| |
Transaction
Fee on Purchases and Sales
|
|
Transaction
Fee on Reinvested Dividends
|
|
Transaction
Fee on Conversion to ETF Shares
|
|
| |
Management
Fees
|
|
12b-1
Distribution Fee
|
|
Other
Expenses
|
|
Total Annual
Fund Operating Expenses
|
|
1
Year
|
3
Years
|
5
Years
|
10
Years
|
$ |
$ |
$ |
$ |
|
Total
Return
|
Quarter
|
|
|
|
|
- |
|
|
1
Year
|
5
Years
|
10
Years
|
Vanguard
Extended Duration Treasury Index Fund
ETF
Shares
|
|
|
|
Based
on NAV
|
|
|
|
Return Before
Taxes
|
|
|
|
Return After
Taxes on Distributions
|
|
|
|
Return After
Taxes on Distributions and Sale of Fund Shares
|
|
|
|
Based
on Market Price
|
|
|
|
Return Before
Taxes
|
|
|
|
Bloomberg
U.S. Treasury STRIPS 20-30 Year Equal Par
Bond
Index
(reflects no
deduction for fees, expenses, or taxes) |
|
|
|
Bloomberg
U.S. Aggregate Bond Index
(reflects no
deduction for fees, expenses, or taxes) |
|
|
|
Plain
Talk About Fund Expenses
|
All funds
have operating expenses. These expenses, which are deducted
from a
fund’s gross income, are expressed as a percentage of the net assets
of the
fund. Assuming that operating expenses remain as stated in the Fees
and
Expenses section, Vanguard Extended Duration Treasury Index Fund ETF
Shares’
expense ratio would be 0.06%, or $0.60 per $1,000 of average net
assets.
The average expense ratio for general U.S. Treasury funds in 2020
was
0.23%, or $2.30 per $1,000 of average net assets (derived from data
provided
by Lipper, a Thomson Reuters Company, which reports on the
fund
industry).
|
Plain
Talk About Costs of Investing
|
Costs
are an important consideration in choosing an ETF. That is because
you,
as a shareholder, pay a proportionate share of the costs of operating a
fund
and any transaction costs incurred when the fund buys or sells
securities.
These costs can erode a substantial portion of the gross income
or
the capital appreciation a fund achieves. Even seemingly small differences
in
expenses can, over time, have a dramatic effect on a fund’s
performance.
|
Plain
Talk About Treasury STRIPS
|
A
Treasury STRIP represents a single coupon payment, or a single principal
payment,
on a U.S. Treasury security that has been “stripped” into separately
tradable
components. For example, a newly issued 10-year U.S. Treasury
note
can be divided into 20 semiannual coupon payments (coupon STRIPS)
and
a single principal payment (principal STRIP). Treasury STRIPS are
obligations
of the U.S. Treasury and are backed by the full faith and credit of
the
U.S. government.
Treasury
STRIPS are sometimes called zero-coupon securities because the
only
time an investor receives payment is at maturity. Consequently,
these
securities
are more sensitive to changes in interest rates than
coupon-bearing
securities with the same maturity date.
Treasury STRIPS
are
popular with pension funds and insurance companies because these
securities
have known cash values at maturity, which enables investors to
closely
match their liabilities with guaranteed payments from the
U.S.
Treasury. Because Treasury STRIPS do not pay interest, they are issued
and
sold at a discount to face value.
We
expect the Fund will be required to distribute income dividends to
shareholders,
but because Treasury STRIPS do not pay interest and are
purchased
at an “original issue discount,” the Fund does not receive cash
interest
payments on the STRIPS in which it invests. As a result, the Fund
may
need to liquidate assets, at potentially inopportune times, to satisfy its
income
dividend distribution requirements.
|
Type
of Bond (Maturity) |
After
a 1%
Increase
|
After
a 1%
Decrease
|
After
a 2%
Increase
|
After
a 2%
Decrease
|
Short-Term
(2.5 years)1
|
$
977 |
$
1,024 |
$
954 |
$
1,049 |
Intermediate-Term
(10 years)1
|
922 |
1,086 |
851 |
1,180 |
Long-Term
(20 years)1
|
874 |
1,150 |
769 |
1,328 |
Long-Term
Zero-Coupon (20 years) |
800 |
1,200 |
600 |
1,400 |
Plain
Talk About Bonds and Interest Rates
|
As
a rule, when interest rates rise, bond prices fall. The opposite is also
true:
Bond
prices go up when interest rates fall. Why do bond prices and interest
rates
move in opposite directions? Let’s assume that you hold a bond
offering
a 4% yield. A year later, interest rates are on the rise and bonds of
comparable
quality and maturity are offered with a 5% yield. With
higher-yielding
bonds available, you would have trouble selling your 4% bond
for
the price you paid—you would probably have to lower your asking price.
On
the other hand, if interest rates were falling and 3% bonds were being
offered,
you should be able to sell your 4% bond for more than you
paid.
|
Plain
Talk About Bond Maturities
|
A bond is
issued with a specific maturity date—the date when the issuer
must pay
back the bond’s principal (face value). Bond maturities range from
less
than 1 year to more than 30 years. Typically, the longer a bond’s
maturity,
the more
price risk you, as a bond investor, will face as interest rates
rise—but
also the higher the potential yield you could receive. Longer-term
bonds
are generally more suitable for investors willing to take a greater risk
of price
fluctuations to get higher and more stable interest income.
Shorter-term
bond investors should be willing to accept lower yields and
greater
income variability in return for less fluctuation in the value of their
investment.
The stated maturity of a bond may differ from the effective
maturity
of a bond, which takes into consideration that an action such as a
call or
refunding may cause bonds to be repaid before their stated
maturity
dates.
|
Plain
Talk About Vanguard’s Unique Corporate Structure
|
The
Vanguard Group is owned jointly by the funds it oversees and thus
indirectly
by the shareholders in those funds. Most other mutual funds are
operated
by management companies that are owned by third parties—either
public
or private stockholders—and not by the funds they serve.
|
Plain
Talk About Distributions
|
As
a shareholder, you are entitled to your portion of a fund’s income from
interest
as well as capital gains from the fund’s sale of investments. Income
consists
of interest the fund earns from its money market and bond
investments.
Capital gains are realized whenever the fund sells securities for
higher
prices than it paid for them. These capital gains are either short-term
or
long-term, depending on whether the fund held the securities for one year
or
less or for more than one year.
|
|
Inception Date
|
Vanguard
Fund Number
|
CUSIP
Number
|
Extended
Duration Treasury Index Fund
| |||
ETF
Shares |
12/6/2007
|
930
|
921910709
|
|
Year Ended August 31,
| ||||
For a
Share Outstanding Throughout Each Period |
2021 |
2020 |
2019 |
2018 |
2017
|
Net
Asset Value, Beginning of Period
|
$163.11 |
$146.43 |
$113.39 |
$120.92 |
$139.77 |
Investment
Operations
|
|
|
|
|
|
Net
Investment Income1
|
2.795 |
3.146 |
3.347 |
3.353 |
3.383 |
Net
Realized and Unrealized Gain (Loss) on
Investments2
|
(17.061) |
18.113 |
32.972 |
(7.272) |
(16.377) |
Total from
Investment Operations |
(14.266) |
21.259 |
36.319 |
(3.919) |
(12.994) |
Distributions
|
|
|
|
|
|
Dividends
from Net Investment Income |
(2.820) |
(3.329) |
(3.279) |
(3.314) |
(3.402) |
Distributions
from Realized Capital Gains |
(5.334) |
(1.250) |
— |
(.297) |
(2.454) |
Total
Distributions |
(8.154) |
(4.579) |
(3.279) |
(3.611) |
(5.856) |
Net
Asset Value, End of Period
|
$140.69 |
$163.11 |
$146.43 |
$113.39 |
$120.92 |
Total
Return
|
-8.94% |
14.98% |
32.92% |
-3.24% |
-8.86% |
Ratios/Supplemental
Data
|
|
|
|
|
|
Net
Assets, End of Period (Millions) |
$1,277
|
$1,810 |
$1,333 |
$658 |
$623
|
Ratio of
Total Expenses to Average Net Assets |
0.06% |
0.07% |
0.07% |
0.07% |
0.07%
|
Ratio of
Net Investment Income to Average Net
Assets
|
1.93% |
2.06% |
2.87% |
2.93% |
2.90%
|
Portfolio
Turnover Rate3
|
23% |
17% |
20% |
18% |
18%
|
|
|
1 |
Calculated
based on average shares outstanding. |
2 |
Includes
increases from purchase fees of $.07, $.07, $.04, $.07, and
$.16. |
3 |
Excludes the
value of portfolio securities received or delivered as a result of in-kind
purchases or redemptions of
the fund’s
capital shares, including ETF Creation Units.
|