Vanguard U.S. Stock Index Funds Large-Capitalization ...

Annual Report | December 31, 2015

Vanguard U.S. Stock Index Funds Large-Capitalization Portfolios

Vanguard Growth Index Fund Vanguard Value Index Fund Vanguard Large-Cap Index Fund

Vanguard's Principles for Investing Success

We want to give you the best chance of investment success. These principles, grounded in Vanguard's research and experience, can put you on the right path. Goals. Create clear, appropriate investment goals. Balance. Develop a suitable asset allocation using broadly diversified funds. Cost. Minimize cost. Discipline. Maintain perspective and long-term discipline. A single theme unites these principles: Focus on the things you can control. We believe there is no wiser course for any investor.

Contents Your Fund's Total Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Chairman's Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Growth Index Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Value Index Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Large-Cap Index Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Your Fund's After-Tax Returns. . . . . . . . . . . . . . . . . . . . . . . 79 About Your Fund's Expenses. . . . . . . . . . . . . . . . . . . . . . . . 80 Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Please note: The opinions expressed in this report are just that--informed opinions. They should not be considered promises or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this report. Of course, the risks of investing in your fund are spelled out in the prospectus. See the Glossary for definitions of investment terms used in this report. About the cover: Pictured is a sailing block on the Brilliant, a 1932 schooner docked in Mystic, Connecticut. A type of pulley, the sailing block helps coordinate the setting of the sails. At Vanguard, the intricate coordination of technology and people allows us to help millions of clients around the world reach their financial goals.

Your Fund's Total Returns

Fiscal Year Ended December 31, 2015

Total Returns

Vanguard Growth Index Fund

Investor Shares

3.17%

ETF Shares

Market Price

3.30

Net Asset Value

3.32

AdmiralTM Shares

3.30

Institutional Shares

3.33

CRSP US Large Cap Growth Index

3.38

Large-Cap Growth Funds Average

4.89

Large-Cap Growth Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

Vanguard Value Index Fund

Investor Shares

-1.03%

ETF Shares

Market Price

-0.92

Net Asset Value

-0.89

Admiral Shares

-0.86

Institutional Shares

-0.85

CRSP US Large Cap Value Index

-0.86

Large-Cap Value Funds Average

-4.16

Large-Cap Value Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

Admiral Shares carry lower expenses and are available to investors who meet certain account-balance requirements. Institutional Shares are available to certain institutional investors who meet specific administrative, service, and account-size criteria. The Vanguard ETF? Shares shown are traded on the NYSE Arca exchange and are available only through brokers. The table provides ETF returns based on both the NYSE Arca market price and the net asset value for a share. U.S. Pat. Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.

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Your Fund's Total Returns

Fiscal Year Ended December 31, 2015

Total Returns

Vanguard Large-Cap Index Fund

Investor Shares

0.93%

ETF Shares

Market Price

1.05

Net Asset Value

1.07

Admiral Shares

1.07

Institutional Shares

1.07

CRSP US Large Cap Index

1.11

Large-Cap Core Funds Average

-0.66

Large-Cap Core Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

Admiral Shares carry lower expenses and are available to investors who meet certain account-balance requirements. Institutional Shares are available to certain institutional investors who meet specific administrative, service, and account-size criteria. The Vanguard ETF? Shares shown are traded on the NYSE Arca exchange and are available only through brokers. The table provides ETF returns based on both the NYSE Arca market price and the net asset value for a share. U.S. Pat. Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.

For the ETF Shares, the market price is determined by the midpoint of the bid-offer spread as of the closing time of the New York Stock Exchange (generally 4 p.m., Eastern time). The net asset value is also determined as of the NYSE closing time. For more information about how the ETF Shares' market prices have compared with their net asset value, visit , select your ETF, and then select the Price and Performance tab. The ETF premium/discount analysis there shows the percentages of days on which the ETF Shares' market price was above or below the NAV.

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Your Fund's Performance at a Glance

December 31, 2014, Through December 31, 2015

Vanguard Growth Index Fund Investor Shares ETF Shares Admiral Shares Institutional Shares

Vanguard Value Index Fund Investor Shares ETF Shares Admiral Shares Institutional Shares

Vanguard Large-Cap Index Fund Investor Shares ETF Shares Admiral Shares Institutional Shares

Starting Share Price

$53.71 104.33

53.71 53.70

$32.95 84.45 32.94 32.94

$38.12 94.36 47.65

196.14

Ending Share Price

$54.78 106.40

54.77 54.77

$31.82 81.56 31.82 31.82

$37.78 93.52 47.23

194.40

Distributions Per Share

Income Dividends

Capital Gains

$0.636 1.388 0.715 0.720

$0.000 0.000 0.000 0.000

$0.782 2.123 0.828 0.831

$0.000 0.000 0.000 0.000

$0.694 1.831 0.926 3.824

$0.000 0.000 0.000 0.000

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Chairman's Letter

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Dear Shareholder,

The year ended December 31, 2015, was a tumultuous one for the world's financial markets. Not immune to the volatility, the broad U.S. stock market navigated a bumpy road to modest gains. Growth stocks outpaced their value counterparts, while largecapitalization stocks exceeded mid-caps and small-caps.

In this investment environment, Vanguard's three large-capitalization U.S. index funds produced varying results. Vanguard Growth Index Fund returned 3.17%, while Vanguard Value Index Fund returned ?1.03%. Vanguard Large-Cap Index Fund, which holds both growth and value stocks, returned 0.93%. (All returns are for the funds' Investor Shares.) Each fund closely tracked its target index for the fiscal year.

If you hold any of these funds in a taxable account, you may wish to review the table of after-tax returns that appears later in this report.

Despite troubles, U.S. stocks eked out a seventh year of gains U.S. stocks returned 0.48% for the 12 months ended December 31, 2015. Although the broad market recorded its worst performance since 2008, it still posted gains for the seventh straight calendar year when dividends are factored into returns.

Stocks rose modestly over the first half of the year but slid in August and September as concerns mounted that China's economic slowdown would spread globally. Falling oil and commodity prices also affected economies and markets across the world for better or worse. Central banks in Europe and Asia bolstered their stimulus efforts against weak growth and low inflation. And in December, the Federal Reserve ended months of uncertainty when it raised the target for short-term interest rates to 0.25%?0.5%.

International stocks returned about ?5%, restrained by the U.S. dollar's strength against many foreign currencies. Emerging markets fared the worst.

U.S. bonds ended the year with a slender advance The broad U.S. taxable bond market gained 0.55% over the 12 months; income accounted for the modestly positive result. The yield of the 10-year Treasury note ended December at 2.30%, up from 2.19% a year earlier. (Bond prices and yields move in opposite directions.)

Investors focused on the Fed's stance on short-term interest rates and alternately embraced or avoided safe-haven assets depending on the stock market's strength.

International bond markets (as measured by the Barclays Global Aggregate Index ex USD) returned ?6.02%, reduced by

Market Barometer

Stocks Russell 1000 Index (Large-caps) Russell 2000 Index (Small-caps) Russell 3000 Index (Broad U.S. market) FTSE All-World ex US Index (International)

Bonds Barclays U.S. Aggregate Bond Index (Broad taxable market) Barclays Municipal Bond Index (Broad tax-exempt market) Citigroup Three-Month U.S. Treasury Bill Index

CPI Consumer Price Index

Average Annual Total Returns Periods Ended December 31, 2015

One Year

Three Years

Five Years

0.92% -4.41 0.48 -4.72

15.01% 11.65 14.74

2.04

12.44% 9.19

12.18 1.48

0.55% 3.30 0.03

1.44% 3.16 0.02

3.25% 5.35 0.04

0.73%

1.00%

1.53%

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the dollar's strength against many foreign currencies. Without this currency effect, returns were modestly positive.

focus specifically on large-cap growth or value stocks through one of the other two funds.

Although the Fed raised its target for short-term interest rates in mid-December, returns for money market funds and savings accounts remained limited by the 0%?0.25% levels in place for much of the past seven years.

Gains in some sectors were offset by energy's double-digit decline Vanguard's three large-cap index funds provide exposure to some of the United States' biggest companies. Investors can invest broadly in the large-cap market through the Large-Cap Index Fund, or

As I mentioned earlier, growth stocks trumped their value counterparts for the 12 months. The performance of Vanguard's large-cap index funds mirrored this broad market trend, with the Growth Index Fund outpacing the Value Index Fund by several percentage points. Results by sector were mixed, and the performance of a few sectors varied between the funds.

For the most part the U.S. economy grew, boosted by shoppers' overall confidence and their willingness and ability to spend. This trend benefited the consumer

Expense Ratios Your Fund Compared With Its Peer Group

Investor Shares

ETF Shares

Admiral Shares

Institutional Peer Group Shares Average

Growth Index Fund

0.23%

0.09%

0.09%

0.08 %

1.21%

Value Index Fund

0.23

0.09

0.09

0.08

1.13

Large-Cap Index Fund

0.23

0.09

0.09

0.08

1.12

The fund expense ratios shown are from the prospectus dated April 28, 2015, and represent estimated costs for the current fiscal year. For the fiscal year ended December 31, 2015, the funds' expense ratios were: for the Growth Index Fund, 0.22% for Investor Shares, 0.08% for ETF Shares, 0.08% for Admiral Shares, and 0.07% for Institutional Shares; for the Value Index Fund, 0.22% for Investor Shares, 0.08% for ETF Shares, 0.08% for Admiral Shares, and 0.07% for Institutional Shares; and for the Large-Cap Index Fund, 0.20% for Investor Shares, 0.08% for ETF Shares, 0.08% for Admiral Shares, and 0.07% for Institutional Shares. The peer-group expense ratios are derived from data provided by Lipper, a Thomson Reuters Company, and capture information through year-end 2014.

Peer groups: For the Growth Index Fund, Large-Cap Growth Funds; for the Value Index Fund, Large-Cap Value Funds; and for the Large-Cap Index Fund, Large-Cap Core Funds.

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