Annual Report   |   October 31, 2021
Vanguard International Dividend Index Funds
Vanguard International Dividend Appreciation Index Fund
Vanguard International High Dividend Yield Index Fund

Contents
Your Fund’s Performance at a Glance

1
About Your Fund’s Expenses

2
International Dividend Appreciation Index Fund

4
International High Dividend Yield Index Fund

28
Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the risks of investing in your fund are spelled out in the prospectus.

Your Fund’s Performance at a Glance
For the 12 months ended October 31, 2021, Vanguard International Dividend Appreciation Index returned 29.93% for ETF Shares (based on net asset value) and 29.31% for Admiral Shares. Vanguard International High Dividend Yield Index Fund returned 39.55% for ETF Shares and 38.91% for Admiral Shares.
The funds returned less than their benchmarks in part because of differences in the prices of securities used by the funds to calculate their net asset value and the quoted or published prices for the same securities.1 Differences in the way the indexes and the funds treat certain capital gains also played a role.
Of the major regional sectors, Europe was the biggest contributor to returns for both funds.
All 10 industry sectors recorded positive returns for the fiscal year. Industrial stocks contributed most to returns for the International Dividend Appreciation Index Fund. In the International High Dividend Yield Index Fund, financial stocks had the largest sector weighting and made the largest contribution to performance.
Market Barometer
  Average Annual Total Returns
Periods Ended October 31, 2021
  One Year Three Years Five Years
Stocks      
Russell 1000 Index (Large-caps) 43.51% 22.01% 19.16%
Russell 2000 Index (Small-caps) 50.80 16.47 15.52
Russell 3000 Index (Broad U.S. market) 43.90 21.62 18.91
FTSE All-World ex US Index (International) 30.23 12.42 10.05
Bonds      
Bloomberg U.S. Aggregate Bond Index
(Broad taxable market)
-0.48% 5.63% 3.10%
Bloomberg Municipal Bond Index
(Broad tax-exempt market)
2.64 5.17 3.41
FTSE Three-Month U.S. Treasury Bill Index 0.05 1.08 1.12
CPI      
Consumer Price Index 6.22% 3.03% 2.73%
  
Fund returns are adjusted to reflect the 0.25% fee on purchases and redemptions. The fees do not apply to the ETF Shares.
1 See Note A-1, “Security Valuation,” in the Notes to Financial Statements.
1

About Your Fund’s Expenses
As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The accompanying table illustrates your fund’s costs in two ways:
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.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading ”Expenses Paid During 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.
Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include any purchase, redemption, or account service fees described in the fund prospectus. If such fees were applied to your account, your costs would be higher. Your fund does not carry a “sales load.”
The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.
2

Six Months Ended October 31, 2021      
  Beginning
Account Value
4/30/2021
Ending
Account Value
10/31/2021
Expenses
Paid During
Period
Based on Actual Fund Return      
International Dividend Appreciation Index Fund      
ETF Shares $1,000.00 $1,070.30 $0.63
Admiral™ Shares 1,000.00 1,070.30 0.73
International High Dividend Yield Index Fund      
ETF Shares $1,000.00 $1,038.20 $1.03
Admiral Shares 1,000.00 1,038.30 0.98
Based on Hypothetical 5% Yearly Return      
International Dividend Appreciation Index Fund      
ETF Shares $1,000.00 $1,024.60 $0.61
Admiral Shares 1,000.00 1,024.50 0.71
International High Dividend Yield Index Fund      
ETF Shares $1,000.00 $1,024.20 $1.02
Admiral Shares 1,000.00 1,024.25 0.97
The calculations are based on expenses incurred in the most recent six-month period. The funds' annualized six-month expense ratios for that period are: for the International Dividend Appreciation Index Fund, 0.12% for ETF Shares and 0.14% for Admiral Shares; and for the International High Dividend Yield Index Fund, 0.20% for ETF Shares and 0.19% for Admiral Shares. The dollar amounts shown as “Expenses Paid" are equal to the annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the number of days in the most recent 12-month period (184/365).
3

International Dividend Appreciation Index Fund
Performance Summary
All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: February 25, 2016, Through October 31, 2021
Initial Investment of $10,000
    Average Annual Total Returns
Periods Ended October 31, 2021
 
    One
Year
Five
Years
Since
Inception
(2/25/2016)
Final Value
of a $10,000
Investment
 International Dividend Appreciation Index Fund
ETF Shares Net Asset Value
29.93% 12.37% 12.62% $19,640
  International Dividend Appreciation Index Fund ETF Shares Market Price 30.07 12.36 12.68 19,704
 Spliced S&P Global Ex-U.S. Dividend Growers Index 30.70 12.61 12.98 20,003
“Since Inception” performance is calculated from the ETF Shares’ inception date for both the fund and its comparative standard(s).
Spliced S&P Global Ex-U.S. Dividend Growers Index: NASDAQ International Dividend Achievers Select Index through September 19, 2021; S&P Global Ex-U.S. Dividend Growers Index thereafter.
       
    One
Year
Five
Years
Since
Inception
(3/2/2016)
Final Value
of a $10,000
Investment
International Dividend Appreciation Index Fund
Admiral Shares
29.31% 12.26% 12.00% $18,998
Spliced S&P Global Ex-U.S. Dividend Growers Index 30.70 12.61 12.43 19,417
“Since Inception” performance is calculated from the Admiral Shares’ inception date for both the fund and its comparative standard(s).
Vanguard fund returns are adjusted to reflect the 0.25% fee on purchases and redemptions. The fees do not apply to the ETF Shares.
See Financial Highlights for dividend and capital gains information.
4

International Dividend Appreciation Index Fund
Cumulative Returns of ETF Shares: February 25, 2016, Through October 31, 2021
  One
Year
Five
Years
Since
Inception
(2/25/2016)
International Dividend Appreciation Index Fund ETF Shares Market Price 30.07% 79.08% 97.04%
International Dividend Appreciation Index Fund ETF Shares Net Asset Value 29.93 79.14 96.40
Spliced S&P Global Ex-U.S. Dividend Growers Index 30.70 81.07 100.03
"Since Inception" performance is calculated from the ETF Shares’ inception date for both the fund and its comparative standard(s).
For the ETF Shares, the market price is determined by the midpoint of the bid-offer spread as of the closing time of the New York Stock Exchange (generally 4 p.m., Eastern time). The net asset value is also determined as of the NYSE closing time. For more information about how the ETF Shares' market prices have compared with their net asset value, visit vanguard.com, select your ETF, and then select the Price and Performance tab. The ETF premium/discount analysis there shows the percentages of days on which the ETF Shares' market price was above or below the NAV.
Vanguard fund returns are adjusted to reflect the 0.25% fee on purchases and redemptions. The fees do not apply to the ETF Shares.
5

International Dividend Appreciation Index Fund
Fund Allocation
As of October 31, 2021
Japan 17.7%
Switzerland 16.9
Canada 12.4
United Kingdom 8.5
India 7.1
Denmark 6.2
Germany 5.7
China 5.1
Hong Kong 4.2
Australia 3.2
France 2.9
Sweden 2.2
South Korea 1.2
Indonesia 1.1
Other 5.6
The table reflects the fund’s investments, except for short-term investments and derivatives.
The fund may invest in derivatives (such as futures and swap contracts) for various reasons, including, but not limited to, attempting to remain fully invested and tracking its target index as closely as possible.
6

International Dividend Appreciation Index Fund
Financial Statements
Schedule of Investments
As of October 31, 2021
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s website at www.sec.gov.
    Shares Market
Value

($000)
Common Stocks (99.4%)
Australia (3.2%)
  CSL Ltd.    460,172   104,708
  Sonic Healthcare Ltd.    476,686    14,465
  Domino's Pizza Enterprises Ltd.     62,749     6,436
  carsales.com Ltd.    281,370     5,265
  Altium Ltd.    119,497     3,329
  Washington H Soul Pattinson & Co. Ltd.    118,866     2,927
  Technology One Ltd.    253,158     2,351
  Brickworks Ltd.     79,007     1,418
  AUB Group Ltd.     76,690     1,264
  Collins Foods Ltd.    107,092     1,040
        143,203
Austria (0.0%)
  CA Immobilien Anlagen AG (XWBO)     43,760     1,878
Belgium (0.8%)
  UCB SA    128,650    15,377
  Groupe Bruxelles Lambert SA     99,303    11,522
  Sofina SA     15,477     6,849
  Barco NV     73,612     1,659
         35,407
Brazil (0.1%)
  Raia Drogasil SA  1,030,341     4,245
Canada (12.3%)
  Toronto-Dominion Bank  1,671,758   121,356
  Brookfield Asset Management Inc. Class A  1,345,912    81,259
  Canadian National Railway Co.    566,318    75,265
  Alimentation Couche-Tard Inc. Class B    746,120    27,986
  Franco-Nevada Corp.    176,035    25,118
  Intact Financial Corp.    156,603    20,994
  Magna International Inc.    254,350    20,690
  Fortis Inc. (XTSE)    428,332    19,067
  Open Text Corp.    251,932    12,690
  Dollarama Inc.    272,464    12,315
  Metro Inc.    230,294    11,587
  Loblaw Cos. Ltd.    152,619    11,478
  TFI International Inc.     84,188     9,335
  CCL Industries Inc. Class B    138,170     7,553
    Shares Market
Value

($000)
1 Canadian Tire Corp. Ltd. Class A     52,441     7,448
  Ritchie Bros Auctioneers Inc.    106,295     7,265
  Toromont Industries Ltd.     80,135     7,130
  George Weston Ltd.     65,526     7,080
  Imperial Oil Ltd.    189,856     6,428
  iA Financial Corp. Inc.    100,433     5,941
  Stantec Inc.    104,153     5,756
  Saputo Inc.    217,774     5,202
  Onex Corp.     67,219     5,009
  Finning International Inc.    152,698     4,521
  Empire Co. Ltd. Class A    150,150     4,489
  Parkland Corp.    147,725     4,298
  Boyd Group Services Inc.     19,312     3,748
  Premium Brands Holdings Corp. Class A     30,425     3,288
  Canadian Western Bank     84,684     2,709
  Innergex Renewable Energy Inc.    145,110     2,415
  Stella-Jones Inc.     59,301     2,129
  Cogeco Communications Inc.     19,673     1,690
  Enghouse Systems Ltd.     38,893     1,687
  Equitable Group Inc.     25,171     1,572
  Savaria Corp.     43,503       687
* Brookfield Asset Management Reinsurance Partners Ltd. Class A      8,558       527
  Cogeco Inc.      7,428       494
  Hardwoods Distribution Inc.     14,249       477
        548,683
China (5.0%)
  Tencent Holdings Ltd.  2,013,024   122,452
  Ping An Insurance Group Co. of China Ltd. Class H  6,304,000    45,154
  Shenzhou International Group Holdings Ltd.    784,300    16,897
  China Tourism Group Duty Free Corp. Ltd. Class A    159,655     6,687
2 Longfor Group Holdings Ltd.  1,360,000     6,580
  China Gas Holdings Ltd.  2,455,530     6,129
  Jiangsu Hengrui Medicine Co. Ltd. Class A    568,469     4,367
  China Resources Gas Group Ltd.    765,000     4,106
7

International Dividend Appreciation Index Fund
    Shares Market
Value

($000)
  Guangdong Investment Ltd.  2,556,000     3,214
  China State Construction Engineering Corp. Ltd. Class A  4,188,200     3,047
  Shanghai Pharmaceuticals Holding Co. Ltd. Class H    772,700     1,414
  Ping An Insurance Group Co. of China Ltd. Class A    146,700     1,133
  Shanghai Pharmaceuticals Holding Co. Ltd. Class A    362,600     1,056
  Angel Yeast Co. Ltd. Class A    101,100       879
  China National Accord Medicines Corp. Ltd. Class A    148,025       775
  Jiangzhong Pharmaceutical Co. Ltd. Class A    152,300       274
        224,164
Colombia (0.3%)
  Bancolombia SA ADR     83,040     2,984
  Bancolombia SA    269,099     2,407
  Grupo de Inversiones Suramericana SA    340,802     1,986
  Grupo Nutresa SA    236,323     1,381
  Grupo Argos SA    335,361     1,051
  Bancolombia SA Preference Shares    116,671     1,047
         10,856
Denmark (6.2%)
  Novo Nordisk A/S Class B  1,586,559   173,974
  DSV A/S    205,331    47,722
  Coloplast A/S Class B    121,463    19,837
  Novozymes A/S Class B    199,762    14,694
  GN Store Nord A/S    152,897     9,291
  SimCorp A/S     38,846     4,704
  Ringkjoebing Landbobank A/S     28,729     3,650
  ROCKWOOL International A/S Class B      6,290     2,877
        276,749
Finland (0.1%)
  Huhtamaki OYJ     90,681     3,954
  Revenio Group OYJ     25,655     1,693
          5,647
France (2.9%)
  Sanofi  1,062,735   106,746
  Teleperformance     56,182    23,468
  Pharmagest Interactive      3,883       426
        130,640
Germany (5.7%)
  SAP SE  1,041,424   150,810
  Fresenius SE & Co. KGaA    392,877    17,858
  Symrise AG Class A    123,809    17,125
  Brenntag SE    138,586    13,185
  Fresenius Medical Care AG & Co. KGaA    192,071    12,759
  LEG Immobilien SE (XETR)     73,386    10,916
  Nemetschek SE     55,623     6,386
  Bechtle AG     80,671     6,051
  TAG Immobilien AG    141,248     4,291
    Shares Market
Value

($000)
  Deutsche Wohnen SE     66,931     3,428
  FUCHS PETROLUB SE Preference Shares     68,927     3,306
  Gerresheimer AG     28,530     2,618
  Encavis AG     99,201     2,079
  FUCHS PETROLUB SE     36,883     1,359
  STRATEC SE      7,531     1,203
  New Work SE      3,287       802
  Cewe Stiftung & Co. KGaA      5,136       718
  MBB SE      1,874       299
        255,193
Hong Kong (4.2%)
  AIA Group Ltd. 11,301,760   126,659
  Techtronic Industries Co. Ltd.  1,641,484    33,725
  Hong Kong & China Gas Co. Ltd. 10,365,145    16,102
  MTR Corp. Ltd.  1,398,120     7,627
  Swire Properties Ltd.    934,400     2,505
  SUNeVision Holdings Ltd.  1,295,000     1,189
        187,807
India (7.1%)
  Reliance Industries Ltd.  2,967,653   100,708
  Infosys Ltd. ADR  3,108,369    69,255
  Tata Consultancy Services Ltd.    951,451    43,248
  Hindustan Unilever Ltd.    820,990    26,278
  Bajaj Finance Ltd.    241,106    23,910
  Asian Paints Ltd.    405,405    16,801
  ITC Ltd.  2,788,164     8,325
  Pidilite Industries Ltd.    143,445     4,439
  Infosys Ltd.    131,928     2,952
  Tata Elxsi Ltd.     32,011     2,515
  Balkrishna Industries Ltd.     74,040     2,439
  Persistent Systems Ltd.     44,459     2,335
  Berger Paints India Ltd.    218,611     2,168
  Astral Ltd. (XNSE)     71,235     2,083
  Sundaram Finance Ltd.     64,778     2,073
  LIC Housing Finance Ltd.    294,074     1,603
  Navin Fluorine International Ltd.     31,418     1,403
  Relaxo Footwears Ltd.     70,180     1,249
  CRISIL Ltd.     23,393       876
  Schaeffler India Ltd.      7,642       755
  KEC International Ltd.    112,119       717
  Finolex Cables Ltd.     72,098       451
  Caplin Point Laboratories Ltd.     21,355       234
  NESCO Ltd.     22,257       181
* Yes Bank Ltd.    545,158        94
        317,092
Indonesia (1.1%)
  Bank Central Asia Tbk PT 54,794,400    28,974
  Bank Rakyat Indonesia Persero Tbk PT 65,205,100    19,574
         48,548
Ireland (0.4%)
  Kerry Group plc Class A    145,263    19,491
Israel (0.0%)
  Matrix IT Ltd.     28,951       786
 
8

International Dividend Appreciation Index Fund
    Shares Market
Value

($000)
Italy (0.3%)
  Recordati Industria Chimica e Farmaceutica SpA     92,557     5,799
  DiaSorin SpA     20,377     4,607
  Reply SpA     22,355     4,339
         14,745
Japan (17.6%)
  Keyence Corp.    195,200   117,826
  Murata Manufacturing Co. Ltd.    636,600    47,222
  KDDI Corp.  1,542,700    47,176
  Nippon Telegraph & Telephone Corp.  1,237,700    34,679
  Tokio Marine Holdings Inc.    641,700    33,798
  Terumo Corp.    706,476    31,167
  Seven & i Holdings Co. Ltd.    724,300    30,410
  M3 Inc.    487,800    28,746
  Astellas Pharma Inc.  1,658,600    27,962
  Kao Corp.    464,500    26,276
  Asahi Group Holdings Ltd.    472,143    21,426
  Aeon Co. Ltd.    879,400    20,230
  Nomura Research Institute Ltd.    446,400    17,871
  Shionogi & Co. Ltd.    255,800    16,678
  Unicharm Corp.    410,500    16,602
  Nitori Holdings Co. Ltd.     89,901    16,516
  Obic Co. Ltd.     64,200    11,872
  Sekisui House Ltd.    562,400    11,693
  Nitto Denko Corp.    147,500    11,526
  Pan Pacific International Holdings Corp.    503,764    10,577
  Yamaha Corp.    156,700     9,900
  Nissan Chemical Corp.    141,200     7,859
  Yakult Honsha Co. Ltd.    147,900     7,473
  GMO Payment Gateway Inc.     48,100     6,094
  Kansai Paint Co. Ltd.    259,500     6,009
  MonotaRO Co. Ltd.    258,867     5,900
  TIS Inc.    214,600     5,846
  Otsuka Corp.    116,600     5,743
  Hulic Co. Ltd.    559,575     5,381
  Kurita Water Industries Ltd.    101,100     4,993
  Kobayashi Pharmaceutical Co. Ltd.     58,400     4,676
  Hakuhodo DY Holdings Inc.    277,000     4,516
  Kakaku.com Inc.    132,700     4,404
  Open House Co. Ltd.     66,300     4,228
  Chiba Bank Ltd.    680,600     4,219
  Benefit One Inc.     75,300     3,800
  Rinnai Corp.     36,384     3,736
  Nisshin Seifun Group Inc.    233,500     3,687
  USS Co. Ltd.    225,300     3,631
  Welcia Holdings Co. Ltd.     97,100     3,625
  Medipal Holdings Corp.    196,600     3,557
  Hikari Tsushin Inc.     20,100     3,098
  Itochu Techno-Solutions Corp.     96,203     3,039
  SCSK Corp.    150,000     3,036
  COMSYS Holdings Corp.    119,700     2,964
  Alfresa Holdings Corp.    209,700     2,956
  Oracle Corp. Japan     30,800     2,914
  Relo Group Inc.    130,400     2,712
    Shares Market
Value

($000)
  Tokyo Tatemono Co. Ltd.    184,300     2,709
  Tokyo Century Corp.     47,000     2,691
  Nomura Real Estate Holdings Inc.    105,280     2,567
  Zenkoku Hosho Co. Ltd.     51,600     2,494
  Sanwa Holdings Corp.    208,900     2,437
  EXEO Group Inc.    105,100     2,429
  Goldwin Inc.     38,300     2,318
  Nihon Unisys Ltd.     77,600     2,180
  Infomart Corp.    214,200     2,090
  SHO-BOND Holdings Co. Ltd.     49,084     2,056
  Sundrug Co. Ltd.     67,624     1,979
  Aica Kogyo Co. Ltd.     63,400     1,943
  en japan Inc.     39,700     1,577
  Seria Co. Ltd.     47,100     1,555
  Yaoko Co. Ltd.     25,100     1,494
  NEC Networks & System Integration Corp.     88,900     1,430
  Mani Inc.     83,400     1,422
  NSD Co. Ltd.     74,500     1,420
  PALTAC Corp.     31,054     1,375
  Nichias Corp.     54,700     1,339
  Hitachi Transport System Ltd.     33,200     1,308
  Fuyo General Lease Co. Ltd.     19,800     1,287
  TS Tech Co. Ltd.     93,200     1,247
  Funai Soken Holdings Inc.     44,800     1,245
  Takara Bio Inc.     47,500     1,240
  Workman Co. Ltd.     22,900     1,218
  Japan Material Co. Ltd.     73,100     1,017
  Mizuho Leasing Co. Ltd.     31,600       976
  Valor Holdings Co. Ltd.     45,912       972
  Takuma Co. Ltd.     74,100       969
  JCU Corp.     22,700       912
  Shoei Co. Ltd.     20,400       908
  DTS Corp.     39,200       870
  Takeuchi Manufacturing Co. Ltd.     33,300       855
  Maruwa Co. Ltd.      7,600       852
  Nomura Co. Ltd.     85,500       843
  Information Services International-Dentsu Ltd.     23,600       826
  Kissei Pharmaceutical Co. Ltd.     39,800       796
  Noevir Holdings Co. Ltd.     16,200       792
  Nojima Corp.     35,700       783
  Elecom Co. Ltd.     50,932       779
  eGuarantee Inc.     33,800       753
  MCJ Co. Ltd.     64,600       727
  Giken Ltd.     18,900       721
  BeNext-Yumeshin Group Co.     53,800       701
  Eizo Corp.     18,200       696
  Nippon Densetsu Kogyo Co. Ltd.     43,500       670
  San-A Co. Ltd.     18,526       668
  Aeon Delight Co. Ltd.     21,300       654
  Sekisui Jushi Corp.     35,100       654
  Future Corp.     21,800       638
  Ai Holdings Corp.     32,670       617
  Mitsubishi Pencil Co. Ltd.     51,300       615
  Riken Keiki Co. Ltd.     22,100       613
  Kameda Seika Co. Ltd.     15,600       610
  Hogy Medical Co. Ltd.     22,000       603
  Intage Holdings Inc.     33,000       557
 
9

International Dividend Appreciation Index Fund
    Shares Market
Value

($000)
  Yellow Hat Ltd.     32,300       526
  Okinawa Cellular Telephone Co.     11,300       509
  S Foods Inc.     17,100       495
  FULLCAST Holdings Co. Ltd.     20,000       467
  Mitsubishi Research Institute Inc.     12,500       467
  Siix Corp.     36,600       405
  Ricoh Leasing Co. Ltd.     11,600       368
  G-7 Holdings Inc.     20,000       366
  Fujicco Co. Ltd.     20,600       346
  Sinko Industries Ltd.     18,700       339
  WDB Holdings Co. Ltd.      9,500       299
  E-Guardian Inc.     10,100       277
  Fukui Computer Holdings Inc.      7,600       274
  G-Tekt Corp.     21,400       267
  Cresco Ltd.     12,600       231
  Members Co. Ltd.      7,300       222
  Nippon Parking Development Co. Ltd.    165,100       209
  Aoyama Zaisan Networks Co. Ltd.     20,000       207
  CTS Co. Ltd.     27,000       189
* Densan System Holdings Co. Ltd.      8,300       187
  Creek & River Co. Ltd.     10,000       173
  Ebase Co. Ltd.     22,500       150
  Ad-sol Nissin Corp.      8,000       147
  Aval Data Corp.      4,900       120
* Value HR Co. Ltd.      6,700       108
        788,294
Kuwait (0.8%)
  National Bank of Kuwait SAKP  6,764,746    22,243
  Kuwait Finance House KSCP  4,560,442    12,604
         34,847
Mexico (0.5%)
  America Movil SAB de CV Series L 21,803,956    19,434
  Grupo Elektra SAB de CV     57,865     4,443
         23,877
Netherlands (0.7%)
  Wolters Kluwer NV    250,289    26,210
  Aalberts NV     87,538     4,845
         31,055
New Zealand (0.3%)
  Fisher & Paykel Healthcare Corp. Ltd.    567,344    12,711
Norway (0.2%)
  TOMRA Systems ASA    110,534     7,144
  Borregaard ASA     87,810     2,132
          9,276
South Korea (1.2%)
  NAVER Corp.    146,668    50,994
  LEENO Industrial Inc.      9,467     1,388
  AfreecaTV Co. Ltd.      7,327     1,214
  JW Pharmaceutical Corp.      8,810       176
  Hanyang Eng Co. Ltd.      7,046        93
         53,865
Spain (0.1%)
  Viscofan SA     39,949     2,732
    Shares Market
Value

($000)
Sweden (2.2%)
  Hexagon AB Class B  1,845,167    29,696
  Assa Abloy AB Class B    860,698    25,255
  Nibe Industrier AB Class B  1,375,661    20,461
  Castellum AB    212,522     5,664
  AAK AB    166,051     3,632
  Wihlborgs Fastigheter AB    129,638     3,073
  Hexpol AB    242,770     2,841
  Kungsleden AB    153,350     2,109
  Hufvudstaden AB Class A    112,472     1,800
  Atrium Ljungberg AB Class B     45,635     1,048
  Svolder AB Class B     22,171       899
         96,478
Switzerland (16.8%)
  Nestle SA (Registered)  1,475,184   194,587
  Roche Holding AG    485,954   188,256
  Novartis AG (Registered)  1,910,577   158,029
  Sika AG (Registered)    131,118    44,420
  Partners Group Holding AG     22,151    38,697
  Givaudan SA (Registered)      7,672    36,150
  Geberit AG (Registered)     33,641    26,272
  Logitech International SA (Registered)    186,519    15,603
  Chocoladefabriken Lindt & Spruengli AG (Registered)         99    11,893
  Chocoladefabriken Lindt & Spruengli AG Ptg. Ctf.        997    11,756
  Temenos AG (Registered)     62,063     9,502
  EMS-Chemie Holding AG (Registered)      6,683     6,629
  Interroll Holding AG (Registered)        709     3,440
  DKSH Holding AG     34,087     2,732
  ALSO Holding AG (Registered)      5,843     1,734
  Kardex Holding AG (Registered)      5,501     1,697
  Orior AG      6,256       643
  Roche Holding AG (Bearer)        612       263
        752,303
Taiwan (0.8%)
  Chailease Holding Co. Ltd.  1,309,650    12,543
  E.Sun Financial Holding Co. Ltd. 12,792,441    12,224
  Advantech Co. Ltd.    416,000     5,440
  ASPEED Technology Inc.     25,000     2,508
  Sinbon Electronics Co. Ltd.    190,000     1,572
  Poya International Co. Ltd.     66,890     1,198
  TCI Co. Ltd.     89,000       723
         36,208
Thailand (0.1%)
  Krungthai Card PCL    795,000     1,386
  Siam Global House PCL  1,594,900       983
          2,369
United Kingdom (8.4%)
  Diageo plc  2,124,517   105,698
  RELX plc  1,895,012    58,759
  Experian plc    881,400    40,413
  Ashtead Group plc    410,584    34,411
 
10

International Dividend Appreciation Index Fund
    Shares Market
Value

($000)
  Croda International plc    135,920    17,592
  Halma plc    367,114    14,888
  Spirax-Sarco Engineering plc     67,212    14,348
  Smurfit Kappa Group plc (XDUB)    249,951    13,102
  Bunzl plc    327,706    12,112
  Intertek Group plc    158,410    10,608
  Sage Group plc  1,036,731    10,083
  DCC plc     94,083     7,850
  Dechra Pharmaceuticals plc    107,447     7,512
  Spectris plc    111,616     5,743
  Diploma plc    114,993     4,726
  Genus plc     62,288     4,723
  Grainger plc    707,770     2,977
  Ultra Electronics Holdings plc     65,993     2,924
  Cranswick plc     51,005     2,411
  Daily Mail & General Trust plc Class A    149,277     2,119
  Clarkson plc     27,760     1,521
  Moneysupermarket.com Group plc    509,767     1,480
  Avon Protection plc     28,445       756
        376,756
Total Common Stocks
(Cost $3,762,654)
4,445,905
    Shares Market
Value

($000)
Temporary Cash Investments (0.4%)
Money Market Fund (0.4%)
3,4 Vanguard Market Liquidity Fund, 0.070% (Cost $16,951)    169,505          16,951
Total Investments (99.8%) (Cost $3,779,605) 4,462,856
Other Assets and Liabilities—Net (0.2%) 10,362
Net Assets (100%) 4,473,218
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 $6,960,000.
2 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. At October 31, 2021, the aggregate value was $6,580,000, representing 0.1% of net assets.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
4 Collateral of $7,399,000 was received for securities on loan.
  ADR—American Depositary Receipt.
  Ptg. Ctf.—Participating Certificates.
 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts
      ($000)
  Expiration Number of
Long (Short)
Contracts
Notional
Amount
Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts        
E-mini S&P 500 Index December 2021 28 6,436 190
Euro Stoxx 50 Index December 2021 185 9,061 112
MSCI Emerging Markets Index December 2021 109 6,878 (118)
Topix Index December 2021 31 5,419 (142)
        42
    
Forward Currency Contracts
  Contract
Settlement
Date
Contract Amount (000) Unrealized
Appreciation
($000)
Unrealized
Depreciation
($000)
Counterparty Receive Deliver
Bank of Montreal 12/15/21 EUR 5,240 USD 6,213 (149)
Bank of America, N.A. 12/15/21 INR 1,366,000 USD 18,390 (243)
Bank of America, N.A. 12/15/21 JPY 320,474 USD 2,920 (107)
Bank of America, N.A. 12/15/21 USD 6,259 CHF 5,748 (28)
Bank of Montreal 12/15/21 USD 1,382 GBP 1,000 13
11

International Dividend Appreciation Index Fund
Forward Currency Contracts (continued)
  Contract
Settlement
Date
Contract Amount (000) Unrealized
Appreciation
($000)
Unrealized
Depreciation
($000)
Counterparty Receive Deliver
BNP Paribas 12/15/21 USD 12,757 INR 950,000 137
Goldman Sachs International 12/15/21 USD 2,334 JPY 260,000 51
            201 (527)
CHF—Swiss franc.
EUR—euro.
GBP—British pound.
INR—Indian rupee.
JPY—Japanese yen.
USD—U.S. dollar.
  
See accompanying Notes, which are an integral part of the Financial Statements.
12

International Dividend Appreciation Index Fund
Statement of Assets and Liabilities
As of October 31, 2021
($000s, except shares and per-share amounts) Amount
Assets  
Investments in Securities, at Value  
Unaffiliated Issuers (Cost $3,762,654) 4,445,905
Affiliated Issuers (Cost $16,951) 16,951
Total Investments in Securities 4,462,856
Investment in Vanguard 146
Cash Collateral Pledged—Futures Contracts 1,490
Cash Collateral Pledged—Forward Currency Contracts 520
Cash Collateral Received for ETF Capital Activity 34,215
Foreign Currency, at Value (Cost $17,078) 17,005
Receivables for Investment Securities Sold 6,396
Receivables for Accrued Income 13,177
Receivables for Capital Shares Issued 2,161
Unrealized Appreciation—Forward Currency Contracts 201
Total Assets 4,538,167
Liabilities  
Due to Custodian 1,157
Payables for Investment Securities Purchased 16,551
Collateral for Securities on Loan 7,399
Collateral for ETF Capital Activity 34,215
Payables for Capital Shares Redeemed 116
Payables to Vanguard 256
Variation Margin Payable—Futures Contracts 88
Unrealized Depreciation—Forward Currency Contracts 527
Deferred Foreign Capital Gains Taxes 4,640
Total Liabilities 64,949
Net Assets 4,473,218
13

International Dividend Appreciation Index Fund
Statement of Assets and Liabilities (continued)

At October 31, 2021, net assets consisted of:  
($000s, except shares and per-share amounts) Amount
Paid-in Capital 3,531,235
Total Distributable Earnings (Loss) 941,983
Net Assets 4,473,218
 
ETF Shares—Net Assets  
Applicable to 46,183,341 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
4,150,044
Net Asset Value Per Share—ETF Shares $89.86
 
Admiral Shares—Net Assets  
Applicable to 7,392,475 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
323,174
Net Asset Value Per Share—Admiral Shares $43.72
  
See accompanying Notes, which are an integral part of the Financial Statements.
14

International Dividend Appreciation Index Fund
Statement of Operations
  Year Ended
October 31, 2021
  ($000)
Investment Income  
Income  
Dividends1 54,094
Interest2 13
Securities Lending—Net 107
Total Income 54,214
Expenses  
The Vanguard Group—Note B  
Investment Advisory Services 570
Management and Administrative—ETF Shares 4,141
Management and Administrative—Admiral Shares 382
Marketing and Distribution—ETF Shares 126
Marketing and Distribution—Admiral Shares 9
Custodian Fees 295
Auditing Fees 45
Shareholders’ Reports—ETF Shares 135
Shareholders’ Reports—Admiral Shares 6
Trustees’ Fees and Expenses 1
Total Expenses 5,710
Net Investment Income 48,504
Realized Net Gain (Loss)  
Investment Securities Sold2,3,4 458,013
Futures Contracts 2,740
Swap Contracts 576
Forward Currency Contracts 277
Foreign Currencies (2,359)
Realized Net Gain (Loss) 459,247
Change in Unrealized Appreciation (Depreciation)  
Investment Securities2,5 350,719
Futures Contracts 584
Forward Currency Contracts (266)
Foreign Currencies 66
Change in Unrealized Appreciation (Depreciation) 351,103
Net Increase (Decrease) in Net Assets Resulting from Operations 858,854
1 Dividends are net of foreign withholding taxes of $6,853,000.
2 Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $12,000, $1,000, and ($1,000), respectively. Purchases and sales are for temporary cash investment purposes.
3 Realized gain (loss) is net of foreign capital gain taxes of $19,351,000.
4 Includes $99,855,000 of net gain (loss) resulting from in-kind redemptions.
5 The change in unrealized appreciation (depreciation) is net of the change in deferred foreign capital gains taxes of ($1,997,000).
  
See accompanying Notes, which are an integral part of the Financial Statements.
15

International Dividend Appreciation Index Fund
Statement of Changes in Net Assets
  Year Ended October 31,
  2021
($000)
2020
($000)
     
Increase (Decrease) in Net Assets    
Operations    
Net Investment Income 48,504 29,753
Realized Net Gain (Loss) 459,247 (62,560)
Change in Unrealized Appreciation (Depreciation) 351,103 158,091
Net Increase (Decrease) in Net Assets Resulting from Operations 858,854 125,284
Distributions    
ETF Shares (39,771) (33,388)
Admiral Shares (3,300) (3,991)
Total Distributions (43,071) (37,379)
Capital Share Transactions    
ETF Shares 943,215 1,064,328
Admiral Shares 38,209 386
Net Increase (Decrease) from Capital Share Transactions 981,424 1,064,714
Total Increase (Decrease) 1,797,207 1,152,619
Net Assets    
Beginning of Period 2,676,011 1,523,392
End of Period 4,473,218 2,676,011
  
See accompanying Notes, which are an integral part of the Financial Statements.
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International Dividend Appreciation Index Fund
Financial Highlights
ETF Shares          
For a Share Outstanding
Throughout Each Period 
Year Ended October 31,
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.
  
See accompanying Notes, which are an integral part of the Financial Statements.
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International Dividend Appreciation Index Fund
Financial Highlights
Admiral Shares          
For a Share Outstanding
Throughout Each Period 
Year Ended October 31,
2021 2020 2019 2018 2017
Net Asset Value, Beginning of Period $34.03 $33.42 $28.52 $31.24 $26.45
Investment Operations          
Net Investment Income1 .518 .453 .6862 .576 .573
Net Realized and Unrealized Gain (Loss) on Investments3 9.645 .765 4.679 (2.727) 4.720
Total from Investment Operations 10.163 1.218 5.365 (2.151) 5.293
Distributions          
Dividends from Net Investment Income (.473) (.608) (.465) (.569) (.503)
Distributions from Realized Capital Gains
Total Distributions (.473) (.608) (.465) (.569) (.503)
Net Asset Value, End of Period $43.72 $34.03 $33.42 $28.52 $31.24
Total Return4 29.96% 3.72% 18.96% -7.03% 20.18%
Ratios/Supplemental Data          
Net Assets, End of Period (Millions) $323 $220 $218 $175 $152
Ratio of Total Expenses to Average Net Assets 0.16% 0.20% 0.20% 0.25% 0.25%
Ratio of Net Investment Income to Average Net Assets 1.25% 1.36% 2.24%2 1.83% 1.96%
Portfolio Turnover Rate5 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 $.188 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, $.00, $.00, $.01, and $.02.
4 Total returns do not include transaction or account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable transaction and account service fees.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.
  
See accompanying Notes, which are an integral part of the Financial Statements.
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International Dividend Appreciation Index Fund
Notes to Financial Statements
Vanguard International Dividend Appreciation Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers two classes of shares: ETF Shares and Admiral Shares. Each of the share classes has different eligibility and minimum purchase requirements, and is designed for different types of investors. ETF Shares are listed for trading on Nasdaq; they can be purchased and sold through a broker.
The fund invests in securities of foreign issuers, which may subject it to investment risks not normally associated with investing in securities of U.S. corporations. Market disruptions associated with the COVID-19 pandemic have had a global impact, and uncertainty exists as to the long-term implications. Such disruptions can adversely affect assets of the fund and thus fund performance.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund’s pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities.
Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value.
Temporary cash investments are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services.
2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund’s pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).
3. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objectives of maintaining full exposure to the stock market, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market.
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International Dividend Appreciation Index Fund
Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund’s performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended October 31, 2021, the fund’s average investments in long and short futures contracts represented less than 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
4. Forward Currency Contracts: The fund enters into forward currency contracts to protect the value of securities and related receivables and payables against changes in future foreign exchange rates. The fund’s risks in using these contracts include movement in the values of the foreign currencies relative to the U.S. dollar and the ability of the counterparties to fulfill their obligations under the contracts. The fund mitigates its counterparty risk by entering into forward currency contracts only with a diverse group of prequalified counterparties, monitoring their financial strength, entering into master netting arrangements with its counterparties, and requiring its counterparties to transfer collateral as security for their performance. In the absence of a default, the collateral pledged or received by the fund cannot be repledged, resold, or rehypothecated. The master netting arrangements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate the forward currency contracts, determine the net amount owed by either party in accordance with its master netting arrangements, and sell or retain any collateral held up to the net amount owed to the fund under the master netting arrangements. The forward currency contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has pledged. Any securities pledged as collateral for open contracts are noted in the Schedule of Investments. The value of collateral received or pledged is compared daily to the value of the forward currency contracts exposure with each counterparty, and any difference, if in excess of a specified minimum transfer amount, is adjusted and settled within two business days.
Forward currency contracts are valued at their quoted daily prices obtained from an independent third party, adjusted for currency risk based on the expiration date of each contract. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on forward currency contracts.
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International Dividend Appreciation Index Fund
During the year ended October 31, 2021, the fund’s average investment in forward currency contracts represented 1% of net assets, based on the average of the notional amounts at each quarter-end during the period.
5.  Swap Contracts: The fund has entered into equity swap contracts to earn the total return on selected reference stocks in the fund’s target index. Under the terms of the swaps, the fund receives the total return on the referenced stock (i.e., receiving the increase or paying the decrease in value of the selected reference stock and receiving the equivalent of any dividends in respect of the selected referenced stock) over a specified period of time, applied to a notional amount that represents the value of a designated number of shares of the selected reference stock at the beginning of the equity swap contract. The fund also pays a floating rate that is based on short-term interest rates, applied to the notional amount. At the same time, the fund generally invests an amount approximating the notional amount of the swap in high-quality temporary cash investments.
A risk associated with all types of swaps is the possibility that a counterparty may default on its obligation to pay net amounts due to the fund. The fund’s maximum amount subject to counterparty risk is the unrealized appreciation on the swap contract. The fund mitigates its counterparty risk by entering into swaps only with a diverse group of prequalified counterparties, monitoring their financial strength, entering into master netting arrangements with its counterparties, and requiring its counterparties to transfer collateral as security for their performance. In the absence of a default, the collateral pledged or received by the fund cannot be repledged, resold, or rehypothecated. In the event of a counterparty’s default (including bankruptcy), the fund may terminate any swap contracts with that counterparty, determine the net amount owed by either party in accordance with its master netting arrangements, and sell or retain any collateral held up to the net amount owed to the fund under the master netting arrangements. The swap contracts contain provisions whereby a counterparty may terminate open contracts if the fund’s net assets decline below a certain level, triggering a payment by the fund if the fund is in a net liability position at the time of the termination. The payment amount would be reduced by any collateral the fund has pledged. Any securities pledged as collateral for open contracts are noted in the Schedule of Investments. The value of collateral received or pledged is compared daily to the value of the swap contracts exposure with each counterparty, and any difference, if in excess of a specified minimum transfer amount, is adjusted and settled within two business days.
The notional amounts of swap contracts are not recorded in the Statement of Assets and Liabilities. Swaps are valued daily based on market quotations received from independent pricing services or recognized dealers and the change in value is recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until periodic payments are made or the termination of the swap, at which time realized gain (loss) is recorded.
During the year ended October 31, 2021, the fund’s average amounts of investments in total return swaps represented less than 1% of net assets, based on the average of notional amounts at each quarter-end during the period. The fund had no open swap contracts at October 31, 2021.
6. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. The fund’s tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is
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International Dividend Appreciation Index Fund
generally three years after the filing of the tax return. Management has analyzed the fund’s tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund’s financial statements.
7. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
8. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are subject to termination by the fund at any time, and are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled before the opening of the market on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the event of a default, the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the Statement of Assets and Liabilities for the return of the collateral, during the period the securities are on loan. Collateral investments in Vanguard Market Liquidity Fund are subject to market appreciation or depreciation. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan. During the term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
9. Collateral for ETF Capital Activity: When an authorized participant fails to deliver one or more of the securities within a designated basket (in the case of a subscription), fails to deliver the fund ETF Shares (in the case of a redemption), or is required by the fund, prior to settlement, to accommodate the trading of foreign securities in local markets (in the case of redemption for an international equity ETF), the fund may require the authorized participant to deliver and maintain cash collateral in accordance with the authorized participant agreement. The fund may invest the collateral in short-term debt instruments or U.S. Treasury securities, or maintain the balance as cash. Daily market fluctuations could cause the value of the missing securities or fund ETF Shares to be more or less than the value of the collateral received; when this occurs the collateral is adjusted. The fund earns interest income from investments and/or custody fee offsets from the cash balance. The fund records an asset (cash or investment, as applicable) and a corresponding liability for the return of the collateral in the Statement of Assets and Liabilities. Interest income and custody fee offsets earned on the investment of collateral are included in the Statement of Operations.
10. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes, subject to the fund’s regulatory and contractual borrowing restrictions. With
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International Dividend Appreciation Index Fund
respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility; these fees are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under either facility bear interest at a rate based upon the higher of the one-month London Interbank Offered Rate (or an acceptable alternate rate, if necessary), federal funds effective rate, or overnight bank funding rate plus an agreed-upon spread, except that borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the “Order”) from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund’s investment objective and investment policies. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one business day’s notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended October 31, 2021, the fund did not utilize the credit facilities or the Interfund Lending Program.
11. Other: Dividend income is recorded on the ex-dividend date. Non-cash dividends included in income, if any, are recorded at the fair value of the securities received.Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Premiums and discounts on debt securities are amortized and accreted, respectively, to interest income over the lives of the respective securities, except for premiums on certain callable debt securities that are amortized to the earliest call date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold. Fees assessed on capital share transactions are credited to paid-in capital.
Taxes on foreign dividends and capital gains have been provided for in accordance with the fund’s understanding of the applicable countries’ tax rules and rates. Foreign capital gains tax, if any, is accrued daily based upon applicable net unrealized gains. The fund has filed tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Such tax reclaims received during the year, if any, are included in dividend income. No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty as to the ultimate resolution of proceedings, the likelihood of receipt of these reclaims, and the potential timing of payment.
Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses) and shareholder reporting. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.
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International Dividend Appreciation Index Fund
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.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At October 31, 2021, the fund had contributed to Vanguard capital in the amount of $146,000, representing less than 0.01% of the fund’s net assets and 0.06% of Vanguard’s capital received pursuant to the FSA. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
C. Various inputs may be used to determine the value of the fund’s investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
The following table summarizes the market value of the fund’s investments and derivatives as of October 31, 2021, based on the inputs used to value them:
  Level 1
($000)
Level 2
($000)
Level 3
($000)
Total
($000)
Investments        
Assets        
Common Stocks—North and South America 587,661 587,661
Common Stocks—Other 69,255 3,788,989 3,858,244
Temporary Cash Investments 16,951 16,951
Total 673,867 3,788,989 4,462,856
Derivative Financial Instruments        
Assets        
Futures Contracts1 302 302
Forward Currency Contracts 201 201
Total 302 201 503
Liabilities        
Futures Contracts1 260 260
Forward Currency Contracts 527 527
Total 260 527 787
1 Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
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International Dividend Appreciation Index Fund
D. At October 31, 2021, the fair values of derivatives were reflected in the Statement of Assets and Liabilities as follows:
    
Statement of Assets and Liabilities Equity
Contracts
($000)
Foreign
Exchange
Contracts
($000)
Total
($000)
Unrealized Appreciation—Futures Contracts1 302 302
Unrealized Appreciation—Forward Currency Contracts 201 201
Total Assets 302 201 503
       
Unrealized Depreciation—Futures Contracts1 260 260
Unrealized Depreciation—Forward Currency Contracts 527 527
Total Liabilities 260 527 787
1 Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
Realized net gain (loss) and the change in unrealized appreciation (depreciation) on derivatives for the year ended October 31, 2021, were:
Realized Net Gain (Loss) on Derivatives Equity
Contracts
($000)
Foreign
Exchange
Contracts
($000)
Total
($000)
Futures Contracts 2,740 2,740
Swap Contracts 576 576
Forward Currency Contracts 277 277
Realized Net Gain (Loss) on Derivatives 3,316 277 3,593
Change in Unrealized Appreciation (Depreciation) on Derivatives
Futures Contracts 584 584
Forward Currency Contracts (266) (266)
Change in Unrealized Appreciation (Depreciation) on Derivatives 584 (266) 318
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions, foreign currency transactions, passive foreign investment companies, distributions in connection with fund share redemptions, swap agreements, and tax expense on capital gains were reclassified between the following accounts:
  Amount
($000)
Paid-in Capital 100,610
Total Distributable Earnings (Loss) (100,610)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods
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International Dividend Appreciation Index Fund
for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; the recognition of unrealized gains or losses from certain derivative contracts; and the recognition of unrealized gains from passive foreign investment companies. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
  Amount
($000)
Undistributed Ordinary Income 138,577
Undistributed Long-Term Gains 130,836
Capital Loss Carryforwards
Qualified Late-Year Losses
Net Unrealized Gains (Losses) 672,570
The tax character of distributions paid was as follows:
  Year Ended October 31,
  2021
Amount
($000)
2020
Amount
($000)
Ordinary Income* 43,071 37,379
Long-Term Capital Gains
Total 43,071 37,379
* Includes short-term capital gains, if any.
As of October 31, 2021, 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 3,785,837
Gross Unrealized Appreciation 794,125
Gross Unrealized Depreciation (117,248)
Net Unrealized Appreciation (Depreciation) 676,877
F. During the year ended October 31, 2021, the fund purchased $3,580,415,000 of investment securities and sold $2,609,184,000 of investment securities, other than temporary cash investments. Purchases and sales include $999,582,000 and $212,947,000, respectively, in connection with in-kind purchases and redemptions of the fund's capital shares.
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International Dividend Appreciation Index Fund
G. Capital share transactions for each class of shares were: