventional shares of a
Vanguard fund to ETF Shares:
• The conversion
process can take anywhere from several days to several weeks, depending on your
broker. Vanguard generally will process conversion requests either on the day
they are received or on the next business day. Vanguard imposes conversion
blackout windows around the dates when a fund with ETF Shares declares
dividends. This is necessary to prevent a shareholder from collecting a dividend
from both the conventional share class currently held and also from the ETF
share class to which the shares will be converted.
• Until the
conversion process is complete, you will remain fully invested in a fund’s
conventional shares, and your investment will increase or decrease in value in
tandem with the NAV of those shares.
• The conversion
transaction is nontaxable except, if applicable, to the very limited extent
previously described.
A precautionary
note to investment companies: Vanguard ETF Shares are issued by
registered investment companies, and therefore the acquisition of such shares by
other investment companies is subject to the restrictions of Section 12(d)(1) of
the Investment Company Act of 1940. Vanguard has obtained SEC exemptive orders
that allow registered investment companies to invest in the issuing funds beyond
the limits of Section 12(d)(1), subject to certain terms and conditions,
including the requirement to enter into a participation agreement with Vanguard.
The SEC recently adopted changes to the regulatory framework for fund of funds
arrangements, and, as a result, Vanguard's exemptive orders were rescinded by
the SEC on January 19, 2022. However, effective
January 19, 2022, new Rule 12d1-4 under the Investment Company Act of 1940
permits registered investment companies to invest in other registered investment
companies beyond the limits in Section 12(d)(1), subject to certain conditions,
including that the funds enter into a fund of funds investment
agreement.
19
Shareholder
Rights
The Fund's Agreement and
Declaration of Trust, as amended, requires a shareholder bringing a derivative
action on behalf of Vanguard Whitehall Funds (the Trust) that is subject to a
pre-suit demand to collectively hold at least 10% of the outstanding shares of
the Trust or at least 10% of the outstanding shares of the series or class to
which the demand relates and to undertake to reimburse the Trust for the expense
of any counsel or advisors used when considering the merits of the demand in the
event that the board of trustees determines not to bring such action. In each
case, these requirements do not apply to claims arising under the federal
securities laws to the extent that any such federal securities laws, rules, or
regulations do not permit such application.
Frequent
Trading and Market-Timing
Unlike frequent
trading of a Vanguard fund’s conventional (i.e., not exchange-traded) classes of
shares, frequent trading of ETF Shares does not disrupt portfolio management or
otherwise harm fund shareholders. The vast majority of trading in ETF Shares
occurs on the secondary market. Because these trades do not involve the issuing
fund, they do not harm the fund or its shareholders. Certain broker-dealers are
authorized to purchase and redeem ETF Shares directly with the issuing fund.
Because these trades typically are effected in kind (i.e., for securities and
not for cash), or are assessed a transaction fee when effected in cash, they do
not cause any of the harmful effects to the issuing fund (as previously noted)
that may result from frequent trading. For these reasons, the board of trustees
of each fund that issues ETF Shares has determined that it is not necessary to
adopt policies and procedures to detect and deter frequent trading and
market-timing of ETF Shares.
Portfolio
Holdings
Please consult the
Fund's Statement
of Additional Information or our website for
a description of the policies and procedures that govern disclosure of the
Fund’s portfolio holdings.
Turnover
Rate
Although the Fund generally seeks
to invest for the long term, it may sell securities regardless of how long they
have been held. Generally, an index fund sells securities in response to
redemption requests from shareholders of conventional (i.e., not
exchange-traded) shares or to changes in the composition of its target index.
The Financial
Highlights section of
this prospectus shows historical turnover rates for the Fund. A turnover rate of
100%, for example, would mean that the Fund had sold and replaced securities
valued at 100% of its net assets within a one-year period. In general, the
greater the turnover rate, the greater the impact transaction costs will have on
a fund’s return. Also, funds
20
with high turnover
rates may be more likely to generate capital gains, including short-term capital
gains, that must be distributed to shareholders and will be taxable to
shareholders investing through a taxable account.
The
Fund and Vanguard
The Fund is a member of The
Vanguard Group, Inc. (Vanguard), a family of over 200
funds. All of the funds that are members of Vanguard (other than funds of funds)
share in the expenses associated with administrative services and business
operations, such as personnel, office space, and equipment.
Vanguard Marketing
Corporation provides marketing services to the funds. Although fund shareholders
do not pay sales commissions or 12b-1 distribution fees, each fund (other than a
fund of funds) or each share class of a fund (in the case of a fund with
multiple share classes) pays its allocated share of the Vanguard funds’
marketing costs.
|
Plain
Talk About Vanguard’s Unique Corporate Structure |
|
Vanguard is
owned jointly by the funds it oversees and thus indirectly by the
shareholders
in those funds. Most other mutual funds are operated by
management
companies that are owned by third parties—either public or
private
stockholders—and not by the funds they
serve. |
Investment
Advisor
The Vanguard Group, Inc., P.O. Box
2600, Valley Forge, PA 19482, which began operations in 1975, serves as advisor
to the Fund through its Equity Index Group. As of October 31, 2021, Vanguard
served as advisor for approximately $6.8 trillion in assets. Vanguard provides
investment advisory services to the Fund pursuant to the Funds’ Service
Agreement and subject to the supervision and oversight of the trustees and
officers of the Fund.
For the fiscal year ended October
31, 2021, the advisory expenses represented an effective annual rate of 0.02% of
the Fund’s average net assets.
Under the terms of
an SEC exemption, the Fund's board of trustees may, without prior approval from
shareholders, change the terms of an advisory agreement with a third-party
investment advisor or hire a new third-party investment advisor—either as a
replacement for an existing advisor or as an
21
additional advisor.
Any significant change in the Fund's advisory arrangements will be communicated
to shareholders in writing. As the Fund's sponsor and overall manager, Vanguard
may provide investment advisory services to the Fund at any time. Vanguard may
also recommend to the board of trustees that an advisor be hired, terminated, or
replaced or that the terms of an existing advisory agreement be revised. The
Fund has filed an application seeking a similar SEC exemption with respect to
investment advisors that are wholly owned subsidiaries of Vanguard. If the
exemption is granted, the Fund may rely on the new SEC relief.
For a discussion of
why the board of trustees approved the Fund's investment advisory arrangement,
see the most recent semiannual report to shareholders covering the fiscal period
ended April 30.
The managers
primarily responsible for the day-to-day management of the Fund
are:
Scott E.
Geiger, CFA, Portfolio
Manager at Vanguard. He has been with Vanguard since 2006, has worked in
investment management since 2008, has managed investment portfolios since 2013,
and has co-managed the Fund since 2021. Education: B.S., Millersville
University.
Michael
Perre,
Principal of Vanguard. He has been with Vanguard since 1990, has managed
investment portfolios since 1999, and has co-managed the Fund since its
inception in 2016. Education: B.A., Saint Joseph’s University; M.B.A., Villanova
University.
The Fund's
Statement
of Additional Information provides
information about each portfolio manager’s compensation, other accounts under
management, and ownership of shares of the Fund.
Dividends,
Capital Gains, and Taxes
Fund
Distributions
The Fund
distributes to shareholders virtually all of its net income (interest and
dividends, less expenses) as well as any net short-term or long-term capital
gains realized from the sale of its holdings. From time to time, the Fund may
also make distributions that are treated as a return of capital. Income
dividends generally are distributed quarterly in March, June, September, and
December;
22
capital gains
distributions, if any, generally occur annually in December. In addition, the
Fund may occasionally make a supplemental distribution at some other time during
the year.
|
Plain
Talk About Distributions |
|
As
a shareholder, you are entitled to your portion of a fund’s income from
interest
and dividends as well as capital gains from the fund’s sale of
investments.
Income consists of both the dividends that the fund earns from
any
stock holdings and the interest it receives from any money market and
bond
investments. Capital gains are realized whenever the fund sells
securities
for higher prices than it paid for them. These capital gains are
either
short-term or long-term, depending on whether the fund held the
securities
for one year or less or for more than one
year. |
Reinvestment
of Distributions
In order to
reinvest dividend and capital gains distributions, investors in the Fund's ETF
Shares must hold their shares at a broker that offers a reinvestment service.
This can be the broker’s own service or a service made available by a third
party, such as the broker’s outside clearing firm or the DTC. If a reinvestment
service is available, distributions of income and capital gains can
automatically be reinvested in additional whole and fractional ETF Shares of the
Fund. If a reinvestment service is not available, investors will receive their
distributions in cash. To determine whether a reinvestment service is available
and whether there is a commission or other charge for using this service,
consult your broker.
As with all
exchange-traded funds, reinvestment of dividend and capital gains distributions
in additional ETF Shares will occur four business days or more after the
ex-dividend date (the date when a distribution of dividends or capital gains is
deducted from the price of the Fund’s shares). The exact number of days depends
on your broker. During that time, the amount of your distribution will not be
invested in the Fund and therefore will not share in the Fund’s income, gains,
and losses.
Basic
Tax Points
Investors in
taxable accounts should be aware of the following basic federal income tax
points:
• Distributions are
taxable to you whether or not you reinvest these amounts in additional ETF
Shares.
23
• Distributions
declared in December—if paid to you by the end of January—are taxable as if
received in December.
• Any dividend
distribution or short-term capital gains distribution that you receive is
taxable to you as ordinary income. If you are an individual and meet certain
holding-period requirements with respect to your ETF Shares, you may be eligible
for reduced tax rates on “qualified dividend income,” if any, or a special tax
deduction on “qualified REIT dividends,” if any, distributed by the
Fund.
• Any distribution
of net long-term capital gains is taxable to you as long-term capital gains, no
matter how long you have owned ETF Shares.
• Capital gains
distributions may vary considerably from year to year as a result of the Fund's
normal investment activities and cash flows.
• Your cost basis
in the Fund will be decreased by the amount of any return of capital that you
receive. This, in turn, will affect the amount of any capital gain or loss that
you realize when selling your ETF Shares.
• Return of capital
distributions generally are not taxable to you until your cost basis has been
reduced to zero. If your cost basis is at zero, return of capital distributions
will be treated as capital gains.
• A sale of ETF
Shares is a taxable event. This means that you may have a capital gain to report
as income, or a capital loss to report as a deduction, when you complete your
tax return.
Individuals,
trusts, and estates whose income exceeds certain threshold amounts are subject
to a 3.8% Medicare contribution tax on “net investment income.” Net investment
income takes into account distributions paid by the Fund and capital gains from
any sale of ETF Shares.
Dividend
distributions and capital gains distributions that you receive, as well as your
gains or losses from any sale of ETF Shares, may be subject to state and local
income taxes.
The Fund may be
subject to foreign taxes or foreign tax withholding on dividends, interest, and
some capital gains that it receives on foreign securities. If at the end of the
taxable year more than 50% of the value of the Fund’s assets consists of
securities of foreign corporations, and the Fund makes a special election, you
will generally be required to include in your income, for U.S. federal income
tax purposes, your share of the qualifying foreign income taxes paid by the Fund
in respect of its foreign portfolio securities. There is no assurance that the
Fund will make this election for a taxable year, even if it is eligible to do
so. You may qualify for an offsetting credit or deduction under U.S. tax laws
for any
24
amount designated
as your portion of the Fund’s foreign tax obligations, provided that you meet
certain requirements. See your tax advisor or IRS publications for more
information.
This prospectus
provides general tax information only. If you are investing through a
tax-advantaged account, such as an IRA or an employer-sponsored retirement or
savings plan, special tax rules apply. Please consult your tax advisor for
detailed information about any tax consequences for you.
Share
Price and Market Price
Share price, also
known as net
asset value (NAV), is
calculated as of the close of regular trading on the New York Stock Exchange
(NYSE), generally 4 p.m., Eastern time, on each day that the NYSE is open for
business (a business day). In the rare event the NYSE experiences unanticipated
disruptions and is unavailable at the close of the trading day, NAVs will be
calculated as of the close of regular trading on the Nasdaq (or another
alternate exchange if the Nasdaq is unavailable, as determined at Vanguard’s
discretion), generally 4 p.m., Eastern time. Each share class has its own NAV,
which is computed by dividing the total assets, minus liabilities, allocated to
the share class by the number of Fund shares outstanding for that class. On U.S.
holidays or other days when the NYSE is closed, the NAV is not calculated, and
the Fund does not sell or redeem shares. However, on those days the value of the
Fund’s assets may be affected to the extent that the Fund holds securities that
change in value on those days (such as foreign securities that trade on foreign
markets that are open).
Remember: If you
buy or sell ETF Shares on the secondary market, you will pay or receive the
market price, which may be higher or lower than NAV. Your transaction will be
priced at NAV only if you purchase or redeem your ETF Shares in Creation Unit
blocks (an option available only to certain authorized broker-dealers) or if you
convert your conventional fund shares to ETF Shares.
Stocks held by a
Vanguard fund are valued at their market
value
when reliable market quotations are readily available from the principal
exchange or market on which they are traded. Such securities are generally
valued at their official closing price, the last reported sales price, or if
there were no sales that day, the mean between the closing bid and asking
prices. When a fund determines that market quotations either are not readily
available or do not accurately reflect the value of a security, the security is
priced at its fair
value
(the amount that the owner might reasonably expect to receive upon the current
sale of the security).
25
The values of any
foreign securities held by a fund are converted into U.S. dollars using an
exchange rate obtained from an independent third party as of the close of
regular trading on the NYSE. The values of any mutual fund shares, including
institutional money market fund shares, held by a fund are based on the NAVs of
the shares. The values of any ETF shares or closed-end fund shares held by a
fund are based on the market value of the shares.
A fund also will
use fair-value pricing if the value of a security it holds has been materially
affected by events occurring before the fund's pricing time but after the close
of the principal exchange or market on which the security is traded. This most
commonly occurs with foreign securities, which may trade on foreign exchanges
that close many hours before the fund's pricing time. Intervening events might
be company-specific (e.g., earnings report, merger announcement) or
country-specific or regional/global (e.g., natural disaster, economic or
political news, act of terrorism, interest rate change). Intervening events
include price movements in U.S. markets that exceed a specified threshold or
that are otherwise deemed to affect the value of foreign
securities.
Fair-value pricing
may be used for domestic securities—for example, if (1) trading in a security is
halted and does not resume before the fund's pricing time or a security does not
trade in the course of a day and (2) the fund holds enough of the security that
its price could affect the NAV.
Fair-value prices
are determined by Vanguard according to procedures adopted by the board of
trustees. When fair-value pricing is employed, the prices of securities used by
a fund to calculate the NAV may differ from quoted or published prices for the
same securities.
Vanguard's website
will show the previous day's closing NAV and closing market price for the Fund's
ETF Shares.
26
Additional
Information
The Fund’s Bylaws
require, unless the Trust otherwise consents in writing, that the U.S. Federal
District Courts be the sole and exclusive forum for the resolution of complaints
under the Securities Act of 1933. This provision may limit a shareholder’s
ability to bring a claim in a different forum and may result in increased
shareholder costs in pursuing such a claim.
|
|
Inception
Date |
Vanguard
Fund
Number |
CUSIP
Number |
|
International
Dividend Appreciation Index Fund |
|
|
|
|
ETF
Shares |
2/25/2016 |
4415 |
921946810 |
Certain affiliates
of the Fund and the advisor may purchase and resell ETF Shares pursuant to the
prospectus.
CGS identifiers have been provided by CUSIP Global Services, managed on behalf of the American Bankers Association by Standard & Poor’s Financial Services, LLC, and are not for use or dissemination in a manner that would serve as a substitute for any CUSIP service. The CUSIP Database, ©2022 American Bankers Association. “CUSIP” is a registered trademark of the American Bankers Association.
27
Financial
Highlights
Financial highlights information is
intended to help you understand a fund’s performance for the past five years
(or, if shorter, its period of operations). Certain information reflects
financial results for a single fund share. Total return represents the rate that
an investor would have earned or lost each period on an investment in a fund or
share class (assuming reinvestment of all distributions). This information has
been obtained from the financial statements audited by PricewaterhouseCoopers
LLP, an independent registered public accounting firm, whose report, along with
fund financial statements, is included in a fund’s most recent annual report to
shareholders. You may obtain a free copy of a fund’s latest annual or semiannual
report, which is available upon request.
Vanguard
International Dividend Appreciation Index Fund ETF Shares
|
|
Year Ended October
31, | ||||
|
For a
Share Outstanding Throughout Each Period |
2021 |
2020 |
2019 |
2018 |
2017 |
|
Net
Asset Value, Beginning of Period |
$69.97 |
$68.72 |
$58.65 |
$64.25 |
$54.43 |
|
Investment
Operations |
|
|
|
|
|
|
Net
Investment Income1
|
1.094 |
.958 |
1.4522
|
1.196 |
1.179 |
|
Net
Realized and Unrealized Gain (Loss) on Investments3
|
19.776 |
1.551 |
9.578 |
(5.623) |
9.715 |
|
Total from
Investment Operations |
20.870 |
2.509 |
11.030 |
(4.427) |
10.894 |
|
Distributions |
|
|
|
|
|
|
Dividends
from Net Investment Income |
(.980) |
(1.259) |
(.960) |
(1.173) |
(1.074) |
|
Distributions
from Realized Capital Gains |
— |
— |
— |
— |
— |
|
Total
Distributions |
(.980) |
(1.259) |
(.960) |
(1.173) |
(1.074) |
|
Net
Asset Value, End of Period |
$89.86 |
$69.97 |
$68.72 |
$58.65 |
$64.25 |
|
Total
Return |
29.93% |
3.73% |
18.96% |
-7.04% |
20.19% |
|
Ratios/Supplemental
Data |
|
|
|
|
|
|
Net
Assets, End of Period (Millions) |
$4,150 |
$2,456 |
$1,305 |
$861 |
$634 |
|
Ratio of
Total Expenses to Average Net Assets |
0.15% |
0.20% |
0.20% |
0.25% |
0.25% |
|
Ratio of
Net Investment Income to Average Net Assets |
1.28% |
1.40% |
2.24%2
|
1.83% |
1.96% |
|
Portfolio
Turnover Rate4
|
65% |
17% |
42% |
36% |
9% |
|
|
|
|
1 |
Calculated
based on average shares outstanding. |
|
2 |
Net
investment income per share and the ratio of net investment income to
average net assets include $.388 and
0.65%,
respectively, resulting from a special dividend from Naspers Ltd. in
September 2019. |
|
3 |
Includes
increases from purchase and redemption fees of $.00, $.01, $.02, $.02, and
$.04. |
|
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. |
28
CFA® is a registered trademark owned by
CFA Institute.
“Dividend
Achievers” is a
trademark of The NASDAQ OMX Group, Inc. (collectively, with its affiliates,
“NASDAQ OMX”) and has been licensed for use by The Vanguard Group, Inc. Vanguard
funds are not sponsored, endorsed, sold, or promoted by NASDAQ OMX and NASDAQ
OMX makes no representation regarding the advisability of investing in the
funds. NASDAQ OMX MAKES NO WARRANTIES AND BEARS NO LIABILITY WITH RESPECT TO THE
VANGUARD FUNDS.
The S&P Global Ex-U.S. Dividend
Growers Index is a product of S&P Dow Jones Indices LLC, a division of
S&P Global, or its affiliates (“SPDJI”) and has been licensed for use by
Vanguard. Standard & Poor’s® and S&P® are registered trademarks of
Standard & Poor’s Financial Services LLC, a division of S&P Global
(“S&P”) and Dow Jones® is a registered trademark of Dow
Jones Trademark Holdings LLC (“Dow Jones”). The trademarks have been licensed to
SPDJI and have been sublicensed for use for certain purposes by Vanguard.
Vanguard International Dividend Appreciation Index ETF is not sponsored,
endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or any of their
respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow
Jones Indices make no representation or warranty, express or implied, to the
owners of Vanguard International Dividend Appreciation Index ETF or any member
of the public regarding the advisability of investing in securities generally or
in Vanguard International Dividend Appreciation Index ETF particularly or the
ability of the S&P Global Ex-U.S. Dividend Growers Index to track general
market performance. S&P Dow Jones Indices only relationship to Vanguard with
respect to the S&P Global Ex-U.S. Dividend Growers Index is the licensing of
the Index and certain trademarks, service marks and/or trade names of S&P
Dow Jones Indices and/or its licensors. The S&P Global Ex-U.S. Dividend
Growers Index is determined, composed and calculated by S&P Dow Jones
Indices without regard to Vanguard or Vanguard International Dividend
Appreciation Index ETF. S&P Dow Jones Indices have no obligation to take the
needs of Vanguard or the owners of Vanguard International Dividend Appreciation
Index ETF into consideration in determining, composing or calculating the
S&P Global Ex-U.S. Dividend Growers Index. S&P Dow Jones Indices are not
responsible for and have not participated in the determination of the prices,
and amount of Vanguard International Dividend Appreciation Index ETF or the
timing of the issuance or sale of Vanguard International Dividend Appreciation
Index ETF or in the determination or calculation of the equation by which
Vanguard International Dividend Appreciation Index ETF is to be converted into
cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices
have no obligation or liability in connection with the administration, marketing
or trading of Vanguard International Dividend Appreciation Index ETF. There is
no assurance that investment products based on the S&P Global Ex-U.S.
Dividend Growers Index will accurately track index performance or provide
positive investment returns. S&P Dow Jones Indices LLC is not an investment
advisor. Inclusion of a security within an index is not a recommendation by
S&P Dow Jones Indices to buy, sell, or hold such security, nor is it
considered to be investment advice.
S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P GLOBAL EX-U.S. DIVIDEND GROWERS INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY VANGUARD, OWNERS OF VANGUARD INTERNATIONAL DIVIDEND APPRECIATION INDEX ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P GLOBAL EX-U.S. DIVIDEND GROWERS INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND VANGUARD, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P GLOBAL EX-U.S. DIVIDEND GROWERS INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY VANGUARD, OWNERS OF VANGUARD INTERNATIONAL DIVIDEND APPRECIATION INDEX ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P GLOBAL EX-U.S. DIVIDEND GROWERS INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND VANGUARD, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
29
Glossary
of Investment Terms
Authorized
Participant. Institutional
investors that are permitted to purchase Creation Units directly from, and
redeem Creation Units directly with, the issuing fund. To be an Authorized
Participant, an entity must be a participant in the Depository Trust Company and
must enter into an agreement with the fund’s Distributor.
Bid-Ask
Spread. The difference
between the highest price a buyer is willing to pay to purchase ETF Shares (bid)
and the lowest price a seller is willing to accept for ETF Shares (ask) when
buying or selling shares in the secondary market.
Capital
Gains Distributions. Payments to fund
shareholders of gains realized on securities that a fund has sold at a profit,
minus any realized losses.
Common
Stock.
A security representing ownership rights in a corporation.
Creation
Unit.
A large block of a specified number of ETF Shares. Certain broker-dealers known
as “Authorized Participants” may purchase and redeem ETF Shares from the issuing
fund in Creation Unit size blocks.
Dividend
Distributions. Payments to fund
shareholders of income from interest or dividends generated by a fund's
investments.
Ex-Dividend
Date.
The date when a distribution of dividends and/or capital gains is deducted from
the share price of a mutual fund, ETF, or stock. On the ex-dividend date, the
share price drops by the amount of the distribution per share (plus or minus any
market activity).
Expense
Ratio.
A fund's total annual operating expenses expressed as a percentage of the fund's
average net assets. The expense ratio includes management and administrative
expenses, but it does not include the transaction costs of buying and selling
portfolio securities.
Inception
Date.
The date on which the assets of a fund (or one of its share classes) are first
invested in accordance with the fund's investment objective. For funds with a
subscription period, the inception date is the day after that period ends.
Investment performance is generally measured from the inception
date.
Indexing. A low-cost
investment strategy in which a fund attempts to track—rather than outperform—a
specified market benchmark, or “index.”
30
Joint
Committed Credit Facility. The Fund
participates, along with other funds managed by Vanguard, in a committed credit
facility provided by a syndicate of lenders pursuant to a credit agreement that
may be renewed annually; each Vanguard fund is individually liable for its
borrowings, if any, under the credit facility. The amount and terms of the
committed credit facility are subject to approval by the Fund's board of
trustees and renegotiation with the lender syndicate on an annual
basis.
Median
Market Capitalization. An indicator of
the size of companies in which a fund invests; the midpoint of market
capitalization (market price x shares outstanding) of a fund's stocks, weighted
by the proportion of the fund's assets invested in each stock. Stocks
representing half of the fund's assets have market capitalizations above the
median, and the rest are below it.
Mutual
Fund.
An investment company that pools the money of many people and invests it in a
variety of securities in an effort to achieve a specific objective over
time.
NASDAQ
International Dividend Achievers Select Index. An index that
focuses on high-quality companies located in developed and emerging markets,
excluding the United States, that have both the ability and the commitment to
increase their dividends over time.
New
York Stock Exchange (NYSE). A stock exchange
based in New York City that is open for regular trading on business days, Monday
through Friday, from 9:30 a.m. to 4 p.m., Eastern time.
Return
of Capital. A return of
capital occurs when a fund's distributions exceed its earnings in a fiscal year.
A return of capital is a return of all or part of your original investment or
amounts paid in excess of your original investment in a fund. In general, a
return of capital reduces your cost basis in a fund's shares and is not taxable
to you until your cost basis has been reduced to zero.
31
Securities. Stocks, bonds,
money market instruments, and other investments.
Total
Return. A percentage
change, over a specified time period, in a fund's net asset value, assuming the
reinvestment of all distributions of dividends and capital gains.
Volatility. The fluctuations
in value of a mutual fund or other security. The greater a fund's volatility,
the wider the fluctuations in its returns.
Yield. Income (interest
or dividends) earned by an investment, expressed as a percentage of the
investment’s price.
32
Connect
with Vanguard®˃
vanguard.com
For
More Information
If you would like
more information about Vanguard International Dividend Appreciation ETF, the
following documents are available free upon request:
Annual/Semiannual
Reports to Shareholders
Additional
information about the Fund's investments is available in the Fund's annual and
semiannual reports to shareholders. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during its last fiscal year.
Statement
of Additional Information (SAI)
The SAI provides more
detailed information about the Fund's ETF Shares and is incorporated by
reference into (and thus legally a part of) this prospectus.
To receive a free
copy of the latest annual or semiannual report or the SAI, or to request
additional information about Vanguard ETF Shares, please visit vanguard.com
or
contact us as follows:
Telephone:
866-499-8473; Text telephone for people with hearing impairment:
800-749-7273
Information
Provided by the Securities and Exchange Commission (SEC)
Reports and other
information about the Fund are available in the EDGAR database on the SEC’s
website at sec.gov, or you can receive copies of this information, for a fee, by
electronic request at the following email address:
publicinfo@sec.gov.
Fund's Investment
Company Act file number: 811-07443
© 2022 The
Vanguard Group, Inc. All rights reserved.
U.S. Patent No6,879,964
Vanguard Marketing Corporation, Distributor.
P 4415 022022
U.S. Patent No6,879,964
Vanguard Marketing Corporation, Distributor.
P 4415 022022