Vanguardfi FTSE All-World ex-US Small-Cap Index Fund

Vanguard ?

Vanguard? FTSE All-World ex-US Small-Cap Index Fund

Investment Approach

Seeks to track the performance of the FTSE Global Small Cap ex

US Index.

Passively managed, using index sampling.

Vanguard Style View: Foreign Small/Mid Growth

Diversified index portfolio of non-U.S. small cap stocks in developed

and emerging equity markets.

Fund remains fully invested.

Broad exposure across developed and emerging non-U.S.

small-cap equity markets around the world.

Low expenses minimize net tracking error.

Quarterly Commentary

People and Process

The pace of inflation and the timing of potential interest rate cuts

remained center stage in the second quarter of 2024. Financial

markets lost ground in April amid slow or stalled progress on inflation

and strong economic data from some markets, including the United

States. This delayed expectations for monetary easing. However,

global stocks soon resumed their upward trajectory, and enthusiasm

about artificial intelligence in the tech sector helped push a number of

indexes to record highs. In the final month of the period, the Bank of

Canada and the European Central Bank cut policy rates.

Vanguard FTSE All-World ex-US Small-Cap Index Fund seeks to track

the investment performance of the FTSE Global Small Cap ex US

Index, which includes approximately 3,300 stocks of companies

located in more than 46 countries, including both developed and

emerging markets. The fund invests in a broadly diversified sampling

of stocks in the index that approximates the index��s key risk factors

and characteristics. The experience and stability of Vanguard��s Equity

Index Group have permitted continuous refinement of techniques for

reducing tracking error. The group uses proprietary software to

implement trading decisions that accommodate cash flow and

maintain close correlation with the index��s key characteristics.

Vanguard��s refined indexing process, combined with low management

fees and efficient trading, has provided tight tracking, net of

expenses.

Global stocks returned 2.42% for the quarter, as measured by the

FTSE Global All Cap Index. U.S. and emerging markets equities led the

way, while those in Europe and the Asia-Pacific region lagged.

The fund��s benchmark, the FTSE Global Small-Cap ex US Index,

returned 1.12% for the quarter ended June 30. The FTSE All-World ex

US Index, which includes large-cap and mid-cap stocks in emerging

and developed markets outside the United States, returned 0.83%.

Industrials (+3.3%), financials (+4.9%), and basic materials (+3.9%)

were the top contributors. They accounted for 44.5% of the index��s

weighting at quarter-end and added about 1.7 percentage points to

its result.

Real estate (�C2.5%), consumer discretionary (�C1.5%), and health care

(�C1.0%) were the top detractors.

For the 12 months ended June 30, 2024, the index returned 10.13%.

Industrials (+15.6%), financials (+24.8%), and technology (+14.6%)

were the top contributors. Consumer staples (�C1.9%) and utilities

(�C2.1%) were the only detractors.

Vanguard Equity Index Group

Launched in 1975, The Vanguard Group, Malvern, Pennsylvania, is

among the world��s largest equity and fixed income managers. As chief

investment officer, Gregory Davis, CFA, oversees Vanguard��s Equity

Index, Investment Strategy, Quantitative Equity, and Fixed Income

Groups. Rodney Comegys, Principal and global head of Vanguard��s

Equity Index Group, is responsible for all equity index funds. The Equity

Index Group manages indexed equity portfolios covering U.S. and

international markets. It has developed sophisticated portfolio

construction methodologies and efficient trading strategies that seek

to deliver returns that are highly correlated with target portfolio

benchmarks. The group has advised Vanguard FTSE All-World ex-US

Small-Cap Index Fund since 2009.

Investment Manager Biographies

Jeffrey D. Miller. Portfolio manager. Advised the fund since 2015.

Worked in investment management since 2007. B.A., Pennsylvania

State University. M.B.A., Drexel University.

Michael Perre, Principal. Portfolio manager. Advised the fund since

2016. Worked in investment management since 1990. B.A., Saint

Joseph��s University. M.B.A., Villanova University.

As of June 30, 2024

Vanguard FTSE All-World ex-US Small-Cap Index Fund

Total Returns

Expense

Ratio

Year

to Date

Quarter

1 Year

3 Years

5 Years

10 Years

Since

Inception

FTSE All-World ex-US Small-Cap Index

Fund

Admiral Shares (2/7/2019)

0.17%

1.02%

2.48%

9.32%

-2.22%

4.91%

��

5.42%

Institutional Shares (4/2/2009)

0.12

1.04

2.53

9.39

-2.17

4.96

3.35%

��

FTSE Global Small Cap ex US Index

��

1.12

2.68

10.14

-2.04

5.01

3.28

��

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so

investors�� shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For

performance data current to the most recent month-end, visit our website at performance. The performance of an index is not an exact

representation of any particular investment, as you cannot invest directly in an index. Figures for periods of less than one year are cumulative returns. All other

figures represent average annual returns. Performance figures include the reinvestment of all dividends and any capital gains distributions. All returns are net of

expenses.

Note: Institutional class shareholders are required to maintain a minimum balance of $5 million.

Quarterly Returns: Admiral Shares

Year-End

Year

1st Quarter

2nd Quarter

2024

1.44%

1.02%

2023

5.97

1.86

2022

-7.32

2021

4.68

2020

2019

1

1

3rd Quarter

4th Quarter

FTSE AW

ex-US

Small-Cap

FTSE Global

Small Cap

ex US Index

Assets

(Millions)

��

��

��

��

-3.38%

10.41%

15.14%

15.53%

$1,413

-16.66

-9.94

13.15

-21.29

-21.45

1,287

6.96

-1.39

2.07

12.70

13.15

1,602

-29.69

24.09

8.87

17.81

11.91

11.54

1,347

3.02

1.53

-2.23

10.97

13.48

13.31

1,064

1,441

Since inception of the share class, 2/7/2019.

As of June 30, 2024

Vanguard FTSE All-World ex-US Small-Cap Index Fund

Quarterly Returns: Institutional Shares

Year-End

Year

1st Quarter

2024

1.47%

2nd Quarter

3rd Quarter

1.04%

4th Quarter

��

��

FTSE AW

ex-US

Small-Cap

��

Assets

(Millions)

��

$557

15.53%

578

2023

5.99

1.88

-3.37%

10.41%

2022

-7.31

-16.63

-9.92

13.13

-21.25

-21.45

410

2021

4.72

6.95

-1.37

2.08

12.76

13.15

396

2020

-29.68

24.10

8.88

17.80

11.93

11.54

370

2019

10.46

1.54

-2.21

10.98

21.73

21.72

264

2018

-0.13

-2.26

-2.32

-14.45

-18.43

-18.80

191

2017

8.80

6.33

6.57

5.69

30.30

29.95

245

2016

0.95

0.08

7.35

-3.78

4.35

4.07

129

2015

3.47

3.78

-10.36

3.70

-0.18

-0.49

162

2014

4.43

3.91

-7.58

-4.92

-4.65

-4.22

55

Fund Facts

Fund Number

Ticker

Newspaper Listing

CUSIP Number

Assets (millions)

(Total $10,364)

Inception

Expense Ratio

(as of 2/2024)

Admiral

Shares

Institutional

Shares

2284

0884

VFSAX

VFSNX

AWxUSSCAdml

AWxUSSCIst

922042593

922042726

$1,413

$557

2/7/2019

4/2/2009

0.17%

0.12%

15.19%

FTSE Global

Small Cap

ex US Index

Volatility Measures

R-Squared

Beta

FTSE Global Small-Cap ex US Index

0.98

1.01

FTSE Global All Cap ex US Index

0.97

1.08

R-squared and beta are calculated from trailing 36-month fund returns relative

to the associated benchmark.

Top 10 Largest Holdings

% of

Total Net Assets

Equity Characteristics

FTSE AW

ex-US

Small-Cap

FTSE Global

Small Cap

ex US Index

4,695

4,616

Median market cap

$1.9 Billion

$1.9 Billion

Average market cap

$2.8 Billion

$2.8 Billion

Price/earnings ratio

15.1x

15.1x

Price/book ratio

1.4x

1.5x

Return on equity

10.1%

10.1%

Earnings growth rate

13.9%

13.8%

Equity yield (dividend)

2.7%

2.7%

Short-term reserves

0.0%

��

Turnover rate (fiscal year end)

13.8%

��

Number of stocks

As of June 30, 2024

WSP Global Inc.

0.6%

RB Global Inc.

0.5

TFI International Inc.

0.4

ARC Resources Ltd.

0.4

Kinross Gold Corp.

0.3

Stantec Inc.

0.3

Emera Inc.

0.3

First Quantum Minerals Ltd.

0.3

GFL Environmental Inc.

0.3

Zealand Pharma A/S

0.3

Total

3.7%

The holdings listed exclude any temporary cash investments and equity index

products.

Vanguard FTSE All-World ex-US Small-Cap Index Fund

Sector Diversification (% of Stocks)

FTSE AW

ex-US

Small-Cap

FTSE Global

Small Cap

ex US Index

Overweight/

Underweight

Basic Materials

11.2%

11.2%

0.0

Consumer Discretionary

13.4

13.4

0.0

4.9

4.9

0.0

Consumer Staples

Energy

4.6

4.6

0.0

Financials

11.3

11.2

0.1

Health Care

6.4

6.2

0.2

Industrials

22.0

22.0

0.0

Other

0.0

0.3

-0.3

Real Estate

8.7

8.6

0.1

Technology

12.3

12.4

-0.1

1.5

1.5

0.0

3.7

3.7

0.0

100.0%

100.0%

Telecommunications

Utilities

Total

Sector categories are based on the Industry Classification Benchmark system

(��ICB��), except for the ��Other�� category (if applicable), which includes securities

that have not been provided an ICB classification as of the effective reporting

period.

As of June 30, 2024

Vanguard FTSE All-World ex-US Small-Cap Index Fund

Market allocation (% of Stocks)

FTSE AW

ex-US

Small-Cap

Europe

United Kingdom

9.0%

Sweden

4.1

Switzerland

2.8

Germany

2.7

France

2.3

Italy

2.0

Denmark

2.0

Norway

1.7

Spain

1.1

Belgium

1.0

Finland

1.0

Other

2.7

Subtotal

32.4

Pacific

Japan

13.3%

Australia

4.8

Korea

4.2

Other

1.4

Subtotal

23.7

Emerging Markets

Taiwan

8.8%

India

8.3

China

4.7

Brazil

1.3

Thailand

1.0

Other

Subtotal

4.2

28.3

North America

Canada

14.8%

Middle East

Other

0.7%

Other

0.1

Total

100.0%

As of June 30, 2024

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