Contents

About Your Fund's Expenses	1
Financial Statements	4
Trustees Approve Advisory Arrangement	42
Liquidity Risk Management	44

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.

1

Six Months Ended June 30, 2021
	Beginning Account Value 12/31/2020	Ending Account Value 6/30/2021	Expenses Paid During Period
Based on Actual Fund Return
Balanced Index Fund
Investor Shares	$1,000.00	$1,082.40	$0.93
AdmiralTM Shares	1,000.00	1,083.00	0.36
Institutional Shares	1,000.00	1,082.80	0.31
Based on Hypothetical 5% Yearly Return
Balanced Index Fund
Investor Shares	$1,000.00	$1,023.90	$0.90
Admiral Shares	1,000.00	1,024.45	0.35
Institutional Shares	1,000.00	1,024.50	0.30

The calculations are based on expenses incurred in the most recent six-month period. The fund's annualized six-month expense ratios for that period are 0.18% for Investor Shares, 0.07% for Admiral Shares, and 0.06% for Institutional 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 (181/365).

2

Balanced Index Fund

Fund Allocation

As of June 30, 2021

Asset-Backed/Commercial Mortgage-Backed Securities	1.0%
Common Stocks	62.3
Corporate Bonds	10.9
Preferred Stocks	0.0
Sovereign Bonds	1.5
Taxable Municipal Bonds	0.3
U.S. Government and Agency Obligations	24.0

The table reflects the fund’s investments, except for short-term investments and derivatives. The agency and mortgage-backed securities may include issues from government-sponsored enterprises; such issues are generally not backed by the full faith and credit of the U.S. government.

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.

3

Balanced Index Fund

Financial Statements (unaudited)

Schedule of Investments—Investments Summary

As of June 30, 2021

This Statement summarizes the fund’s holdings by asset type. Details are reported for each of the fund’s 50 largest individual holdings and for investments that, in total for any issuer, represent more than 1% of the fund’s net assets. The total value of smaller holdings is reported as a single amount within each category.

The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) four times in each fiscal year. For the second and fourth quarters the complete list of the fund’s holdings is available on vanguard.com and on Form N-CSR, or you can have it mailed to you without charge by calling 800-662-7447. For the first and third quarters of each fiscal year, the complete list of the fund’s holdings is available as an exhibit to its reports on Form N-PORT. The fund’s Form N-CSR and Form N-PORT reports are available on the SEC’s website at www.sec.gov.

				Shares	Market Value• ($000)	Percentage of Net Assets
Common Stocks
†Basic Materials*,1,2					711,212	1.24%
Consumer Discretionary
	Amazon.com Inc.*			340,019	1,169,720	2.03%
	Tesla Inc.*			611,270	415,480	0.72%
	Home Depot Inc.			842,645	268,711	0.47%
	Walt Disney Co.*			1,440,649	253,223	0.44%
	Netflix Inc.*			351,684	185,763	0.32%
	Walmart Inc.			1,114,696	157,194	0.27%
	NIKE Inc. Class B			1,011,182	156,218	0.27%
†	Consumer Discretionary—Other*,1,2				3,011,574	5.23%
					5,617,883	9.75%
Consumer Staples
	Procter & Gamble Co.			1,940,125	261,781	0.46%
	Coca-Cola Co.			3,076,655	166,478	0.29%
	PepsiCo Inc.			1,094,781	162,214	0.28%
†	Consumer Staples —Other*,1				1,071,021	1.85%
					1,661,494	2.88%
Energy
	Exxon Mobil Corp.			3,356,486	211,727	0.37%
	Chevron Corp.			1,528,680	160,114	0.28%
†	Energy—Other*,1,2				663,760	1.15%
					1,035,601	1.80%
Financials
	JPMorgan Chase & Co.			2,398,970	373,136	0.65%
	Berkshire Hathaway Inc. Class B*			1,297,367	360,564	0.63%
	Bank of America Corp.			6,110,875	251,951	0.44%
	Wells Fargo & Co.			3,277,724	148,448	0.26%
	Citigroup Inc.			1,638,773	115,943	0.20%

4

Balanced Index Fund

				Shares	Market Value• ($000)	Percentage of Net Assets
	Morgan Stanley			1,179,688	108,166	0.19%
	Goldman Sachs Group Inc.			269,251	102,189	0.18%
	Berkshire Hathaway Inc. Class A*			79	33,069	0.06%
	BM Technologies Inc. (Acquired 12/17/20, Cost $53)*,3			4,264	48	0.00%
†	Financials—Other*,1,2				2,443,200	4.22%
					3,936,714	6.83%
Health Care
	Johnson & Johnson			2,088,884	344,123	0.60%
	UnitedHealth Group Inc.			748,090	299,565	0.52%
	Pfizer Inc.			4,441,447	173,927	0.30%
	Abbott Laboratories			1,409,380	163,389	0.29%
	AbbVie Inc.			1,402,445	157,971	0.28%
	Eli Lilly & Co.			684,808	157,177	0.27%
	Merck & Co. Inc.			2,010,145	156,329	0.27%
†	Health Care—Other*,1,2				3,142,869	5.45%
					4,595,350	7.98%
Industrials
	Visa Inc. Class A			1,341,360	313,637	0.55%
	PayPal Holdings Inc.*			931,697	271,571	0.47%
	Mastercard Inc. Class A			701,319	256,045	0.45%
	Boeing Co.*			464,011	111,158	0.19%
†	Industrials—Other*,1,2,4				3,927,779	6.81%
					4,880,190	8.47%
Other5
	Vanguard Total Bond Market ETF6			375,384	32,241	0.06%
†	Other—Other*,2				11	0.00%
					32,252	0.06%
†Real Estate*,1,2					1,222,989	2.12%
Technology
	Apple Inc.			12,573,240	1,722,031	2.99%
	Microsoft Corp.			5,973,183	1,618,136	2.81%
	Facebook Inc. Class A*			1,900,328	660,763	1.15%
	Alphabet Inc. Class A*			239,154	583,964	1.01%
	Alphabet Inc. Class C*			217,504	545,135	0.95%
	NVIDIA Corp.			469,373	375,545	0.65%
	Adobe Inc.*			378,881	221,888	0.39%
	Intel Corp.			3,202,706	179,800	0.31%
	salesforce.com Inc.*			694,829	169,726	0.30%
	Broadcom Inc.			307,570	146,662	0.26%
	Oracle Corp.			1,372,016	106,798	0.19%
†	Technology—Other*,1,2				3,198,558	5.53%
					9,529,006	16.54%
Telecommunications
	Comcast Corp. Class A			3,634,501	207,239	0.36%
	Verizon Communications Inc.			3,118,010	174,702	0.31%
	AT&T Inc.			5,662,937	162,979	0.28%
	Cisco Systems Inc.			3,006,538	159,347	0.28%
†	Telecommunications—Other*,1				352,844	0.61%
					1,057,111	1.84%

5

Balanced Index Fund

					Market Value• ($000)	Percentage of Net Assets
†Utilities*					931,834	1.62%
Total Common Stocks (Cost $10,142,567)					35,211,636	61.13%
†Preferred Stocks (Cost $5)					8	0.00%
		Coupon	Maturity Date	Face Amount ($000)
U.S. Government and Agency Obligations
U.S. Government Securities
	United States Treasury Note/Bond	0.125–8.000%	11/15/21–5/15/51	8,164,633	8,400,706	14.59%
	United States Treasury Note/Bond7	0.500%	3/15/23–3/31/25	490,306	490,305	0.85%
					8,891,011	15.44%
Agency Bonds and Notes
	Federal Home Loan Mortgage Corp.8,9	0.125–6.750%	7/25/22–9/15/29	12,970	14,110	0.03%
	Federal Home Loan Mortgage Corp.9	0.125–6.250%	4/20/23–7/15/32	61,716	64,588	0.13%
	Federal National Mortgage Assn.9	0.250–7.250%	9/6/22–7/15/37	93,755	101,968	0.18%
†	Agency Bonds and Notes—Other8,10				86,998	0.12%
					267,664	0.46%
Conventional Mortgage-Backed Securities
	Freddie Mac Gold Pool8,9	2.000–9.000%	9/1/21–1/1/49	400,831	429,688	0.56%
	Ginnie Mae I Pool8	3.000–9.000%	8/15/23–9/15/49	43,079	47,553	0.01%
	Ginnie Mae II Pool8	1.500–7.000%	9/20/25–6/20/51	796,028	839,144	1.65%
	Ginnie Mae II Pool8,11	2.000–3.000%	7/15/51	91,150	93,437	0.17%
	UMBS Pool8,9	1.500–9.000%	10/1/21–7/1/51	2,593,752	2,702,713	4.74%
	UMBS Pool8,9,11	1.500–4.000%	7/25/36–7/25/51	294,474	300,205	0.53%
					4,412,740	7.66%
Nonconventional Mortgage-Backed Securities
	Fannie Mae Pool, 12M USD LIBOR + 1.290%8,9,12	1.668%	12/1/41	37	39	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.310%8,9,12	1.887%	9/1/37	81	83	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.431%8,9,12	1.958%	7/1/36	9	9	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.472%8,9,12	1.847%	3/1/43	126	132	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.530%8,9,12	1.934%	12/1/43	90	97	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.553%8,9,12	2.199%	9/1/43	15	15	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.560%8,9,12	2.310%	7/1/43	252	259	0.00%

6

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Fannie Mae Pool, 12M USD LIBOR + 1.594%8,9,12	2.005%	6/1/43	57	57	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.618%8,9,12	2.326%	8/1/35	49	52	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.623%8,9,12	1.998%	2/1/36	18	18	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.624%8,9,12	1.974%	10/1/37	21	22	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.627%8,9,12	2.002%	3/1/38	6	6	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.635%8,9,12	2.135%	11/1/36	14	15	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.655%8,9,12	2.187%	10/1/42	62	65	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.658%8,9,12	2.033%	1/1/37	16	17	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.660%8,9,12	2.207%	9/1/40	5	5	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.665%8,9,12	1.915%	6/1/36	3	3	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.675%8,9,12	2.172%	11/1/39	20	21	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.684%8,9,12	2.154%	8/1/39	49	51	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.684%8,9,12	2.156%	1/1/42	65	67	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.685%8,9,12	1.940%	6/1/42	139	145	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.685%8,9,12	2.105%	12/1/33	12	13	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.690%8,9,12	1.962%	5/1/40	12	13	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.690%8,9,12	2.213%	10/1/39	22	23	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.690%8,9,12	2.329%	9/1/42	69	73	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.695%8,9,12	2.445%	7/1/39	6	7	0.00%

7

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Fannie Mae Pool, 12M USD LIBOR + 1.698%8,9,12	2.242%	8/1/40	12	13	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.700%8,9,12	2.075%	12/1/40	33	35	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.700%8,9,12	2.163%	7/1/37	16	17	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.701%8,9,12	2.234%	10/1/42	36	38	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.705%8,9,12	2.110%	11/1/39	9	10	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.716%8,9,12	2.042%	5/1/42	72	76	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.721%8,9,12	2.249%	9/1/43	99	104	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.728%8,9,12	2.228%	9/1/34	14	14	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.737%8,9,12	1.988%	6/1/41	9	10	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.747%8,9,12	2.192%	7/1/41	60	64	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.750%8,9,12	2.451%	10/1/40	9	10	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.768%8,9,12	2.121%	5/1/42	22	23	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.780%8,9,12	2.155%	2/1/41	25	27	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.783%8,9,12	2.276%	7/1/42	50	55	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.795%8,9,12	2.170%	3/1/42	55	58	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.795%8,9,12	3.354%	8/1/42	96	96	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.796%8,9,12	2.384%	9/1/40	34	36	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.799%8,9,12	2.203%	2/1/42	175	187	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.799%8,9,12	2.371%	3/1/42	52	57	0.00%

8

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Fannie Mae Pool, 12M USD LIBOR + 1.805%8,9,12	2.274%	11/1/41	49	53	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.810%8,9,12	2.185%	11/1/39–12/1/40	16	17	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.810%8,9,12	2.310%	11/1/33–10/1/40	43	47	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.813%8,9,12	2.204%	1/1/42	22	23	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.813%8,9,12	2.218%	11/1/41	24	25	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.815%8,9,12	2.071%	5/1/41	29	31	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.815%8,9,12	2.190%	2/1/41	18	19	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.815%8,9,12	2.224%	12/1/41	30	33	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.815%8,9,12	2.289%	12/1/40	14	14	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.815%8,9,12	2.315%	11/1/40	13	14	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.820%8,9,12	2.195%	12/1/40	4	4	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.821%8,9,12	2.196%	3/1/41	36	38	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.823%8,9,12	2.293%	12/1/39	19	20	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.825%8,9,12	2.200%	3/1/41	24	26	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.827%8,9,12	2.201%	2/1/41	17	17	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.828%8,9,12	2.152%	2/1/42	36	39	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.830%8,9,12	2.080%	6/1/41	42	45	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.830%8,9,12	2.205%	4/1/41	30	31	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.835%8,9,12	2.210%	1/1/40	29	30	0.00%

9

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Fannie Mae Pool, 12M USD LIBOR + 1.840%8,9,12	2.566%	8/1/39	17	18	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.865%8,9,12	2.115%	5/1/40	6	6	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.880%8,9,12	2.315%	11/1/34	24	26	0.00%
	Fannie Mae Pool, 12M USD LIBOR + 1.914%8,9,12	2.164%	4/1/37	25	27	0.00%
	Fannie Mae Pool, 1YR CMT + 2.155%8,9,12	2.280%	12/1/37	38	40	0.00%
	Fannie Mae Pool, 1YR CMT + 2.313%8,9,12	2.438%	1/1/35	22	23	0.00%
	Fannie Mae Pool, 6M USD LIBOR + 1.146%8,9,12	1.396%	4/1/37	20	21	0.00%
	Fannie Mae Pool, 6M USD LIBOR + 1.840%8,9,12	2.090%	8/1/37	25	26	0.00%
	Fannie Mae REMICS8,9	2.488%	3/25/23	574	593	0.01%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.516%8,9,12	2.016%	9/1/37	15	15	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.545%8,9,12	1.919%	3/1/37	2	2	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.625%8,9,12	2.000%	1/1/38	4	4	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.640%8,9,12	1.890%	5/1/42	11	11	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.640%8,9,12	2.015%	12/1/36	22	24	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.640%8,9,12	2.155%	11/1/43	55	58	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.660%8,9,12	2.160%	10/1/37	12	12	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.665%8,9,12	2.040%	12/1/34	6	6	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.695%8,9,12	2.070%	2/1/37	16	17	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.727%8,9,12	2.102%	1/1/35	3	3	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.743%8,9,12	2.118%	12/1/36	13	14	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.745%8,9,12	2.120%	12/1/40	44	46	0.00%

10

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.750%8,9,12	2.000%	5/1/38	2	2	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.750%8,9,12	2.125%	12/1/41	36	38	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.819%8,9,12	2.369%	3/1/42	46	49	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.830%8,9,12	2.247%	12/1/35	23	25	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.853%8,9,12	2.242%	2/1/42	12	13	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.880%8,9,12	2.130%	5/1/40	10	10	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.880%8,9,12	2.132%	6/1/40	6	7	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.880%8,9,12	2.255%	12/1/40–3/1/41	40	43	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.880%8,9,12	2.500%	6/1/41	11	12	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.880%8,9,12	2.880%	6/1/40	17	17	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.888%8,9,12	2.287%	2/1/42	25	25	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.895%8,9,12	2.501%	9/1/40	51	54	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.900%8,9,12	2.287%	6/1/40	10	10	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.900%8,9,12	2.353%	11/1/40	16	17	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.910%8,9,12	2.285%	1/1/41–2/1/41	36	37	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 1.980%8,9,12	2.247%	5/1/37	59	60	0.00%
	Freddie Mac Non Gold Pool, 12M USD LIBOR + 2.085%8,9,12	2.460%	3/1/38	5	5	0.00%
	Freddie Mac Non Gold Pool, 1YR CMT + 2.250%8,9,12	2.375%	2/1/36–5/1/36	24	26	0.00%
	Freddie Mac Non Gold Pool, 1YR CMT + 2.250%8,9,12	2.378%	11/1/34	23	24	0.00%

11

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Freddie Mac Non Gold Pool, 1YR CMT + 2.410%8,9,12	2.537%	10/1/36	21	23	0.00%
	Freddie Mac Non Gold Pool, 6M USD LIBOR + 1.665%8,9,12	1.915%	1/1/37	44	46	0.00%
	Ginnie Mae II Pool, 1YR CMT + 1.500%8,12	1.625%	7/20/38–12/20/40	49	52	0.00%
	Ginnie Mae II Pool, 1YR CMT + 1.500%8,12	2.000%	1/20/41–3/20/43	422	440	0.00%
	Ginnie Mae II Pool, 1YR CMT + 1.500%8,12	2.125%	10/20/38–12/20/43	478	493	0.00%
	Ginnie Mae II Pool, 1YR CMT + 1.500%8,12	2.250%	7/20/41–8/20/41	193	200	0.00%
	Ginnie Mae II Pool, 1YR CMT + 1.500%8,12	2.875%	4/20/41–6/20/43	302	316	0.00%
	Ginnie Mae II Pool, 1YR CMT + 2.000%8,12	2.125%	11/20/40	5	5	0.00%
	Ginnie Mae II Pool, 1YR CMT + 2.000%8,12	2.375%	5/20/41	9	10	0.00%
	Ginnie Mae II Pool, 1YR CMT + 2.000%8,12	3.375%	5/20/41	6	6	0.00%
					5,820	0.01%
Total U.S. Government and Agency Obligations (Cost $13,371,752)					13,577,235	23.57%
Asset-Backed/Commercial Mortgage-Backed Securities
	Fannie Mae-Aces Series 2013-M78,9	2.280%	12/27/22	208	213	0.00%
	Fannie Mae-Aces Series 2014-M18,9	3.185%	7/25/23	884	925	0.00%
	Fannie Mae-Aces Series 2014-M128,9	2.614%	10/25/21	129	130	0.00%
	Fannie Mae-Aces Series 2014-M138,9	3.021%	8/25/24	419	446	0.00%
	Fannie Mae-Aces Series 2014-M38,9	3.501%	1/25/24	341	362	0.00%
	Fannie Mae-Aces Series 2014-M48,9	3.346%	3/25/24	496	528	0.00%
	Fannie Mae-Aces Series 2014-M78,9	3.338%	6/25/24	849	906	0.00%
	Fannie Mae-Aces Series 2014-M88,9	3.056%	6/25/24	525	556	0.00%
	Fannie Mae-Aces Series 2014-M98,9	3.103%	7/25/24	688	732	0.00%
	Fannie Mae-Aces Series 2015-M18,9	2.532%	9/25/24	974	1,026	0.00%
	Fannie Mae-Aces Series 2015-M108,9	3.092%	4/25/27	347	380	0.00%
	Fannie Mae-Aces Series 2015-M128,9	2.884%	5/25/25	758	810	0.00%
	Fannie Mae-Aces Series 2015-M158,9	2.923%	10/25/25	1,025	1,103	0.00%
	Fannie Mae-Aces Series 2015-M28,9	2.620%	12/25/24	560	592	0.00%
	Fannie Mae-Aces Series 2015-M38,9	2.723%	10/25/24	364	385	0.00%
	Fannie Mae-Aces Series 2015-M48,9	2.509%	7/25/22	259	261	0.00%

12

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Fannie Mae-Aces Series 2015-M78,9	2.590%	12/25/24	618	652	0.00%
	Fannie Mae-Aces Series 2015-M88,9	2.344%	1/25/25	93	95	0.00%
	Fannie Mae-Aces Series 2015-M88,9	2.900%	1/25/25	825	881	0.00%
	Fannie Mae-Aces Series 2016-M118,9	2.369%	7/25/26	900	955	0.00%
	Fannie Mae-Aces Series 2016-M128,9	2.533%	9/25/26	950	1,008	0.00%
	Fannie Mae-Aces Series 2016-M138,9	2.566%	9/25/26	249	265	0.00%
	Fannie Mae-Aces Series 2016-M28,9	2.152%	1/25/23	373	379	0.00%
	Fannie Mae-Aces Series 2016-M38,9	2.702%	2/25/26	391	419	0.00%
	Fannie Mae-Aces Series 2016-M48,9	2.576%	3/25/26	400	427	0.00%
	Fannie Mae-Aces Series 2016-M58,9	2.469%	4/25/26	800	851	0.00%
	Fannie Mae-Aces Series 2016-M68,9	2.488%	5/25/26	600	639	0.00%
	Fannie Mae-Aces Series 2016-M78,9	2.157%	10/25/23	149	153	0.00%
	Fannie Mae-Aces Series 2016-M78,9	2.499%	9/25/26	261	273	0.00%
	Fannie Mae-Aces Series 2016-M98,9	2.292%	6/25/26	1,300	1,370	0.01%
	Fannie Mae-Aces Series 2017-M18,9	2.496%	10/25/26	1,075	1,142	0.00%
	Fannie Mae-Aces Series 2017-M108,9	2.639%	7/25/24	435	455	0.00%
	Fannie Mae-Aces Series 2017-M118,9	2.980%	8/25/29	500	554	0.00%
	Fannie Mae-Aces Series 2017-M128,9	3.181%	6/25/27	1,206	1,330	0.01%
	Fannie Mae-Aces Series 2017-M148,9	2.964%	11/25/27	350	382	0.00%
	Fannie Mae-Aces Series 2017-M158,9	3.196%	11/25/27	1,150	1,244	0.01%
	Fannie Mae-Aces Series 2017-M28,9	2.890%	2/25/27	1,182	1,281	0.01%
	Fannie Mae-Aces Series 2017-M38,9	2.559%	12/25/26	1,500	1,606	0.01%
	Fannie Mae-Aces Series 2017-M48,9	2.665%	12/25/26	1,116	1,196	0.00%
	Fannie Mae-Aces Series 2017-M58,9	3.276%	4/25/29	300	337	0.00%
	Fannie Mae-Aces Series 2017-M78,9	2.961%	2/25/27	675	734	0.00%
	Fannie Mae-Aces Series 2017-M88,9	3.061%	5/25/27	1,563	1,722	0.01%
	Fannie Mae-Aces Series 2018-M18,9	3.084%	12/25/27	575	632	0.00%
	Fannie Mae-Aces Series 2018-M128,9	3.775%	8/25/30	850	994	0.00%
	Fannie Mae-Aces Series 2018-M138,9	3.820%	9/25/30	825	972	0.00%

13

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Fannie Mae-Aces Series 2018-M148,9	3.700%	8/25/28	700	804	0.00%
	Fannie Mae-Aces Series 2018-M28,9	2.999%	1/25/28	1,425	1,568	0.01%
	Fannie Mae-Aces Series 2018-M38,9	3.191%	2/25/30	325	366	0.00%
	Fannie Mae-Aces Series 2018-M48,9	3.147%	3/25/28	720	798	0.00%
	Fannie Mae-Aces Series 2018-M78,9	3.150%	3/25/28	400	443	0.00%
	Fannie Mae-Aces Series 2019-M18,9	3.673%	9/25/28	750	857	0.00%
	Fannie Mae-Aces Series 2019-M128,9	2.885%	6/25/29	2,725	2,986	0.01%
	Fannie Mae-Aces Series 2019-M188,9	2.469%	8/25/29	1,000	1,070	0.00%
	Fannie Mae-Aces Series 2019-M28,9	3.749%	11/25/28	875	988	0.00%
	Fannie Mae-Aces Series 2019-M218,9	2.350%	2/25/31	125	134	0.00%
	Fannie Mae-Aces Series 2019-M228,9	2.522%	8/25/29	1,475	1,581	0.01%
	Fannie Mae-Aces Series 2019-M48,9	3.610%	2/25/31	900	1,053	0.00%
	Fannie Mae-Aces Series 2019-M58,9	3.273%	2/25/29	775	872	0.00%
	Fannie Mae-Aces Series 2019-M78,9	3.143%	4/25/29	975	1,092	0.00%
	Fannie Mae-Aces Series 2019-M98,9	2.937%	4/25/29	1,225	1,353	0.01%
	Fannie Mae-Aces Series 2020-M18,9	2.444%	10/25/29	815	880	0.00%
	Fannie Mae-Aces Series 2020-M298,9	1.492%	5/25/30	350	350	0.00%
	Fannie Mae-Aces Series 2020-M428,9	1.270%	7/25/30	1,150	1,128	0.00%
	Fannie Mae-Aces Series 2020-M468,9	1.323%	5/25/30	900	890	0.00%
	Fannie Mae-Aces Series 2020-M58,9	2.210%	1/25/30	525	554	0.00%
	Fannie Mae-Aces Series 2020-M528,9	1.363%	10/25/30	675	661	0.00%
	Fannie Mae-Aces Series 2021-M18,9	1.436%	11/25/30	725	717	0.00%
	Fannie Mae-Aces Series 2021-M118,9	1.507%	3/25/31	1,900	1,897	0.01%
	Fannie Mae-Aces Series 2021-M138,9	1.659%	4/25/31	215	216	0.00%
	Fannie Mae-Aces Series 2021-M48,9	1.515%	2/25/31	4,275	4,255	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0178,9	2.873%	12/25/21	1,259	1,267	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0198,9	2.272%	3/25/22	1,047	1,058	0.00%

14

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K0208,9	2.373%	5/25/22	100	101	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0218,9	2.396%	6/25/22	904	917	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0268,9	2.510%	11/25/22	1,275	1,308	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0278,9	2.637%	1/25/23	1,275	1,314	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0298,9	3.320%	2/25/23	1,250	1,303	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0308,9	2.779%	9/25/22	93	94	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0318,9	3.300%	4/25/23	1,260	1,321	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0328,9	3.016%	2/25/23	296	302	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0338,9	2.871%	2/25/23	415	426	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0348,9	3.531%	7/25/23	1,208	1,273	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0368,9	3.527%	10/25/23	1,375	1,462	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0378,9	3.490%	1/25/24	50	53	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0388,9	2.604%	10/25/23	89	90	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0388,9	3.389%	3/25/24	1,275	1,364	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0398,9	2.683%	12/25/23	92	95	0.00%

15

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K0398,9	3.303%	7/25/24	850	913	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0408,9	2.768%	4/25/24	212	220	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0408,9	3.241%	9/25/24	1,025	1,103	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0418,9	3.171%	10/25/24	1,000	1,076	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0428,9	2.267%	6/25/24	96	99	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0428,9	2.670%	12/25/24	2,375	2,521	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0438,9	2.532%	10/25/23	91	93	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0438,9	3.062%	12/25/24	600	645	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0458,9	2.493%	4/25/48	238	245	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0458,9	3.023%	4/25/48	675	725	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0468,9	3.205%	3/25/25	650	704	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0478,9	2.827%	12/25/24	126	131	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0478,9	3.329%	5/25/25	525	572	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0488,9	3.284%	6/25/25	1,025	1,115	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0498,9	3.010%	7/25/25	450	486	0.00%

16

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K0508,9	3.334%	8/25/25	750	819	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0528,9	3.151%	11/25/25	450	490	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0538,9	2.995%	12/25/25	275	298	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0548,9	2.745%	1/25/26	700	752	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0558,9	2.673%	3/25/26	1,000	1,072	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0568,9	2.525%	5/25/26	575	613	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0578,9	2.570%	7/25/26	1,025	1,096	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0588,9	2.653%	8/25/26	500	537	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0598,9	3.120%	9/25/26	800	878	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0608,9	3.300%	10/25/26	1,000	1,108	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0618,9	3.347%	11/25/26	2,000	2,222	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0628,9	3.413%	12/25/26	2,400	2,678	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0638,9	3.430%	1/25/27	1,775	1,981	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0648,9	3.224%	3/25/27	1,300	1,439	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0658,9	3.243%	4/25/27	915	1,015	0.00%

17

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K0668,9	3.117%	6/25/27	600	662	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0678,9	3.194%	7/25/27	875	971	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0688,9	3.244%	8/25/27	500	557	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0698,9	3.187%	9/25/27	875	973	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0708,9	3.303%	11/25/27	275	308	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0718,9	3.286%	11/25/27	960	1,074	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0728,9	3.444%	12/25/27	450	508	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0738,9	3.350%	1/25/28	500	562	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0748,9	3.600%	1/25/28	1,000	1,141	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0758,9	3.650%	2/25/28	675	773	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0768,9	3.900%	4/25/28	2,575	2,991	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0788,9	3.854%	6/25/28	500	580	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0798,9	3.926%	6/25/28	1,000	1,166	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0808,9	3.736%	4/25/28	279	310	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0808,9	3.926%	7/25/28	800	934	0.00%

18

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K0818,9	3.900%	8/25/28	1,200	1,401	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0828,9	3.920%	9/25/28	550	643	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0838,9	4.050%	9/25/28	3,425	4,032	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0848,9	3.780%	11/25/51	2,400	2,771	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0858,9	4.060%	10/25/28	1,025	1,203	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0878,9	3.591%	10/25/27	92	102	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0878,9	3.771%	12/25/28	800	929	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0888,9	3.690%	1/25/29	1,175	1,359	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0898,9	3.563%	1/25/29	475	545	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0908,9	3.422%	2/25/29	900	1,025	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0918,9	3.505%	3/25/29	300	344	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0928,9	3.298%	4/25/29	975	1,103	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0938,9	2.982%	5/25/29	1,650	1,830	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0948,9	2.903%	6/25/29	1,150	1,270	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0958,9	2.785%	6/25/29	1,150	1,260	0.01%

19

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K0968,9	2.519%	7/25/29	1,000	1,077	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0988,9	2.425%	8/25/29	1,850	1,980	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K0998,9	2.595%	9/25/29	850	921	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1018,9	2.524%	10/25/29	1,500	1,617	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1028,9	2.537%	10/25/29	1,400	1,511	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1038,9	2.651%	11/25/29	1,100	1,197	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1048,9	2.253%	2/25/52	1,835	1,944	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1058,9	1.872%	3/25/53	365	376	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1088,9	1.517%	3/25/30	600	602	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1098,9	1.558%	4/25/30	1,000	1,007	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1108,9	1.477%	4/25/30	225	225	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1118,9	1.350%	5/25/30	550	544	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1148,9	1.366%	6/25/30	700	693	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1168,9	1.378%	7/25/30	1,250	1,238	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1178,9	1.406%	8/25/30	1,200	1,190	0.00%

20

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K1188,9	1.493%	9/25/30	1,600	1,599	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1208,9	1.500%	10/25/30	1,100	1,099	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1218,9	0.995%	11/25/53	124	123	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1218,9	1.547%	11/25/53	700	702	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1228,9	0.863%	11/25/30	50	49	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1228,9	1.521%	11/25/30	700	700	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1238,9	1.621%	2/25/54	2,150	2,170	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1248,9	1.658%	12/25/30	1,225	1,240	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1258,9	1.846%	1/25/31	875	900	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1268,9	2.074%	1/25/31	1,075	1,126	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1278,9	2.108%	1/25/31	600	630	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1288,9	2.020%	3/25/31	1,115	1,163	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1298,9	1.342%	9/25/30	250	249	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1298,9	1.914%	5/25/31	1,800	1,855	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15108,9	3.718%	1/25/31	300	352	0.00%

21

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15108,9	3.794%	1/25/34	2,135	2,580	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15118,9	3.470%	3/25/31	375	434	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15118,9	3.542%	3/25/34	950	1,124	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15138,9	2.797%	8/25/34	2,295	2,532	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15148,9	2.859%	10/25/34	950	1,056	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15158,9	1.940%	2/25/35	625	631	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15168,9	1.721%	5/25/35	875	859	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15178,9	1.716%	7/25/35	1,250	1,228	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15188,9	1.860%	10/25/35	375	374	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15198,9	2.013%	12/25/35	1,065	1,081	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1528,9	3.080%	1/25/31	400	452	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15208,9	2.007%	7/25/35	250	258	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K-15208,9	2.438%	2/25/36	875	928	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1538,9	3.294%	3/25/29	1,600	1,801	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1538,9	3.117%	10/25/31	900	1,016	0.00%

22

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K1548,9	3.424%	4/25/32	150	172	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1548,9	3.459%	11/25/32	200	234	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1558,9	3.750%	11/25/32	400	470	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1558,9	3.750%	4/25/33	850	1,018	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1578,9	3.990%	5/25/33	275	330	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K1578,9	3.990%	8/25/33	375	460	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7178,9	2.991%	9/25/21	980	982	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7188,9	2.791%	1/25/22	745	752	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7208,9	2.716%	6/25/22	525	533	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7228,9	2.183%	5/25/22	161	163	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7238,9	2.454%	8/25/23	500	517	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7248,9	3.062%	11/25/23	1,000	1,050	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7258,9	3.002%	1/25/24	1,200	1,266	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7268,9	2.905%	4/25/24	719	756	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7278,9	2.946%	7/25/24	1,500	1,586	0.01%

23

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	FHLMC Multifamily Structured Pass-Through Certificates Series K7288,9	3.064%	8/25/24	1,175	1,251	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7298,9	3.136%	10/25/24	2,000	2,140	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7308,9	3.452%	9/25/24	20	20	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7308,9	3.590%	1/25/25	1,200	1,303	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7318,9	3.600%	2/25/25	1,000	1,082	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7328,9	3.700%	5/25/25	1,000	1,095	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7348,9	3.208%	2/25/26	1,565	1,707	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7358,9	2.862%	5/25/26	2,000	2,158	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7378,9	2.525%	10/25/26	1,700	1,817	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7398,9	1.336%	9/25/27	1,850	1,864	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7418,9	1.603%	12/25/27	1,725	1,763	0.01%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7428,9	1.760%	3/25/28	850	876	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series K7438,9	1.770%	5/25/28	550	566	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series KC028,9	3.370%	7/25/25	800	850	0.00%
	FHLMC Multifamily Structured Pass-Through Certificates Series KW018,9	2.853%	1/25/26	800	863	0.00%

24

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
†	Asset-Backed/Commercial Mortgage-Backed Securities—Other8,11				333,843	0.38%
Total Asset-Backed/Commercial Mortgage-Backed Securities (Cost $519,954)					544,457	0.94%
Corporate Bonds
	Communications
	Alphabet Inc.	0.450–3.375%	2/25/24–8/15/60	9,800	9,254	0.00%
	AT&T Inc.	0.900–5.550%	12/15/23–2/1/61	66,257	72,897	0.17%
	AT&T Inc.8	4.100–5.150%	2/15/28–11/15/46	3,943	4,636	0.01%
	AT&T Inc.4,8	2.550–3.800%	12/1/33–9/15/59	26,577	26,875	0.05%
	Comcast Corp.	1.500–7.050%	3/1/24–8/15/62	64,300	74,321	0.10%
	Verizon Communications Inc.	0.750–5.250%	3/22/24–3/22/61	85,037	93,415	0.23%
	Walt Disney Co.	1.650–6.650%	9/1/22–5/13/60	31,733	37,420	0.06%
†	Communications—Other8				251,649	0.37%
					570,467	0.99%
	Consumer Discretionary
	Amazon.com Inc.	0.250–5.200%	11/29/22–5/12/61	43,943	47,049	0.17%
	Home Depot Inc.	0.900–5.950%	4/1/23–3/15/51	27,660	31,807	0.08%
	NIKE Inc.	2.250–3.875%	5/1/23–3/27/50	8,025	8,902	0.02%
†	Consumer Discretionary—Other4,8				297,024	0.40%
					384,782	0.67%
	Consumer Staples
	Coca-Cola Co.	1.000–4.200%	9/6/24–6/1/60	16,871	17,149	0.02%
	PepsiCo Inc.	0.400–4.600%	3/1/23–3/19/60	25,941	28,789	0.10%
	Procter & Gamble Co.	0.550–5.550%	8/15/23–3/25/50	12,443	13,814	0.03%
	Walmart Inc.	2.350–7.550%	12/15/22–9/24/49	25,464	29,975	0.09%
†	Consumer Staples—Other4,8				329,844	0.49%
					419,571	0.73%
	Energy
	Chevron Corp.	1.141–3.326%	12/5/22–5/11/50	14,770	15,227	0.03%
	Exxon Mobil Corp.	1.571–4.327%	8/16/22–4/15/51	31,874	35,000	0.07%
†	Energy—Other4,8				439,806	0.75%
					490,033	0.85%
	Financials
	Bank of America Corp.8	0.523–5.875%	10/21/22–3/13/52	137,408	147,689	0.33%
	Bank of America Corp.	0.976–7.750%	7/24/23–4/22/42	18,085	20,518	0.06%
	Berkshire Hathaway Inc.	2.750–4.500%	2/11/23–2/11/43	5,956	6,561	0.01%
	Citigroup Inc.	0.776–8.125%	8/2/21–7/23/48	41,747	48,439	0.11%
	Citigroup Inc.8	2.312–5.316%	11/4/22–3/26/41	34,660	39,589	0.09%
	Goldman Sachs Group Inc.8	0.481–4.800%	10/31/22–7/8/44	23,300	25,630	0.07%
	Goldman Sachs Group Inc.	0.523–6.750%	1/22/23–10/21/45	58,319	65,958	0.15%
	JPMorgan Chase & Co.	0.563–7.625%	9/23/22–4/22/52	69,233	76,670	0.19%
	JPMorgan Chase & Co.8	1.514–4.493%	4/1/23–4/22/51	70,055	75,551	0.19%
	Mastercard Inc.	1.900–3.950%	4/1/24–3/15/51	13,664	15,173	0.03%
	Morgan Stanley8	0.529–6.250%	11/17/21–1/25/52	59,153	64,487	0.18%
	Morgan Stanley	0.731–7.250%	11/1/22–1/22/47	27,833	31,253	0.08%
	PayPal Holdings Inc.	1.350–3.250%	9/26/22–6/1/50	5,700	6,023	0.00%
	Visa Inc.	0.750–4.300%	9/15/22–8/15/50	21,506	23,468	0.04%
	Wells Fargo & Co.8	1.654–5.950%	2/13/23–4/4/51	65,360	73,159	0.15%

25

Balanced Index Fund

		Coupon	Maturity Date	Face Amount ($000)	Market Value• ($000)	Percentage of Net Assets
	Wells Fargo & Co.	3.000–5.606%	8/15/23–5/1/45	12,075	14,017	0.04%
†	Financials—Other4,8,11				953,724	1.21%
					1,687,909	2.93%
	Health Care
	Abbott Laboratories	1.150–6.150%	11/30/23–11/30/46	14,326	17,439	0.04%
	AbbVie Inc.	2.300–4.875%	10/1/22–11/21/49	61,407	69,613	0.18%
	Eli Lilly & Co.	2.250–4.150%	6/1/25–9/15/60	6,590	7,176	0.01%
	Johnson & Johnson	0.550–6.950%	3/1/23–9/1/60	22,165	24,840	0.03%
	Merck & Co. Inc.	0.750–6.500%	9/15/22–6/24/50	19,338	20,903	0.05%
	Pfizer Inc.	0.800–7.200%	6/15/23–5/28/50	21,507	24,917	0.04%
	UnitedHealth Group Inc.	1.150–6.875%	7/15/22–5/15/60	38,706	43,321	0.10%
†	Health Care—Other4,8,11				492,017	0.77%
					700,226	1.22%
	Industrials
	Boeing Co.	1.167–6.875%	2/4/23–5/1/60	49,685	56,584	0.12%
†	Industrials—Other4,8,11				422,477	0.71%
					479,061	0.83%
†	Materials4,8,11				177,447	0.31%
†	Real Estate 8,11				226,296	0.39%
	Technology
	Adobe Inc.	1.700–3.250%	2/1/23–2/1/30	2,780	2,926	0.00%
	Apple Inc.	0.550–4.650%	9/12/22–2/8/61	80,896	86,699	0.19%
	Broadcom Inc.	2.250–5.000%	11/15/23–11/15/32	18,111	20,376	0.05%
	Broadcom Inc.4,8	1.950–3.750%	2/15/28–2/15/51	11,894	12,177	0.03%
	Cisco Systems Inc.	2.200–5.900%	2/28/23–1/15/40	8,325	9,920	0.02%
	Intel Corp.	2.450–4.950%	7/29/22–3/25/60	24,977	28,707	0.05%
	Microsoft Corp.	2.000–4.100%	11/3/22–3/17/62	44,526	47,869	0.11%
	NVIDIA Corp.	0.309–3.700%	6/15/23–4/1/60	10,429	11,183	0.01%
	Oracle Corp.	1.650–6.125%	10/15/22–3/25/61	70,801	76,063	0.18%
	salesforce.com Inc.	3.250–3.700%	4/11/23–4/11/28	2,100	2,318	0.00%
	salesforce.com Inc.11	1.500–3.050%	7/15/28–7/15/61	2,965	2,986	0.00%
†	Technology—Other4,8				230,676	0.28%
					531,900	0.92%
†	Utilities4,8				512,563	0.89%
Total Corporate Bonds (Cost $5,761,300)					6,180,255	10.73%
†Sovereign Bonds (Cost $799,893)4,8,11,13,14,15,16,17					830,512	1.44%
†Taxable Municipal Bonds (Cost $141,062)18,19,20,21					160,911	0.28%

26

Balanced Index Fund

			Coupon	Shares	Market Value• ($000)	Percentage of Net Assets
Temporary Cash Investments
Money Market Fund
	Vanguard Market Liquidity Fund22,23 (Cost $1,673,302)		0.056%	16,735,349	1,673,535	2.91%
Total Investments (Cost $32,409,835)					58,178,549	101.00%
Other Assets and Liabilities—Net					(577,933)	(1.00%)
Net Assets					57,600,616	100.00%

Cost is in $000.
•	See Note A in Notes to Financial Statements.
†	Represents the aggregate value, by category, of securities that are not among the 50 largest holdings and, in total for any issuer, represent 1% or less of net assets.
*	Includes non-income-producing security.
1	Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $109,106,000.
2	Certain securities are valued using significant unobservable inputs.
3	Restricted securities totaling $48,000, representing 0.0% of net assets.
4	Certain securities are 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 June 30, 2021, the aggregate value of these securities was $110,802,000, representing 0.2% of net assets.
5	“Other” represents securities that are not classified by the fund’s benchmark index.
6	Considered an affiliated company of the fund as the issuer is another member of The Vanguard Group.
7	Securities with a value of $82,000 have been segregated as collateral for certain open To Be Announced (TBA) transactions.
8	The average or expected maturity is shorter than the final maturity shown because of the possibility of interim principal payments and prepayments or the possibility of the issue being called.
9	The issuer was placed under federal conservatorship in September 2008; since that time, its daily operations have been managed by the Federal Housing Finance Agency and it receives capital from the U.S. Treasury, as needed to maintain a positive net worth, in exchange for senior preferred stock.
10	U.S. government-guaranteed.
11	Includes securities purchased on a when-issued or delayed-delivery basis for which the fund has not taken delivery as of June 30, 2021.
12	Variable-rate security; rate shown is effective rate at period end. Certain variable-rate securities are not based on a published reference rate and spread but are determined by the issuer or agent based on current market conditions.
13	Guaranteed by the Government of Canada.
14	Guaranteed by the Federal Republic of Germany.
15	Guaranteed by the Government of Japan.
16	Guaranteed by the Republic of Austria.
17	Guaranteed by the Government of Mexico.
18	Scheduled principal and interest payments are guaranteed by Texas Permanent School Fund.
19	Scheduled principal and interest payments are guaranteed by National Public Finance Guarantee Corp.
20	Scheduled principal and interest payments are guaranteed by Build America Mutual Assurance Co.
21	Scheduled principal and interest payments are guaranteed by Assured Guaranty Municipal Corp.
22	Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
23	Collateral of $114,839,000 was received for securities on loan, of which $107,524,000 is held in Vanguard Market Liquidity Fund and $7,315,000 is held in cash.

	12M—12-month.
	1YR—1-year.
	6M—6-month.
	CMT—Constant Maturing Treasury Rate.
	LIBOR—London Interbank Offered Rate.
	REMICS—Real Estate Mortgage Investment Conduits.
	UMBS—Uniform Mortgage-Backed Securities.

27

Balanced Index Fund

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
10-Year U.S. Treasury Note	September 2021	6,466	856,745	2,555
E-mini Russell 2000 Index	September 2021	186	21,463	(213)
E-mini S&P 500 Index	September 2021	654	140,237	1,699
				4,041

See accompanying Notes, which are an integral part of the Financial Statements.

28

Balanced Index Fund

Statement of Assets and Liabilities

As of June 30, 2021

($000s, except shares and per-share amounts)	Amount
Assets
Investments in Securities, at Value
Unaffiliated Issuers (Cost $30,703,713)	56,472,773
Affiliated Issuers (Cost $1,706,122)	1,705,776
Total Investments in Securities	58,178,549
Investment in Vanguard	1,963
Cash	7,315
Cash Collateral Pledged—Futures Contracts	18,220
Receivables for Investment Securities Sold	174,532
Receivables for Accrued Income	119,591
Receivables for Capital Shares Issued	33,055
Variation Margin Receivable—Futures Contracts	1,761
Total Assets	58,534,986
Liabilities
Due to Custodian	20,422
Payables for Investment Securities Purchased	738,538
Collateral for Securities on Loan	114,839
Payables for Capital Shares Redeemed	58,964
Payables to Vanguard	1,607
Total Liabilities	934,370
Net Assets	57,600,616

29

Balanced Index Fund

Statement of Assets and Liabilities (continued)
At June 30, 2021, net assets consisted of:
($000s, except shares and per-share amounts)	Amount
Paid-in Capital	31,296,558
Total Distributable Earnings (Loss)	26,304,058
Net Assets	57,600,616
Investor Shares—Net Assets
Applicable to 7,123,981 outstanding $.001 par value shares of beneficial interest (unlimited authorization)	338,224
Net Asset Value Per Share—Investor Shares	$47.48
Admiral Shares—Net Assets
Applicable to 942,313,256 outstanding $.001 par value shares of beneficial interest (unlimited authorization)	44,738,052
Net Asset Value Per Share—Admiral Shares	$47.48
Institutional Shares—Net Assets
Applicable to 263,755,537 outstanding $.001 par value shares of beneficial interest (unlimited authorization)	12,524,340
Net Asset Value Per Share—Institutional Shares	$47.48

See accompanying Notes, which are an integral part of the Financial Statements.

30

Balanced Index Fund

Statement of Operations

	Six Months Ended June 30, 2021
	($000)
Investment Income
Income
Dividends—Unaffiliated Issuers	215,716
Dividends—Affiliated Issuers	252
Interest—Unaffiliated Issuers	188,081
Interest—Affiliated Issuers	598
Securities Lending—Net	2,286
Total Income	406,933
Expenses
The Vanguard Group—Note B
Investment Advisory Services	1,397
Management and Administrative—Investor Shares	279
Management and Administrative—Admiral Shares	12,673
Management and Administrative—Institutional Shares	3,124
Marketing and Distribution—Investor Shares	8
Marketing and Distribution—Admiral Shares	624
Marketing and Distribution—Institutional Shares	139
Custodian Fees	134
Shareholders’ Reports—Investor Shares	1
Shareholders’ Reports—Admiral Shares	194
Shareholders’ Reports—Institutional Shares	20
Trustees’ Fees and Expenses	8
Total Expenses	18,601
Net Investment Income	388,332
Realized Net Gain (Loss)
Capital Gain Distributions Received—Affiliated Issuers	20
Investment Securities Sold—Unaffiliated Issuers	542,725
Investment Securities Sold—Affiliated Issuers	—
Futures Contracts	(8,344)
Realized Net Gain (Loss)	534,401
Change in Unrealized Appreciation (Depreciation)
Investment Securities—Unaffiliated Issuers	3,457,651
Investment Securities—Affiliated Issuers	(864)
Futures Contracts	2,646
Change in Unrealized Appreciation (Depreciation)	3,459,433
Net Increase (Decrease) in Net Assets Resulting from Operations	4,382,166

See accompanying Notes, which are an integral part of the Financial Statements.

31

Balanced Index Fund

Statement of Changes in Net Assets

	Six Months Ended June 30, 2021		Year Ended December 31, 2020
	($000)		($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	388,332		846,874
Realized Net Gain (Loss)	534,401		701,847
Change in Unrealized Appreciation (Depreciation)	3,459,433		5,507,432
Net Increase (Decrease) in Net Assets Resulting from Operations	4,382,166		7,056,153
Distributions
Investor Shares	(3,524)		(9,390)
Admiral Shares	(473,847)		(1,021,760)
Institutional Shares	(135,854)		(312,065)
Total Distributions	(613,225)		(1,343,215)
Capital Share Transactions
Investor Shares	(19,027)		(102,842)
Admiral Shares	1,930,045		1,959,244
Institutional Shares	372		(773,352)
Net Increase (Decrease) from Capital Share Transactions	1,911,390		1,083,050
Total Increase (Decrease)	5,680,331		6,795,988
Net Assets
Beginning of Period	51,920,285		45,124,297
End of Period	57,600,616		51,920,285

See accompanying Notes, which are an integral part of the Financial Statements.

32

Balanced Index Fund

Financial Highlights

Investor Shares
For a Share Outstanding Throughout Each Period	Six Months Ended June 30, 2021	Year Ended December 31,
		2020	2019	2018	2017	2016
Net Asset Value, Beginning of Period	$44.34	$39.23	$32.99	$34.72	$31.11	$29.22
Investment Operations
Net Investment Income	.3001	.7001	.7551	.7481	.6471	.613
Capital Gain Distributions Received	.0001,2	—	—	—	—	—
Net Realized and Unrealized Gain (Loss) on Investments	3.327	5.537	6.345	(1.753)	3.600	1.889
Total from Investment Operations	3.627	6.237	7.100	(1.005)	4.247	2.502
Distributions
Dividends from Net Investment Income	(.306)	(.687)	(.794)	(.725)	(.637)	(.612)
Distributions from Realized Capital Gains	(.181)	(.440)	(.066)	—	—	—
Total Distributions	(.487)	(1.127)	(.860)	(.725)	(.637)	(.612)
Net Asset Value, End of Period	$47.48	$44.34	$39.23	$32.99	$34.72	$31.11
Total Return3	8.24%	16.26%	21.67%	-2.97%	13.75%	8.63%
Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$338	$334	$396	$3,014	$3,474	$3,343
Ratio of Total Expenses to Average Net Assets	0.18%	0.18%	0.18%	0.18%	0.19%	0.19%
Ratio of Net Investment Income to Average Net Assets	1.32%	1.76%	2.11%	2.15%	1.97%	2.06%
Portfolio Turnover Rate4	20%	60%	37%5	44%5	37%5	44%5
The expense ratio and net investment income ratio for the current period have been annualized.

1	Calculated based on average shares outstanding.
2	Distribution was less than $.001 per share.
3	Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4	Includes 9%, 12%, 6%, 10%, 11%, and 12%, respectively, attributable to mortgage-dollar-roll activity.
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.

See accompanying Notes, which are an integral part of the Financial Statements.

33

Balanced Index Fund

Financial Highlights

Admiral Shares
For a Share Outstanding Throughout Each Period	Six Months Ended June 30, 2021	Year Ended December 31,
		2020	2019	2018	2017	2016
Net Asset Value, Beginning of Period	$44.34	$39.23	$32.99	$34.72	$31.11	$29.22
Investment Operations
Net Investment Income	.3241	.7421	.8171	.7911	.6891	.649
Capital Gain Distributions Received	.0001,2	—	—	—	—	—
Net Realized and Unrealized Gain (Loss) on Investments	3.328	5.542	6.319	(1.757)	3.599	1.890
Total from Investment Operations	3.652	6.284	7.136	(.966)	4.288	2.539
Distributions
Dividends from Net Investment Income	(.331)	(.733)	(.830)	(.764)	(.678)	(.649)
Distributions from Realized Capital Gains	(.181)	(.441)	(.066)	—	—	—
Total Distributions	(.512)	(1.174)	(.896)	(.764)	(.678)	(.649)
Net Asset Value, End of Period	$47.48	$44.34	$39.23	$32.99	$34.72	$31.11
Total Return3	8.30%	16.40%	21.79%	-2.86%	13.89%	8.77%
Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$44,738	$39,901	$33,585	$23,913	$23,556	$18,695
Ratio of Total Expenses to Average Net Assets	0.07%	0.07%	0.07%	0.07%	0.07%	0.07%
Ratio of Net Investment Income to Average Net Assets	1.43%	1.86%	2.22%	2.26%	2.09%	2.18%
Portfolio Turnover Rate4	20%	60%	37%5	44%5	37%5	44%5
The expense ratio and net investment income ratio for the current period have been annualized.

1	Calculated based on average shares outstanding.
2	Distribution was less than $.001 per share.
3	Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4	Includes 9%, 12%, 6%, 10%, 11%, and 12%, respectively, attributable to mortgage-dollar-roll activity.
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.

See accompanying Notes, which are an integral part of the Financial Statements.

34

Balanced Index Fund

Financial Highlights

Institutional Shares
For a Share Outstanding Throughout Each Period	Six Months Ended June 30, 2021	Year Ended December 31,
		2020	2019	2018	2017	2016
Net Asset Value, Beginning of Period	$44.35	$39.24	$33.00	$34.72	$31.12	$29.22
Investment Operations
Net Investment Income	.3271	.7471	.8201	.7931	.6911	.653
Capital Gain Distributions Received	.0001,2	—	—	—	—	—
Net Realized and Unrealized Gain (Loss) on Investments	3.317	5.541	6.320	(1.745)	3.588	1.899
Total from Investment Operations	3.644	6.288	7.140	(.952)	4.279	2.552
Distributions
Dividends from Net Investment Income	(.333)	(.737)	(.834)	(.768)	(.679)	(.652)
Distributions from Realized Capital Gains	(.181)	(.441)	(.066)	—	—	—
Total Distributions	(.514)	(1.178)	(.900)	(.768)	(.679)	(.652)
Net Asset Value, End of Period	$47.48	$44.35	$39.24	$33.00	$34.72	$31.12
Total Return	8.28%	16.41%	21.79%	-2.82%	13.86%	8.81%
Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$12,524	$11,685	$11,143	$9,543	$10,075	$8,495
Ratio of Total Expenses to Average Net Assets	0.06%	0.06%	0.06%	0.06%	0.06%	0.06%
Ratio of Net Investment Income to Average Net Assets	1.44%	1.87%	2.23%	2.27%	2.10%	2.19%
Portfolio Turnover Rate3	20%	60%	37%4	44%4	37%4	44%4
The expense ratio and net investment income ratio for the current period have been annualized.

1	Calculated based on average shares outstanding.
2	Distribution was less than $.001 per share.
3	Includes 9%, 12%, 6%, 10%, 11%, and 12%, respectively, attributable to mortgage-dollar-roll activity.
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.

See accompanying Notes, which are an integral part of the Financial Statements.

35

Balanced Index Fund

Notes to Financial Statements

Vanguard Balanced Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers three classes of shares: Investor Shares, Admiral Shares, and Institutional Shares. Each of the share classes has different eligibility and minimum purchase requirements, and is designed for different types of investors.

Certain of the fund's investments are in corporate debt instruments; the issuers’ abilities to meet their obligations may be affected by economic developments in their respective industries. 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. Bonds and 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.

Structured debt securities, including mortgages and asset-backed securities, are valued using the latest bid prices or using valuations based on a matrix system that considers such factors as issuer, tranche, nominal or option-adjusted spreads, weighted average coupon, weighted average maturity, credit enhancements, and collateral. Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value. Securities for which market quotations are not readily available, or whose values have been materially affected by events occurring before the fund's pricing time but after the close of the securities’ primary markets, are valued by methods deemed by the board of trustees to represent fair value.

2. Futures Contracts: The fund uses futures contracts to invest in fixed income asset classes with greater efficiency and lower cost than is possible through direct investment, to add value when these instruments are attractively priced, or to adjust sensitivity to changes in interest rates. The fund also uses index futures contracts to a limited extent, with the objective of maintaining full exposure to the stock market while maintaining liquidity. The fund may purchase or sell futures contracts to achieve a desired level of investment, whether to accommodate portfolio turnover or cash flows from capital share transactions. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of bonds or stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market. 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

36

Balanced Index Fund

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 six months ended June 30, 2021, the fund’s average investments in long and short futures contracts represented 2% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.

3. To Be Announced (TBA) Transactions: A TBA transaction is an agreement to buy or sell mortgage-backed securities with agreed-upon characteristics (face amount, coupon, maturity) for settlement at a future date. The fund may be a seller of TBA transactions to reduce its exposure to the mortgage-backed securities market or in order to sell mortgage-backed securities it owns under delayed-delivery arrangements. When the fund is a buyer of TBA transactions, it maintains cash or short-term investments in an amount sufficient to meet the purchase price at the settlement date of the TBA transaction. The primary risk associated with TBA transactions is that a counterparty may default on its obligations. The fund mitigates its counterparty risk by, among other things, performing a credit analysis of counterparties, allocating transactions among numerous counterparties, and monitoring its exposure to each counterparty. The fund may also enter into a Master Securities Forward Transaction Agreement (MSFTA) with certain counterparties and require them 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. Under an MSFTA, upon a counterparty default (including bankruptcy), the fund may terminate any TBA transactions 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.

At June 30, 2021, counterparties had deposited in segregated accounts cash of $10,000 in connection with TBA transactions.

4. Mortgage Dollar Rolls: The fund enters into mortgage-dollar-roll transactions, in which the fund sells mortgage-backed securities to a dealer and simultaneously agrees to purchase similar securities in the future at a predetermined price. The proceeds of the securities sold in mortgage-dollar-roll transactions are typically invested in high-quality short-term fixed income securities. The fund forgoes principal and interest paid on the securities sold, and is compensated by interest earned on the proceeds of the sale and by a lower price on the securities to be repurchased. The fund has also entered into mortgage-dollar-roll transactions in which the fund buys mortgage-backed securities from a dealer pursuant to a TBA transaction and simultaneously agrees to sell similar securities in the future at a predetermined price. The securities bought in mortgage-dollar-roll transactions are used to cover an open TBA sell position. The fund continues to earn interest on mortgage-backed security pools already held and receives a lower price on the securities to be sold in the future. The fund accounts for mortgage-dollar-roll transactions as purchases and sales; as such, these transactions may increase the fund’s portfolio turnover rate. Amounts to be received or paid in connection with open mortgage dollar rolls are included in Receivables for Investment Securities Sold or Payables for Investment Securities Purchased in the Statement of Assets and Liabilities.

5. 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

37

Balanced 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.

6. 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.

7. 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.

8. 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 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 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

38

Balanced Index Fund

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 June 30, 2021, the fund did not utilize the credit facilities or the Interfund Lending Program.

9. 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.

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.

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 June 30, 2021, the fund had contributed to Vanguard capital in the amount of $1,963,000, representing less than 0.01% of the fund’s net assets and 0.79% 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.

39

Balanced Index Fund

The following table summarizes the market value of the fund's investments and derivatives as of June 30, 2021, based on the inputs used to value them:

	Level 1 ($000)	Level 2 ($000)	Level 3 ($000)	Total ($000)
Investments
Assets
Common Stocks	35,211,157	50	429	35,211,636
Preferred Stocks	8	—	—	8
U.S. Government and Agency Obligations	—	13,577,235	—	13,577,235
Asset-Backed/Commercial Mortgage-Backed Securities	—	544,457	—	544,457
Corporate Bonds	—	6,180,255	—	6,180,255
Sovereign Bonds	—	830,512	—	830,512
Taxable Municipal Bonds	—	160,911	—	160,911
Temporary Cash Investments	1,673,535	—	—	1,673,535
Total	36,884,700	21,293,420	429	58,178,549
Derivative Financial Instruments
Assets
Futures Contracts1	4,254	—	—	4,254
Liabilities
Futures Contracts1	213	—	—	213

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.

D.  As of June 30, 2021, gross unrealized appreciation and depreciation for investments, derivatives and sale commitments based on cost for U.S. federal income tax purposes were as follows:

	Amount ($000)
Tax Cost	32,429,660
Gross Unrealized Appreciation	26,164,941
Gross Unrealized Depreciation	(412,011)
Net Unrealized Appreciation (Depreciation)	25,752,930

E.  During the six months ended June 30, 2021, the fund purchased $1,850,426,000 of investment securities and sold $1,965,659,000 of investment securities, other than U.S. government securities and U.S. government securities and temporary cash investments. Purchases and sales of U.S. government securities were $10,128,558,000 and $8,566,643,000, respectively.

40

Balanced Index Fund

F.  Capital share transactions for each class of shares were:

	Six Months Ended June 30, 2021			Year Ended December 31, 2020
	Amount ($000)	Shares (000)		Amount ($000)	Shares (000)
Investor Shares
Issued	12,130	265		32,057	799
Issued in Lieu of Cash Distributions	3,524	78		9,391	238
Redeemed	(34,681)	(762)		(144,290)	(3,588)
Net Increase (Decrease)—Investor Shares	(19,027)	(419)		(102,842)	(2,551)
Admiral Shares
Issued	4,600,843	100,841		7,512,084	187,887
Issued in Lieu of Cash Distributions	432,619	9,552		935,633	23,485
Redeemed	(3,103,417)	(67,959)		(6,488,473)	(167,507)
Net Increase (Decrease)—Admiral Shares	1,930,045	42,434		1,959,244	43,865
Institutional Shares
Issued	1,133,375	25,083		1,362,269	33,415
Issued in Lieu of Cash Distributions	132,142	2,917		303,674	7,647
Redeemed	(1,265,145)	(27,728)		(2,439,295)	(61,549)
Net Increase (Decrease)—Institutional Shares	372	272		(773,352)	(20,487)

G.  Transactions during the period in affiliated underlying Vanguard funds were as follows:

		Current Period Transactions
	Dec. 31, 2020 Market Value ($000)	Purchases at Cost ($000)	Proceeds from Securities Sold ($000)	Realized Net Gain (Loss) ($000)	Change in Unrealized App. (Dep.) ($000)	Income ($000)	Capital Gain Distributions Received ($000)	Jun. 30, 2021 Market Value ($000)
Vanguard Market Liquidity Fund	1,548,665	NA1	NA1	—	—	598	—	1,673,535
Vanguard Total Bond Market ETF	33,105	—	—	—	(864)	252	20	32,241
Total	1,581,770				(864)	850	20	1,705,776

1	Not applicable—purchases and sales are for temporary cash investment purposes.

H.  Management has determined that no events or transactions occurred subsequent to June 30, 2021, that would require recognition or disclosure in these financial statements.

41

Trustees Approve Advisory Arrangement

The board of trustees of Vanguard Balanced Index Fund has renewed the fund’s investment advisory arrangement with The Vanguard Group, Inc. (Vanguard), through its Equity Index and Fixed Income Groups. The board determined that continuing the fund’s internalized management structure was in the best interests of the fund and its shareholders

The board based its decision upon an evaluation of the advisor’s investment staff, portfolio management process, and performance. This evaluation included information provided to the board by Vanguard’s Portfolio Review Department, which is responsible for fund and advisor oversight and product management. The Portfolio Review Department met regularly with the advisor and made monthly presentations to the board during the fiscal year that directed the board’s focus to relevant information and topics.

The board, or an investment committee made up of board members, also received information throughout the year during advisor presentations. For each advisor presentation, the board was provided with letters and reports that included information about, among other things, the advisory firm and the advisor’s assessment of the investment environment, portfolio performance, and portfolio characteristics.

In addition, the board received monthly reports, which included a Market and Economic Report, a Fund Dashboard Monthly Summary, and a Fund Performance Report.

Prior to their meeting, the trustees were provided with a memo and materials that summarized the information they received over the course of the year. They also considered the factors discussed below, among others. However, no single factor determined whether the board approved the arrangement. Rather, it was the totality of the circumstances that drove the board’s decision.

Nature, extent, and quality of services

The board reviewed the quality of the fund’s investment management services over both the short and long term, and took into account the organizational depth and stability of the advisor. The board considered that Vanguard has been managing investments for more than four decades. Both the Equity Index Group and the Fixed Income Group adhere to sound, disciplined investment management processes; each group’s management team has considerable experience, stability, and depth.

The board concluded that Vanguard’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangement.

Investment performance

The board considered the short- and long-term performance of the fund, including any periods of outperformance or underperformance compared with its target index and peer group. The board concluded that the performance was such that the advisory arrangement should continue.

Cost

The board concluded that the fund’s expense ratio was well below the average expense ratio charged by funds in its peer group and that the fund’s advisory expenses were also well below the peer-group average.

42

The board does not conduct a profitability analysis of Vanguard because of Vanguard’s unique structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees.

The benefit of economies of scale

The board concluded that the fund’s arrangement with Vanguard ensures that the fund will realize economies of scale as it grows, with the cost to shareholders declining as fund assets increase.

The board will consider whether to renew the advisory arrangement again after a one-year period.

43

Liquidity Risk Management

Vanguard funds (except for the money market funds) have adopted and implemented a written liquidity risk management program (the “Program”) as required by Rule 22e-4 under the Investment Company Act of 1940. Rule 22e-4 requires that each fund adopt a program that is reasonably designed to assess and manage the fund’s liquidity risk, which is the risk that the fund could not meet redemption requests without significant dilution of remaining investors’ interests in the fund.

Assessment and management of a fund’s liquidity risk under the Program take into consideration certain factors, such as the fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions, its short- and long-term cash-flow projections during both normal and reasonably foreseeable stressed conditions, and its cash and cash-equivalent holdings and access to other funding sources. As required by the rule, the Program includes policies and procedures for classification of fund portfolio holdings in four liquidity categories, maintaining certain levels of highly liquid investments, and limiting holdings of illiquid investments.

The board of trustees of approved the appointment of liquidity risk management program administrators responsible for administering Vanguard Balanced Index Fund’s Program and for carrying out the specific responsibilities set forth in the Program, including reporting to the board on at least an annual basis regarding the Program’s operation, its adequacy, and the effectiveness of its implementation for the past year (the “Program Administrator Report”). The board has reviewed the Program Administrator Report covering the period from January 1, 2020, through December 31, 2020 (the “Review Period”). The Program Administrator Report stated that during the Review Period the Program operated and was implemented effectively to manage the fund’s liquidity risk.

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Fund Information > 800-662-7447

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Institutional Investor Services > 800-523-1036

Text Telephone for People
Who Are Deaf or Hard of Hearing > 800-749-7273

This material may be used in conjunction with the offering of shares of any Vanguard fund only if preceded or accompanied by the fund’s current prospectus.

All comparative mutual fund data are from Lipper, a Thomson Reuters Company, or Morningstar, Inc., unless otherwise noted.

You can obtain a free copy of Vanguard’s proxy voting guidelines by visiting vanguard.com/proxyreporting or by calling Vanguard at 800-662-2739. The guidelines are also available from the SEC’s website, www.sec.gov. In addition, you may obtain a free report on how your fund voted the proxies for securities it owned during the 12 months ended June 30. To get the report, visit either vanguard.com/proxyreporting or www.sec.gov.

You can review information about your fund on the SEC’s website, and you can receive copies of this information, for a fee, by sending a request via email addressed to publicinfo@sec.gov.

© 2021 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.

Q022 082021

Contents

About Your Fund's Expenses	1
Financial Statements	4
Trustees Approve Advisory Arrangement	13
Liquidity Risk Management	15

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 typical fund’s expenses are expressed as a percentage of its average net assets. The Managed Allocation Fund 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 cost (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 Managed Allocation Fund.

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.

1

Six Months Ended June 30, 2021
Managed Allocation Fund	Beginning Account Value 12/31/2020	Ending Account Value 6/30/2021	Expenses Paid During Period
Based on Actual Fund Return	$1,000.00	$1,098.30	$1.61
Based on Hypothetical 5% Yearly Return	1,000.00	1,023.26	1.56

The calculations are based on acquired fund fees and expenses for the most recent six-month period. The fund's annualized expense figure for that period is 0.31%. 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).

2

Managed Allocation Fund

Underlying Vanguard Funds

As of June 30, 2021

Vanguard Total International Stock Index Fund Investor Shares	23.8%
Vanguard Total Stock Market Index Fund Investor Shares	14.2
Vanguard Total Bond Market II Index Fund Investor Shares	11.5
Vanguard Commodity Strategy Fund AdmiralTM Shares	8.3
Vanguard Alternative Strategies Fund Investor Shares	7.9
Vanguard Small-Cap Value Index Fund Admiral Shares	5.9
Vanguard Market Neutral Fund Investor Shares	5.0
Vanguard Value Index Fund Investor Shares	4.9
Vanguard Total International Bond Index Fund Investor Shares	4.0
Vanguard Dividend Appreciation Index Fund Admiral Shares	3.5
Vanguard Emerging Markets Bond Fund Investor Shares	3.0
Vanguard High Dividend Yield Index Fund Admiral Shares	3.0
Vanguard Emerging Markets Stock Index Fund Investor Shares	2.5
Vanguard Global Minimum Volatility Fund Investor Shares	2.5

The table reflects the fund's investments, except for short-term investments.

3

Managed Allocation Fund

Financial Statements (unaudited)

Schedule of Investments

As of June 30, 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)
Investment Companies (100.0%)
U.S. Stock Funds (31.6%)
	Vanguard Total Stock Market Index Fund Investor Shares				1,799,881	195,215
	Vanguard Small-Cap Value Index Fund Admiral Shares				1,094,503	81,661
	Vanguard Value Index Fund Investor Shares				1,260,893	67,634
	Vanguard Dividend Appreciation Index Fund Admiral Shares				1,149,984	48,299
	Vanguard High Dividend Yield Index Fund Admiral Shares				1,293,970	40,877
						433,686
Global Stock Fund (2.5%)
	Vanguard Global Minimum Volatility Fund Investor Shares				2,359,831	34,619
International Stock Funds (26.3%)
	Vanguard Total International Stock Index Fund Investor Shares				15,496,664	326,515
	Vanguard Emerging Markets Stock Index Fund Investor Shares				1,017,199	34,951
						361,466
U.S. Bond Fund (11.4%)
1	Vanguard Total Bond Market II Index Fund Investor Shares				14,102,472	157,384
International Bond Funds (7.0%)
	Vanguard Total International Bond Index Fund Investor Shares				4,773,343	54,464
	Vanguard Emerging Markets Bond Fund Investor Shares				3,411,007	41,136
						95,600
Alternative Funds (21.2%)
	Vanguard Commodity Strategy Fund Admiral Shares				3,410,613	113,369
	Vanguard Alternative Strategies Fund Investor Shares				6,341,827	108,445
	Vanguard Market Neutral Fund Investor Shares				7,062,625	69,002
						290,816
Total Investment Companies (Cost $1,015,077)						1,373,571
Temporary Cash Investments (0.0%)
Money Market Fund (0.0%)
1	Vanguard Market Liquidity Fund, 0.056% (Cost $453)				4,535	453
Total Investments (100.0%) (Cost $1,015,530)						1,374,024
Other Assets and Liabilities—Net (0.0%)						(178)
Net Assets (100%)						1,373,846

Cost is in $000.

•	See Note A in Notes to Financial Statements.
1	Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.

See accompanying Notes, which are an integral part of the Financial Statements.

4

Managed Allocation Fund

Statement of Assets and Liabilities

As of June 30, 2021

($000s, except shares and per-share amounts)	Amount
Assets
Investments in Securities, at Value—Affiliated Funds (Cost $1,015,530)	1,374,024
Receivables for Investment Securities Sold	369
Receivables for Accrued Income	375
Receivables for Capital Shares Issued	780
Total Assets	1,375,548
Liabilities
Payables for Investment Securities Purchased	375
Payables for Capital Shares Redeemed	1,327
Total Liabilities	1,702
Net Assets	1,373,846
At June 30, 2021, net assets consisted of:
Paid-in Capital	988,069
Total Distributable Earnings (Loss)	385,777
Net Assets	1,373,846
Net Assets
Applicable to 73,004,445 outstanding $.001 par value shares of beneficial interest (unlimited authorization)	1,373,846
Net Asset Value Per Share	$18.82

See accompanying Notes, which are an integral part of the Financial Statements.

5

Managed Allocation Fund

Statement of Operations

	Six Months Ended June 30, 2021
	($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds	8,664
Net Investment Income—Note B	8,664
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds	46
Affiliated Funds Sold	18,825
Realized Net Gain (Loss)	18,871
Change in Unrealized Appreciation (Depreciation) from Affiliated Funds	95,604
Net Increase (Decrease) in Net Assets Resulting from Operations	123,139

See accompanying Notes, which are an integral part of the Financial Statements.

6

Managed Allocation Fund

Statement of Changes in Net Assets

	Six Months Ended June 30, 2021		Year Ended December 31, 2020
	($000)		($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	8,664		23,491
Realized Net Gain (Loss)	18,871		60,523
Change in Unrealized Appreciation (Depreciation)	95,604		(56,962)
Net Increase (Decrease) in Net Assets Resulting from Operations	123,139		27,052
Distributions
Total Distributions	(14,682)		(66,320)
Capital Share Transactions
Issued	114,018		150,614
Issued in Lieu of Cash Distributions	9,318		32,898
Redeemed	(160,773)		(710,431)
Net Increase (Decrease) from Capital Share Transactions	(37,437)		(526,919)
Total Increase (Decrease)	71,020		(566,187)
Net Assets
Beginning of Period	1,302,826		1,869,013
End of Period	1,373,846		1,302,826

See accompanying Notes, which are an integral part of the Financial Statements.

7

Managed Allocation Fund

Financial Highlights

	Six Months Ended June 30, 2021	Year Ended December 31,
For a Share Outstanding Throughout Each Period		2020	20191	20181	20171	20161
Net Asset Value, Beginning of Period	$17.33	$17.00	$15.68	$19.11	$17.54	$17.33
Investment Operations
Net Investment Income	.1192	.2652	.4312	.3952	.3582	.324
Capital Gain Distributions Received	.0012	.0202	.1072	.0562	.0112	.072
Net Realized and Unrealized Gain (Loss) on Investments	1.573	.839	1.877	(1.502)	1.919	.881
Total from Investment Operations	1.693	1.124	2.415	(1.051)	2.288	1.277
Distributions
Dividends from Net Investment Income	—	(.235)	(.535)	(.394)	(.394)	(.480)
Distributions from Realized Capital Gains	(.203)	(.559)	(.354)	(.996)	(.024)	(.266)
Return of Capital	—	—	(.206)	(.989)	(.300)	(.321)
Total Distributions	(.203)	(.794)	(1.095)	(2.379)	(.718)	(1.067)
Net Asset Value, End of Period	$18.82	$17.33	$17.00	$15.68	$19.11	$17.54
Total Return	9.83%	6.89%	15.64%	-5.67%	13.29%	7.55%
Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$1,374	$1,303	$1,869	$1,760	$2,089	$1,698
Ratio of Total Expenses to Average Net Assets	—	—	0.02%	0.03%	0.02%	0.02%
Acquired Fund Fees and Expenses	0.31%	0.28%	0.30%	0.29%	0.32%	0.32%
Ratio of Net Investment Income to Average Net Assets	1.32%	1.65%	2.57%	2.11%	1.95%	1.80%
Portfolio Turnover Rate	10%	33%	19%	17%	8%	19%
The expense ratio, acquired fund fees and expenses, and net investment income ratio for the current period have been annualized.