Vanguard® Telecommunication Services Index Fund As of June 30, 2013

Product Summary • Seeks to track the performance of the MSCI US Investable Market Telecommunication Services 25/50 Index. • Multicapitalization equity in the telecommunication services sector. • Passively managed, uses full-replication strategy when possible. • If regulatory constraints prevent full replication, uses sampling strategy to approximate the index’s key characteristics. • Fund remains fully invested. • Low expenses minimize net tracking error.

People and Process Vanguard Telecommunication Services Index Fund seeks to track the investment performance of the MSCI US Investable Market Telecommunication Services 25/50 Index, a benchmark of large-, mid-, and small-cap U.S. stocks in the telecommunication services sector, as classified under the Global Industry Classification Standard (GICS). This GICS sector is made up of companies that provide communications services primarily through a fixed-line, cellular, wireless, high bandwidth, and/or fiber-optic cable network. Whenever possible, the fund attempts to fully replicate the target index, holding each stock in approximately the same proportion as its weighting in the index. However, the fund will use a sampling strategy if regulatory constraints or other considerations prevent it from replicating the index. Vanguard’s Equity Investment Group uses proprietary software to implement trading decisions that accommodate cash flows and maintain close correlation with index characteristics. Vanguard’s refined indexing process, combined with low management fees and efficient trading, has provided tight tracking net of expenses.

Vanguard Equity Investment Group Launched in 1975, The Vanguard Group, Malvern, Pennsylvania, is among the world’s largest equity and fixed income managers. As chief investment officer and managing director, Mortimer J. Buckley oversees Vanguard’s Equity Investment and Fixed Income Groups. Joseph Brennan, CFA, Principal of Vanguard and head of Vanguard’s Equity Index Group, has oversight responsibility for all equity index funds managed by the Equity Investment Group. John Ameriks, Ph.D., Principal of Vanguard and head of Vanguard’s Active Equity Group, has oversight responsibility for all active equity funds managed by the Equity Investment Group. The Equity Investment Group manages indexed and structured equity portfolios covering U.S. and international markets. It has developed sophisticated portfolio construction methodologies and efficient trading strategies that seek to deliver returns that are highly correlated with target portfolio benchmarks. The group has advised Vanguard Telecommunication Services Index Fund since 2004. Investment Manager Biographies Ryan E. Ludt, Principal • Portfolio manager. • Advised the fund since 2005. • Worked in investment management since 1997. • B.S., The Pennsylvania State University.

Vanguard® Telecommunication Services Index Fund As of June 30, 2013 Quarterly Commentary • The U.S. stock market, as measured by the MSCI US Investable Market 2500 Index, returned 2.74% in the second quarter. The Spliced US IMI/Telecommunication Services 25/50 outperformed the broad market, returning 6.26%. • Top contributors included T-Mobile US (+70%), Clearwire (+54%), and Verizon Communications (+3%).

• Among those subtracting from performance were Elephant Talk Communications (–52%), AT&T (–2%), and General Communications (–15%). • For the 12 months ended June 30, 2013, the MSCI US Investable Market 2500 Index returned 21.39%. The Spliced Telecommunication Services Index underperformed the broad market, returning 20.33%.

Total Returns Year to Date

1 Year

3 Years

6.24%

12.70%

20.22%

17.82%

8.10%

7.82%

6.26

12.73

20.33

17.92

6.48

7.12 1

Quarter Telecommunication Services Index Fund Admiral Shares (3/11/2005) Spliced U.S. Investable Market Telecommunication Services 25/50 Index

5 Years

Since Inception

1 Since the fund’s inception, 3/11/2005. Figures for periods of less than one year are cumulative returns. All other figures represent average annual returns. Performance figures include the reinvestment of all dividends and any capital gains distributions. All returns are net of expenses. Note: Spliced U.S. Investable Market Telecommunication Services 25/50 Index: MSCI US Investable Market Telecommunication Services Index through February 26, 2010; MSCI US Investable Market Telecommunication Services 25/50 Index thereafter. Admiral class shareholders are required to maintain specific minimum balances and meet other special criteria.

Quarterly Returns

Year 2013 2012 2011 2010 2009 2008 2007 2006 20052

1st Quarter 6.09% 4.67 4.33 -0.52 -2.63 -17.88 4.49 14.83 -2.28

2 Since inception of the share class, 3/11/2005.

2nd Quarter 6.24% 4.40 4.15 -5.52 13.97 0.41 7.70 -0.72 4.74

3rd Quarter — 10.37% -15.05 18.20 10.08 -14.14 0.45 10.13 2.56

4th Quarter — -3.36% 5.91 7.72 6.09 -13.68 -6.73 8.85 1.51

Telecom Services Index Fund — 16.57% -2.23 19.67 29.60 -38.88 5.44 36.65 6.55

Year-End Spliced US IMI Telecom Services Index — 16.59% -2.09 17.65 12.56 -33.16 10.48 37.26 2.51

Assets (Millions) $21 19 17 18 14 11 40 22 1

Vanguard® Telecommunication Services Index Fund As of June 30, 2013 Fund Facts Fund Number Ticker Newspaper Listing CUSIP Number Assets (millions) Inception Expense Ratio (as of 12/2012) SEC 30-Day Yield

Risk Statement Admiral Shares 5488 VTCAX TeleComAd 92204A777 $21 3/11/2005 0.14% 3.05%

The fund seeks to match the risk and return characteristics of the MSCI® US Investable Market Telecommunication Services 25/50 Index. The telecommunication services sector has historically performed quite differently from the broad equity market. The fund’s concentration in a relatively narrow market sector involves higher nondiversification risk. In addition, sector index funds that sample their target indexes to comply with diversification rules may experience a greater degree of tracking error than other sector index funds.

Volatility Measures Spliced U.S. Investable Market Telecommunication Services 25/50 Index MSCI US Investable Market 2500 Index

R-squared

Beta

1.00

1.00

0.47

0.66

R-squared and beta are calculated from trailing 36-month fund returns relative to the associated benchmark.

Equity Characteristics

Number of Stocks Median Market Cap P/E Ratio P/B Ratio Return on Equity Earnings Growth Rate Foreign Holdings Short-Term Reserves Turnover Rate (Fiscal Year End 8/2012)

Top 10 Largest Holdings MSCI US IMI Telecom Telecom Services Services 25/50 Index Fund 35 34 $21.2 Billion $21.2 Billion 39.5x 39.5x 2.4x 2.4x 6.3% 6.3% -17.8% -17.8% 0.0% 0.0% 0.0% — 27.8%

—

Verizon Communications Inc. AT&T Inc. Crown Castle International Corp. Sprint Nextel Corp. CenturyLink Inc. SBA Communications Corp. Clearwire Corp. T-Mobile US Inc. tw telecom Inc. Windstream Corp. Total

% of Total Net Assets 22.3% 22.0 4.5 4.4 4.3 3.3 2.5 2.3 2.0 1.9 69.5%

The holdings listed exclude any temporary cash investments and equity index products.

Vanguard® Telecommunication Services Index Fund As of June 30, 2013 Sector Diversification (% of Stocks)

Alternative Carriers Integrated Telecommunication Services Wireless Telecommunication Services Total

Telecom Services Index Fund 13.7%

MSCI US IMI Telecom Services Overweight/ 25/50 Underweight 13.7% 0.0

60.5

60.5

0.0

25.8 100.0%

25.8 100.0%

0.0

Sector categories are based on Vanguard's classification system.

Disclosures Past performance—especially short-term past performance—cannot be used to predict future returns. Investment returns and principal value (with the exception of money market funds, which seek to maintain a stable $1 per share net asset value) will fluctuate, so that investors’ shares, when sold, may be worth more or less than their original cost. 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 www.vanguard.com/performance. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund. All funds subject to risk. The structured equity mandates are managed by Vanguard Fiduciary Trust Company, a subsidiary of The Vanguard Group. Visit our website, call 866-499-8473, or contact your broker to obtain a product description and prospectus for Vanguard ETF™ Shares. Investment objectives, risks, charges, expenses, and other important information are contained in these documents; read and consider them carefully before investing. For more information about Vanguard funds, visit www.vanguard.com, or call 800-523-1036, to obtain a prospectus. FTSE® and FTSE4Good™ are trademarks jointly owned by the London Stock Exchange plc and The Financial Times Limited and are used by FTSE International Limited under license. “GEIS” and "All-World" are trademarks of FTSE International Limited. The FTSE4Good US Select Index, FTSE Global Equity Index Series (GEIS), FTSE All-World ex US Index, FTSE All-World Index, FTSE Global Small Cap ex US Index and FTSE High Dividend Yield Index are calculated by FTSE International Limited. FTSE International Limited does not sponsor, endorse, or promote the fund; is not in any way connected to it; and does not accept any liability in relation to its issue, operation, and trading. The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities. For any such funds or securities, the prospectus or the Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with The Vanguard Group and any related funds. Standard & Poor’s®, S&P®, S&P 500®, Standard & Poor’s 500, 500®, S&P MidCap 400®, and S&P SmallCap 600® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and have been licensed for use by The Vanguard Group, Inc. The Vanguard mutual funds are not sponsored, endorsed, sold, or promoted by S&P or its Affiliates, and S&P and its Affiliates make no representation, warranty, or condition regarding the advisability of buying, selling, or holding units/shares in the funds. The Russell Indexes and Russell® are registered trademarks of Russell Investments and have been licensed for use by The Vanguard Group. The products are not sponsored, endorsed, sold or promoted by Russell Investments and Russell Investments makes no representation regarding the advisability of investing in the products. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. Dividend Achievers is a trademark of Mergent, Inc., and has been licensed for use by The Vanguard Group, Inc. Vanguard mutual funds are not sponsored, endorsed, sold, or promoted by Mergent, and Mergent makes no representation regarding the advisability of investing in the funds. Vanguard ETFs are not sponsored, endorsed, sold, or promoted by Barclays. Barclays makes no representation or warranty, express or implied, to the owners of Vanguard ETFs or any member of the public regarding the advisability of investing in securities generally or in Vanguard ETFs particularly or the ability of the Barclays Index to track general bond market performance. Barclays hereby expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect to the Barclays Index and any data included therein. Barclays’s only relationship to Vanguard and Vanguard ETFs is the licensing of the Barclays Index which is determined, composed, and calculated by Barclays without regard to Vanguard or the Vanguard ETFs. Barclays is not responsible for, and has not participated in, the determination of the timing of, prices of, or quantities of Vanguard ETFs to be issued. Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the Fund name refers to the approximate year (the target date) when an investor in the Fund would retire and leave the work force. The Fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in the Target Retirement Fund is not guaranteed at any time, including on or after the target date. B2013Q2201307170919 © 2013 The Vanguard Group, Inc. All rights reserved. U.S. Pat. No. 6,879,964 B2; 7,337,138; 7,720,749; 7,925,573; 8,090,646. Vanguard Marketing Corporation, Distributor.