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

8

International Dividend Appreciation Index Fund

9

International Dividend Appreciation Index Fund

10

International Dividend Appreciation Index Fund

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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.

16

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: