Semiannual Report  |  February 28, 2022
Vanguard Total Corporate Bond ETF

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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. The Total Corporate Bond ETF has no direct expenses, but bears its proportionate share of the costs for the underlying funds in which it invests. These indirect expenses make up the acquired fund fees and expenses, also expressed as a percentage of average net assets. 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 costs were calculated using the acquired fund fees and expenses for the Total Corporate Bond ETF.
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. 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 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.
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Six Months Ended February 28, 2022      
Total Corporate Bond ETF Beginning
Account Value
8/31/2021
Ending
Account Value
2/28/2022
Expenses
Paid During
Period
Based on Actual Fund Return $1,000.00 $ 941.00 $0.19
Based on Hypothetical 5% Yearly Return 1,000.00 1,024.60 0.20
The calculations are based on acquired fund fees and expenses for the most recent six-month period. The underlying fundś annualized expense figure for that period is 0.04%. The dollar amounts shown as ”Expenses Paid” are equal to the annualized average weighted expense ratio for the underlying funds 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 (181/365).
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Total Corporate Bond ETF
Underlying Vanguard Funds
As of February 28, 2022
Vanguard Long-Term Corporate Bond ETF 38.0%
Vanguard Short-Term Corporate Bond ETF 33.8
Vanguard Intermediate-Term Corporate Bond ETF 28.2
The table reflects the fund's investments, except for short-term investments.
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Total Corporate Bond ETF
Financial Statements (unaudited)
Schedule of Investments
As of February 28, 2022
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)
Investment Companies (100.0%)
U.S. Bond Funds (100.0%)
  Vanguard Long-Term Corporate Bond ETF 2,479,402 240,750
  Vanguard Short-Term Corporate Bond ETF 2,691,105 214,293
  Vanguard Intermediate-Term Corporate Bond ETF 2,013,163 179,111
Total Investment Companies (Cost $681,653) 634,154
Temporary Cash Investments (0.0%)
Money Market Fund (0.0%)
1 Vanguard Market Liquidity Fund, 0.138% (Cost $208)     2,079         208
Total Investments (100.0%) (Cost $681,861)   634,362
Other Assets and Liabilities—Net (0.0%)   (1)
Net Assets (100%)   634,361
Cost is in $000.
See Note A in Notes to Financial Statements.
1 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
See accompanying Notes, which are an integral part of the Financial Statements.
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Total Corporate Bond ETF
Statement of Assets and Liabilities
As of February 28, 2022
($000s, except shares and per-share amounts) Amount
Assets  
Investments in Securities, at Value—Affiliated Funds (Cost $681,861) 634,362
Receivables for Investment Securities Sold 782
Total Assets 635,144
Liabilities  
Payables for Investment Securities Purchased 783
Total Liabilities 783
Net Assets 634,361

At February 28, 2022, net assets consisted of:

   
Paid-in Capital 682,180
Total Distributable Earnings (Loss) (47,819)
Net Assets 634,361
   
Net Assets  
Applicable to 7,370,000 outstanding $.001 par value shares of
beneficial interest (unlimited authorization)
634,361
Net Asset Value Per Share $86.07
See accompanying Notes, which are an integral part of the Financial Statements.
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Total Corporate Bond ETF
Statement of Operations
  Six Months Ended
February 28, 2022
  ($000)
Investment Income  
Income  
Income Distributions Received from Affiliated Funds 8,123
Net Investment Income—Note B 8,123
Realized Net Gain (Loss)  
Capital Gain Distributions Received from Affiliated Funds 1,772
Affiliated Funds Sold1 (1,263)
Realized Net Gain (Loss) 509
Change in Unrealized Appreciation (Depreciation) from Affiliated Funds (50,376)
Net Increase (Decrease) in Net Assets Resulting from Operations (41,744)
1 Includes ($580,000) of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
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Total Corporate Bond ETF
Statement of Changes in Net Assets
  Six Months Ended
February 28,
2022
  Year Ended
August 31,
2021
  ($000)   ($000)
Increase (Decrease) in Net Assets      
Operations      
Net Investment Income 8,123   17,944
Realized Net Gain (Loss) 509   10,516
Change in Unrealized Appreciation (Depreciation) (50,376)   (18,980)
Net Increase (Decrease) in Net Assets Resulting from Operations (41,744)   9,480
Distributions      
Total Distributions (8,246)   (17,930)
Capital Share Transactions      
Issued 30,403   389,344
Issued in Lieu of Cash Distributions  
Redeemed (41,120)   (304,510)
Net Increase (Decrease) from Capital Share Transactions (10,717)   84,834
Total Increase (Decrease) (60,707)   76,384
Net Assets      
Beginning of Period 695,068   618,684
End of Period 634,361   695,068
See accompanying Notes, which are an integral part of the Financial Statements.
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Total Corporate Bond ETF
Financial Highlights
For a Share Outstanding
Throughout Each Period
Six Months
Ended
February 28,
2022
Year Ended August 31, November 7,
20171 to
August 31,
2018
2021 2020 2019  
Net Asset Value, Beginning of Period $92.55 $92.62 $89.19 $81.59 $85.00
Investment Operations          
Net Investment Income2 1.057 2.229 2.638 2.825 2.081
Capital Gain Distributions Received2 .231 .053
Net Realized and Unrealized Gain (Loss) on Investments (6.695) (.131) 3.614 7.717 (3.445)
Total from Investment Operations (5.407) 2.151 6.252 10.542 (1.364)
Distributions          
Dividends from Net Investment Income (1.061) (2.221) (2.822) (2.942) (2.046)
Distributions from Realized Capital Gains (.012)
Total Distributions (1.073) (2.221) (2.822) (2.942) (2.046)
Net Asset Value, End of Period $86.07 $92.55 $92.62 $89.19 $81.59
Total Return -5.90% 2.37% 7.18% 13.29% -1.60%
Ratios/Supplemental Data          
Net Assets, End of Period (Millions) $634 $695 $619 $203 $55
Ratio of Total Expenses to Average Net Assets 3
Acquired Fund Fees and Expenses 0.04% 0.04% 0.05% 0.05% 0.07% 3
Ratio of Net Investment Income to Average Net Assets 2.36% 2.43% 2.94% 3.38% 3.10% 3
Portfolio Turnover Rate4 5% 10% 40% 12% 4%
The expense ratio, acquired fund fees and expenses, and net investment income ratio for the current period have been annualized.
1 Inception.
2 Calculated based on average shares outstanding.
3 Annualized.
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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Total Corporate Bond ETF
Notes to Financial Statements
Vanguard Total Corporate Bond ETF is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund seeks to match the perfomance of its target index by investing in select bond index ETF's. ETF Shares are listed for trading on Nasdaq; they can be purchased and sold through a broker. Financial statements and other information about each underlying fund are available at www.vanguard.com.
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: Underlying ETFs are valued at the latest quoted sales prices or official closing prices taken from their primary market or, if not traded on the valuation date, at the mean of the latest quoted bid and asked prices. Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value.
2. 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 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.
3. 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.
4. 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 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 borne by the funds in which the fund invests (see Note B). 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 alternative 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
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Total Corporate Bond ETF
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 six months ended February 28, 2022, the fund did not utilize the credit facilities or the Interfund Lending Program.
5. Other: Income and capital gain distributions received are recorded on the ex-dividend 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.
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. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the period ended February 28, 2022, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
C.  Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1—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 valued with significant unobservable inputs are noted on the Schedule of Investments.
At February 28, 2022, 100% of the market value of the fund's investments was determined based on Level 1 inputs.
D.  As of February 28, 2022, gross unrealized appreciation and depreciation for investments based on cost for U.S. federal income tax purposes were as follows:
  Amount
($000)
Tax Cost 682,426
Gross Unrealized Appreciation 43
Gross Unrealized Depreciation (48,107)
Net Unrealized Appreciation (Depreciation) (48,064)
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The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at August 31, 2021, the fund had available capital losses totaling $178,000 that may be carried forward indefinitely to offset future net capital gains. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending August 31, 2022; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.
E.  Capital shares issued and redeemed were:
  Six Months Ended
February 28, 2022
  Year Ended
August 31, 2021
  Shares
(000)
  Shares
(000)
Issued 330   4,200
Issued in Lieu of Cash Distributions  
Redeemed (470)   (3,370)
Net Increase (Decrease) in Shares Outstanding (140)   830
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Total Corporate Bond ETF
F.   Transactions during the period in affiliated underlying Vanguard funds were as follows:
    Current Period Transactions  
  Aug. 31, 2021
Market Value
($000)
Purchases
at Cost1
($000)
Proceeds
from
Securities
Sold2
($000)
Realized
Net Gain
(Loss)
($000)
Change in
Unrealized
App. (Dep.)
($000)
Income
($000)
Capital Gain
Distributions
Received
($000)
Feb. 28, 2022
Market Value
($000)
Vanguard Intermediate-Term Corporate Bond ETF 197,418 16,878 21,252 (339) (13,594) 2,174 1,252 179,111
Vanguard Long-Term Corporate Bond ETF 270,620 29,629 30,419 (670) (28,410) 4,227 240,750
Vanguard Market Liquidity Fund 24 NA 3 NA 3 208
Vanguard Short-Term Corporate Bond ETF 226,998 21,137 25,216 (254) (8,372) 1,722 520 214,293
Total 695,060 67,644 76,887 (1,263) (50,376) 8,123 1,772 634,362
1 Includes $30,401,000 of portfolio securities received as a result of in-kind purchases of the fund’s capital shares.
2 Includes $41,113,000 of portfolio securities delivered as a result of in-kind redemptions of the fund’s capital shares.
3 Not applicable—purchases and sales are for temporary cash investment purposes.
G.  Market disruptions associated with current geopolitical events have had a global impact, and uncertainty exists as to their implications. Such disruptions can adversely affect assets and thus performance of the fund; at this time, an aggregate effect on assets and performance cannot be reasonably estimated. Management is continuing to monitor these developments and evaluate impacts they may have on the fund.
Management has determined that no other events or transactions occurred subsequent to February 28, 2022, that would require recognition or disclosure in these financial statements.
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