Vanguard Small Cap Growth Index I NCSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES


Investment Company Act file number:	811-02652
Name of Registrant:	Vanguard Index Funds
Address of Registrant:	P.O. Box 2600
	Valley Forge, PA 19482
Name and address of agent for service:	Anne E. Robinson, Esquire
	P.O. Box 876
	Valley Forge, PA 19482
Registrant’s telephone number, including area code: (610) 669-1000
Date of fiscal year end: December 31
Date of reporting period: January 1, 2017 – June 30, 2017
Item 1: Reports to Shareholders

Semiannual Report | June 30, 2017

Vanguard 500 Index Fund

A new format, unwavering commitment

As you begin reading this report, you’ll notice that we’ve made some improvements to the opening sections—based on feedback from you, our clients.

Page 1 starts with a new ”Your Fund’s Performance at a Glance,” a concise, handy summary of how your fund performed during the period.

In the renamed ”Chairman’s Perspective,” Bill McNabb will focus on enduring principles and investment insights.

We’ve modified some tables, and eliminated some redundancy, but we haven’t removed any information.

At Vanguard, we’re always looking for better ways to communicate and to help you make sound investment decisions. Thank you for entrusting your assets to us.


Contents
Your Fund’s Performance at a Glance.	1
Chairman’s Perspective.	3
Fund Profile.	7
Performance Summary.	9
Financial Statements.	10
About Your Fund’s Expenses.	29
Trustees Approve Advisory Arrangement.	31
Glossary.	33

See the Glossary for definitions of investment terms used in this report.

About the cover: No matter what language you speak, Vanguard has one consistent message and set of principles. Our primary focus is on you, our clients. We conduct our business with integrity as a faithful steward of your assets. This message is shown translated into seven languages, reflecting our expanding global presence.

Your Fund’s Performance at a Glance

• Vanguard 500 Index Fund returned about 9% for the six months ended June 30, 2017. The fund closely tracked its target index, the Standard & Poor’s 500 Index, and exceeded the average return of its large-capitalization core fund peers.

• The fund offers investors exposure to roughly 500 of the largest U.S. companies, which span many different industries and account for about three-fourths of the U.S. stock market’s value.

• The fund recorded positive returns in nine of the 11 market sectors, with three posting double-digit gains.

• Information technology, the fund’s largest sector, was the top contributor; health care, consumer discretionary, industrials, and financials also added significantly to returns. Only telecommunication services and energy stocks declined.


Total Returns: Six Months Ended June 30, 2017
	Total
	Returns
Vanguard 500 Index Fund
Investor Shares	9.26%
ETF Shares
Market Price	9.23
Net Asset Value	9.31
Admiral™ Shares	9.31
Institutional Select Shares	9.34
S&P 500 Index	9.34
Large-Cap Core Funds Average	8.64
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 Select
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 vanguard.com, 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.


Expense Ratios
Your Fund Compared With Its Peer Group

	Investor	ETF	Admiral	Institutional	Peer Group
	Shares	Shares	Shares	Select Shares	Average
500 Index Fund	0.14%	0.04%	0.04%	0.01%	1.07%

Chairman’s Perspective

Bill McNabb
Chairman and Chief Executive Officer

Dear Shareholder,

More than a decade ago, the eminent investor and commentator Howard Marks published a memo to his clients titled simply “Risk.” In it, Howard distilled the relationship between investors and risk. “When you boil it all down, it’s the investor’s job to intelligently bear risk for profit,” he wrote.

It’s not surprising, then, that everyone from portfolio managers to behavioral economists avidly studies how investors’ reactions to risk influence not only individual investment decisions but also the broader financial markets. I’m a big fan of some of the behavioral finance work being done, which includes studies by our own investment strategists and analysts.

A lens on investor behavior

For example, Vanguard’s Investment Strategy Group introduced a “risk speedometers” report in January to look at how investors are reacting to market developments. This lens on real-world behavior measures the risk investors are taking in a given period by calculating the difference between net cash flows into higher-risk assets, such as stocks, and net cash flows into lower-risk assets, such as Treasuries. The measures are then compared with long-term averages.

In the spring, the risk speedometer spiked. The spike was fueled by investors’ decisions to direct more of their equity

dollars to international investments in developed and emerging markets, and their bond dollars to riskier credit categories.

A spiking speedometer seems a fitting analogy for what can happen. I consider myself a responsible driver. Still, when the highway is clear and the weather is nice, I might glance down at the speedometer and find that my right foot has gotten a little heavy.

The same phenomenon is possible with our investment portfolios. Just as our attention can drift from our speed—and the risk level on the road—we can neglect the risk level of our portfolio’s asset allocation. Experience teaches that investors are especially prone to lose sight of risk when markets have been buoyant.

How I manage risk in my own portfolio

Rebalancing—periodically adjusting your asset allocation so it stays in line with your goals and risk tolerance—is one of the best ways I know of to help manage risk. Without rebalancing, your portfolio may end up potentially riskier than you intended and no longer aligned with your goals.

I have a ritual I perform every June and again each December, between Christmas and New Year’s, as I prepare for a series of annual meetings with the Vanguard crew. I’ll set aside some time, review my


Market Barometer
			Total Returns
		Periods Ended June 30, 2017
			Five Years
	Six Months	One Year	(Annualized)
Stocks
Russell 1000 Index (Large-caps)	9.27%	18.03%	14.67%
Russell 2000 Index (Small-caps)	4.99	24.60	13.70
Russell 3000 Index (Broad U.S. market)	8.93	18.51	14.58
FTSE All-World ex US Index (International)	13.95	20.53	7.68

Bonds
Bloomberg Barclays U.S. Aggregate Bond Index
(Broad taxable market)	2.27%	-0.31%	2.21%
Bloomberg Barclays Municipal Bond Index
(Broad tax-exempt market)	3.57	-0.49	3.26
Citigroup Three-Month U.S. Treasury Bill Index	0.30	0.46	0.13

CPI
Consumer Price Index	1.46%	1.63%	1.31%

investment portfolio, and, if necessary, rebalance back to my target asset allocation.

My own portfolio is a mix of equity and fixed income funds, and I invest in both actively managed funds and index funds. Most years, I’ll make a minor adjustment to get back to the appropriate asset allocation for my own longer-term goals and risk tolerance. It’s not all that complicated, although my portfolio is a little more complex than some because I own more funds than we’d typically suggest. As chairman of Vanguard’s funds, I feel I should own a significant number of them.

Consider your options

You should consider rebalancing if your target allocation is off by 5 percentage points or more. Admittedly, this is often easier said than done. When an investment has performed exceptionally well, people have a hard time trimming it. They can be led astray by that old (and none-too-helpful) investing saw: Let your winners run.

Fortunately, in recent years we’ve seen all sorts of investors take steps to rebalance. Many of the endowments, foundations, and traditional pension plans that Vanguard serves have good processes built into their investment guidelines to make sure rebalancing takes place on a regular basis. And among investors in defined contribution retirement plans, more and more are using target-date funds, where rebalancing happens automatically.

If you choose to rebalance on your own, use your target asset allocation as your guidepost. Don’t be afraid to buy into bad news. In a sense, don’t worry about the noise of the marketplace. If you work with an advisor, make sure he or she understands the importance you place on your rebalancing ritual.

And remember, the goal of rebalancing is to manage risk, not to avoid it altogether. Risk is inherent in investing—we just want to bear that risk intelligently.

In that insightful memo on risk, Howard Marks included a saying often attributed to Will Rogers: “You’ve got to go out on a limb sometimes because that’s where the fruit is.”

Tim Buckley chosen as Vanguard’s next CEO

In closing, I’ll note senior leadership changes that we announced in July. Our board of directors has elected Vanguard Chief Investment Officer Tim Buckley as president and director of Vanguard. Under the planned transition, Tim will succeed me as Vanguard’s chief executive officer on January 1, 2018.

I’m delighted with our board’s selection of Tim. We first met in 1991 when Tim was interviewing for a job at Vanguard. In the decades since, we’ve worked closely together, and he’s always impressed me as a man of tremendous character and an outstanding leader with a passion for serving our clients. During the transition

period, I will work closely with Tim in managing the firm and overseeing its operations.

Replacing Tim as chief investment officer is Greg Davis, who had been global head of Vanguard Fixed Income Group. And succeeding Greg as our fixed income leader is John Hollyer, who most recently served as our global head of investment risk management. I know Greg and John will both do a superb job in their new roles.

As with past successions, I will remain as chairman for a period of time determined by the board. On a personal note, it has been an honor and a privilege to lead Vanguard. Having spent more than half my life at Vanguard, I have come to know many fabulous crew members who are incredibly dedicated to Vanguard’s mission. Please be assured that Tim and the rest of the team will serve you and our other clients extremely well as Vanguard prepares for its next chapter.

As always, thank you for investing with Vanguard.

Sincerely,

F. William McNabb III
Chairman and Chief Executive Officer
July 14, 2017

Vanguard fund shareholders encouraged to vote in proxy campaign

This summer you will be asked to vote on the election of trustees for all U.S.-domiciled

Vanguard funds. Shareholders will also be asked to vote on several fund policy proposals

that we believe are in the best interests of all shareholders.

Vanguard filed a preliminary proxy statement on July 13, 2017, with the U.S. Securities and

Exchange Commission (SEC). Following the SEC’s review, we expect to provide the proxy

materials to Vanguard fund shareholders beginning in late August 2017. That’s when you

can begin to vote online, by phone, or by mail.

A shareholder meeting is scheduled to be held in Scottsdale, Arizona, on November 15,

2017, when voting will conclude. We encourage you to vote promptly. Please visit

vanguard.com for updates.

500 Index Fund

Fund Profile
As of June 30, 2017


Share-Class Characteristics
	Investor		Admiral	Institutional
	Shares	ETF Shares	Shares	Select Shares
Ticker Symbol	VFINX	VOO	VFIAX	VFFSX
Expense Ratio¹	0.14%	0.04%	0.04%	0.01%
30-Day SEC Yield	1.87%	1.97%	1.97%	2.00%


Portfolio Characteristics
			DJ
			U.S. Total
		S&P 500	Market
	Fund	Index	FA Index
Number of Stocks	506	505	3,800
Median Market Cap	$87.8B	$87.8B	$59.8B
Price/Earnings Ratio	21.5x	21.5x	21.2x
Price/Book Ratio	3.0x	3.0x	2.9x
Return on Equity	24.1%	24.1%	16.3%
Earnings Growth Rate	8.1%	8.1%	10.0%
Dividend Yield	1.9%	1.9%	1.8%
Foreign Holdings	0.0%	0.0%	0.0%
Turnover Rate
(Annualized)	3%	—	—
Short-Term Reserves	0.1%	—	—


Sector Diversification (% of equity exposure)
			DJ
			U.S. Total
		S&P 500	Market
	Fund	Index	FA Index
Consumer Discretionary	12.3%	12.3%	12.7%
Consumer Staples	9.0	9.0	8.0
Energy	6.1	6.0	5.6
Financials	14.5	14.5	15.0
Health Care	14.5	14.5	14.0
Industrials	10.3	10.3	10.8
Information Technology	22.3	22.3	21.4
Materials	2.8	2.9	3.3
Real Estate	2.9	2.9	4.1
Telecommunication
Services	2.1	2.1	1.9
Utilities	3.2	3.2	3.2


Volatility Measures
		DJ
		U.S. Total
	S&P 500	Market
	Index	FA Index
R-Squared	1.00	0.99
Beta	1.00	0.97

These measures show the degree and timing of the fund’s
fluctuations compared with the indexes over 36 months.


Ten Largest Holdings (% of total net assets)
Apple Inc.	Technology
	Hardware, Storage &
	Peripherals	3.6%
Alphabet Inc.	Internet Software &
	Services	2.6
Microsoft Corp.	Systems Software	2.6
Amazon.com Inc.	Internet & Direct
	Marketing Retail	1.8
Facebook Inc.	Internet Software &
	Services	1.7
Johnson & Johnson	Pharmaceuticals	1.7
Exxon Mobil Corp.	Integrated Oil & Gas	1.6
JPMorgan Chase & Co.	Diversified Banks	1.6
Berkshire Hathaway Inc. Multi-Sector
	Holdings	1.5
Wells Fargo & Co.	Diversified Banks	1.2
Top Ten		19.9%

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

1 The expense ratios shown are from the prospectus dated April 27, 2017, and represent estimated costs for the current fiscal year. For
the six months ended June 30, 2017, the fund’s annualized expense ratios were 0.14% for Investor Shares, 0.04% for ETF Shares, 0.04%
for Admiral Shares, and 0.01% for Institutional Select Shares.

500 Index Fund

Investment Focus

500 Index Fund

Performance Summary

All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (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 vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.

Fiscal-Year Total Returns (%): December 31, 2006, Through June 30, 2017

Note: For 2017, performance data reflect the six months ended June 30, 2017.


Average Annual Total Returns: Periods Ended June 30, 2017
	Inception	One	Five	Ten
	Date	Year	Years	Years
Investor Shares	8/31/1976	17.74%	14.46%	7.06%
ETF Shares	9/7/2010
Market Price		17.86	14.59	14.79¹
Net Asset Value		17.86	14.59	14.79¹
Admiral Shares	11/13/2000	17.85	14.59	7.18
Institutional Select Shares	6/24/2016	17.90	—	21.15¹
1 Return since inception.

500 Index Fund

Financial Statements (unaudited)

Statement of Net Assets
As of June 30, 2017

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).


			Market
			Value^•
		Shares	($000)
Common Stocks (99.7%)¹
Consumer Discretionary (12.2%)
*	Amazon.com Inc.	6,268,600	6,068,005
	Comcast Corp. Class A	74,806,986	2,911,488
	Home Depot Inc.	18,898,755	2,899,069
	Walt Disney Co.	22,987,012	2,442,370
	McDonald’s Corp.	12,880,312	1,972,749
*	Priceline Group Inc.	777,725	1,454,750
	Starbucks Corp.	22,910,141	1,335,890
	NIKE Inc. Class B	20,910,627	1,233,727
	Time Warner Inc.	12,237,366	1,228,754
*	Charter
	Communications Inc.
	Class A	3,412,815	1,149,607
	Lowe’s Cos. Inc.	13,596,814	1,054,161
*	Netflix Inc.	6,821,834	1,019,250
	General Motors Co.	21,671,529	756,986
	TJX Cos. Inc.	10,232,111	738,451
	Ford Motor Co.	62,219,607	696,237
	Marriott International
	Inc. Class A	4,901,831	491,703
	Twenty-First Century
	Fox Inc. Class A	16,593,544	470,261
	Target Corp.	8,701,495	455,001
	Carnival Corp.	6,604,640	433,066
	Newell Brands Inc.	7,623,290	408,761
	Yum! Brands Inc.	5,217,691	384,857
	CBS Corp. Class B	5,812,337	370,711
	Delphi Automotive plc	4,225,420	370,358
	Ross Stores Inc.	6,182,081	356,892
*	O’Reilly Automotive Inc.	1,435,510	314,003
	Omnicom Group Inc.	3,671,944	304,404
^	VF Corp.	5,056,155	291,235
	Royal Caribbean Cruises
	Ltd.	2,646,803	289,110
	Dollar General Corp.	3,981,766	287,046
	Expedia Inc.	1,918,218	285,719
*	Ulta Beauty Inc.	920,162	264,399


*	Dollar Tree Inc.	3,735,116	261,159
*	AutoZone Inc.	444,381	253,502
*	Mohawk Industries Inc.	1,004,822	242,855
	Best Buy Co. Inc.	4,183,816	239,858
*	DISH Network Corp.
	Class A	3,586,847	225,111
	Whirlpool Corp.	1,167,646	223,744
	Shares	Market
	Genuine Parts Co.	2,324,465	215,617
	Twenty-First Century
	Fox Inc.	7,692,102	214,379
	Coach Inc.	4,433,050	209,861
	L Brands Inc.	3,799,582	204,759
	Hilton Worldwide
	Holdings Inc.	3,234,065	200,027
	Hasbro Inc.	1,774,074	197,827
*	Chipotle Mexican Grill
	Inc. Class A	451,996	188,076
	Viacom Inc. Class B	5,555,635	186,503
	DR Horton Inc.	5,390,095	186,336
^{*,^}	CarMax Inc.	2,921,123	184,206
	Darden Restaurants Inc.	1,963,126	177,545
	Lennar Corp. Class A	3,204,819	170,881
	Wynn Resorts Ltd.	1,259,340	168,903
	Wyndham Worldwide
	Corp.	1,646,204	165,295
*	LKQ Corp.	4,863,223	160,243
	Tiffany & Co.	1,691,189	158,752
	Interpublic Group of
	Cos. Inc.	6,233,416	153,342
^	Harley-Davidson Inc.	2,761,549	149,179
	PVH Corp.	1,230,992	140,949
	Goodyear Tire & Rubber
	Co.	3,973,264	138,905
	Advance Auto Parts Inc.	1,165,069	135,835
	BorgWarner Inc.	3,147,834	133,342
^	Hanesbrands Inc.	5,747,086	133,103
	Mattel Inc.	5,407,070	116,414
	Macy’s Inc.	4,807,769	111,733

500 Index Fund


			Market
			Value^•
		Shares	($000)
	Tractor Supply Co.	2,029,661	110,028
	PulteGroup Inc.	4,483,745	109,986
	Leggett & Platt Inc.	2,088,778	109,723
	News Corp. Class A	7,990,604	109,471
^	Kohl’s Corp.	2,692,662	104,125
	Staples Inc.	10,319,457	103,917
	Scripps Networks
	Interactive Inc. Class A	1,514,668	103,467
	Foot Locker Inc.	2,072,212	102,119
	H&R Block Inc.	3,267,765	101,007
	Garmin Ltd.	1,807,728	92,248
*	Michael Kors Holdings
	Ltd.	2,459,195	89,146
*	Discovery
	Communications Inc.	3,375,207	85,089
	Nordstrom Inc.	1,753,252	83,858
	Gap Inc.	3,472,979	76,371
	Bed Bath & Beyond Inc.	2,285,689	69,485
^	Signet Jewelers Ltd.	1,076,982	68,108
*	TripAdvisor Inc.	1,738,805	66,422
	Ralph Lauren Corp.
	Class A	867,809	64,044
^{*,^}	Under Armour Inc.
	Class A	2,914,593	63,422
^{*,^}	Discovery
	Communications Inc.
	Class A	2,378,790	61,444
^{*,^}	Under Armour Inc.	2,910,419	58,674
^{*,^}	AutoNation Inc.	1,041,053	43,891
			40,263,306
Consumer Staples (9.0%)
	Procter & Gamble Co.	40,387,811	3,519,798
	Philip Morris
	International Inc.	24,531,669	2,881,245
	Coca-Cola Co.	60,738,022	2,724,100
	PepsiCo Inc.	22,566,398	2,606,193
	Altria Group Inc.	30,517,925	2,272,670
	Wal-Mart Stores Inc.	23,350,446	1,767,162
	CVS Health Corp.	16,076,585	1,293,522
	Costco Wholesale Corp.	6,943,582	1,110,487
	Walgreens Boots
	Alliance Inc.	13,517,195	1,058,532
	Mondelez International
	Inc. Class A	24,012,891	1,037,117
	Colgate-Palmolive Co.	13,979,794	1,036,322
	Reynolds American Inc.	13,054,877	849,089
	Kraft Heinz Co.	9,450,561	809,346
	Kimberly-Clark Corp.	5,624,145	726,133
	Constellation Brands
	Inc. Class A	2,704,960	524,032
	General Mills Inc.	9,091,216	503,653
	Sysco Corp.	7,769,758	391,052
	Archer-Daniels-Midland
	Co.	9,002,156	372,509


	Estee Lauder Cos. Inc.
	Class A	3,530,897	338,896
	Kroger Co.	14,398,117	335,764
*	Monster Beverage Corp.	6,359,357	315,933
	Tyson Foods Inc.
	Class A	4,547,379	284,802
	Kellogg Co.	3,978,833	276,370
	Clorox Co.	2,032,312	270,785
	Dr Pepper Snapple
	Group Inc.	2,900,561	264,270
	Molson Coors Brewing
	Co. Class B	2,914,415	251,631
	Hershey Co.	2,209,551	237,240
	Conagra Brands Inc.	6,380,272	228,159
	JM Smucker Co.	1,835,816	217,232
	Whole Foods Market
	Inc.	5,040,742	212,266
	Church & Dwight Co.
	Inc.	3,930,481	203,913
	McCormick & Co. Inc.	1,785,595	174,113
	Campbell Soup Co.	3,024,583	157,732
	Hormel Foods Corp.	4,251,786	145,028
	Coty Inc. Class A	7,436,965	139,517
	Brown-Forman Corp.
	Class B	2,791,198	135,652
			29,672,265
Energy (6.0%)
	Exxon Mobil Corp.	66,945,490	5,404,509
	Chevron Corp.	29,940,137	3,123,655
	Schlumberger Ltd.	21,982,912	1,447,355
	ConocoPhillips	19,611,459	862,120
	EOG Resources Inc.	9,159,551	829,123
	Occidental Petroleum
	Corp.	12,126,743	726,028
	Halliburton Co.	13,695,258	584,924
	Kinder Morgan Inc.	30,291,234	580,380
	Phillips 66	6,921,588	572,346
	Valero Energy Corp.	7,056,862	476,056
	Marathon Petroleum
	Corp.	8,185,546	428,350
	Pioneer Natural
	Resources Co.	2,683,476	428,229
	Anadarko Petroleum
	Corp.	8,841,784	400,886
	Williams Cos. Inc.	13,036,166	394,735
	Baker Hughes Inc.	6,712,922	365,921
^	ONEOK Inc.	5,989,871	312,432
	Apache Corp.	6,001,274	287,641
*	Concho Resources Inc.	2,337,926	284,128
	Devon Energy Corp.	8,295,746	265,215
	Tesoro Corp.	2,383,077	223,056
	Noble Energy Inc.	7,177,951	203,136
*	TechnipFMC plc	7,363,252	200,280

500 Index Fund


			Market
			Value^•
		Shares	($000)
	National Oilwell Varco
	Inc.	5,993,734	197,434
	Hess Corp.	4,261,537	186,954
	Cabot Oil & Gas Corp.	7,342,573	184,152
	EQT Corp.	2,734,685	160,225
	Marathon Oil Corp.	13,407,353	158,877
	Cimarex Energy Co.	1,500,576	141,069
^	Helmerich & Payne
	Inc.	1,711,480	93,002
*	Newfield Exploration
	Co.	3,146,406	89,547
	Range Resources
	Corp.	2,968,428	68,778
^	Murphy Oil Corp.	2,554,841	65,481
^{*,^}	Chesapeake Energy
	Corp.	12,023,805	59,758
^{*,^}	Transocean Ltd.	6,157,440	50,676
			19,856,458
Financials (14.5%)
	JPMorgan Chase & Co.	56,119,843	5,129,354
*	Berkshire Hathaway
	Inc. Class B	28,451,496	4,818,830
	Wells Fargo & Co.	71,073,951	3,938,208
	Bank of America Corp.	157,308,184	3,816,297
	Citigroup Inc.	43,518,425	2,910,512
	US Bancorp	25,061,408	1,301,188
	Goldman Sachs Group
	Inc.	5,791,553	1,285,146
	Chubb Ltd.	7,389,134	1,074,232
	Morgan Stanley	22,569,866	1,005,713
	American Express Co.	11,910,558	1,003,345
	PNC Financial Services
	Group Inc.	7,678,438	958,807
	MetLife Inc.	17,110,261	940,038
	American International
	Group Inc.	13,928,488	870,809
	Bank of New York
	Mellon Corp.	16,474,639	840,536
	Charles Schwab Corp.	19,198,860	824,783
	BlackRock Inc.	1,920,910	811,412
	Prudential Financial Inc.	6,798,907	735,234
	CME Group Inc.	5,360,286	671,322
	Marsh & McLennan
	Cos. Inc.	8,129,758	633,796
	Capital One Financial
	Corp.	7,621,082	629,654
	Intercontinental
	Exchange Inc.	9,340,433	615,721
	S&P Global Inc.	4,067,100	593,756
	BB&T Corp.	12,803,039	581,386
	Travelers Cos. Inc.	4,408,434	557,799
	Aon plc	4,134,624	549,698
	Allstate Corp.	5,751,384	508,652


	State Street Corp.	5,580,033	500,696
	Aflac Inc.	6,261,725	486,411
	SunTrust Banks Inc.	7,629,778	432,761
	Progressive Corp.	9,163,762	404,030
	M&T Bank Corp.	2,428,298	393,263
	Discover Financial
	Services	5,998,768	373,063
	Synchrony Financial	12,148,329	362,263
	Northern Trust Corp.	3,404,529	330,954
	KeyCorp	17,292,636	324,064
	Moody’s Corp.	2,625,668	319,491
	Fifth Third Bancorp	11,837,487	307,301
	Ameriprise Financial Inc.	2,405,127	306,149
	Hartford Financial
	Services Group Inc.	5,795,730	304,682
	Willis Towers Watson
	plc	2,004,880	291,630
	Citizens Financial
	Group Inc.	7,992,485	285,172
	T. Rowe Price Group
	Inc.	3,807,012	282,518
	Regions Financial
	Corp.	18,960,814	277,586
	Principal Financial
	Group Inc.	4,229,735	270,999
*	Berkshire Hathaway
	Inc. Class A	1,022	260,303
	Franklin Resources Inc.	5,402,282	241,968
	Lincoln National Corp.	3,540,166	239,244
	Huntington Bancshares
	Inc.	17,142,732	231,770
	Invesco Ltd.	6,418,097	225,853
	Comerica Inc.	2,790,062	204,344
	Loews Corp.	4,356,924	203,948
	XL Group Ltd.	4,123,494	180,609
	Cincinnati Financial
	Corp.	2,363,897	171,264
	Unum Group	3,599,825	167,860
	Everest Re Group Ltd.	648,206	165,027
*	E*TRADE Financial
	Corp.	4,333,992	164,822
	Raymond James
	Financial Inc.	2,021,960	162,202
	Arthur J Gallagher & Co.	2,831,121	162,082
	Affiliated Managers
	Group Inc.	892,207	147,982
	Zions Bancorporation	3,193,703	140,236
	Leucadia National Corp.	5,110,358	133,687
	CBOE Holdings Inc.	1,449,994	132,529
	Torchmark Corp.	1,716,991	131,350
	Nasdaq Inc.	1,798,697	128,589
	People’s United
	Financial Inc.	5,422,707	95,765

500 Index Fund


			Market
			Value^•
		Shares	($000)
	Assurant Inc.	865,610	89,755
	Navient Corp.	4,486,678	74,703
			47,715,153
Health Care (14.5%)
	Johnson & Johnson	42,553,380	5,629,387
	Pfizer Inc.	94,300,517	3,167,554
	UnitedHealth Group Inc.	15,234,836	2,824,843
	Merck & Co. Inc.	43,227,047	2,770,421
	Amgen Inc.	11,636,998	2,004,240
	Medtronic plc	21,641,780	1,920,708
	AbbVie Inc.	25,159,195	1,824,293
*	Celgene Corp.	12,354,454	1,604,473
	Gilead Sciences Inc.	20,618,698	1,459,391
	Bristol-Myers Squibb
	Co.	26,063,339	1,452,249
	Abbott Laboratories	27,457,560	1,334,712
	Allergan plc	5,312,701	1,291,465
	Eli Lilly & Co.	15,359,536	1,264,090
	Thermo Fisher
	Scientific Inc.	6,190,850	1,080,118
*	Biogen Inc.	3,370,216	914,542
	Danaher Corp.	9,675,911	816,550
	Aetna Inc.	5,261,170	798,803
	Anthem Inc.	4,181,469	786,660
	Becton Dickinson and
	Co.	3,587,081	699,875
	Stryker Corp.	4,894,819	679,303
	Cigna Corp.	4,038,593	676,020
*	Boston Scientific Corp.	21,760,842	603,211
*	Express Scripts
	Holding Co.	9,363,852	597,788
*	Regeneron
	Pharmaceuticals Inc.	1,202,019	590,360
	Humana Inc.	2,276,892	547,866
	McKesson Corp.	3,327,423	547,494
*	Intuitive Surgical Inc.	581,218	543,654
*	Vertex
	Pharmaceuticals Inc.	3,929,767	506,429
	Zoetis Inc.	7,743,880	483,063
	Baxter International Inc.	7,695,630	465,893
*	Alexion
	Pharmaceuticals Inc.	3,543,448	431,131
	Zimmer Biomet
	Holdings Inc.	3,175,593	407,746
*	Illumina Inc.	2,303,806	399,756
*	HCA Healthcare Inc.	4,516,405	393,831
*	Edwards Lifesciences
	Corp.	3,308,649	391,215
	Cardinal Health Inc.	4,983,904	388,346
	CR Bard Inc.	1,142,192	361,058
*	Incyte Corp.	2,681,103	337,578
*	Cerner Corp.	4,638,160	308,299
	Agilent Technologies
	Inc.	5,084,513	301,563


*	Mylan NV	7,273,631	282,362
*	Laboratory Corp. of
	America Holdings	1,614,805	248,906
	AmerisourceBergen
	Corp. Class A	2,619,312	247,604
	Quest Diagnostics Inc.	2,159,629	240,064
*	Mettler-Toledo
	International Inc.	407,260	239,689
	Dentsply Sirona Inc.	3,616,458	234,491
*	Waters Corp.	1,262,135	232,031
*	Henry Schein Inc.	1,251,486	229,047
*	IDEXX Laboratories Inc.	1,389,599	224,309
*	Centene Corp.	2,716,380	216,984
*	Hologic Inc.	4,415,648	200,382
	Cooper Cos. Inc.	770,290	184,423
*	Align Technology Inc.	1,190,750	178,755
	Universal Health
	Services Inc. Class B	1,410,411	172,183
	Perrigo Co. plc	2,261,560	170,793
*	DaVita Inc.	2,456,685	159,095
*	Varian Medical
	Systems Inc.	1,450,278	149,654
	PerkinElmer Inc.	1,737,143	118,369
*	Envision Healthcare
	Corp.	1,853,640	116,168
*	Mallinckrodt plc	1,570,105	70,356
^	Patterson Cos. Inc.	1,284,760	60,320
			47,581,963
Industrials (10.3%)
	General Electric Co.	137,632,967	3,717,466
	3M Co.	9,444,656	1,966,283
	Boeing Co.	8,875,794	1,755,188
	Honeywell
	International Inc.	12,052,676	1,606,501
	United Technologies
	Corp.	11,783,941	1,438,937
	Union Pacific Corp.	12,770,321	1,390,816
	United Parcel Service
	Inc. Class B	10,897,055	1,205,105
	Lockheed Martin Corp.	3,939,095	1,093,532
	Caterpillar Inc.	9,338,698	1,003,537
	General Dynamics Corp.	4,474,388	886,376
	FedEx Corp.	3,900,385	847,671
	CSX Corp.	14,554,191	794,077
	Raytheon Co.	4,592,707	741,630
	Northrop Grumman
	Corp.	2,753,991	706,977
	Illinois Tool Works Inc.	4,905,480	702,710
	Johnson Controls
	International plc	14,885,151	645,420
	Delta Air Lines Inc.	11,616,065	624,247
	Emerson Electric Co.	10,234,792	610,198
	Southwest Airlines Co.	9,540,588	592,852
	Deere & Co.	4,669,343	577,084

500 Index Fund


			Market
			Value^•
		Shares	($000)
	Norfolk Southern Corp.	4,571,623	556,367
	Eaton Corp. plc	7,057,021	549,248
	Waste Management Inc.	6,412,911	470,387
	Cummins Inc.	2,438,500	395,574
	American Airlines Group
	Inc.	7,771,721	391,073
	Roper Technologies Inc.	1,609,872	372,734
	Ingersoll-Rand plc	4,040,666	369,277
	PACCAR Inc.	5,542,664	366,038
	Stanley Black & Decker
	Inc.	2,413,045	339,588
	Parker-Hannifin Corp.	2,101,585	335,875
*	United Continental
	Holdings Inc.	4,444,579	334,455
	Rockwell Automation
	Inc.	2,032,201	329,135
	Fortive Corp.	4,757,039	301,358
	Rockwell Collins Inc.	2,562,350	269,252
	Equifax Inc.	1,897,186	260,711
	Republic Services Inc.
	Class A	3,624,803	231,009
*	IHS Markit Ltd.	5,006,839	220,501
	AMETEK Inc.	3,628,040	219,750
^	TransDigm Group Inc.	771,085	207,322
	L3 Technologies Inc.	1,227,974	205,170
	Nielsen Holdings plc	5,296,246	204,753
*	Verisk Analytics Inc.
	Class A	2,424,865	204,586
	Textron Inc.	4,221,317	198,824
	Fastenal Co.	4,563,822	198,663
	Dover Corp.	2,454,645	196,912
	Masco Corp.	5,045,415	192,785
	Pentair plc	2,644,467	175,963
	Kansas City Southern	1,673,149	175,095
	Alaska Air Group Inc.	1,949,603	174,996
	Cintas Corp.	1,362,173	171,688
	Expeditors International
	of Washington Inc.	2,842,937	160,569
	Fortune Brands Home
	& Security Inc.	2,426,634	158,314
	Arconic Inc.	6,951,285	157,447
	Xylem Inc.	2,835,186	157,154
	WW Grainger Inc.	847,654	153,027
	CH Robinson Worldwide
	Inc.	2,222,522	152,643
*	United Rentals Inc.	1,333,624	150,313
	Snap-on Inc.	914,255	144,452
	Acuity Brands Inc.	696,138	141,511
	JB Hunt Transport
	Services Inc.	1,353,999	123,728
	Allegion plc	1,503,597	121,972
	Jacobs Engineering
	Group Inc.	1,901,946	103,447
*	Stericycle Inc.	1,346,402	102,757


	Fluor Corp.	2,205,709	100,977
	Robert Half International
	Inc.	2,007,812	96,234
	Flowserve Corp.	2,062,928	95,782
*	Quanta Services Inc.	2,332,527	76,787
			33,722,810
Information Technology (22.2%)
	Apple Inc.	82,373,427	11,863,421
	Microsoft Corp.	121,969,818	8,407,380
*	Facebook Inc. Class A	37,345,375	5,638,405
*	Alphabet Inc. Class A	4,707,787	4,376,735
*	Alphabet Inc. Class C	4,707,690	4,278,019
	Visa Inc. Class A	29,164,844	2,735,079
	Intel Corp.	74,397,657	2,510,177
	Cisco Systems Inc.	79,040,446	2,473,966
	Oracle Corp.	47,477,276	2,380,511
	International Business
	Machines Corp.	13,510,067	2,078,254
	Mastercard Inc.
	Class A	14,824,872	1,800,481
	Broadcom Ltd.	6,347,571	1,479,301
	NVIDIA Corp.	9,409,837	1,360,286
	QUALCOMM Inc.	23,370,950	1,290,544
	Accenture plc Class A	9,810,693	1,213,386
	Texas Instruments Inc.	15,771,741	1,213,320
*	Adobe Systems Inc.	7,839,386	1,108,803
*	PayPal Holdings Inc.	17,684,272	949,115
*	salesforce.com Inc.	10,588,505	916,965
	Automatic Data
	Processing Inc.	7,091,655	726,611
	Applied Materials Inc.	16,956,533	700,474
	Activision Blizzard Inc.	10,937,969	629,699
	Cognizant Technology
	Solutions Corp.
	Class A	9,291,787	616,975
*	eBay Inc.	15,880,125	554,534
*	Electronic Arts Inc.	4,891,097	517,087
	Intuit Inc.	3,840,038	509,995
*	Micron Technology Inc.	16,407,198	489,919
	HP Inc.	26,559,615	464,262
	Analog Devices Inc.	5,790,695	450,516
	Fidelity National
	Information
	Services Inc.	5,216,105	445,455
	TE Connectivity Ltd.	5,601,750	440,746
	Corning Inc.	14,520,383	436,337
	Hewlett Packard
	Enterprise Co.	26,269,249	435,807
*	Fiserv Inc.	3,349,248	409,747
	Western Digital Corp.	4,596,005	407,206
	Lam Research Corp.	2,544,769	359,907
	Amphenol Corp.
	Class A	4,822,438	355,992
	DXC Technology Co.	4,467,666	342,759

500 Index Fund


			Market
			Value^•
		Shares	($000)
*	Autodesk Inc.	3,059,281	308,437
	Paychex Inc.	5,044,327	287,224
	Skyworks Solutions Inc.	2,912,444	279,449
^	Microchip
	Technology Inc.	3,619,575	279,359
	Symantec Corp.	9,597,797	271,138
*	Red Hat Inc.	2,804,523	268,533
	Xilinx Inc.	3,913,299	251,703
	KLA-Tencor Corp.	2,471,681	226,183
	Alliance Data
	Systems Corp.	877,880	225,343
	Motorola Solutions Inc.	2,579,020	223,704
	Global Payments Inc.	2,404,252	217,152
	Harris Corp.	1,924,056	209,876
*	Citrix Systems Inc.	2,383,679	189,693
	Seagate Technology plc	4,683,614	181,490
*	Gartner Inc.	1,426,350	176,168
*	Synopsys Inc.	2,370,854	172,906
	NetApp Inc.	4,272,030	171,095
	CA Inc.	4,943,537	170,404
	Juniper Networks Inc.	6,026,392	168,016
*	ANSYS Inc.	1,348,449	164,079
^{*,^}	Advanced Micro
	Devices Inc.	12,227,274	152,596
	Total System
	Services Inc.	2,613,045	152,210
	Western Union Co.	7,436,116	141,658
*	Akamai
	Technologies Inc.	2,728,001	135,882
*	F5 Networks Inc.	1,020,307	129,640
^{*,^}	VeriSign Inc.	1,393,476	129,538
*	Qorvo Inc.	2,005,401	126,982
	Xerox Corp.	3,367,525	96,749
	FLIR Systems Inc.	2,153,079	74,626
	CSRA Inc.	2,294,571	72,853
*	Conduent Inc.	4	—
			73,022,862
Materials (2.8%)
	Dow Chemical Co.	17,794,478	1,122,298
	EI du Pont de Nemours
	& Co.	13,723,502	1,107,624
	Monsanto Co.	6,950,803	822,697
	Praxair Inc.	4,534,225	601,012
	Ecolab Inc.	4,118,118	546,680
	Air Products &
	Chemicals Inc.	3,435,017	491,414
	Sherwin-Williams Co.	1,278,323	448,640
	PPG Industries Inc.	4,042,256	444,486
	LyondellBasell
	Industries NV Class A	5,211,868	439,830
	International Paper Co.	6,511,904	368,639
	Nucor Corp.	5,034,159	291,327
	Newmont Mining Corp.	8,413,814	272,523
	Vulcan Materials Co.	2,084,581	264,075


*	Freeport-McMoRan
	Inc.	20,991,443	252,107
	Ball Corp.	5,523,648	233,153
	WestRock Co.	3,963,079	224,548
	Martin Marietta
	Materials Inc.	988,379	219,993
	Eastman Chemical Co.	2,299,731	193,154
	Albemarle Corp.	1,746,599	184,336
	International Flavors
	& Fragrances Inc.	1,245,820	168,186
	FMC Corp.	2,113,900	154,420
	Sealed Air Corp.	3,089,772	138,298
	Mosaic Co.	5,540,286	126,485
	Avery Dennison Corp.	1,397,858	123,529
	CF Industries Holdings
	Inc.	3,672,938	102,695
			9,342,149
Real Estate (2.9%)
	American Tower
	Corporation	6,728,762	890,350
	Simon Property
	Group Inc.	4,954,391	801,422
	Crown Castle
	International Corp.	5,776,448	578,685
	Equinix Inc.	1,229,235	527,538
	Public Storage	2,359,012	491,925
	Prologis Inc.	8,368,539	490,731
	Welltower Inc.	5,776,056	432,338
	AvalonBay
	Communities Inc.	2,172,978	417,581
	Weyerhaeuser Co.	11,853,391	397,089
	Ventas Inc.	5,596,818	388,867
	Equity Residential	5,790,718	381,203
	Boston Properties Inc.	2,427,857	298,675
	Digital Realty Trust Inc.	2,520,899	284,736
	Essex Property Trust Inc.	1,035,075	266,294
	Vornado Realty Trust	2,719,061	255,320
	Realty Income Corp.	4,378,322	241,596
	HCP Inc.	7,387,894	236,117
	GGP Inc.	9,186,009	216,422
	Host Hotels & Resorts
	Inc.	11,665,247	213,124
	Mid-America Apartment
	Communities Inc.	1,790,994	188,735
	Alexandria Real Estate
	Equities Inc.	1,436,407	173,044
*	CBRE Group Inc.
	Class A	4,743,405	172,660
	SL Green Realty Corp.	1,606,175	169,933
	UDR Inc.	4,217,585	164,359
	Extra Space Storage Inc.	1,986,504	154,947
	Regency Centers Corp.	2,307,700	144,554
	Federal Realty
	Investment Trust	1,139,674	144,043

500 Index Fund


			Market
			Value^•
		Shares	($000)
	Iron Mountain Inc.	3,876,155	133,185
	Kimco Realty Corp.	6,718,728	123,289
	Macerich Co.	1,881,140	109,219
	Apartment Investment
	& Management Co.	2,480,390	106,582
			9,594,563
Telecommunication Services (2.1%)
	AT&T Inc.	97,137,557	3,665,000
	Verizon Communications
	Inc.	64,470,190	2,879,239
*	Level 3 Communications
	Inc.	4,618,522	273,878
^	CenturyLink Inc.	8,659,549	206,790
			7,024,907
Utilities (3.2%)
	NextEra Energy Inc.	7,409,093	1,038,236
	Duke Energy Corp.	11,080,703	926,236
	Dominion Energy Inc.	9,966,417	763,727
	Southern Co.	15,760,435	754,610
	American Electric Power
	Co. Inc.	7,756,813	538,866
	PG&E Corp.	8,104,487	537,895
	Exelon Corp.	14,610,686	527,008
	Sempra Energy	3,957,394	446,196
	PPL Corp.	10,779,807	416,747
	Edison International	5,141,049	401,979
	Consolidated Edison Inc.	4,819,113	389,481
	Xcel Energy Inc.	8,010,973	367,543
	Public Service
	Enterprise Group Inc.	7,983,943	343,389
	WEC Energy Group Inc.	4,979,348	305,632
	Eversource Energy	4,999,130	303,497
	DTE Energy Co.	2,830,433	299,432
	American Water Works
	Co. Inc.	2,810,691	219,093
	Entergy Corp.	2,833,069	217,495
	Ameren Corp.	3,828,523	209,305
	CMS Energy Corp.	4,422,127	204,523
	FirstEnergy Corp.	6,996,765	204,026
	CenterPoint Energy Inc.	6,796,271	186,082
	SCANA Corp.	2,253,985	151,040
	Pinnacle West Capital
	Corp.	1,759,947	149,877
	Alliant Energy Corp.	3,594,415	144,388
	NiSource Inc.	5,104,426	129,448
	AES Corp.	10,420,919	115,776
	NRG Energy Inc.	4,990,488	85,936
			10,377,463
Total Common Stocks
(Cost $208,413,428)		328,173,899


Temporary Cash Investments (0.5%)¹
Money Market Fund (0.5%)
^2,3	Vanguard Market
	Liquidity Fund,
	1.181%	16,534,578	1,653,789

		Face
		Amount
		($000)
U. S. Government and Agency Obligations (0.0%)
4	United States Treasury
	Bill, 0.592%, 7/13/17	34,000	33,993
4	United States Treasury
	Bill, 0.918%, 9/14/17	10,000	9,981
4	United States Treasury
	Bill, 0.980%, 10/5/17	9,000	8,976
4	United States Treasury
	Bill, 1.056%, 11/24/17	2,000	1,991
			54,941
Total Temporary Cash Investments
(Cost $1,708,551)			1,708,730
Total Investments (100.2%)
(Cost $210,121,979)			329,882,629

			Amount
			($000)
Other Assets and Liabilities (-0.2%)
Other Assets
Investment in Vanguard			21,361
Receivables for Accrued Income			327,343
Receivables for Capital Shares Issued			322,649
Other Assets			5,224
Total Other Assets			676,577
Liabilities
Payables for Investment
Securities Purchased			(610,790)
Collateral for Securities on Loan			(278,767)
Payables for Capital Shares Redeemed			(237,349)
Payables to Vanguard			(143,289)
Other Liabilities			(7)
Total Liabilities			(1,270,202)
Net Assets (100%)		329,289,004

500 Index Fund


At June 30, 2017, net assets consisted of:
	Amount
	($000)
Paid-in Capital	210,507,850
Overdistributed Net Investment Income (25,687)
Accumulated Net Realized Losses	(948,541)
Unrealized Appreciation (Depreciation)
Investment Securities	119,760,650
Futures Contracts	(5,268)
Net Assets	329,289,004


Investor Shares—Net Assets
Applicable to 125,885,207 outstanding
$.001 par value shares of beneficial
interest (unlimited authorization)	28,166,376
Net Asset Value Per Share—
Investor Shares	$223.75


ETF Shares—Net Assets
Applicable to 315,547,095 outstanding
$.001 par value shares of beneficial
interest (unlimited authorization)	70,065,971
Net Asset Value Per Share—
ETF Shares	$222.05


Admiral Shares—Net Assets
Applicable to 917,705,073 outstanding
$.001 par value shares of beneficial
interest (unlimited authorization)	205,334,976
Net Asset Value Per Share—
Admiral Shares	$223.75


Institutional Select Shares—Net Assets
Applicable to 216,949,561 outstanding
$.001 par value shares of beneficial
interest (unlimited authorization)	25,721,681
Net Asset Value Per Share—
Institutional Select Shares	$118.56

• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $268,591,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After giving effect to futures
investments, the fund’s effective common stock and temporary cash investment positions represent 100.0% and 0.2%, respectively, of
net assets.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the
7-day yield.
3 Includes $278,767,000 of collateral received for securities on loan.
4 Securities with a value of $40,545,000 have been segregated as initial margin for open futures contracts.
See accompanying Notes, which are an integral part of the Financial Statements.

500 Index Fund

Statement of Operations


	Six Months Ended
	June30,2017
	($000)
Investment Income
Income
Dividends	3,030,718
Interest¹	6,202
Securities Lending—Net	1,561
Total Income	3,038,481
Expenses
The Vanguard Group—Note B
Investment Advisory Services	5,827
Management and Administrative—Investor Shares	16,042
Management and Administrative—ETF Shares	9,593
Management and Administrative—Admiral Shares	30,781
Management and Administrative—Institutional Select Shares	578
Marketing and Distribution—Investor Shares	2,169
Marketing and Distribution—ETF Shares	2,007
Marketing and Distribution—Admiral Shares	6,625
Marketing and Distribution—Institutional Select Shares	1
Custodian Fees	1,177
Shareholders’ Reports—Investor Shares	817
Shareholders’ Reports—ETF Shares	1,200
Shareholders’ Reports—Admiral Shares	1,691
Shareholders’ Reports—Institutional Select Shares	3
Trustees’ Fees and Expenses	102
Total Expenses	78,613
Net Investment Income	2,959,868
Realized Net Gain (Loss)
Investment Securities Sold¹	2,599,995
Futures Contracts	110,367
Realized Net Gain (Loss)	2,710,362
Change in Unrealized Appreciation (Depreciation)
Investment Securities	21,302,918
Futures Contracts	3,465
Change in Unrealized Appreciation (Depreciation)	21,306,383
Net Increase (Decrease) in Net Assets Resulting from Operations	26,976,613
1 Interest income and realized net gain (loss) from an affiliated company of the fund were $6,016,000 and $34,000, respectively.

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

500 Index Fund

Statement of Changes in Net Assets


	Six Months Ended	Year Ended
	June 30,	December 31,
	2017	2016
	($000)	($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income	2,959,868	5,265,549
Realized Net Gain (Loss)	2,710,362	6,689,644
Change in Unrealized Appreciation (Depreciation)	21,306,383	16,565,774
Net Increase (Decrease) in Net Assets Resulting from Operations	26,976,613	28,520,967
Distributions
Net Investment Income
Investor Shares	(242,544)	(530,428)
ETF Shares	(613,484)	(1,047,723)
Admiral Shares	(1,828,106)	(3,539,036)
Institutional Select Shares	(214,453)	(141,449)
Realized Capital Gain
Investor Shares	—	—
ETF Shares	—	—
Admiral Shares	—	—
Institutional Select Shares	—	—
Total Distributions	(2,898,587)	(5,258,636)
Capital Share Transactions
Investor Shares	(679,825)	(1,863,704)
ETF Shares	8,476,654	11,566,096
Admiral Shares	8,502,710	13,258,093
Institutional Select Shares	6,345,434	17,071,485
Net Increase (Decrease) from Capital Share Transactions	22,644,973	40,031,970
Total Increase (Decrease)	46,722,999	63,294,301
Net Assets
Beginning of Period	282,566,005	219,271,704
End of Period¹	329,289,004	282,566,005
1 Net Assets—End of Period includes undistributed (overdistributed) net investment income of ($25,687,000) and ($86,968,000).

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

500 Index Fund

Financial Highlights


Investor Shares
Six Months
	Ended
For a Share Outstanding	June 30,	Year Ended December 31,
Throughout Each Period	2017	2016	2015	2014	2013	2012
Net Asset Value, Beginning of Period	$206.57	$188.48	$189.89	$170.36	$131.37	$115.80
Investment Operations
Net Investment Income	1.961	3.997	3.775	3.326	2.956	2.709
Net Realized and Unrealized Gain (Loss)
on Investments	17.140	18.069	(1.438)	19.507	38.982	15.560
Total from Investment Operations	19.101	22.066	2.337	22.833	41.938	18.269
Distributions
Dividends from Net Investment Income	(1.921)	(3.976)	(3.747)	(3.303)	(2.948)	(2.699)
Distributions from Realized Capital Gains	—	—	—	—	—	—
Total Distributions	(1.921)	(3.976)	(3.747)	(3.303)	(2.948)	(2.699)
Net Asset Value, End of Period	$223.75	$206.57	$188.48	$189.89	$170.36	$131.37

Total Return¹	9.26%	11.82%	1.25%	13.51%	32.18%	15.82%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$28,166	$26,652	$26,092	$28,040	$27,758	$24,821
Ratio of Total Expenses to
Average Net Assets	0.14%	0.14%	0.16%	0.17%	0.17%	0.17%
Ratio of Net Investment Income to
Average Net Assets	1.86%	2.05%	2.00%	1.88%	1.95%	2.13%
Portfolio Turnover Rate²	3%	4%	3%	3%	3%	3%

The expense ratio, net investment income ratio, and turnover rate for the current period have been annualized.
1 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.
2 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital
shares, including ETF Creation Units.

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

500 Index Fund

Financial Highlights


ETF Shares
Six Months
	Ended
For a Share Outstanding	June 30,	Year Ended December 31,
Throughout Each Period	2017	2016	2015	2014	2013¹	2012¹
Net Asset Value, Beginning of Period	$205.00	$187.05	$188.45	$169.07	$130.38	$114.92
Investment Operations
Net Investment Income	2.054	4.155	3.958	3.518	3.117	2.846
Net Realized and Unrealized Gain (Loss)
on Investments	17.004	17.933	(1.427)	19.352	38.681	15.450
Total from Investment Operations	19.058	22.088	2.531	22.870	41.798	18.296
Distributions
Dividends from Net Investment Income	(2.008)	(4.138)	(3.931)	(3.490)	(3.108)	(2.836)
Distributions from Realized Capital Gains	—	—	—	—	—	—
Total Distributions	(2.008)	(4.138)	(3.931)	(3.490)	(3.108)	(2.836)
Net Asset Value, End of Period	$222.05	$205.00	$187.05	$188.45	$169.07	$130.38

Total Return	9.31%	11.93%	1.35%	13.63%	32.33%	15.98%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$70,066	$56,648	$40,440	$27,630	$15,037	$6,628
Ratio of Total Expenses to
Average Net Assets	0.04%	0.04%	0.05%	0.05%	0.05%	0.05%
Ratio of Net Investment Income to
Average Net Assets	1.96%	2.15%	2.11%	2.00%	2.07%	2.25%
Portfolio Turnover Rate²	3%	4%	3%	3%	3%	3%

The expense ratio, net investment income ratio, and turnover rate for the current period have been annualized.
1 Adjusted to reflect a 1-for-2 reverse share split as of the close of business on October 24, 2013.
2 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital
shares, including ETF Creation Units.

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

500 Index Fund

Financial Highlights


Admiral Shares
Six Months
	Ended
For a Share Outstanding	June 30,	Year Ended December 31,
Throughout Each Period	2017	2016	2015	2014	2013	2012
Net Asset Value, Beginning of Period	$206.57	$188.48	$189.89	$170.36	$131.37	$115.80
Investment Operations
Net Investment Income	2.069	4.185	3.990	3.544	3.142	2.866
Net Realized and Unrealized Gain (Loss)
on Investments	17.133	18.074	(1.439)	19.503	38.980	15.560
Total from Investment Operations	19.202	22.259	2.551	23.047	42.122	18.426
Distributions
Dividends from Net Investment Income	(2.022)	(4.169)	(3.961)	(3.517)	(3.132)	(2.856)
Distributions from Realized Capital Gains	—	—	—	—	—	—
Total Distributions	(2.022)	(4.169)	(3.961)	(3.517)	(3.132)	(2.856)
Net Asset Value, End of Period	$223.75	$206.57	$188.48	$189.89	$170.36	$131.37

Total Return¹	9.31%	11.93%	1.36%	13.64%	32.33%	15.96%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$205,335	$181,513	$152,740 $143,043		$82,357	$59,749
Ratio of Total Expenses to
Average Net Assets	0.04%	0.04%	0.05%	0.05%	0.05%	0.05%
Ratio of Net Investment Income to
Average Net Assets	1.96%	2.15%	2.11%	2.00%	2.07%	2.25%
Portfolio Turnover Rate²	3%	4%	3%	3%	3%	3%

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

500 Index Fund

Financial Highlights


Institutional Select Shares
	Six Months	June 24,
	Ended	2016¹to
	June 30,	Dec. 31,
For a Share Outstanding Throughout Each Period	2017	2016
Net Asset Value, Beginning of Period	$109.45	$99.57
Investment Operations
Net Investment Income	1.115	1.200
Net Realized and Unrealized Gain (Loss) on Investments	9.085	9.859
Total from Investment Operations	10.200	11.059
Distributions
Dividends from Net Investment Income	(1.090)	(1.179)
Distributions from Realized Capital Gains	—	—
Total Distributions	(1.090)	(1.179)
Net Asset Value, End of Period	$118.56	$109.45

Total Return	9.34%	11.12%

Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$25,722	$17,753
Ratio of Total Expenses to Average Net Assets	0.01%	0.01%²
Ratio of Net Investment Income to Average Net Assets	1.99%	2.26%²
Portfolio Turnover Rate³	3%	4%⁴

The expense ratio, net investment income ratio, and turnover rate for the current period have been annualized.
1 Inception.
2 Annualized.
3 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital
shares, including ETF Creation Units.
4 Reflects the fund’s portfolio turnover for the fiscal year ended December 31, 2016.

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

500 Index Fund

Notes to Financial Statements

Vanguard 500 Index Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers four classes of shares: Investor Shares, ETF Shares, Admiral Shares, and Institutional Select Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. ETF Shares are listed for trading on NYSE Arca; they can be purchased and sold through a broker. Admiral Shares and Institutional Select Shares are designed for investors who meet certain administrative, service, and account-size criteria.

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. 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. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. 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.

2. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objectives of maintaining full exposure to the stock market, enhancing returns, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying index while maintaining a cash balance for liquidity. The fund may seek to enhance returns by using futures contracts instead of the underlying securities when futures are believed to be priced more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of 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.

Futures contracts are valued at their quoted daily settlement prices. The aggregate settlement values of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets 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 futures gains (losses).

During the six months ended June 30, 2017, the fund’s average investments in long and short futures contracts represented less than 1% and 0% of net assets, respectively, based on the average of aggregate settlement values at each quarter-end during the period.

500 Index Fund

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (December 31, 2013–2016), and for the period ended June 30, 2017, and has concluded that no provision for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions to shareholders are recorded on the ex-dividend date.

5. 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 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 Net Assets for the return of the collateral, during the period the securities are on loan. 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.

6. Credit Facility: The fund and certain other funds managed by The Vanguard Group (“Vanguard”) participate in a $3.1 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement that may be renewed annually; each fund is individually liable for its borrowings, if any, under the credit facility. Borrowings may be utilized for temporary and emergency purposes, and are subject to the fund’s regulatory and contractual borrowing restrictions. The participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn 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 this facility bear interest at a rate based upon the higher of the one-month London Interbank Offered Rate, federal funds effective rate, or overnight bank funding rate plus an agreed-upon spread.

The fund had no borrowings outstanding at June 30, 2017, or at any time during the period then ended.

7. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Premiums and discounts on debt securities purchased are amortized and accreted, respectively, to interest income over the lives of the respective securities. 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.

500 Index Fund

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. Vanguard does not require reimbursement in the current period for certain costs of operations (such as deferred compensation/benefits and risk/insurance costs); the fund’s liability for these costs of operations is included in Payables to Vanguard on the Statement of Net Assets.

Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At June 30, 2017, the fund had contributed to Vanguard capital in the amount of $21,361,000, representing 0.01% of the fund’s net assets and 8.54% of Vanguard’s capitalization. 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. 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).

The following table summarizes the market value of the fund’s investments as of June 30, 2017, based on the inputs used to value them:


	Level 1	Level 2	Level 3
Investments	($000)	($000)	($000)
Common Stocks	328,173,899	—	—
Temporary Cash Investments	1,653,789	54,941	—
Futures Contracts—Assets¹	409	—	—
Total	329,828,097	54,941	—
1 Represents variation margin on the last day of the reporting period.

500 Index Fund

D. At June 30, 2017, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:


			($000)
			Aggregate
		Number of	Settlement	Unrealized
		Long (Short)	Value	Appreciation
Futures Contracts	Expiration	Contracts	Long (Short)	(Depreciation)
E-mini S&P 500 Index	September 2017	9,083	1,099,452	(5,268)

Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.

E. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes. These differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

During the six months ended June 30, 2017, the fund realized $2,823,550,000 of net capital gains resulting from in-kind redemptions—in which shareholders exchanged fund shares for securities held by the fund rather than for cash. Because such gains are not taxable to the fund, and are not distributed to shareholders, they have been reclassified from accumulated net realized losses to paid-in capital.

The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at December 31, 2016, the fund had available capital losses totaling $840,474,000 that may be carried forward indefinitely to offset future net capital gains. The fund will use these capital losses to offset net taxable capital gains, if any, realized during the year ending December 31, 2017; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.

At June 30, 2017, the cost of investment securities for tax purposes was $210,121,979,000. Net unrealized appreciation of investment securities for tax purposes was $119,760,650,000, consisting of unrealized gains of $123,433,262,000 on securities that had risen in value since their purchase and $3,672,612,000 in unrealized losses on securities that had fallen in value since their purchase.

F. During the six months ended June 30, 2017, the fund purchased $31,799,423,000 of investment securities and sold $9,045,520,000 of investment securities, other than temporary cash investments. Purchases and sales include $17,172,867,000 and $4,255,232,000, respectively, in connection with in-kind purchases and redemptions of the fund’s capital shares.

500 Index Fund

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


	Six Months Ended		Year Ended
	June 30, 2017		December 31, 2016
	Amount	Shares	Amount	Shares
	($000)	(000)	($000)	(000)
Investor Shares
Issued	2,252,238	10,351	3,996,733	20,796
Issued in Lieu of Cash Distributions	228,837	1,038	502,725	2,544
Redeemed	(3,160,900)	(14,523)	(6,363,162)	(32,754)
Net Increase (Decrease)—Investor Shares	(679,825)	(3,134)	(1,863,704)	(9,414)
ETF Shares
Issued	12,107,100	56,009	20,791,085	108,961
Issued in Lieu of Cash Distributions	—	—	—	—
Redeemed	(3,630,446)	(16,800)	(9,224,989)	(48,825)
Net Increase (Decrease)—ETF Shares	8,476,654	39,209	11,566,096	60,136
Admiral Shares
Issued	19,586,120	89,911	30,149,922	155,773
Issued in Lieu of Cash Distributions	1,619,728	7,347	3,138,593	15,855
Redeemed	(12,703,138)	(58,256)	(20,030,422)	(103,296)
Net Increase (Decrease) —Admiral Shares	8,502,710	39,002	13,258,093	68,332
Institutional Select Shares¹
Issued	6,636,626	57,299	17,224,925	163,684
Issued in Lieu of Cash Distributions	214,452	1,833	141,449	1,293
Redeemed	(505,644)	(4,385)	(294,889)	(2,774)
Net Increase (Decrease) —Institutional
Select Shares	6,345,434	54,747	17,071,485	162,203
1 Inception was June 24, 2016, for Institutional Select Shares.

H. Management has determined that no material events or transactions occurred subsequent to June 30, 2017, that would require recognition or disclosure in these financial statements.

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.


Six Months Ended June 30, 2017
	Beginning	Ending	Expenses
	Account Value	Account Value	Paid During
500 Index Fund	12/31/2016	6/30/2017	Period
Based on Actual Fund Return
Investor Shares	$1,000.00	$1,092.63	$0.73
ETF Shares	1,000.00	1,093.12	0.21
Admiral Shares	1,000.00	1,093.13	0.21
Institutional Select Shares	1,000.00	1,093.37	0.05
Based on Hypothetical 5% Yearly Return
Investor Shares	$1,000.00	$1,024.10	$0.70
ETF Shares	1,000.00	1,024.60	0.20
Admiral Shares	1,000.00	1,024.60	0.20
Institutional Select Shares	1,000.00	1,024.74	0.05

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 0.14% for Investor Shares, 0.04% for ETF Shares, 0.04% for Admiral Shares, and 0.01% for Institutional Select 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).

Trustees Approve Advisory Arrangement

The board of trustees of Vanguard 500 Index Fund has renewed the fund’s investment advisory arrangement with The Vanguard Group, Inc. (Vanguard), through its Equity Index Group. 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 three decades. The Equity Index Group adheres to a sound, disciplined investment management process; the 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. Information about the fund’s most recent performance can be found in the Performance Summary section of this report.

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. Information about the fund’s expenses appears in the About Your Fund’s Expenses section of this report as well as in the Financial Statements section.

The board does not conduct a profitability analysis of Vanguard because of Vanguard’s unique “at-cost” structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees and produces “profits” only in the form of reduced expenses for fund shareholders.

The benefit of economies of scale

The board concluded that the fund’s at-cost 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.

Glossary

30-Day SEC Yield. A fund’s 30-day SEC yield is derived using a formula specified by the U.S. Securities and Exchange Commission. Under the formula, data related to the fund’s security holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that period, which is then annualized and divided by the fund’s estimated average net assets over the calculation period. For the purposes of this calculation, a security’s income is based on its current market yield to maturity (for bonds), its actual income (for asset-backed securities), or its projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized income, it will differ—at times significantly—from the fund’s actual experience. As a result, the fund’s income distributions may be higher or lower than implied by the SEC yield.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.

Dividend Yield. Dividend income earned by stocks, expressed as a percentage of the aggregate market value (or of net asset value, for a fund). The yield is determined by dividing the amount of the annual dividends by the aggregate value (or net asset value) at the end of the period. For a fund, the dividend yield is based solely on stock holdings and does not include any income produced by other investments.

Earnings Growth Rate. The average annual rate of growth in earnings over the past five years for the stocks now in a fund.

Equity Exposure. A measure that reflects a fund’s investments in stocks and stock futures. Any holdings in short-term reserves are excluded.

Expense Ratio. A fund’s total annual operating expenses expressed as a percentage of the fund’s average net assets. The expense ratio includes management and administrative expenses, but does not include the transaction costs of buying and selling portfolio securities.

Foreign Holdings. The percentage of a fund represented by securities or depositary receipts of companies based outside the United States.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.

Median Market Cap. An indicator of the size of companies in which a fund invests; the midpoint of market capitalization (market price x shares outstanding) of a fund’s stocks, weighted by the proportion of the fund’s assets invested in each stock. Stocks representing half of the fund’s assets have market capitalizations above the median, and the rest are below it.

Price/Book Ratio. The share price of a stock divided by its net worth, or book value, per share.

For a fund, the weighted average price/book ratio of the stocks it holds.

Price/Earnings Ratio. The ratio of a stock’s current price to its per-share earnings over the past year. For a fund, the weighted average P/E of the stocks it holds. P/E is an indicator of market expectations about corporate prospects; the higher the P/E, the greater the expectations for a company’s future growth.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.

Return on Equity. The annual average rate of return generated by a company during the past five years for each dollar of shareholder’s equity (net income divided by shareholder’s equity). For a fund, the weighted average return on equity for the companies whose stocks it holds.

Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.

Turnover Rate. An indication of the fund’s trading activity. Funds with high turnover rates incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The turnover rate excludes in-kind transactions, which have minimal impact on costs.

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark
of MSCI Inc. (“MSCI”) and Standard and Poor’s, a division of McGraw-Hill Companies, Inc. (“S&P”), and is licensed for use
by Vanguard. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classification
makes any express or implied warranties or representations with respect to such standard or classification (or the results
to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy,
completeness, merchantability or fitness for a particular purpose with respect to any such standard or classification.
Without limiting any of the foregoing, in no event shall MSCI, S&P, any of its affiliates or any third party involved in
making or compiling the GICS or any GICS classification have any liability for any direct, indirect, special, punitive,
consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 197 Vanguard funds.

Information for each trustee and executive officer of the fund appears below. The mailing address of the trustees and officers is P.O. Box 876, Valley Forge, PA 19482. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at vanguard.com.

Interested Trustee¹

F. William McNabb III

Born 1957. Trustee Since July 2009. Chairman of the Board. Principal Occupation(s) During the Past Five Years and Other Experience: Chairman of the Board of The Vanguard Group, Inc., and of each of the investment companies served by The Vanguard Group, since January 2010; Director of The Vanguard Group since 2008; Chief Executive Officer and President of The Vanguard Group, and of each of the investment companies served by The Vanguard Group, since 2008; Director of Vanguard Marketing Corporation; Managing Director of The Vanguard Group (1995–2008).

Independent Trustees

Emerson U. Fullwood

Born 1948. Trustee Since January 2008. Principal Occupation(s) During the Past Five Years and Other Experience: Executive Chief Staff and Marketing Officer for North America and Corporate Vice President (retired 2008) of Xerox Corporation (document management products and services); Executive in Residence and 2009–2010 Distinguished Minett Professor at the Rochester Institute of Technology; Lead Director of SPX FLOW, Inc. (multi-industry manufacturing); Director of the United Way of Rochester, the University of Rochester Medical Center, Monroe Community College Foundation, North Carolina A&T University, and Roberts Wesleyan College; Trustee of the University of Rochester.

Rajiv L. Gupta

Born 1945. Trustee Since December 2001.²Principal Occupation(s) During the Past Five Years and Other Experience: Chairman and Chief Executive Officer (retired 2009) and President (2006–2008) of Rohm and Haas Co. (chemicals); Director of Arconic Inc. (diversified manufacturer), HP Inc. (printer and personal computer manufacturing), and Delphi Automotive plc (automotive components); Senior Advisor at New Mountain Capital.

Amy Gutmann

Born 1949. Trustee Since June 2006. Principal Occupation(s) During the Past Five Years and Other Experience: President of the University of Pennsylvania; Christopher H. Browne Distinguished Professor of Political Science, School of Arts and Sciences, and Professor of Communication, Annenberg School for Communication, with secondary faculty appointments in the Department of Philosophy, School of Arts and Sciences, and at the Graduate School of Education, University of Pennsylvania; Trustee of the National Constitution Center.

JoAnn Heffernan Heisen

Born 1950. Trustee Since July 1998. Principal Occupation(s) During the Past Five Years and Other Experience: Corporate Vice President and Member of the Executive Committee (1997–2008), Chief Global Diversity Officer (retired 2008), Vice President and Chief Information Officer (1997–2006), Controller (1995–1997), Treasurer (1991–1995), and Assistant Treasurer (1989–1991) of Johnson & Johnson (pharmaceuticals/medical devices/consumer products); Director of Skytop Lodge Corporation (hotels) and the Robert Wood Johnson Foundation; Member of the Advisory Board of the Institute for Women’s Leadership at Rutgers University.

F. Joseph Loughrey

Born 1949. Trustee Since October 2009. Principal Occupation(s) During the Past Five Years and Other Experience: President and Chief Operating Officer (retired 2009) of Cummins Inc. (industrial machinery); Chairman of the Board of Hillenbrand, Inc. (specialized consumer services), Oxfam America, and the Lumina

Foundation for Education; Director of the V Foundation for Cancer Research; Member of the Advisory Council for the College of Arts and Letters and Chair of the Advisory Board to the Kellogg Institute for International Studies, both at the University of Notre Dame.

Mark Loughridge

Born 1953. Trustee Since March 2012. Principal Occupation(s) During the Past Five Years and Other Experience: Senior Vice President and Chief Financial Officer (retired 2013) at IBM (information technology services); Fiduciary Member of IBM’s Retirement Plan Committee (2004–2013); Director of the Dow Chemical Company; Member of the Council on Chicago Booth.

Scott C. Malpass

Born 1962. Trustee Since March 2012. Principal Occupation(s) During the Past Five Years and Other Experience: Chief Investment Officer and Vice President at the University of Notre Dame; Assistant Professor of Finance at the Mendoza College of Business at Notre Dame; Member of the Notre Dame 403(b) Investment Committee, the Board of Advisors for Spruceview Capital Partners, the Board of Catholic Investment Services, Inc. (investment advisor), and the Board of Superintendence of the Institute for the Works of Religion; Chairman of the Board of TIFF Advisory Services, Inc. (investment advisor).

André F. Perold

Born 1952. Trustee Since December 2004. Principal Occupation(s) During the Past Five Years and Other Experience: George Gund Professor of Finance and Banking, Emeritus at the Harvard Business School (retired 2011); Chief Investment Officer and Co-Managing Partner of HighVista Strategies LLC (private investment firm); Overseer of the Museum of Fine Arts Boston.

Peter F. Volanakis

Born 1955. Trustee Since July 2009. Principal Occupation(s) During the Past Five Years and Other Experience: President and Chief Operating Officer (retired 2010) of Corning Incorporated (communications equipment); Chairman of the Board of Trustees of Colby-Sawyer College; Member of the Board of Hypertherm, Inc. (industrial cutting systems, software, and consumables).

Executive Officers

Glenn Booraem

Born 1967. Investment Stewardship Officer Since February 2017. Principal Occupation(s) During the Past Five Years and Other Experience: Principal of The Vanguard Group, Inc.; Treasurer (2015–2017), Controller (2010–2015), and Assistant Controller (2001–2010) of each of the investment companies served by The Vanguard Group.

Thomas J. Higgins

Born 1957. Chief Financial Officer Since September 2008. Principal Occupation(s) During the Past Five Years and Other Experience: Principal of The Vanguard Group, Inc.; Chief Financial Officer of each of the investment companies served by The Vanguard Group; Treasurer of each of the investment companies served by The Vanguard Group (1998–2008).

Peter Mahoney

Born 1974. Controller Since May 2015. Principal Occupation(s) During the Past Five Years and Other Experience: Principal of The Vanguard Group, Inc.; Controller of each of the investment companies served by The Vanguard Group; Head of International Fund Services at The Vanguard Group (2008–2014).

Anne E. Robinson

Born 1970. Secretary Since September 2016. Principal Occupation(s) During the Past Five Years and Other Experience: Managing Director of The Vanguard Group, Inc.; General Counsel of The Vanguard Group; Secretary of The Vanguard Group and of each of the investment companies served by The Vanguard Group; Director and Senior Vice President of Vanguard Marketing Corporation; Managing Director and General Counsel of Global Cards and Consumer Services at Citigroup (2014–2016); Counsel at American Express (2003–2014).

Michael Rollings

Born 1963. Treasurer Since February 2017. Principal Occupation(s) During the Past Five Years and Other Experience: Managing Director of The Vanguard Group, Inc.; Treasurer of each of the investment companies served by The Vanguard Group; Director of Vanguard Marketing Corporation; Executive Vice President and Chief Financial Officer of MassMutual Financial Group (2006–2016).


Vanguard Senior ManagementTeam
Mortimer J. Buckley	James M. Norris
John James	Thomas M. Rampulla
Martha G. King	Glenn W. Reed
John T. Marcante	Karin A. Risi
Chris D. McIsaac

Chairman Emeritus and Senior Advisor
John J. Brennan
Chairman, 1996–2009
Chief Executive Officer and President, 1996–2008

Founder
John C. Bogle
Chairman and Chief Executive Officer, 1974–1996

1 Mr. McNabb is considered an “interested person,” as defined in the Investment Company Act of 1940, because he is an officer of the Vanguard funds.
2 December 2002 for Vanguard Equity Income Fund, the Vanguard Municipal Bond Funds, and the Vanguard State Tax-Exempt Funds.


	P.O. Box 2600
	Valley Forge, PA 19482-2600



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	© 2017 The Vanguard Group, Inc.
	All rights reserved.
	Vanguard Marketing Corporation, Distributor.

	Q402 082017

Semiannual Report | June 30, 2017

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

Vanguard Small-Cap Index Fund

Vanguard Small-Cap Growth Index Fund

Vanguard Small-Cap Value Index Fund

A new format, unwavering commitment

As you begin reading this report, you’ll notice that we’ve made some improvements to the opening sections—based on feedback from you, our clients.

Page 1 starts with a new ”Your Fund’s Performance at a Glance,” a concise, handy summary of how your fund performed during the period.

In the renamed ”Chairman’s Perspective,” Bill McNabb will focus on enduring principles and investment insights.

We’ve modified some tables, and eliminated some redundancy, but we haven’t removed any information.

At Vanguard, we’re always looking for better ways to communicate and to help you make sound investment decisions. Thank you for entrusting your assets to us.


Contents
Your Fund’s Performance at a Glance.	1
Chairman’s Perspective.	4
Small-Cap Index Fund.	8
Small-Cap Growth Index Fund.	28
Small-Cap Value Index Fund.	46
About Your Fund’s Expenses.	65
Trustees Approve Advisory Arrangements.	68
Glossary.	70

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: No matter what language you speak, Vanguard has one consistent message and set of
principles. Our primary focus is on you, our clients. We conduct our business with integrity as a faithful steward
of your assets. This message is shown translated into seven languages, reflecting our expanding global
presence.

Your Fund’s Performance at a Glance

• For the six months ended June 30, 2017, returns for Vanguard’s three small-capitalization U.S. index funds ranged from more than 2% for Vanguard Small-Cap Value Index Fund to about 10% for Vanguard Small-Cap Growth Index Fund. Vanguard Small-Cap Index Fund, which contains both growth and value stocks, returned almost 6%.

• All three funds closely tracked their target indexes. The Small-Cap Index Fund and Small-Cap Value Index Fund exceeded the average return of their peers, while the Small-Cap Growth Index Fund trailed the average return of its peers.

• Small-cap stocks trailed their large- and mid-cap counterparts, while growth stocks outperformed value stocks.

• Health care was the top-performing sector for all three funds; technology and industrial stocks also made strong contributions. However, all three funds suffered double-digit declines in the oil and gas and telecommunications sectors.


Total Returns: Six Months Ended June 30, 2017
	Total
	Returns
Vanguard Small-Cap Index Fund
Investor Shares	5.70%
ETF Shares
Market Price	5.70
Net Asset Value	5.75
Admiral™ Shares	5.76
Institutional Shares	5.75
Institutional Plus Shares	5.77
CRSP US Small Cap Index	5.75
Small-Cap Core Funds Average	3.44
Small-Cap Core Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.


Total Returns: Six Months Ended June 30, 2017
	Total
	Returns
Vanguard Small-Cap Growth Index Fund
Investor Shares	9.98%
ETF Shares
Market Price	9.99
Net Asset Value	10.03
Admiral Shares	10.04
Institutional Shares	10.04
CRSP US Small Cap Growth Index	10.02
Small-Cap Growth Funds Average	10.49
Small-Cap Growth Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

Vanguard Small-Cap Value Index Fund
Investor Shares	2.35%
ETF Shares
Market Price	2.37
Net Asset Value	2.41
Admiral Shares	2.43
Institutional Shares	2.42
CRSP US Small Cap Value Index	2.43
Small-Cap Value Funds Average	0.29
Small-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
and Institutional Plus 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 vanguard.com, 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.


Expense Ratios
Your Fund Compared With Its Peer Group
	Investor	ETF	Admiral	Institutional	Institutional	Peer Group
	Shares	Shares	Shares	Shares	Plus Shares	Average
Small-Cap Index Fund	0.18%	0.06%	0.06%	0.05%	0.04%	1.24%
Small-Cap Growth Index Fund	0.19	0.07	0.07	0.06	—	1.34
Small-Cap Value Index Fund	0.19	0.07	0.07	0.06	—	1.32

The fund expense ratios shown are from the prospectus dated April 27, 2017, and represent estimated costs for the current fiscal year. For
the six months ended June 30, 2017, the funds’ annualized expense ratios were: for the Small-Cap Index Fund, 0.18% for Investor
Shares, 0.06% for ETF Shares, 0.06% for Admiral Shares, 0.05% for Institutional Shares, and 0.04% for Institutional Plus Shares; for the
Small-Cap Growth Index Fund, 0.19% for Investor Shares, 0.07% for ETF Shares, 0.07% for Admiral Shares, and 0.06% for Institutional
Shares; and for the Small-Cap Value Index Fund, 0.19% for Investor Shares, 0.07% for ETF Shares, 0.07% for Admiral Shares, and 0.06%
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 2016.

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

Chairman’s Perspective

Bill McNabb
Chairman and Chief Executive Officer

Dear Shareholder,

A lens on investor behavior

In the spring, the risk speedometer spiked. The spike was fueled by investors’ decisions to direct more of their equity

dollars to international investments in developed and emerging markets, and their bond dollars to riskier credit categories.

How I manage risk in my own portfolio


Market Barometer
			Total Returns
		Periods Ended June 30, 2017
			Five Years
	Six Months	One Year	(Annualized)
Stocks
Russell 1000 Index (Large-caps)	9.27%	18.03%	14.67%
Russell 2000 Index (Small-caps)	4.99	24.60	13.70
Russell 3000 Index (Broad U.S. market)	8.93	18.51	14.58
FTSE All-World ex US Index (International)	13.95	20.53	7.68

Bonds
Bloomberg Barclays U.S. Aggregate Bond Index
(Broad taxable market)	2.27%	-0.31%	2.21%
Bloomberg Barclays Municipal Bond Index
(Broad tax-exempt market)	3.57	-0.49	3.26
Citigroup Three-Month U.S. Treasury Bill Index	0.30	0.46	0.13

CPI
Consumer Price Index	1.46%	1.63%	1.31%

investment portfolio, and, if necessary, rebalance back to my target asset allocation.

Consider your options

And remember, the goal of rebalancing is to manage risk, not to avoid it altogether. Risk is inherent in investing—we just want to bear that risk intelligently.

In that insightful memo on risk, Howard Marks included a saying often attributed to Will Rogers: “You’ve got to go out on a limb sometimes because that’s where the fruit is.”

Tim Buckley chosen as Vanguard’s next CEO

period, I will work closely with Tim in managing the firm and overseeing its operations.

my life at Vanguard, I have come to know many fabulous crew members who are incredibly dedicated to Vanguard’s mission. Please be assured that Tim and the rest of the team will serve you and our other clients extremely well as Vanguard prepares for its next chapter.

As always, thank you for investing with Vanguard.

Sincerely,