representing less than 0.01% of the fund’s net assets and 0.28% of Vanguard’s capital received pursuant to the FSA. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
C. The fund’s custodian bank has agreed to reduce its fees when the fund maintains cash on deposit in the non-interest-bearing custody account. For the six months ended June 30, 2022, custodian fee offset arrangements reduced the fund’s expenses by $1,000 (an annual rate of less than 0.01% of average net assets).
D. Various inputs may be used to determine the value of the fund’s investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At June 30, 2022, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. As of June 30, 2022, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
| | Amount
($000) |
| Tax Cost | 16,122,032 |
| Gross Unrealized Appreciation | 4,530,179 |
| Gross Unrealized Depreciation | (2,691,448) |
| Net Unrealized Appreciation (Depreciation) | 1,838,731 |
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, 2021, the fund had available capital losses totaling $1,189,969,000 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, 2022; should the fund realize net capital losses for the year, the losses will be added to the loss carryforward balance above.
F. During the six months ended June 30, 2022, the fund purchased $4,820,431,000 of investment securities and sold $4,600,512,000 of investment securities, other than temporary cash investments. Purchases and sales include $2,243,873,000 and $2,037,579,000, respectively, in connection with in-kind purchases and redemptions of the fund’s capital shares.
The fund purchased securities from and sold securities to other Vanguard funds or accounts managed by Vanguard or its affiliates, in accordance with procedures adopted by the board of trustees in compliance with Rule 17a-7 of the Investment Company Act of 1940. For the six months ended June 30, 2022, such purchases were $277,726,000 and sales were $687,029,000, resulting in net realized loss of $1,043,095,000; these amounts, other than temporary cash investments, are included in the purchases and sales of investment securities noted above.
G. Capital share transactions for each class of shares were:
| | Six Months Ended
June 30, 2022 | | Year Ended
December 31, 2021 |
| | Amount
($000) | Shares
(000) | | Amount
($000) | Shares
(000) |
| Investor Shares | | | | | |
| Issued | 4,300 | 52 | | 19,175 | 208 |
| Issued in Lieu of Cash Distributions | 131 | 2 | | 202 | 2 |
| Redeemed | (20,248) | (237) | | (29,443) | (320) |
| Net Increase (Decrease)—Investor Shares | (15,817) | (183) | | (10,066) | (110) |
