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: 811-04526
| | |
| Name of Registrant: | Vanguard Quantitative 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: September 30
Date of reporting period: October 1, 2017 – March 31, 2018
Item 1: Reports to Shareholders
Semiannual Report | March 31, 2018
Vanguard Growth and Income Fund
Vanguard’s Principles for Investing Success
We want to give you the best chance of investment success. These
principles, grounded in Vanguard’s research and experience, can put you on
the right path.
Goals. Create clear, appropriate investment goals.
Balance. Develop a suitable asset allocation using broadly diversified funds.
Cost. Minimize cost.
Discipline. Maintain perspective and long-term discipline.
A single theme unites these principles: Focus on the things you can control.
We believe there is no wiser course for any investor.
| |
| Contents | |
| Your Fund’s Performance at a Glance. | 1 |
| CEO’s Perspective. | 2 |
| Advisors’ Report. | 4 |
| Results of Proxy Voting. | 10 |
| Fund Profile. | 11 |
| Performance Summary. | 13 |
| Financial Statements. | 14 |
| About Your Fund’s Expenses. | 36 |
| Glossary. | 38 |
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: Nautical images have been part of Vanguard’s rich heritage since its start in 1975. For an
incoming ship, a lighthouse offers a beacon and safe path to shore. You can similarly depend on Vanguard to put
you first––and light the way––as you strive to meet your financial goals. Our client focus and low costs,
stemming from our unique ownership structure, assure that your interests are paramount.
Your Fund’s Performance at a Glance
• Vanguard Growth and Income Fund returned nearly 6% for the six months ended
March 31, 2018, slightly ahead of its benchmark and the average return of its peers.
• The fund seeks a total return greater than that of the Standard & Poor’s 500 Index
by investing in U.S. large- and mid-capitalization stocks. Three independent advisors
manage the fund, each responsible for its own portfolio.
• Growth stocks outperformed their value counterparts, and large-cap stocks topped
their mid- and small-cap peers. U.S. stocks outpaced those of developed markets but
trailed those of emerging markets.
• Five of the fund’s 11 sectors produced positive relative results. Industrials
contributed the most, followed by energy, real estate, utilities, and consumer
staples. Information technology, consumer discretionary, and health care detracted
from relative performance.
| |
| Total Returns: Six Months Ended March 31, 2018 | |
| | Total |
| | Returns |
| Vanguard Growth and Income Fund | |
| Investor Shares | 5.91% |
| Admiral™ Shares | 5.97 |
| S&P 500 Index | 5.84 |
| Large-Cap Core Funds Average | 5.20 |
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.
| | | |
| Expense Ratios | | | |
| Your Fund Compared With Its Peer Group | | | |
| | Investor | Admiral | Peer Group |
| | Shares | Shares | Average |
| Growth and Income Fund | 0.34% | 0.23% | 1.03% |
The fund expense ratios shown are from the prospectus dated January 26, 2018, and represent estimated costs for the current fiscal year. For the six months ended March 31, 2018, the fund’s annualized expense ratios were 0.34% for Investor Shares and 0.23% for Admiral Shares. The peer-group expense ratio is derived from data provided by Lipper, a Thomson Reuters Company, and captures information through year-end 2017.
Peer group: Large-Cap Core Funds.
1
CEO’s Perspective
Tim Buckley
President and Chief Executive Officer
Dear Shareholder,
I feel extremely fortunate to have the chance to lead a company filled with people who come to work every day passionate about Vanguard’s core purpose: to take a stand for all investors, to treat them fairly, and to give them the best chance for investment success.
When I joined Vanguard in 1991, I found a mission-driven team focused on improving lives—helping people retire more comfortably, put their children through college, and achieve financial security. I also found a company with purpose in an industry ripe for improvement.
It was clear, even early in my career, that the cards were stacked against most investors. Hidden fees, performance-chasing, and poor advice were relentlessly eroding investors’ dreams.
We knew Vanguard could be different and, as a result, could make a real difference. We have lowered the costs of investing for our shareholders significantly. And we’re proud of the performance of our funds.
Vanguard is built for Vanguard investors—we focus solely on you, our fund shareholders. Everything we do is designed to give our clients the best chance for investment success. In my role as CEO, I’ll keep this priority
2
front and center. We’re proud of what we’ve achieved, but we’re even more excited about what’s to come.
Steady, time-tested guidance
Our guidance for investors, as always, is to stay the course, tune out the hyperbolic headlines, and focus on your goals and what you can control, such as costs and how much you save. This time-tested advice has served our clients well over the decades.
Regardless of how the markets perform in the short term, I’m incredibly optimistic about the future for our investors. We have a dedicated team serving you, and we will never stop striving to make
Vanguard the best place for you to invest through our high-quality funds and services, advice and guidance to help you meet your financial goals, and an experience that makes you feel good about entrusting us with your hard-earned savings.
Thank you for your continued loyalty.
Mortimer J. Buckley
President and Chief Executive Officer
April 13, 2018
| | | |
| Market Barometer | | | |
| | | | Total Returns |
| | | Periods Ended March 31, 2018 |
| | Six | One | Five Years |
| | Months | Year | (Annualized) |
| Stocks | | | |
| Russell 1000 Index (Large-caps) | 5.85% | 13.98% | 13.17% |
| Russell 2000 Index (Small-caps) | 3.25 | 11.79 | 11.47 |
| Russell 3000 Index (Broad U.S. market) | 5.65 | 13.81 | 13.03 |
| FTSE All-World ex US Index (International) | 4.03 | 16.45 | 6.30 |
| |
| Bonds | | | |
| Bloomberg Barclays U.S. Aggregate Bond Index | | | |
| (Broad taxable market) | -1.08% | 1.20% | 1.82% |
| Bloomberg Barclays Municipal Bond Index | | | |
| (Broad tax-exempt market) | -0.37 | 2.66 | 2.73 |
| Citigroup Three-Month U.S. Treasury Bill Index | 0.63 | 1.07 | 0.30 |
| |
| CPI | | | |
| Consumer Price Index | 1.11% | 2.36% | 1.40% |
3
Advisors’ Report
For the six months ended March 31, 2018, Vanguard Growth and Income Fund returned 5.91% for Investor Shares and 5.97% for the low-cost Admiral Shares.
Your fund is managed by three independent advisors, a strategy that enhances the fund’s diversification by providing exposure to distinct yet complementary investment approaches. It’s not uncommon for different advisors to have different views about individual securities or the broader investment environment.
The advisors, the percentage of fund assets each manages, and brief descriptions of their investment strategies are presented in the accompanying table. The advisors have also prepared a discussion of the investment environment that existed during the period and of how portfolio positioning reflects this assessment. (Please note that Los Angeles Capital’s discussion refers to industry sectors as defined by Russell classifications, rather than by the Global Industry Classification Standard used elsewhere in this report.) These comments were prepared on April 17, 2018.
Vanguard Quantitative Equity Group
Portfolio Managers:
James P. Stetler
Binbin Guo, Principal,
Head of Alpha Equity Investments
The period opened with global equities posting positive returns for the seventh consecutive quarter. As 2018 began, positive global economic momentum continued against a backdrop of rising volatility and a hawkish tone from the major central banks. In the United States, companies began to respond to new tax laws, and strong earnings announcements moved the S&P 500 Index to a record high at the end of January. Developed Europe and Asia-Pacific equities also rose, fueled by improvement in macroeconomic fundamentals.
February brought a sudden change in market sentiment, and investors saw the return of volatility after an unusually long period of calm. Over the period, the broad U.S. equity market (as measured by the Russell 3000 Index) returned 5.65%. U.S. stock market performance was mixed; seven of 11 industry sectors advanced, led by information technology and consumer
4
discretionary. Growth stocks outperformed their value counterparts, and large-capitalization stocks topped small-caps.
Although overall performance is affected by macro factors, our approach to investing focuses on specific fundamentals. We believe that attractive stocks exhibit five key characteristics: high quality (healthy balance sheets and steady cash-flow generation), effective use of capital by management with sound investment policies that favor internal over external funding, consistent earnings growth with the ability to grow earnings year after year, strong market sentiment, and reasonable valuation.
Using these five themes, we generate a daily composite stock ranking, seeking to capitalize on market inefficiencies. We then monitor our portfolio and adjust when appropriate to maximize expected returns and minimize exposure to risks that our research indicates don’t improve returns (such as industry selection and other risks relative to the benchmark).
Over the period, our sentiment, quality, and growth models boosted performance, while our management decisions and valuation models were approximately flat. Our strongest sector results were in energy, industrials, and information technology. Our worst were in consumer discretionary, materials, and telecommunication services.
At the individual stock level, the largest contributions to relative performance came from underweighted position in General Electric and overweighted positions in Boeing, Freeport-McMoRan, Red Hat, and Ralph Lauren. Underweighted positions in Amazon.com and overweighted positions in Albemarle, PG&E, Advanced Micro Devices, and Celgene hurt performance.
We believe that our approach will benefit investors over the long term and feel that the fund offers a strong mix of stocks with attractive valuation and growth characteristics relative to its benchmark.
D. E. Shaw Investment
Management, L.L.C.
Portfolio Manager:
Philip Kearns, Ph.D.,
Managing Director
The S&P 500 Index gained 5.84% for the half year, but this rise masked considerable volatility. The index’s performance over the six months is best understood in terms of two distinct segments: a period of gains, which lasted until January 26 and seemed to be characterized by optimism and even complacency; and a period of losses, which lasted from January 29 through the end of March and was characterized by apparent uncertainty and volatility.
During the first period, the S&P 500 rose 14.69%, had a maximum drawdown of just 1.05%, and never fell more than 0.53% on a single day. In what may have been a
5
sign that investors expected the calm to continue, the CBOE Volatility Index (VIX), a measure of the expected volatility of the S&P 500, remained quite low. It ranged between 9.1 and 13.2 and closed above 12 on only two days. Even these low estimates of upcoming volatility proved too high, however, as the S&P 500 realized annualized volatility of just 5.57% for this first period. The market rally was broad-based, with all sectors of the S&P 500 except utilities rising. The consumer discretionary sector, which includes stocks that investors generally expect will outperform in times of strong growth and confidence, was the best-performing sector through January 26.
The big economic news of the fourth quarter—the signing of the Tax Cuts and Jobs Act of 2017 on December 22—did not seem at first to affect equities, as the S&P 500 was essentially flat during the last week of the year. Once the calendar flipped to 2018, however, investors may have begun to consider the effects of the tax legislation, and the U.S. stock market resumed its rise—even accelerating—as the S&P 500 posted positive returns in eight of the first nine trading days of January.
On January 29, the day Janet Yellen began presiding over her final U.S. Federal Reserve meeting, the ten-year U.S. Treasury bond yield rose to 2.69%, its highest level since April 2014, and the S&P 500 fell 0.67%. Although the Fed took no major monetary policy actions at this meeting, fears of higher short-term
interest rates may have been behind the continued rise of long-term rates and the decline of the equity market. By February 8, the S&P 500 was down 10.09% from its January peak. Market sentiment seemed to shift during this time, as the VIX closed as high as 30 on February 6 after topping 50 earlier that day. Although stocks rebounded over the next few weeks, the March 22 announcement of new U.S. tariffs on Chinese imports reignited negative sentiment and drove equities back down.
Although we actively monitor market activity of the type described above, we generally do not make investment decisions based on a subjective analysis of the investment environment. The one exception is when we attempt to mitigate certain situation-specific risks identified by the firm. There were no such occurrences of this during the six months under review.
Our quantitative equity investment process deploys both alpha models that seek to forecast individual stock returns and risk models that seek to mitigate active exposures to industries, sectors, and common risk factors. However, the resulting portfolios may exhibit small to moderate active exposures to industries, sectors, and risk factors as a by-product of our focus on bottom-up stock selection. Therefore, we generally attribute portfolio performance to three major sources: bottom-up stock selection; exposure to industry groups; and exposure to risk factors such as value, growth, and market capitalization.
6
Stock selection was the largest contributor to relative performance during the reporting period, with exposure to technical risk factors—primarily overweight exposure to small-capitalization and less liquid stocks—being the principal detractors.
No other risk category had a notable impact on performance.
Underweighted positions in General Electric, Facebook, and Exxon Mobil contributed most to our portfolio’s performance. The biggest detractors were underweighted positions in Amazon.com, Microsoft, and Intel.
In our view, the U.S. economy is continuing to expand. There are, however, reasons to be cautious about the prospects for the equity markets. The new year began with optimism about the effect of tax reform legislation on corporate earnings apparently pushing up U.S. stocks, but this confidence appears to have quickly faded. As analysts began reporting that companies would probably spend most of their newfound cash on acquisitions, stock buybacks, and debt repayments, investors may have begun to see the tax changes as a quick windfall that would have little effect on future earnings growth.
Lastly, we note that concerns about rising interest rates and a possible trade war with China appear to have precipitated the market’s retreat from its January peak. An
increase in implied volatility may indicate that investors are willing to pay more to hedge against additional declines.
Los Angeles Capital
Portfolio Managers:
Thomas D. Stevens, CFA,
Chairman and Principal
Hal W. Reynolds, CFA,
Chief Investment Officer and Principal
While the S&P 500 Index generated a 5.84% return for the six months ended March 31, 2018, returns in February and March were negative—the first consecutive-month losses in two years. Following a period of record low volatility and strong market returns, concerns over the impact of rising interest rates emerged as a dominant theme at the end of January. Although the market’s strong fundamentals and earnings outlook remained intact throughout the first quarter of 2018, the scope of investor fears spread, encompassing first rising inflation, then protectionist trade policies, and finally the risks of new regulations governing data privacy. And all of these concerns weighed on the valuations of larger-cap U.S. equities.
The best-performing stocks were those with strong momentum and favorable earnings yields. Continuing the broader trend from recent periods, higher-yielding stocks underperformed as the market
7
adjusted to rising rate expectations. The retail industry offered the highest returns as steady economic growth and improving consumer confidence has translated into robust consumer spending and further consolidation. Technology returns remained strong, while value-oriented segments such as telecommunications and utilities continued to lag the broader market.
The portfolio maintained a bias toward securities exhibiting strong earnings growth. We reduced its exposure to companies with high foreign revenue in light of rising concerns over the potential for new tariffs. Exposure to stocks with strong momentum and positive analyst insight added value, as did an overweight allocation to stocks with strong earnings
quality. The portfolio’s bias toward companies with high foreign revenue hindered performance.
The market continues to favor growth stocks over value. Investors remain comfortable with above-average valuations for higher-quality companies, given an improving economic outlook and strong earnings. Today, the portfolio favors higher-quality companies with strong fundamental momentum. It is tilted toward technology and industrial stocks, which benefit from increased capital spending, and away from utilities and real estate stocks, which are sensitive to changes in interest rates.
8
Vanguard Growth and Income Fund Investment Advisors
| | | |
| | Fund Assets Managed | |
| Investment Advisor | % | $ Million | Investment Strategy |
| Vanguard Quantitative Equity | 33 | 3,390 | Employs a quantitative fundamental management |
| Group | | | approach, using models that assess valuation, growth |
| | | | prospects, management decisions, market |
| | | | sentiment, and earnings and balance-sheet quality of |
| | | | companies as compared with their peers. |
| D. E. Shaw Investment | 32 | 3,389 | Employs quantitative models that seek to capture |
| Management, L.L.C. | | | predominantly bottom-up stock-specific return |
| | | | opportunities. The portfolio’s sector weights, size, |
| | | | and style characteristics may differ modestly from the |
| | | | benchmark in a risk-controlled manner. |
| Los Angeles Capital | 32 | 3,377 | Employs a quantitative model that emphasizes stocks |
| | | | with characteristics investors are currently seeking |
| | | | and underweights stocks with characteristics |
| | | | investors are currently avoiding. The portfolio’s sector |
| | | | weights, size, and style characteristics may differ |
| | | | modestly from the benchmark in a risk-controlled |
| | | | manner. |
| Cash Investments | 3 | 283 | These short-term reserves are invested by Vanguard |
| | | | in equity index products to simulate investments in |
| | | | stocks. Each advisor also may maintain a modest |
| | | | cash position. |
9
Results of Proxy Voting
At a special meeting of shareholders on November 15, 2017, fund shareholders approved the following proposals:
Proposal 1—Elect trustees for the fund.*
The individuals listed in the table below were elected as trustees for the fund. All trustees with the exception of Ms. Mulligan, Ms. Raskin, and Mr. Buckley (each of whom already serves as a director of The Vanguard Group, Inc.) served as trustees to the funds prior to the shareholder meeting.
| | | |
| | | | Percentage |
| Trustee | For | Withheld | For |
| Mortimer J. Buckley | 99,221,791 | 3,987,035 | 96.1% |
| Emerson U. Fullwood | 98,727,834 | 4,480,991 | 95.7% |
| Amy Gutmann | 98,720,197 | 4,488,628 | 95.7% |
| JoAnn Heffernan Heisen | 98,985,252 | 4,223,573 | 95.9% |
| F. Joseph Loughrey | 98,943,017 | 4,265,808 | 95.9% |
| Mark Loughridge | 99,106,004 | 4,102,821 | 96.0% |
| Scott C. Malpass | 98,939,753 | 4,269,072 | 95.9% |
| F. William McNabb III | 99,035,314 | 4,173,511 | 96.0% |
| Deanna Mulligan | 99,119,033 | 4,089,792 | 96.0% |
| André F. Perold | 98,579,484 | 4,629,342 | 95.5% |
| Sarah Bloom Raskin | 99,023,928 | 4,184,897 | 95.9% |
| Peter F. Volanakis | 99,115,244 | 4,093,581 | 96.0% |
| * Results are for all funds within the same trust. | | | |
Proposal 3—Approve a manager-of-managers arrangement with wholly owned subsidiaries of Vanguard.
This arrangement enables Vanguard or the fund to enter into and materially amend investment advisory arrangements with wholly owned subsidiaries of Vanguard, subject to the approval of the fund’s board of trustees and any conditions imposed by the Securities and Exchange Commission (SEC), while avoiding the costs and delays associated with obtaining future shareholder approval. The ability of the fund to operate in this manner is contingent upon the SEC’s approval of a pending application for an order of exemption.
| | | | | |
| | | | | Broker | Percentage |
| Vanguard Fund | For | Abstain | Against | Non-Votes | For |
| Growth and Income Fund | 83,199,721 | 5,074,141 | 4,547,033 | 10,387,930 | 80.6% |
10
Growth and Income Fund
Fund Profile
As of March 31, 2018
| | |
| Share-Class Characteristics | |
| | Investor | Admiral |
| | Shares | Shares |
| Ticker Symbol | VQNPX | VGIAX |
| Expense Ratio1 | 0.34% | 0.23% |
| 30-Day SEC Yield | 1.49% | 1.60% |
| | | |
| Portfolio Characteristics | | |
| | | | DJ |
| | | | U.S. Total |
| | | S&P 500 | Market |
| | Fund | Index | FA Index |
| Number of Stocks | 1,012 | 505 | 3,771 |
| Median Market Cap | $69.8B | $100.5B | $64.2B |
| Price/Earnings Ratio | 21.0x | 21.5x | 21.2x |
| Price/Book Ratio | 3.3x | 3.1x | 2.9x |
| Return on Equity | 16.1% | 16.1% | 15.0% |
| Earnings Growth Rate | 8.8% | 7.9% | 8.4% |
| Dividend Yield | 1.7% | 1.9% | 1.8% |
| Foreign Holdings | 0.1% | 0.0% | 0.0% |
| Turnover Rate | | | |
| (Annualized) | 89% | — | — |
| Short-Term Reserves | 0.3% | — | — |
| | | |
| Sector Diversification (% of equity exposure) |
| | | | DJ |
| | | | U.S. Total |
| | | S&P 500 | Market |
| | Fund | Index | FA Index |
| Consumer Discretionary | 12.2% | 12.7% | 12.9% |
| Consumer Staples | 7.3 | 7.6 | 6.8 |
| Energy | 5.9 | 5.7 | 5.5 |
| Financials | 14.7 | 14.7 | 15.1 |
| Health Care | 13.9 | 13.7 | 13.3 |
| Industrials | 10.5 | 10.2 | 10.9 |
| Information Technology | 26.7 | 24.9 | 23.9 |
| Materials | 2.7 | 2.9 | 3.3 |
| Real Estate | 2.2 | 2.8 | 3.7 |
| Telecommunication | | | |
| Services | 1.6 | 1.9 | 1.7 |
| Utilities | 2.3 | 2.9 | 2.9 |
Sector categories are based on the Global Industry Classification Standard (“GICS”), except for the “Other” category (if applicable), which includes securities that have not been provided a GICS classification as of the effective reporting period.
These measures show the degree and timing of the fund’s fluctuations compared with the indexes over 36 months.
| | |
| Volatility Measures | | |
| | | DJ |
| | | U.S. Total |
| | S&P 500 | Market |
| | Index | FA Index |
| R-Squared | 0.99 | 0.99 |
| Beta | 0.98 | 0.97 |
| | |
| Ten Largest Holdings (% of total net assets) |
| Apple Inc. | Technology | |
| | Hardware, Storage & | |
| | Peripherals | 4.1% |
| Microsoft Corp. | Systems Software | 2.9 |
| Amazon.com Inc. | Internet & Direct | |
| | Marketing Retail | 2.3 |
| Alphabet Inc. Class C | Internet Software & | |
| | Services | 1.6 |
| Alphabet Inc. Class A | Internet Software & | |
| | Services | 1.6 |
| Facebook Inc. Class A | Internet Software & | |
| | Services | 1.4 |
| JPMorgan Chase & Co. | Diversified Banks | 1.4 |
| Johnson & Johnson | Pharmaceuticals | 1.3 |
| Bank of America Corp. | Diversified Banks | 1.2 |
| Merck & Co. Inc. | Pharmaceuticals | 1.1 |
| Top Ten | | 18.9% |
The holdings listed exclude any temporary cash investments and equity index products.
1 The expense ratios shown are from the prospectus dated January 26, 2018, and represent estimated costs for the current fiscal year. For the six months ended March 31, 2018, the annualized expense ratios were 0.34% for Investor Shares and 0.23% for Admiral Shares.
11
Growth and Income Fund
Investment Focus
12
Growth and Income 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 (%): September 30, 2007, Through March 31, 2018
Note: For 2018, performance data reflect the six months ended March 31, 2018.
| | | | |
| Average Annual Total Returns: Periods Ended March 31, 2018 |
| | Inception | One | Five | Ten |
| | Date | Year | Years | Years |
| Investor Shares | 12/10/1986 | 13.82% | 13.34% | 9.06% |
| Admiral Shares | 5/14/2001 | 13.95 | 13.47 | 9.19 |
See Financial Highlights for dividend and capital gains information.
13
Growth and Income Fund
Financial Statements (unaudited)
Statement of Net Assets
As of March 31, 2018
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 (97.0%)1 | | |
| Consumer Discretionary (11.8%) | |
| * | Amazon.com Inc. | 167,952 | 243,084 |
| | Home Depot Inc. | 586,183 | 104,481 |
| | Comcast Corp. Class A | 2,093,229 | 71,526 |
| | McDonald’s Corp. | 345,742 | 54,067 |
| * | Booking Holdings Inc. | 24,034 | 50,000 |
| | Yum! Brands Inc. | 452,625 | 38,532 |
| | Lowe’s Cos. Inc. | 414,574 | 36,379 |
| | Ross Stores Inc. | 410,587 | 32,018 |
| * | Netflix Inc. | 107,243 | 31,674 |
| | TJX Cos. Inc. | 362,920 | 29,600 |
| | Kohl’s Corp. | 437,983 | 28,692 |
| | Best Buy Co. Inc. | 407,215 | 28,501 |
| * | Dollar Tree Inc. | 289,112 | 27,437 |
| * | Michael Kors Holdings | | |
| | Ltd. | 399,124 | 24,778 |
| | Hilton Worldwide | | |
| | Holdings Inc. | 310,107 | 24,424 |
| | H&R Block Inc. | 852,398 | 21,659 |
| | Wynn Resorts Ltd. | 118,532 | 21,615 |
| | Time Warner Inc. | 224,255 | 21,210 |
| | BorgWarner Inc. | 365,308 | 18,349 |
| | Marriott International | | |
| | Inc. Class A | 133,660 | 18,175 |
| | Ralph Lauren Corp. | | |
| | Class A | 157,640 | 17,624 |
| | News Corp. Class A | 1,100,803 | 17,393 |
| * | Charter Communications | | |
| | Inc. Class A | 49,143 | 15,294 |
| | Walt Disney Co. | 125,559 | 12,611 |
| | Carnival Corp. | 186,870 | 12,255 |
| | Aptiv plc | 135,000 | 11,471 |
| | PVH Corp. | 74,996 | 11,357 |
| | Ford Motor Co. | 1,008,473 | 11,174 |
| | News Corp. Class B | 657,785 | 10,590 |
| | Darden Restaurants Inc. | 123,068 | 10,492 |
| | DR Horton Inc. | 232,794 | 10,206 |
| *,^ | Discovery Communications | | |
| | Inc. Class A | 460,906 | 9,877 |
| | Wyndham Worldwide | | |
| | Corp. | 85,596 | 9,795 |
| * | DISH Network Corp. | | |
| | Class A | 250,519 | 9,492 |
| | Royal Caribbean Cruises | | |
| | Ltd. | 75,366 | 8,874 |
| | Expedia Group Inc. | 74,890 | 8,269 |
| * | LKQ Corp. | 207,524 | 7,876 |
| * | O’Reilly Automotive Inc. | 29,787 | 7,369 |
| | L Brands Inc. | 167,820 | 6,412 |
| | Target Corp. | 91,016 | 6,319 |
| | Tiffany & Co. | 61,253 | 5,982 |
| | Goodyear Tire & Rubber | | |
| | Co. | 218,200 | 5,800 |
| | Foot Locker Inc. | 122,070 | 5,559 |
| | VF Corp. | 56,400 | 4,180 |
| | Starbucks Corp. | 68,693 | 3,977 |
| | Viacom Inc. Class B | 121,750 | 3,782 |
| | Tapestry Inc. | 67,245 | 3,538 |
| | Macy’s Inc. | 109,990 | 3,271 |
| * | Mohawk Industries Inc. | 10,300 | 2,392 |
| ^ | Signet Jewelers Ltd. | 60,812 | 2,342 |
| * | Ulta Beauty Inc. | 10,967 | 2,240 |
| * | TripAdvisor Inc. | 49,900 | 2,040 |
| | Dollar General Corp. | 20,930 | 1,958 |
| * | Michaels Cos. Inc. | 98,700 | 1,945 |
| * | Liberty Media Corp-Liberty | | |
| | SiriusXM Class C | 43,900 | 1,793 |
| * | Discovery Communications | | |
| | Inc. | 89,950 | 1,756 |
| | Advance Auto Parts Inc. | 13,400 | 1,589 |
| * | Adtalem Global Education | | |
| | Inc. | 33,100 | 1,574 |
| * | Crocs Inc. | 93,400 | 1,518 |
| | Graham Holdings Co. | | |
| | Class B | 2,457 | 1,480 |
| | Delphi Technologies plc | 31,022 | 1,478 |
14
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| | PulteGroup Inc. | 49,198 | 1,451 |
| | Dick’s Sporting Goods Inc. | 40,500 | 1,419 |
| | Las Vegas Sands Corp. | 19,400 | 1,395 |
| | CBS Corp. Class B | 27,120 | 1,394 |
| * | Burlington Stores Inc. | 9,800 | 1,305 |
| * | ServiceMaster Global | | |
| | Holdings Inc. | 21,300 | 1,083 |
| | Carter’s Inc. | 10,200 | 1,062 |
| * | Liberty Media Corp-Liberty | | |
| | SiriusXM Class A | 25,800 | 1,060 |
| | Restaurant Brands | | |
| | International Inc. | 18,500 | 1,053 |
| | La-Z-Boy Inc. | 35,000 | 1,048 |
| | Hyatt Hotels Corp. | | |
| | Class A | 13,100 | 999 |
| | Omnicom Group Inc. | 12,279 | 892 |
| * | Sleep Number Corp. | 24,100 | 847 |
| * | Express Inc. | 117,000 | 838 |
| | Lennar Corp. Class A | 13,600 | 802 |
| * | Hibbett Sports Inc. | 31,100 | 745 |
| ^ | Sirius XM Holdings Inc. | 116,200 | 725 |
| | Brinker International Inc. | 16,800 | 606 |
| * | Visteon Corp. | 5,500 | 606 |
| | Garmin Ltd. | 9,500 | 560 |
| * | Sally Beauty Holdings Inc. | 31,600 | 520 |
| * | Hilton Grand Vacations Inc. | 11,900 | 512 |
| | Nordstrom Inc. | 10,400 | 503 |
| | Newell Brands Inc. | 19,034 | 485 |
| | International Game | | |
| | Technology plc | 18,100 | 484 |
| | Pier 1 Imports Inc. | 148,500 | 478 |
| | Yum China Holdings Inc. | 11,362 | 471 |
| | Gap Inc. | 15,104 | 471 |
| * | Liberty Expedia Holdings | | |
| | Inc. Class A | 11,000 | 432 |
| * | Groupon Inc. Class A | 95,400 | 414 |
| | Big Lots Inc. | 9,507 | 414 |
| ^ | GameStop Corp. Class A | 31,300 | 395 |
| | Lions Gate Entertainment | | |
| | Corp. Class A | 14,500 | 375 |
| * | Fossil Group Inc. | 29,200 | 371 |
| | Gentex Corp. | 14,000 | 322 |
| | Bloomin’ Brands Inc. | 12,800 | 311 |
| * | Urban Outfitters Inc. | 6,900 | 255 |
| * | Wayfair Inc. | 3,700 | 250 |
| | Finish Line Inc. Class A | 18,100 | 245 |
| * | Ferrari NV | 1,900 | 229 |
| | Cable One Inc. | 305 | 210 |
| * | GCI Liberty Inc. Class A | 3,900 | 206 |
| | MGM Resorts International | 4,700 | 165 |
| | Tailored Brands Inc. | 6,500 | 163 |
| * | Liberty TripAdvisor | | |
| | Holdings Inc. Class A | 11,100 | 119 |
| | Aaron’s Inc. | 2,400 | 112 |
| | Genuine Parts Co. | 1,200 | 108 |
| ^ | Big 5 Sporting Goods Corp. | 12,623 | 91 |
| | Adient plc | 1,500 | 90 |
| | Service Corp. International | 2,131 | 80 |
| | Gannett Co. Inc. | 8,050 | 80 |
| | Brunswick Corp. | 1,200 | 71 |
| * | Kirkland’s Inc. | 6,800 | 66 |
| * | Pinnacle Entertainment Inc. | 2,100 | 63 |
| * | Altice USA Inc. Class A | 2,300 | 42 |
| * | Liberty Global plc Class A | 1,280 | 40 |
| * | MDC Partners Inc. Class A | 5,400 | 39 |
| * | Horizon Global Corp. | 4,300 | 35 |
| * | Taylor Morrison Home Corp. | | |
| | Class A | 1,500 | 35 |
| * | Shutterfly Inc. | 419 | 34 |
| * | Liberty Interactive Corp. | | |
| | QVC Group Class A | 1,300 | 33 |
| * | Sotheby’s | 600 | 31 |
| | Tenneco Inc. | 501 | 27 |
| * | La Quinta Holdings Inc. | 1,300 | 25 |
| | Entravision Communications | | |
| | Corp. Class A | 5,200 | 24 |
| | American Eagle | | |
| | Outfitters Inc. | 1,100 | 22 |
| | Bassett Furniture | | |
| | Industries Inc. | 689 | 21 |
| | New Media Investment | | |
| | Group Inc. | 1,200 | 21 |
| | Ethan Allen Interiors Inc. | 800 | 18 |
| | Dunkin’ Brands Group Inc. | 300 | 18 |
| * | Nautilus Inc. | 1,300 | 17 |
| | Toll Brothers Inc. | 400 | 17 |
| | Tile Shop Holdings Inc. | 2,800 | 17 |
| | Libbey Inc. | 3,300 | 16 |
| * | Biglari Holdings Inc. | 34 | 14 |
| *,^ | Iconix Brand Group Inc. | 12,400 | 14 |
| * | Modine Manufacturing Co. | 605 | 13 |
| * | Monarch Casino & Resort | | |
| | Inc. | 300 | 13 |
| | Ruth’s Hospitality Group Inc. | 500 | 12 |
| * | Lumber Liquidators | | |
| | Holdings Inc. | 500 | 12 |
| * | Vitamin Shoppe Inc. | 2,000 | 9 |
| * | American Public | | |
| | Education Inc. | 200 | 9 |
| * | Bojangles’ Inc. | 400 | 6 |
| * | GoPro Inc. Class A | 900 | 4 |
| * | WideOpenWest Inc. | 600 | 4 |
| | Cato Corp. Class A | 271 | 4 |
| | Aramark | 100 | 4 |
| * | Overstock.com Inc. | 100 | 4 |
| * | Liberty Global plc | 100 | 3 |
| | | | 1,231,253 |
15
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| Consumer Staples (7.1%) | | |
| | PepsiCo Inc. | 848,596 | 92,624 |
| | Walmart Inc. | 838,051 | 74,561 |
| | Procter & Gamble Co. | 792,639 | 62,840 |
| | CVS Health Corp. | 765,497 | 47,622 |
| | Constellation Brands Inc. | | |
| | Class A | 177,462 | 40,447 |
| | Costco Wholesale Corp. | 211,597 | 39,871 |
| | Philip Morris International | | |
| | Inc. | 371,828 | 36,960 |
| | Coca-Cola Co. | 797,245 | 34,624 |
| | Estee Lauder Cos. Inc. | | |
| | Class A | 218,378 | 32,696 |
| | Conagra Brands Inc. | 865,411 | 31,916 |
| | Walgreens Boots Alliance | | |
| | Inc. | 400,300 | 26,208 |
| | Colgate-Palmolive Co. | 361,559 | 25,917 |
| | Altria Group Inc. | 400,684 | 24,971 |
| * | Monster Beverage Corp. | 394,123 | 22,548 |
| | Clorox Co. | 165,720 | 22,059 |
| | Mondelez International | | |
| | Inc. Class A | 502,049 | 20,951 |
| | Kraft Heinz Co. | 324,438 | 20,209 |
| | Kimberly-Clark Corp. | 177,910 | 19,593 |
| | Hershey Co. | 179,393 | 17,753 |
| | Tyson Foods Inc. Class A | 193,856 | 14,188 |
| | Molson Coors Brewing | | |
| | Co. Class B | 103,802 | 7,819 |
| | Coty Inc. Class A | 394,090 | 7,212 |
| * | US Foods Holding Corp. | 98,000 | 3,211 |
| | Dr Pepper Snapple Group | | |
| | Inc. | 26,126 | 3,093 |
| | Archer-Daniels-Midland Co. | 50,175 | 2,176 |
| | Lamb Weston Holdings Inc. | 33,900 | 1,974 |
| | Church & Dwight Co. Inc. | 36,930 | 1,860 |
| | Kroger Co. | 64,330 | 1,540 |
| | Sysco Corp. | 18,222 | 1,093 |
| * | TreeHouse Foods Inc. | 11,599 | 444 |
| * | Post Holdings Inc. | 5,700 | 432 |
| | Casey’s General Stores Inc. | 2,800 | 307 |
| * | Boston Beer Co. Inc. | | |
| | Class A | 400 | 76 |
| * | Sprouts Farmers Market | | |
| | Inc. | 3,000 | 70 |
| * | Pilgrim’s Pride Corp. | 2,318 | 57 |
| * | Avon Products Inc. | 14,500 | 41 |
| * | USANA Health Sciences | | |
| | Inc. | 400 | 34 |
| | Nu Skin Enterprises Inc. | | |
| | Class A | 400 | 30 |
| * | Central Garden & Pet Co. | | |
| | Class A | 700 | 28 |
| * | Nomad Foods Ltd. | 1,400 | 22 |
| | Dean Foods Co. | 1,300 | 11 |
| * | Adecoagro SA | 1,252 | 9 |
| | Coca-Cola European | | |
| | Partners plc | 100 | 4 |
| | | | 740,101 |
| Energy (5.7%) | | |
| | Chevron Corp. | 744,479 | 84,900 |
| | Exxon Mobil Corp. | 997,316 | 74,410 |
| | Phillips 66 | 593,068 | 56,887 |
| | ConocoPhillips | 942,147 | 55,860 |
| | Marathon Petroleum | | |
| | Corp. | 737,539 | 53,921 |
| | Valero Energy Corp. | 432,463 | 40,120 |
| | Occidental Petroleum | | |
| | Corp. | 553,410 | 35,950 |
| | Marathon Oil Corp. | 1,655,062 | 26,696 |
| | Anadarko Petroleum | | |
| | Corp. | 432,791 | 26,145 |
| | Cabot Oil & Gas Corp. | 761,706 | 18,266 |
| | ONEOK Inc. | 298,260 | 16,977 |
| | Halliburton Co. | 337,170 | 15,827 |
| | EOG Resources Inc. | 133,000 | 14,001 |
| | Kinder Morgan Inc. | 741,300 | 11,164 |
| | Schlumberger Ltd. | 137,500 | 8,907 |
| | Baker Hughes a GE Co. | 320,400 | 8,898 |
| | Cimarex Energy Co. | 82,576 | 7,721 |
| | Williams Cos. Inc. | 246,400 | 6,125 |
| * | Newfield Exploration Co. | 193,900 | 4,735 |
| | Apache Corp. | 99,925 | 3,845 |
| | EQT Corp. | 80,360 | 3,818 |
| | Pioneer Natural | | |
| | Resources Co. | 18,572 | 3,190 |
| | Andeavor | 24,700 | 2,484 |
| * | Transocean Ltd. | 205,900 | 2,038 |
| * | Energen Corp. | 26,100 | 1,641 |
| | Peabody Energy Corp. | 27,600 | 1,007 |
| * | Superior Energy Services | | |
| | Inc. | 112,500 | 948 |
| * | QEP Resources Inc. | 95,500 | 935 |
| | Encana Corp. | 75,600 | 832 |
| * | Keane Group Inc. | 38,000 | 562 |
| | Murphy Oil Corp. | 19,100 | 494 |
| * | CNX Resources Corp. | 28,700 | 443 |
| * | Continental Resources Inc. | 5,000 | 295 |
| | Hess Corp. | 4,400 | 223 |
| | Oceaneering International | | |
| | Inc. | 11,200 | 208 |
| | Patterson-UTI Energy Inc. | 9,600 | 168 |
| * | W&T Offshore Inc. | 34,039 | 151 |
| * | CONSOL Energy Inc. | 3,700 | 107 |
| * | C&J Energy Services Inc. | 4,000 | 103 |
| * | Exterran Corp. | 3,800 | 101 |
| * | Laredo Petroleum Inc. | 11,500 | 100 |
| * | Bonanza Creek Energy Inc. | 3,245 | 90 |
| * | Oasis Petroleum Inc. | 10,200 | 83 |
16
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| * | Rowan Cos. plc Class A | 6,310 | 73 |
| | Golar LNG Ltd. | 2,410 | 66 |
| * | Fairmount Santrol Holdings | | |
| | Inc. | 14,200 | 60 |
| * | Helix Energy Solutions | | |
| | Group Inc. | 9,992 | 58 |
| | World Fuel Services Corp. | 2,000 | 49 |
| | Bristow Group Inc. | 3,500 | 45 |
| *,^ | California Resources Corp. | 2,500 | 43 |
| * | Southwestern Energy Co. | 7,900 | 34 |
| * | ProPetro Holding Corp. | 2,021 | 32 |
| | Plains GP Holdings LP | | |
| | Class A | 1,300 | 28 |
| | RPC Inc. | 1,400 | 25 |
| | Archrock Inc. | 2,600 | 23 |
| * | Matrix Service Co. | 1,300 | 18 |
| * | Ultra Petroleum Corp. | 4,000 | 17 |
| * | Earthstone Energy Inc. | | |
| | Class A | 1,600 | 16 |
| * | Denbury Resources Inc. | 4,500 | 12 |
| | Devon Energy Corp. | 229 | 7 |
| * | Kosmos Energy Ltd. | 300 | 2 |
| | Antero Midstream GP LP | 100 | 2 |
| | | | 591,986 |
| Financials (14.2%) | | |
| | JPMorgan Chase & Co. | 1,280,379 | 140,803 |
| | Bank of America Corp. | 4,079,202 | 122,335 |
| | Wells Fargo & Co. | 1,914,968 | 100,363 |
| * | Berkshire Hathaway Inc. | | |
| | Class B | 461,924 | 92,145 |
| | Citigroup Inc. | 1,018,395 | 68,742 |
| | CME Group Inc. | 292,860 | 47,367 |
| | BlackRock Inc. | 75,643 | 40,977 |
| | Progressive Corp. | 660,861 | 40,266 |
| | Fifth Third Bancorp | 1,130,476 | 35,893 |
| | T. Rowe Price Group Inc. | 325,150 | 35,106 |
| | Allstate Corp. | 359,398 | 34,071 |
| | S&P Global Inc. | 178,300 | 34,066 |
| | Bank of New York | | |
| | Mellon Corp. | 659,133 | 33,965 |
| | Aflac Inc. | 756,914 | 33,123 |
| | Intercontinental | | |
| | Exchange Inc. | 404,095 | 29,305 |
| | PNC Financial Services | | |
| | Group Inc. | 186,382 | 28,188 |
| | Unum Group | 570,034 | 27,139 |
| * | E*TRADE Financial Corp. | 480,753 | 26,638 |
| | State Street Corp. | 243,314 | 24,266 |
| | Capital One Financial | | |
| | Corp. | 249,127 | 23,871 |
| | Ameriprise Financial Inc. | 160,702 | 23,774 |
| | Synchrony Financial | 675,260 | 22,641 |
| | SunTrust Banks Inc. | 327,390 | 22,276 |
| | Comerica Inc. | 227,860 | 21,859 |
| | |
| Lincoln National Corp. | 292,772 | 21,390 |
| Citizens Financial Group | | |
| Inc. | 508,000 | 21,326 |
| Chubb Ltd. | 149,272 | 20,416 |
| Morgan Stanley | 329,246 | 17,766 |
| Franklin Resources Inc. | 495,665 | 17,190 |
| M&T Bank Corp. | 92,863 | 17,120 |
| Torchmark Corp. | 203,333 | 17,115 |
| Discover Financial | | |
| Services | 219,035 | 15,755 |
| Prudential Financial Inc. | 129,859 | 13,447 |
| Willis Towers Watson plc | 85,500 | 13,012 |
| People’s United Financial | | |
| Inc. | 685,909 | 12,799 |
| Moody’s Corp. | 71,300 | 11,501 |
| American International | | |
| Group Inc. | 199,900 | 10,879 |
| Everest Re Group Ltd. | 40,859 | 10,493 |
| Goldman Sachs Group Inc. | 41,375 | 10,421 |
| US Bancorp | 190,926 | 9,642 |
| Regions Financial Corp. | 490,178 | 9,107 |
| American Express Co. | 91,787 | 8,562 |
| Cboe Global Markets Inc. | 75,031 | 8,561 |
| Leucadia National Corp. | 336,911 | 7,658 |
| Nasdaq Inc. | 82,700 | 7,130 |
| Principal Financial | | |
| Group Inc. | 113,089 | 6,888 |
| Travelers Cos. Inc. | 44,904 | 6,235 |
| Affiliated Managers | | |
| Group Inc. | 32,420 | 6,146 |
| Invesco Ltd. | 189,890 | 6,078 |
| Hartford Financial | | |
| Services Group Inc. | 98,900 | 5,095 |
| XL Group Ltd. | 86,800 | 4,797 |
| Marsh & McLennan Cos. | | |
| Inc. | 58,000 | 4,790 |
| Huntington Bancshares | | |
| Inc. | 299,982 | 4,530 |
| Zions Bancorporation | 83,720 | 4,415 |
| Raymond James | | |
| Financial Inc. | 49,260 | 4,404 |
| First Horizon National | | |
| Corp. | 200,310 | 3,772 |
| Voya Financial Inc. | 69,700 | 3,520 |
| Navient Corp. | 257,369 | 3,377 |
| MetLife Inc. | 61,290 | 2,813 |
| First American Financial | | |
| Corp. | 44,500 | 2,611 |
| Arthur J Gallagher & Co. | 35,655 | 2,451 |
| Loews Corp. | 48,680 | 2,421 |
| FNF Group | 57,100 | 2,285 |
| Northern Trust Corp. | 21,300 | 2,197 |
| Assurant Inc. | 23,280 | 2,128 |
| Aon plc | 11,234 | 1,576 |
17
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| | Cincinnati Financial Corp. | 16,200 | 1,203 |
| | Credicorp Ltd. | 3,441 | 781 |
| | Financial Engines Inc. | 21,100 | 738 |
| | American Equity Investment | | |
| | Life Holding Co. | 24,900 | 731 |
| | TCF Financial Corp. | 25,100 | 572 |
| * | Flagstar Bancorp Inc. | 12,766 | 452 |
| | Argo Group International | | |
| | Holdings Ltd. | 5,135 | 295 |
| | LPL Financial Holdings Inc. | 4,000 | 244 |
| | Ares Capital Corp. | 13,500 | 214 |
| | Beneficial Bancorp Inc. | 13,200 | 205 |
| | PacWest Bancorp | 3,824 | 189 |
| | Apollo Investment Corp. | 33,306 | 174 |
| * | eHealth Inc. | 12,000 | 172 |
| | Bank of NT Butterfield & | | |
| | Son Ltd. | 3,800 | 171 |
| | Synovus Financial Corp. | 3,400 | 170 |
| * | Arch Capital Group Ltd. | 1,800 | 154 |
| | Hanover Insurance Group | | |
| | Inc. | 1,200 | 141 |
| | Santander Consumer USA | | |
| | Holdings Inc. | 8,300 | 135 |
| | Primerica Inc. | 1,300 | 126 |
| | Great Western Bancorp Inc. | 2,999 | 121 |
| | BankUnited Inc. | 3,000 | 120 |
| | SEI Investments Co. | 1,600 | 120 |
| | East West Bancorp Inc. | 1,800 | 113 |
| | Reinsurance Group of | | |
| | America Inc. Class A | 663 | 102 |
| | KeyCorp | 4,900 | 96 |
| | Hilltop Holdings Inc. | 3,800 | 89 |
| * | BrightSphere Investment | | |
| | Group plc | 5,500 | 87 |
| | Meridian Bancorp Inc. | 4,000 | 81 |
| * | Brighthouse Financial Inc. | 1,500 | 77 |
| | TD Ameritrade Holding Corp. | 1,300 | 77 |
| | Umpqua Holdings Corp. | 3,400 | 73 |
| | Kearny Financial Corp. | 5,381 | 70 |
| * | Essent Group Ltd. | 1,600 | 68 |
| | Kemper Corp. | 1,105 | 63 |
| | Erie Indemnity Co. Class A | 500 | 59 |
| | First Financial Bancorp | 1,786 | 52 |
| | Preferred Bank | 788 | 51 |
| | First Midwest Bancorp Inc. | 1,900 | 47 |
| | Heritage Financial Corp. | 1,488 | 46 |
| | Washington Federal Inc. | 1,222 | 42 |
| | Walker & Dunlop Inc. | 600 | 36 |
| | Stifel Financial Corp. | 600 | 36 |
| * | Credit Acceptance Corp. | 100 | 33 |
| * | Green Dot Corp. Class A | 483 | 31 |
| | Federated Investors Inc. | | |
| | Class B | 900 | 30 |
| | Resource Capital Corp. | 3,145 | 30 |
| | | |
| | Oaktree Specialty Lending | | |
| | Corp. | 6,200 | 26 |
| * | First BanCorp | 4,300 | 26 |
| | Old Republic International | | |
| | Corp. | 1,200 | 26 |
| | Home BancShares Inc. | 1,100 | 25 |
| | First Hawaiian Inc. | 900 | 25 |
| | Brookline Bancorp Inc. | 1,500 | 24 |
| * | World Acceptance Corp. | 200 | 21 |
| * | Bancorp Inc. | 1,936 | 21 |
| * | PHH Corp. | 1,900 | 20 |
| | Berkshire Hills Bancorp Inc. | 500 | 19 |
| | BGC Partners Inc. Class A | 1,400 | 19 |
| | Nelnet Inc. Class A | 339 | 18 |
| ^ | PennantPark Floating Rate | | |
| | Capital Ltd. | 1,300 | 17 |
| | Columbia Banking System | | |
| | Inc. | 400 | 17 |
| | MFA Financial Inc. | 2,100 | 16 |
| | Investment Technology | | |
| | Group Inc. | 700 | 14 |
| | Opus Bank | 483 | 13 |
| | PJT Partners Inc. | 200 | 10 |
| * | Athene Holding Ltd. Class A | 200 | 10 |
| | Maiden Holdings Ltd. | 1,300 | 8 |
| | MainSource Financial | | |
| | Group Inc. | 200 | 8 |
| | Newtek Business Services | | |
| | Corp. | 400 | 7 |
| | Garrison Capital Inc. | 500 | 4 |
| | Employers Holdings Inc. | 100 | 4 |
| * | Cowen Inc. Class A | 300 | 4 |
| | Assured Guaranty Ltd. | 100 | 4 |
| * | Donnelley Financial | | |
| | Solutions Inc. | 200 | 3 |
| | Banner Corp. | 60 | 3 |
| | OFG Bancorp | 300 | 3 |
| | THL Credit Inc. | 207 | 2 |
| | | | 1,482,132 |
| Health Care (13.4%) | | |
| | Johnson & Johnson | 1,033,807 | 132,482 |
| | Merck & Co. Inc. | 2,075,889 | 113,074 |
| | AbbVie Inc. | 1,013,687 | 95,945 |
| | Pfizer Inc. | 2,456,089 | 87,167 |
| | UnitedHealth Group Inc. | 385,638 | 82,527 |
| | Bristol-Myers Squibb Co. | 1,299,483 | 82,192 |
| | Eli Lilly & Co. | 799,867 | 61,886 |
| | Anthem Inc. | 201,496 | 44,269 |
| * | Vertex Pharmaceuticals | | |
| | Inc. | 261,392 | 42,602 |
| | Humana Inc. | 156,404 | 42,046 |
| | Agilent Technologies Inc. | 532,370 | 35,616 |
| * | Intuitive Surgical Inc. | 82,327 | 33,987 |
| | Zoetis Inc. | 366,485 | 30,605 |
18
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| | Cigna Corp. | 182,407 | 30,597 |
| | Amgen Inc. | 174,801 | 29,800 |
| * | Align Technology Inc. | 115,313 | 28,959 |
| | Medtronic plc | 342,532 | 27,478 |
| * | Express Scripts Holding | | |
| | Co. | 378,401 | 26,140 |
| | AmerisourceBergen Corp. | | |
| | Class A | 269,364 | 23,222 |
| | Baxter International Inc. | 351,162 | 22,840 |
| * | Celgene Corp. | 244,864 | 21,844 |
| | Gilead Sciences Inc. | 284,525 | 21,450 |
| * | IQVIA Holdings Inc. | 211,486 | 20,749 |
| * | Centene Corp. | 159,573 | 17,054 |
| * | Edwards Lifesciences | | |
| | Corp. | 121,670 | 16,975 |
| * | Boston Scientific Corp. | 600,123 | 16,395 |
| * | Mettler-Toledo | | |
| | International Inc. | 27,172 | 15,625 |
| | Thermo Fisher Scientific | | |
| | Inc. | 75,603 | 15,609 |
| * | DaVita Inc. | 218,720 | 14,422 |
| | Becton Dickinson and Co. | 54,073 | 11,718 |
| * | Biogen Inc. | 42,375 | 11,603 |
| | Cooper Cos. Inc. | 43,374 | 9,924 |
| * | Mylan NV | 232,310 | 9,564 |
| | HCA Healthcare Inc. | 97,580 | 9,465 |
| * | IDEXX Laboratories Inc. | 42,744 | 8,181 |
| * | Waters Corp. | 35,103 | 6,973 |
| | Aetna Inc. | 41,079 | 6,942 |
| | Quest Diagnostics Inc. | 67,860 | 6,806 |
| | Zimmer Biomet Holdings | | |
| | Inc. | 61,510 | 6,707 |
| | Abbott Laboratories | 111,151 | 6,660 |
| * | Illumina Inc. | 27,673 | 6,542 |
| * | Regeneron | | |
| | Pharmaceuticals Inc. | 17,921 | 6,171 |
| | Universal Health Services | | |
| | Inc. Class B | 49,700 | 5,885 |
| | Danaher Corp. | 59,634 | 5,839 |
| | McKesson Corp. | 40,082 | 5,646 |
| * | Laboratory Corp. of | | |
| | America Holdings | 27,200 | 4,400 |
| * | Hologic Inc. | 109,012 | 4,073 |
| | ResMed Inc. | 35,360 | 3,482 |
| | Patterson Cos. Inc. | 146,520 | 3,257 |
| | Cardinal Health Inc. | 51,420 | 3,223 |
| * | Molina Healthcare Inc. | 23,700 | 1,924 |
| * | Alexion Pharmaceuticals | | |
| | Inc. | 14,903 | 1,661 |
| | Perrigo Co. plc | 17,298 | 1,442 |
| * | Myriad Genetics Inc. | 45,300 | 1,339 |
| | Bruker Corp. | 40,800 | 1,221 |
| * | Varian Medical Systems | | |
| | Inc. | 9,770 | 1,198 |
| * | Dynavax Technologies | | |
| | Corp. | 57,400 | 1,139 |
| * | Portola Pharmaceuticals | | |
| | Inc. | 34,300 | 1,120 |
| * | Incyte Corp. | 12,100 | 1,008 |
| * | Insulet Corp. | 10,500 | 910 |
| * | Puma Biotechnology Inc. | 12,500 | 851 |
| * | MyoKardia Inc. | 16,900 | 825 |
| * | LivaNova plc | 7,600 | 673 |
| * | AMAG Pharmaceuticals | | |
| | Inc. | 30,771 | 620 |
| * | Masimo Corp. | 7,000 | 616 |
| | Dentsply Sirona Inc. | 11,400 | 574 |
| * | WellCare Health Plans Inc. | 2,900 | 562 |
| * | Depomed Inc. | 81,100 | 534 |
| *,^ | MannKind Corp. | 225,800 | 515 |
| * | Momenta | | |
| | Pharmaceuticals Inc. | 23,900 | 434 |
| *,^ | Sorrento Therapeutics Inc. | 70,600 | 364 |
| * | Spark Therapeutics Inc. | 5,300 | 353 |
| * | Amicus Therapeutics Inc. | 19,600 | 295 |
| * | United Therapeutics Corp. | 2,500 | 281 |
| * | Charles River Laboratories | | |
| | International Inc. | 2,500 | 267 |
| * | Neurocrine Biosciences Inc. | 3,000 | 249 |
| * | Clovis Oncology Inc. | 4,600 | 243 |
| * | Madrigal Pharmaceuticals | | |
| | Inc. | 2,000 | 234 |
| * | Editas Medicine Inc. | 6,800 | 225 |
| * | Allscripts Healthcare | | |
| | Solutions Inc. | 18,100 | 224 |
| * | Heron Therapeutics Inc. | 8,012 | 221 |
| *,^ | Arrowhead | | |
| | Pharmaceuticals Inc. | 27,300 | 197 |
| * | Ophthotech Corp. | 66,680 | 183 |
| * | PTC Therapeutics Inc. | 6,300 | 170 |
| * | Horizon Pharma plc | 11,300 | 160 |
| * | Community Health | | |
| | Systems Inc. | 33,700 | 133 |
| * | QIAGEN NV | 4,082 | 132 |
| * | Triple-S Management Corp. | | |
| | Class B | 4,400 | 115 |
| * | HMS Holdings Corp. | 6,800 | 115 |
| * | Eagle Pharmaceuticals Inc. | 1,900 | 100 |
| * | Tivity Health Inc. | 2,500 | 99 |
| * | OraSure Technologies Inc. | 5,800 | 98 |
| * | Endocyte Inc. | 10,700 | 97 |
| * | Sangamo Therapeutics Inc. | 5,000 | 95 |
| * | Agenus Inc. | 19,800 | 93 |
| * | Rocket Pharmaceuticals Inc. | 4,600 | 86 |
| * | Mallinckrodt plc | 5,900 | 85 |
| * | ImmunoGen Inc. | 8,100 | 85 |
| * | Varex Imaging Corp. | 2,100 | 75 |
| *,^ | Rockwell Medical Inc. | 12,854 | 67 |
19
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| * | Exelixis Inc. | 2,900 | 64 |
| * | Premier Inc. Class A | 1,700 | 53 |
| * | AngioDynamics Inc. | 2,600 | 45 |
| * | Rigel Pharmaceuticals Inc. | 12,565 | 44 |
| * | Quidel Corp. | 800 | 41 |
| * | Select Medical Holdings | | |
| | Corp. | 2,200 | 38 |
| * | CytomX Therapeutics Inc. | 1,129 | 32 |
| * | Syneos Health Inc. | 900 | 32 |
| * | Taro Pharmaceutical | | |
| | Industries Ltd. | 300 | 30 |
| * | Endo International plc | 4,600 | 27 |
| *,^ | Aurinia Pharmaceuticals Inc. | 5,200 | 27 |
| | Encompass Health Corp. | 400 | 23 |
| * | Valeant Pharmaceuticals | | |
| | International Inc. | 1,300 | 21 |
| * | Stemline Therapeutics Inc. | 1,122 | 17 |
| * | Novus Therapeutics Inc. | 3,477 | 17 |
| * | uniQure NV | 700 | 16 |
| | Meridian Bioscience Inc. | 1,000 | 14 |
| * | Spectrum Pharmaceuticals | | |
| | Inc. | 700 | 11 |
| * | Flexion Therapeutics Inc. | 500 | 11 |
| * | Otonomy Inc. | 2,600 | 11 |
| * | Catalyst Pharmaceuticals | | |
| | Inc. | 4,544 | 11 |
| * | Nektar Therapeutics | | |
| | Class A | 100 | 11 |
| * | Immunomedics Inc. | 700 | 10 |
| * | Innoviva Inc. | 600 | 10 |
| * | Enzo Biochem Inc. | 1,760 | 10 |
| * | BioCryst Pharmaceuticals | | |
| | Inc. | 2,000 | 10 |
| * | Chimerix Inc. | 1,834 | 10 |
| * | Accelerate Diagnostics Inc. | 400 | 9 |
| * | BioScrip Inc. | 3,700 | 9 |
| * | BioMarin Pharmaceutical Inc. | 100 | 8 |
| * | Diplomat Pharmacy Inc. | 402 | 8 |
| * | Enanta Pharmaceuticals Inc. | 100 | 8 |
| * | Haemonetics Corp. | 100 | 7 |
| * | Advaxis Inc. | 4,000 | 7 |
| * | ACADIA Pharmaceuticals | | |
| | Inc. | 300 | 7 |
| * | Vanda Pharmaceuticals Inc. | 400 | 7 |
| * | Arbutus Biopharma Corp. | 1,300 | 6 |
| * | Adverum Biotechnologies | | |
| | Inc. | 1,100 | 6 |
| * | Acorda Therapeutics Inc. | 200 | 5 |
| * | Civitas Solutions Inc. | 300 | 5 |
| * | Edge Therapeutics Inc. | 3,500 | 4 |
| * | Brookdale Senior Living Inc. | 600 | 4 |
| * | RTI Surgical Inc. | 802 | 4 |
| * | Radius Health Inc. | 100 | 4 |
| * | Medpace Holdings Inc. | 100 | 3 |
| | | |
| * | Intrexon Corp. | 200 | 3 |
| * | Quality Systems Inc. | 200 | 3 |
| * | AcelRx Pharmaceuticals Inc. | 1,100 | 2 |
| * | Concert Pharmaceuticals Inc. | 100 | 2 |
| * | Celldex Therapeutics Inc. | 900 | 2 |
| * | OvaScience Inc. | 2,518 | 2 |
| *,^ | AquaBounty Technologies | | |
| | Inc. | 371 | 1 |
| | | | 1,401,697 |
| Industrials (10.2%) | | |
| | Boeing Co. | 333,053 | 109,201 |
| | Lockheed Martin Corp. | 155,289 | 52,477 |
| | Caterpillar Inc. | 341,301 | 50,301 |
| | Waste Management Inc. | 597,334 | 50,248 |
| | Raytheon Co. | 191,291 | 41,284 |
| | 3M Co. | 184,841 | 40,576 |
| | Honeywell International | | |
| | Inc. | 256,135 | 37,014 |
| | Cummins Inc. | 209,271 | 33,921 |
| | Pentair plc | 480,509 | 32,737 |
| | Norfolk Southern Corp. | 239,602 | 32,533 |
| | Southwest Airlines Co. | 566,086 | 32,425 |
| | American Airlines Group | | |
| | Inc. | 505,476 | 26,265 |
| * | United Rentals Inc. | 141,658 | 24,469 |
| | Harris Corp. | 150,957 | 24,346 |
| | Fortive Corp. | 306,370 | 23,750 |
| | Ingersoll-Rand plc | 253,318 | 21,661 |
| | Dover Corp. | 218,000 | 21,412 |
| | CSX Corp. | 369,938 | 20,609 |
| | Kansas City Southern | 184,445 | 20,261 |
| | Eaton Corp. plc | 245,028 | 19,580 |
| | PACCAR Inc. | 294,539 | 19,490 |
| | Cintas Corp. | 102,600 | 17,502 |
| | General Dynamics Corp. | 71,104 | 15,707 |
| | KAR Auction Services | | |
| | Inc. | 278,664 | 15,104 |
| | Masco Corp. | 369,100 | 14,926 |
| | Deere & Co. | 95,471 | 14,829 |
| | Emerson Electric Co. | 210,526 | 14,379 |
| | WW Grainger Inc. | 47,677 | 13,458 |
| | Northrop Grumman Corp. | 38,165 | 13,324 |
| | AMETEK Inc. | 175,140 | 13,305 |
| | Spirit AeroSystems | | |
| | Holdings Inc. Class A | 151,300 | 12,664 |
| | Expeditors International | | |
| | of Washington Inc. | 190,320 | 12,047 |
| | Rockwell Automation Inc. | 63,607 | 11,080 |
| | United Technologies Corp. | 83,354 | 10,488 |
| | Fluor Corp. | 175,617 | 10,049 |
| | Illinois Tool Works Inc. | 58,508 | 9,166 |
| | United Parcel Service Inc. | | |
| | Class B | 85,952 | 8,996 |
20
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| | Fortune Brands Home & | | |
| | Security Inc. | 127,900 | 7,532 |
| | Dun & Bradstreet Corp. | 62,340 | 7,294 |
| | TransDigm Group Inc. | 23,099 | 7,090 |
| | Jacobs Engineering Group | | |
| | Inc. | 116,600 | 6,897 |
| | Roper Technologies Inc. | 23,344 | 6,552 |
| | Allegion plc | 75,559 | 6,444 |
| | Republic Services Inc. | | |
| | Class A | 96,936 | 6,420 |
| | Allison Transmission | | |
| | Holdings Inc. | 163,600 | 6,390 |
| | JB Hunt Transport | | |
| | Services Inc. | 50,903 | 5,963 |
| | CH Robinson Worldwide | | |
| | Inc. | 63,520 | 5,952 |
| | Delta Air Lines Inc. | 104,315 | 5,718 |
| | General Electric Co. | 344,589 | 4,645 |
| | Canadian Pacific Railway | | |
| | Ltd. | 26,000 | 4,589 |
| * | Quanta Services Inc. | 129,936 | 4,463 |
| | Old Dominion Freight | | |
| | Line Inc. | 20,800 | 3,057 |
| | Stanley Black & Decker | | |
| | Inc. | 19,379 | 2,969 |
| | Owens Corning | 36,900 | 2,967 |
| | Parker-Hannifin Corp. | 13,010 | 2,225 |
| | Equifax Inc. | 18,675 | 2,200 |
| | Robert Half International | | |
| | Inc. | 36,960 | 2,140 |
| * | HD Supply Holdings Inc. | 51,900 | 1,969 |
| | Alaska Air Group Inc. | 30,400 | 1,884 |
| | Arconic Inc. | 56,200 | 1,295 |
| * | XPO Logistics Inc. | 12,500 | 1,273 |
| | Pitney Bowes Inc. | 115,900 | 1,262 |
| * | United Continental | | |
| | Holdings Inc. | 18,000 | 1,250 |
| * | MRC Global Inc. | 53,200 | 875 |
| * | Stericycle Inc. | 13,300 | 778 |
| * | Continental Building | | |
| | Products Inc. | 24,900 | 711 |
| | Xylem Inc. | 8,500 | 654 |
| * | Moog Inc. Class A | 7,800 | 643 |
| | RPX Corp. | 54,900 | 587 |
| * | AECOM | 15,700 | 559 |
| | Hubbell Inc. Class B | 4,200 | 511 |
| * | AerCap Holdings NV | 8,900 | 451 |
| | Insperity Inc. | 6,400 | 445 |
| | Trinity Industries Inc. | 12,800 | 418 |
| * | Armstrong World | | |
| | Industries Inc. | 7,300 | 411 |
| | BWX Technologies Inc. | 5,500 | 349 |
| * | Hertz Global Holdings Inc. | 17,600 | 349 |
| | KBR Inc. | 20,300 | 329 |
| | Carlisle Cos. Inc. | 3,100 | 324 |
| | Graco Inc. | 6,600 | 302 |
| | Timken Co. | 6,600 | 301 |
| * | Colfax Corp. | 9,200 | 293 |
| | Brady Corp. Class A | 6,900 | 256 |
| * | TransUnion | 4,300 | 244 |
| * | JetBlue Airways Corp. | 11,100 | 226 |
| * | TriNet Group Inc. | 3,600 | 167 |
| * | Civeo Corp. | 43,700 | 165 |
| | EnerSys | 2,300 | 160 |
| * | SPX FLOW Inc. | 2,800 | 138 |
| * | Navigant Consulting Inc. | 7,100 | 137 |
| | ArcBest Corp. | 4,100 | 131 |
| * | WESCO International Inc. | 1,900 | 118 |
| | Quad/Graphics Inc. | 4,400 | 112 |
| * | Rexnord Corp. | 3,400 | 101 |
| * | Masonite International Corp. | 1,600 | 98 |
| | Landstar System Inc. | 800 | 88 |
| | Spartan Motors Inc. | 5,100 | 88 |
| | Chicago Bridge & Iron Co. | | |
| | NV | 6,000 | 86 |
| * | FTI Consulting Inc. | 1,700 | 82 |
| * | TrueBlue Inc. | 2,900 | 75 |
| * | Univar Inc. | 2,600 | 72 |
| | Federal Signal Corp. | 3,100 | 68 |
| | Copa Holdings SA Class A | 500 | 64 |
| * | Mistras Group Inc. | 3,189 | 60 |
| * | LB Foster Co. Class A | 2,557 | 60 |
| | Greenbrier Cos. Inc. | 1,100 | 55 |
| | H&E Equipment Services | | |
| | Inc. | 1,400 | 54 |
| * | SPX Corp. | 1,600 | 52 |
| * | NCI Building Systems Inc. | 2,600 | 46 |
| * | USA Truck Inc. | 1,800 | 46 |
| | Oshkosh Corp. | 530 | 41 |
| | Albany International Corp. | 600 | 38 |
| * | USG Corp. | 900 | 36 |
| * | KLX Inc. | 500 | 36 |
| * | Huron Consulting Group Inc. | 899 | 34 |
| | Hillenbrand Inc. | 737 | 34 |
| | LSC Communications Inc. | 1,800 | 31 |
| * | GMS Inc. | 1,000 | 31 |
| * | YRC Worldwide Inc. | 3,300 | 29 |
| * | Armstrong Flooring Inc. | 2,060 | 28 |
| | ACCO Brands Corp. | 2,200 | 28 |
| * | Babcock & Wilcox | | |
| | Enterprises Inc. | 6,100 | 27 |
| * | Sparton Corp. | 1,500 | 26 |
| * | Rush Enterprises Inc. | | |
| | Class A | 600 | 26 |
| * | ARC Document Solutions | | |
| | Inc. | 11,400 | 25 |
| * | Harsco Corp. | 1,200 | 25 |
21
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| | Global Brass & Copper | | |
| | Holdings Inc. | 700 | 23 |
| | Matson Inc. | 800 | 23 |
| | Donaldson Co. Inc. | 500 | 23 |
| * | Textainer Group Holdings Ltd. | 1,000 | 17 |
| * | Builders FirstSource Inc. | 800 | 16 |
| | Triumph Group Inc. | 600 | 15 |
| * | Saia Inc. | 200 | 15 |
| | Caesarstone Ltd. | 595 | 12 |
| | Universal Forest Products Inc. | 300 | 10 |
| * | Aerojet Rocketdyne | | |
| | Holdings Inc. | 300 | 8 |
| | Werner Enterprises Inc. | 221 | 8 |
| * | Kirby Corp. | 100 | 8 |
| * | DXP Enterprises Inc. | 157 | 6 |
| | CRA International Inc. | 100 | 5 |
| | Crane Co. | 52 | 5 |
| | Essendant Inc. | 600 | 5 |
| * | CAI International Inc. | 200 | 4 |
| * | Milacron Holdings Corp. | 208 | 4 |
| | CECO Environmental Corp. | 780 | 3 |
| * | Gibraltar Industries Inc. | 100 | 3 |
| | Heidrick & Struggles | | |
| | International Inc. | 100 | 3 |
| * | Vicor Corp. | 100 | 3 |
| * | Echo Global Logistics Inc. | 100 | 3 |
| | Covanta Holding Corp. | 100 | 1 |
| | Steelcase Inc. Class A | 100 | 1 |
| | | | 1,065,082 |
| Information Technology (25.9%) | | |
| | Apple Inc. | 2,537,476 | 425,738 |
| | Microsoft Corp. | 3,312,548 | 302,336 |
| * | Alphabet Inc. Class C | 160,463 | 165,564 |
| * | Alphabet Inc. Class A | 158,042 | 163,912 |
| * | Facebook Inc. Class A | 900,710 | 143,924 |
| | NVIDIA Corp. | 412,302 | 95,485 |
| | Visa Inc. Class A | 777,627 | 93,020 |
| | Mastercard Inc. Class A | 502,486 | 88,015 |
| | Intel Corp. | 1,513,889 | 78,843 |
| | Cisco Systems Inc. | 1,682,629 | 72,168 |
| | Applied Materials Inc. | 992,563 | 55,196 |
| * | Adobe Systems Inc. | 244,253 | 52,778 |
| | International Business | | |
| | Machines Corp. | 325,255 | 49,904 |
| | QUALCOMM Inc. | 808,698 | 44,810 |
| | HP Inc. | 2,035,626 | 44,621 |
| | Western Digital Corp. | 449,280 | 41,455 |
| | Accenture plc Class A | 264,136 | 40,545 |
| | DXC Technology Co. | 393,141 | 39,522 |
| * | VeriSign Inc. | 327,290 | 38,803 |
| | Intuit Inc. | 214,001 | 37,097 |
| * | Electronic Arts Inc. | 295,982 | 35,885 |
| | Fidelity National | | |
| | Information | | |
| | Services Inc. | 368,646 | 35,501 |
| | NetApp Inc. | 560,308 | 34,565 |
| | Broadcom Ltd. | 127,937 | 30,148 |
| | Oracle Corp. | 656,453 | 30,033 |
| | Total System | | |
| | Services Inc. | 333,309 | 28,751 |
| * | Cadence Design | | |
| | Systems Inc. | 701,058 | 25,778 |
| * | Red Hat Inc. | 167,202 | 24,998 |
| * | salesforce.com Inc. | 186,082 | 21,641 |
| | Cognizant Technology | | |
| | Solutions Corp. Class A | 260,260 | 20,951 |
| | KLA-Tencor Corp. | 185,248 | 20,194 |
| | Activision Blizzard Inc. | 290,720 | 19,612 |
| * | Micron Technology Inc. | 367,473 | 19,160 |
| * | Citrix Systems Inc. | 205,665 | 19,086 |
| * | eBay Inc. | 474,020 | 19,075 |
| | Motorola Solutions Inc. | 176,185 | 18,552 |
| | Lam Research Corp. | 86,558 | 17,585 |
| *,^ | Advanced Micro | | |
| | Devices Inc. | 1,604,799 | 16,128 |
| * | Synopsys Inc. | 187,513 | 15,609 |
| | Juniper Networks Inc. | 519,805 | 12,647 |
| | Analog Devices Inc. | 132,864 | 12,108 |
| * | F5 Networks Inc. | 83,186 | 12,030 |
| | Western Union Co. | 550,609 | 10,588 |
| * | PayPal Holdings Inc. | 136,429 | 10,351 |
| | CA Inc. | 305,130 | 10,344 |
| | Paychex Inc. | 165,132 | 10,170 |
| | Seagate Technology plc | 167,304 | 9,791 |
| | Texas Instruments Inc. | 94,076 | 9,774 |
| | Xilinx Inc. | 127,120 | 9,183 |
| * | Take-Two Interactive | | |
| | Software Inc. | 83,800 | 8,194 |
| * | CoreLogic Inc. | 127,730 | 5,777 |
| * | ANSYS Inc. | 31,978 | 5,011 |
| * | Autodesk Inc. | 28,900 | 3,629 |
| *,^ | VMware Inc. Class A | 26,000 | 3,153 |
| | Skyworks Solutions Inc. | 31,445 | 3,153 |
| * | Fiserv Inc. | 43,062 | 3,071 |
| | Versum Materials Inc. | 81,193 | 3,055 |
| | Symantec Corp. | 101,613 | 2,627 |
| | FLIR Systems Inc. | 49,100 | 2,455 |
| * | BlackBerry Ltd. | 188,000 | 2,162 |
| | Amphenol Corp. Class A | 21,493 | 1,851 |
| * | Palo Alto Networks Inc. | 9,700 | 1,761 |
| * | Zynga Inc. Class A | 467,800 | 1,712 |
| * | IPG Photonics Corp. | 7,184 | 1,677 |
| * | First Data Corp. Class A | 93,100 | 1,490 |
| * | IAC/InterActiveCorp | 8,800 | 1,376 |
| * | Flex Ltd. | 76,485 | 1,249 |
| | LogMeIn Inc. | 8,900 | 1,028 |
22
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| | InterDigital Inc. | 13,900 | 1,023 |
| * | Black Knight Inc. | 21,300 | 1,003 |
| | CSRA Inc. | 24,200 | 998 |
| * | Yelp Inc. Class A | 20,569 | 859 |
| | Sabre Corp. | 38,900 | 834 |
| * | NCR Corp. | 25,500 | 804 |
| * | Kulicke & Soffa Industries | | |
| | Inc. | 27,900 | 698 |
| | Avnet Inc. | 15,100 | 631 |
| * | CommVault Systems Inc. | 10,592 | 606 |
| * | NetScout Systems Inc. | 22,300 | 588 |
| * | ARRIS International plc | 20,000 | 531 |
| * | MicroStrategy Inc. Class A | 3,307 | 427 |
| * | Cirrus Logic Inc. | 10,300 | 418 |
| * | Dell Technologies Inc. | | |
| | Class V | 5,600 | 410 |
| * | CommScope Holding | | |
| | Co. Inc. | 9,700 | 388 |
| * | Conduent Inc. | 19,400 | 362 |
| | Amdocs Ltd. | 5,100 | 340 |
| * | Manhattan Associates Inc. | 7,400 | 310 |
| | Travelport Worldwide Ltd. | 18,500 | 302 |
| * | Tower Semiconductor Ltd. | 9,700 | 261 |
| * | Synaptics Inc. | 5,400 | 247 |
| * | Sanmina Corp. | 9,100 | 238 |
| * | Cornerstone OnDemand Inc. | 6,023 | 236 |
| | Maxim Integrated | | |
| | Products Inc. | 3,900 | 235 |
| * | InterXion Holding NV | 3,700 | 230 |
| * | Cree Inc. | 5,700 | 230 |
| | Teradyne Inc. | 5,000 | 229 |
| * | Tech Data Corp. | 2,640 | 225 |
| * | Nuance Communications | | |
| | Inc. | 12,700 | 200 |
| * | First Solar Inc. | 2,800 | 199 |
| | Xperi Corp. | 9,200 | 195 |
| | Convergys Corp. | 8,600 | 195 |
| * | Atlassian Corp. plc Class A | 3,600 | 194 |
| * | Fortinet Inc. | 3,600 | 193 |
| | Dolby Laboratories Inc. | | |
| | Class A | 2,900 | 184 |
| | Leidos Holdings Inc. | 2,600 | 170 |
| | Genpact Ltd. | 5,200 | 166 |
| * | Trimble Inc. | 4,400 | 158 |
| * | Rambus Inc. | 10,500 | 141 |
| * | Photronics Inc. | 16,501 | 136 |
| * | SINA Corp. | 1,300 | 136 |
| * | Shutterstock Inc. | 2,800 | 135 |
| * | SolarEdge Technologies Inc. | 2,500 | 131 |
| | NIC Inc. | 8,300 | 110 |
| * | Rudolph Technologies Inc. | 3,900 | 108 |
| * | Etsy Inc. | 3,700 | 104 |
| * | MoneyGram International | | |
| | Inc. | 11,400 | 98 |
| * | Glu Mobile Inc. | 25,800 | 97 |
| | Vishay Intertechnology Inc. | 5,200 | 97 |
| | Progress Software Corp. | 2,400 | 92 |
| * | TechTarget Inc. | 4,200 | 83 |
| * | Knowles Corp. | 6,600 | 83 |
| * | Lattice Semiconductor | | |
| | Corp. | 13,800 | 77 |
| * | Alpha & Omega | | |
| | Semiconductor Ltd. | 3,900 | 60 |
| | Cohu Inc. | 2,600 | 59 |
| | NVE Corp. | 682 | 57 |
| * | Teradata Corp. | 1,400 | 56 |
| * | Calix Inc. | 8,061 | 55 |
| * | EchoStar Corp. Class A | 1,000 | 53 |
| * | Web.com Group Inc. | 2,600 | 47 |
| * | KEMET Corp. | 2,400 | 43 |
| * | Hortonworks Inc. | 2,100 | 43 |
| * | FleetCor Technologies Inc. | 200 | 40 |
| * | Euronet Worldwide Inc. | 500 | 39 |
| * | Fitbit Inc. Class A | 7,700 | 39 |
| * | Net 1 UEPS | | |
| | Technologies Inc. | 4,100 | 39 |
| * | XO Group Inc. | 1,821 | 38 |
| * | Ubiquiti Networks Inc. | 500 | 34 |
| * | Blucora Inc. | 1,200 | 30 |
| * | Zix Corp. | 6,500 | 28 |
| * | Celestica Inc. | 2,600 | 27 |
| * | ViaSat Inc. | 400 | 26 |
| * | Ciena Corp. | 1,000 | 26 |
| * | SPS Commerce Inc. | 400 | 26 |
| * | QuinStreet Inc. | 2,000 | 26 |
| * | Amkor Technology Inc. | 2,400 | 24 |
| | Science Applications | | |
| | International Corp. | 300 | 24 |
| * | A10 Networks Inc. | 4,045 | 24 |
| * | Rubicon Project Inc. | 13,000 | 23 |
| * | Sykes Enterprises Inc. | 800 | 23 |
| | Systemax Inc. | 771 | 22 |
| * | 8x8 Inc. | 1,100 | 20 |
| * | FireEye Inc. | 1,200 | 20 |
| * | CommerceHub Inc. Class A | 850 | 19 |
| * | Orbotech Ltd. | 300 | 19 |
| * | DHI Group Inc. | 11,400 | 18 |
| * | Endurance International | | |
| | Group Holdings Inc. | 2,413 | 18 |
| * | VirnetX Holding Corp. | 3,500 | 14 |
| | EVERTEC Inc. | 800 | 13 |
| * | Aerohive Networks Inc. | 3,000 | 12 |
| * | Ribbon Communications Inc. | 2,091 | 11 |
| | Daktronics Inc. | 1,200 | 11 |
| * | Match Group Inc. | 200 | 9 |
| * | TrueCar Inc. | 903 | 9 |
| * | Cision Ltd. | 733 | 8 |
| | Hackett Group Inc. | 500 | 8 |
23
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| * | Mellanox Technologies Ltd. | 100 | 7 |
| * | CommerceHub Inc. | 300 | 7 |
| * | Care.com Inc. | 400 | 6 |
| | TE Connectivity Ltd. | 65 | 6 |
| | CDK Global Inc. | 100 | 6 |
| * | GoDaddy Inc. Class A | 100 | 6 |
| * | Everi Holdings Inc. | 700 | 5 |
| * | Extreme Networks Inc. | 300 | 3 |
| | | | 2,706,836 |
| Materials (2.6%) | | |
| * | Freeport-McMoRan Inc. | 2,170,102 | 38,129 |
| | Air Products & | | |
| | Chemicals Inc. | 196,779 | 31,294 |
| | LyondellBasell Industries | | |
| | NV Class A | 271,293 | 28,670 |
| | Packaging Corp. of | | |
| | America | 162,208 | 18,281 |
| | CF Industries | | |
| | Holdings Inc. | 447,991 | 16,903 |
| | FMC Corp. | 214,787 | 16,446 |
| | Praxair Inc. | 110,243 | 15,908 |
| | WestRock Co. | 194,585 | 12,487 |
| | DowDuPont Inc. | 192,826 | 12,285 |
| | Sealed Air Corp. | 274,235 | 11,735 |
| * | Owens-Illinois Inc. | 525,762 | 11,388 |
| | Avery Dennison Corp. | 93,048 | 9,886 |
| | Eastman Chemical Co. | 72,280 | 7,631 |
| | Sherwin-Williams Co. | 14,053 | 5,510 |
| | Albemarle Corp. | 55,704 | 5,166 |
| | Newmont Mining Corp. | 131,951 | 5,155 |
| | PPG Industries Inc. | 42,764 | 4,772 |
| | Graphic Packaging | | |
| | Holding Co. | 310,100 | 4,760 |
| | Chemours Co. | 69,700 | 3,395 |
| | Nucor Corp. | 53,645 | 3,277 |
| | Celanese Corp. Class A | 25,100 | 2,515 |
| | Methanex Corp. | 31,488 | 1,910 |
| | Huntsman Corp. | 37,700 | 1,103 |
| * | Berry Global Group Inc. | 20,000 | 1,096 |
| | Reliance Steel & | | |
| | Aluminum Co. | 12,284 | 1,053 |
| * | Alcoa Corp. | 21,300 | 958 |
| * | Allegheny | | |
| | Technologies Inc. | 40,400 | 957 |
| * | Cleveland-Cliffs Inc. | 89,427 | 622 |
| | Steel Dynamics Inc. | 13,600 | 601 |
| | Monsanto Co. | 4,708 | 549 |
| | WR Grace & Co. | 8,800 | 539 |
| * | Ferroglobe plc | 41,400 | 444 |
| * | Crown Holdings Inc. | 7,500 | 381 |
| * | Coeur Mining Inc. | 38,600 | 309 |
| | Valvoline Inc. | 10,900 | 241 |
| * | SunCoke Energy Inc. | 13,500 | 145 |
| | Louisiana-Pacific Corp. | 5,000 | 144 |
| | | |
| * | Constellium NV Class A | 13,100 | 142 |
| | Ecolab Inc. | 1,000 | 137 |
| | Mercer International Inc. | 7,600 | 95 |
| * | AdvanSix Inc. | 2,714 | 94 |
| * | Flotek Industries Inc. | 15,300 | 93 |
| | Domtar Corp. | 1,200 | 51 |
| * | Century Aluminum Co. | 2,700 | 45 |
| * | TimkenSteel Corp. | 1,800 | 27 |
| ^ | Israel Chemicals Ltd. | 4,934 | 21 |
| | Orion Engineered Carbons | | |
| | SA | 700 | 19 |
| * | Ryerson Holding Corp. | 1,900 | 16 |
| | Barrick Gold Corp. | 401 | 5 |
| | Worthington Industries Inc. | 100 | 4 |
| | Schweitzer-Mauduit | | |
| | International Inc. | 100 | 4 |
| | Core Molding | | |
| | Technologies Inc. | 200 | 4 |
| *,2 | Ferroglobe R&W Trust | 48,731 | — |
| | | | 277,402 |
| Other (0.2%) | | |
| | SPDR S&P 500 ETF Trust | 62,500 | 16,447 |
| *,2 | Babcock & Wilcox | | |
| | Enterprises Inc. Rights | | |
| | Exp. 04/10/2018 | 5,000 | 9 |
| * | Rizzoli Corriere Della Sera | | |
| | Mediagroup SPA | 2,001 | 3 |
| *,2 | Safeway Inc. CVR (PDC) | | |
| | Exp. 01/30/2019 | 75,810 | — |
| *,2 | Biosante Pharmaceutical | | |
| | Inc. CVR | 4,189 | — |
| | | | 16,459 |
| Real Estate (2.1%) | | |
| * | SBA Communications | | |
| | Corp. Class A | 283,674 | 48,486 |
| | American Tower Corp. | 236,172 | 34,325 |
| | Host Hotels & Resorts | | |
| | Inc. | 936,670 | 17,460 |
| | Weyerhaeuser Co. | 454,031 | 15,891 |
| | Prologis Inc. | 238,758 | 15,039 |
| * | CBRE Group Inc. Class A | 263,666 | 12,450 |
| | Equity Residential | 169,100 | 10,420 |
| | HCP Inc. | 447,996 | 10,407 |
| | Realogy Holdings Corp. | 343,064 | 9,359 |
| | Apartment Investment | | |
| | & Management Co. | 191,900 | 7,820 |
| | Duke Realty Corp. | 222,200 | 5,884 |
| | Simon Property Group Inc. | 36,947 | 5,703 |
| | Public Storage | 21,898 | 4,388 |
| | Extra Space Storage Inc. | 45,042 | 3,935 |
| | AvalonBay Communities | | |
| | Inc. | 19,796 | 3,256 |
| | Ventas Inc. | 51,699 | 2,561 |
24
Growth and Income Fund
| | | |
| | | | Market |
| | | | Value• |
| | | Shares | ($000) |
| | Crown Castle International | | |
| | Corp. | 20,914 | 2,292 |
| | SL Green Realty Corp. | 18,700 | 1,811 |
| | Brixmor Property Group | | |
| | Inc. | 98,000 | 1,495 |
| | Sun Communities Inc. | 13,100 | 1,197 |
| | CoreCivic Inc. | 52,000 | 1,015 |
| | Liberty Property Trust | 22,803 | 906 |
| | Spirit Realty Capital Inc. | 111,400 | 864 |
| * | Equity Commonwealth | 22,204 | 681 |
| | American Homes 4 Rent | | |
| | Class A | 27,200 | 546 |
| | Equity LifeStyle | | |
| | Properties Inc. | 5,800 | 509 |
| | Kimco Realty Corp. | 17,731 | 255 |
| | Park Hotels & Resorts Inc. | 9,200 | 249 |
| | InfraREIT Inc. | 8,100 | 157 |
| | Outfront Media Inc. | 7,900 | 148 |
| | Colony NorthStar Inc. | | |
| | Class A | 21,700 | 122 |
| | Forest City Realty Trust | | |
| | Inc. Class A | 6,000 | 122 |
| | Piedmont Office Realty | | |
| | Trust Inc. Class A | 6,000 | 106 |
| | Highwoods Properties Inc. | 1,700 | 75 |
| | VEREIT Inc. | 9,400 | 65 |
| | GEO Group Inc. | 3,100 | 63 |
| | Retail Properties of America | |
| �� | Inc. | 4,922 | 57 |
| | Columbia Property Trust Inc. | 2,447 | 50 |
| | National Retail Properties | | |
| | Inc. | 800 | 31 |
| | STORE Capital Corp. | 1,100 | 27 |
| * | Quality Care Properties Inc. | 1,106 | 21 |
| | Hersha Hospitality Trust | | |
| | Class A | 870 | 16 |
| | Mack-Cali Realty Corp. | 900 | 15 |
| | Brandywine Realty Trust | 600 | 10 |
| * | St. Joe Co. | 500 | 9 |
| | Front Yard Residential Corp. | 700 | 7 |
| | CyrusOne Inc. | 100 | 5 |
| | | | 220,310 |
| Telecommunication Services (1.6%) | |
| | AT&T Inc. | 2,473,146 | 88,168 |
| | Verizon | | |
| | Communications Inc. | 1,266,337 | 60,556 |
| | CenturyLink Inc. | 521,800 | 8,573 |
| * | T-Mobile US Inc. | 92,400 | 5,640 |
| * | Boingo Wireless Inc. | 13,300 | 330 |
| *,^ | Globalstar Inc. | 286,700 | 197 |
| ^ | Frontier Communications | | |
| | Corp. | 19,000 | 141 |
| * | Vonage Holdings Corp. | 5,200 | 55 |
| * | United States Cellular | | |
| | Corp. | 417 | 17 |
| * | Intelsat SA | 1,800 | 7 |
| | | | 163,684 |
| Utilities (2.2%) | | |
| | NRG Energy Inc. | 1,448,196 | 44,213 |
| | NextEra Energy Inc. | 239,866 | 39,177 |
| | Exelon Corp. | 696,975 | 27,189 |
| | FirstEnergy Corp. | 660,148 | 22,452 |
| | CenterPoint Energy Inc. | 735,911 | 20,164 |
| | American Electric Power | | |
| | Co. Inc. | 277,981 | 19,067 |
| | Duke Energy Corp. | 166,300 | 12,883 |
| | Entergy Corp. | 147,800 | 11,644 |
| | Public Service Enterprise | | |
| | Group Inc. | 173,400 | 8,712 |
| | Dominion Energy Inc. | 68,141 | 4,595 |
| | PG&E Corp. | 72,700 | 3,194 |
| | AES Corp. | 277,700 | 3,158 |
| | NiSource Inc. | 110,100 | 2,633 |
| | Pinnacle West Capital | | |
| | Corp. | 31,100 | 2,482 |
| | Edison International | 38,300 | 2,438 |
| | PPL Corp. | 76,500 | 2,164 |
| | Avangrid Inc. | 9,300 | 475 |
| | Xcel Energy Inc. | 10,200 | 464 |
| *,^ | Atlantic Power Corp. | 99,700 | 209 |
| | UGI Corp. | 3,900 | 173 |
| | Westar Energy Inc. | | |
| | Class A | 2,800 | 147 |
| | Portland General | | |
| | Electric Co. | 2,800 | 113 |
| | Fortis Inc. | 2,200 | 74 |
| | Chesapeake Utilities Corp. | 388 | 27 |
| | Great Plains Energy Inc. | 300 | 10 |
| | MGE Energy Inc. | 100 | 6 |
| | | | 227,863 |
| Total Common Stocks | | |
| (Cost $8,340,438) | | 10,124,805 |
| Temporary Cash Investments (3.2%)1 | |
| Money Market Fund (3.0%) | | |
| 3,4 | Vanguard Market | | |
| | Liquidity Fund, | | |
| | 1.775% | 3,113,981 | 311,398 |
25
Growth and Income Fund
| | | |
| | | Face | Market |
| | | Amount | Value • |
| | | ($000) | ($000) |
| U.S. Government and Agency Obligations (0.2%) |
| 5 | United States Treasury Bill, | | |
| | 1.461%, 5/3/18 | 1,600 | 1,598 |
| 5 | United States Treasury Bill, | | |
| | 1.370%%–1.462%, | | |
| | 5/17/18 | 8,000 | 7,984 |
| 5 | United States Treasury Bill, | | |
| | 1.446%, 5/31/18 | 600 | 598 |
| 5 | United States Treasury Bill, | | |
| | 1.845%, 8/9/18 | 5,000 | 4,967 |
| | United States Treasury Bill, | | |
| | 1.849%, 8/16/18 | 5,000 | 4,966 |
| | | | 20,113 |
| Total Temporary Cash Investments | |
| (Cost $331,491) | | 331,511 |
| Total Investments (100.2%) | | |
| (Cost $8,671,929) | | 10,456,316 |
| |
| | Amount |
| | ($000 |
| Other Assets and Liabilities (-0.2%) | |
| Other Assets | |
| Investment in Vanguard | 581 |
| Receivables for Investment Securities Sold | 32,996 |
| Receivables for Accrued Income | 9,865 |
| Receivables for Capital Shares Issued | 3,115 |
| Variation Margin Receivable— | |
| Futures Contracts | 4,440 |
| Other Assets | 3,526 |
| Total Other Assets | 54,523 |
| Liabilities | |
| Payables for Investment Securities | |
| Purchased | (33,525) |
| Collateral for Securities on Loan | (7,226) |
| Payables to Investment Advisor | (2,130) |
| Payables for Capital Shares Redeemed | (16,771) |
| Payables to Vanguard | (11,711) |
| Total Liabilities | (71,363) |
| Net Assets (100%) | 10,439,476 |
| |
| At March 31, 2018, net assets consisted of: |
| | Amount |
| | ($000) |
| Paid-in Capital | 8,398,624 |
| Undistributed Net Investment Income | 30,877 |
| Accumulated Net Realized Gains | 237,522 |
| Unrealized Appreciation (Depreciation) | |
| Investment Securities | 1,784,387 |
| Futures Contracts | (11,934) |
| Net Assets | 10,439,476 |
| |
| |
| Investor Shares—Net Assets | |
| Applicable to 60,693,777 outstanding | |
| $.001 par value shares of beneficial | |
| interest (unlimited authorization) | 2,846,798 |
| Net Asset Value Per Share— | |
| Investor Shares | $46.90 |
| |
| |
| Admiral Shares—Net Assets | |
| Applicable to 99,149,513 outstanding | |
| $.001 par value shares of beneficial | |
| interest (unlimited authorization) | 7,592,678 |
| Net Asset Value Per Share— | |
| Admiral Shares | $76.58 |
• 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 $6,919,000.
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 99.8% and 0.4%, respectively, of net assets.
2 Security value determined using significant unobservable inputs.
3 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
4 Includes $7,226,000 of collateral received for securities on loan.
5 Securities with a value of $14,348,000 have been segregated as initial margin for open futures contracts.
CVR—Contingent Value Rights.
26
Growth and Income Fund
| | | | |
| Derivative Financial Instruments Outstanding as of Period End | | |
| Futures Contracts | | | | |
| | | | | ($000) |
| | | | | Value and |
| | | Number of | | Unrealized |
| | | Long (Short) | Notional | Appreciation |
| | Expiration | Contracts | Amount | (Depreciation) |
| Long Futures Contracts | | | | |
| E-mini S&P 500 Index | June 2018 | 2,240 | 296,016 | (11,934) |
Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.
See accompanying Notes, which are an integral part of the Financial Statements.
27
Growth and Income Fund
| |
| Statement of Operations | |
| |
| | Six Months Ended |
| | March 31, 2018 |
| | ($000) |
| Investment Income | |
| Income | |
| Dividends1 | 92,349 |
| Interest 2 | 1,813 |
| Securities Lending—Net | 70 |
| Total Income | 94,232 |
| Expenses | |
| Investment Advisory Fees—Note B | |
| Basic Fee | 5,109 |
| Performance Adjustment | 26 |
| The Vanguard Group—Note C | |
| Management and Administrative—Investor Shares | 3,177 |
| Management and Administrative—Admiral Shares | 4,474 |
| Marketing and Distribution—Investor Shares | 210 |
| Marketing and Distribution—Admiral Shares | 258 |
| Custodian Fees | 127 |
| Shareholders’ Reports and Proxy—Investor Shares | 71 |
| Shareholders’ Reports and Proxy—Admiral Shares | 59 |
| Trustees’ Fees and Expenses | 8 |
| Total Expenses | 13,519 |
| Net Investment Income | 80,713 |
| Realized Net Gain (Loss) | |
| Investment Securities Sold 2 | 281,412 |
| Futures Contracts | 24,293 |
| Realized Net Gain (Loss) | 305,705 |
| Change in Unrealized Appreciation (Depreciation) | |
| Investment Securities 2 | 225,899 |
| Futures Contracts | (16,152) |
| Change in Unrealized Appreciation (Depreciation) | 209,747 |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 596,165 |
1 Dividends are net of foreign withholding taxes of $8,000.
2 Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $1,726,000, ($30,000), and ($13,000), respectively. Purchases and sales are for temporary cash investment purposes.
See accompanying Notes, which are an integral part of the Financial Statements.
28
Growth and Income Fund
| | |
| Statement of Changes in Net Assets | | |
| |
| | Six Months Ended | Year Ended |
| | March 31, | September 30, |
| | 2018 | 2017 |
| | ($000) | ($000) |
| Increase (Decrease) in Net Assets | | |
| Operations | | |
| Net Investment Income | 80,713 | 136,920 |
| Realized Net Gain (Loss) | 305,705 | 448,835 |
| Change in Unrealized Appreciation (Depreciation) | 209,747 | 616,233 |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 596,165 | 1,201,988 |
| Distributions | | |
| Net Investment Income | | |
| Investor Shares | (20,786) | (53,480) |
| Admiral Shares | (59,193) | (81,075) |
| Realized Capital Gain1 | | |
| Investor Shares | (119,262) | (131,717) |
| Admiral Shares | (313,418) | (184,783) |
| Total Distributions | (512,659) | (451,055) |
| Capital Share Transactions | | |
| Investor Shares | (162,653) | (112,815) |
| Admiral Shares | 521,769 | 2,725,083 |
| Net Increase (Decrease) from Capital Share Transactions | 359,116 | 2,612,268 |
| Total Increase (Decrease) | 442,622 | 3,363,201 |
| Net Assets | | |
| Beginning of Period | 9,996,854 | 6,633,653 |
| End of Period2 | 10,439,476 | 9,996,854 |
1 Includes fiscal 2018 and 2017 short-term gain distributions totaling $184,579,000 and $13,413,000, respectively. Short-term gain distributions are treated as ordinary income dividends for tax purposes.
2 Net Assets—End of Period includes undistributed (overdistributed) net investment income of $30,877,000 and $30,143,000.
See accompanying Notes, which are an integral part of the Financial Statements.
29
Growth and Income Fund
| | | | | | |
| Financial Highlights | | | | | | |
| |
| |
| Investor Shares | | | | | | |
| Six Months | | | | | |
| | Ended | | | | | |
| For a Share Outstanding | March 31, | | | Year Ended September 30, |
| Throughout Each Period | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 |
| Net Asset Value, Beginning of Period | $46.50 | $42.16 | $39.55 | $42.69 | $36.02 | $30.73 |
| Investment Operations | | | | | | |
| Net Investment Income | . 3471 | .7921 | . 852 | .729 | .671 | .631 |
| Net Realized and Unrealized Gain (Loss) | | | | | | |
| on Investments | 2.429 | 6.346 | 4.813 | (.541) | 6.639 | 5.288 |
| Total from Investment Operations | 2.776 | 7.138 | 5.665 | .188 | 7.310 | 5.919 |
| Distributions | | | | | | |
| Dividends from Net Investment Income | (. 353) | (.799) | (.790) | (.724) | (. 640) | (. 629) |
| Distributions from Realized Capital Gains | (2.023) | (1.999) | (2.265) | (2.604) | — | — |
| Total Distributions | (2.376) | (2.798) | (3.055) | (3.328) | (.640) | (.629) |
| Net Asset Value, End of Period | $46.90 | $46.50 | $42.16 | $39.55 | $42.69 | $36.02 |
| |
| Total Return2 | 5.91% | 17.66% | 14.79% | 0.22% | 20.42% | 19.54% |
| |
| Ratios/Supplemental Data | | | | | | |
| Net Assets, End of Period (Millions) | $2,847 | $2,982 | $2,801 | $2,691 | $2,979 | $2,869 |
| Ratio of Total Expenses to | | | | | | |
| Average Net Assets3 | 0.34% | 0.34% | 0.34% | 0.34% | 0.37% | 0.36% |
| Ratio of Net Investment Income to | | | | | | |
| Average Net Assets | 1.46% | 1.80% | 2.09% | 1.70% | 1.67% | 1.90% |
| Portfolio Turnover Rate | 89% | 96% | 96% | 116% | 133% | 109% |
The expense ratio, net investment income ratio, and turnover rate for the current period have been annualized.
1 Calculated based on average shares outstanding.
2 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.
3 Includes performance-based investment advisory fee increases (decreases) of 0.00%, 0.00%, 0.00%, 0.00%, 0.02%, and 0.01%.
See accompanying Notes, which are an integral part of the Financial Statements.
30
Growth and Income Fund
| | | | | | |
| Financial Highlights | | | | | | |
| |
| |
| Admiral Shares | | | | | | |
| Six Months | | | | | |
| | Ended | | | | | |
| For a Share Outstanding | March 31, | | | Year Ended September 30, |
| Throughout Each Period | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 |
| Net Asset Value, Beginning of Period | $75.93 | $68.83 | $64.57 | $69.71 | $58.82 | $50.18 |
| Investment Operations | | | | | | |
| Net Investment Income | . 6121 | 1.3621 | 1.466 | 1.272 | 1.176 | 1.097 |
| Net Realized and Unrealized Gain (Loss) | | | | | | |
| on Investments | 3.965 | 10.384 | 7.855 | (.897) | 10.833 | 8.633 |
| Total from Investment Operations | 4.577 | 11.746 | 9.321 | .375 | 12.009 | 9.730 |
| Distributions | | | | | | |
| Dividends from Net Investment Income | (.624) | (1.384) | (1.364) | (1.264) | (1.119) | (1.090) |
| Distributions from Realized Capital Gains | (3.303) | (3.262) | (3.697) | (4.251) | — | — |
| Total Distributions | (3.927) | (4.646) | (5.061) | (5.515) | (1.119) | (1.090) |
| Net Asset Value, End of Period | $76.58 | $75.93 | $68.83 | $64.57 | $69.71 | $58.82 |
| |
| Total Return2 | 5.97% | 17.81% | 14.91% | 0.31% | 20.55% | 19.69% |
| |
| Ratios/Supplemental Data | | | | | | |
| Net Assets, End of Period (Millions) | $7,593 | $7,015 | $3,833 | $3,177 | $2,917 | $2,157 |
| Ratio of Total Expenses to | | | | | | |
| Average Net Assets3 | 0.23% | 0.23% | 0.23% | 0.23% | 0.26% | 0.26% |
| Ratio of Net Investment Income to | | | | | | |
| Average Net Assets | 1.57% | 1.91% | 2.20% | 1.81% | 1.78% | 2.00% |
| Portfolio Turnover Rate | 89% | 96% | 96% | 116% | 133% | 109% |
The expense ratio, net investment income ratio, and turnover rate for the current period have been annualized.
1 Calculated based on average shares outstanding.
2 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.
3 Includes performance-based investment advisory fee increases (decreases) of 0.00%, 0.00%, 0.00%, 0.00%, 0.02%, and 0.01%.
See accompanying Notes, which are an integral part of the Financial Statements.
31
Growth and Income Fund
Notes to Financial Statements
Vanguard Growth and Income Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers two classes of shares: Investor Shares and Admiral Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral 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 objective of maintaining full exposure to the stock market while maintaining liquidity. The fund may purchase or sell futures contracts to achieve a desired level of investment, whether to accommodate portfolio turnover or cash flows from capital share transactions. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of 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 notional amounts 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 March 31, 2018, the fund’s average investments in long and short futures contracts represented 2% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. 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 (September 30, 2014–2017), and for the period ended March 31, 2018, and has concluded that no provision for federal income tax is required in the fund’s financial statements.
32
Growth and Income Fund
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 March 31, 2018, 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.
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), shareholder reporting, and the proxy. 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.
33
Growth and Income Fund
B. The investment advisory firms D.E. Shaw Investment Management, L.L.C., and Los Angeles Capital Management and Equity Research, Inc., each provide investment advisory services to a portion of the fund for a fee calculated at an annual percentage rate of average net assets managed by the advisor. The basic fee of D.E. Shaw Investment Management, L.L.C. is subject to quarterly adjustments based on performance relative to the S&P 500 Index for the preceding three years. The basic fee of Los Angeles Capital Management and Equity Research, Inc. is subject to quarterly adjustments based on performance relative to the S&P 500 Index for the preceding five years.
Vanguard provides investment advisory services to a portion of the fund as described below; the fund paid Vanguard advisory fees of $611,000 for the six months ended March 31, 2018.
For the six months ended March 31, 2018, the aggregate investment advisory fee paid to all advisors represented an effective annual basic rate of 0.10% of the fund’s average net assets, before an increase of $26,000 (0.00%) based on performance.
C. 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. All other costs of operations payable to Vanguard are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At March 31, 2018, the fund had contributed to Vanguard capital in the amount of $581,000, representing 0.01% of the fund’s net assets and 0.23% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
D. 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). Any investments valued with significant unobservable inputs are noted on the Statement of Net Assets.
The following table summarizes the market value of the fund’s investments as of March 31, 2018, based on the inputs used to value them:
| | | |
| | Level 1 | Level 2 | Level 3 |
| Investments | ($000) | ($000) | ($000) |
| Common Stocks | 10,124,793 | 3 | 9 |
| Temporary Cash Investments | 311,398 | 20,113 | — |
| Futures Contracts—Assets1 | 4,440 | — | — |
| Total | 10,440,631 | 20,116 | 9 |
| 1 Represents variation margin on the last day of the reporting period. | | | |
34
Growth and Income Fund
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. The fund’s tax-basis capital gains and losses are determined only at the end of each fiscal year.
At March 31, 2018, the cost of investment securities for tax purposes was $8,671,936,000. Net unrealized appreciation of investment securities for tax purposes was $1,784,380,000, consisting of unrealized gains of $1,954,497,000 on securities that had risen in value since their purchase and $170,117,000 in unrealized losses on securities that had fallen in value since their purchase.
F. During the six months ended March 31, 2018, the fund purchased $4,562,501,000 of investment securities and sold $4,709,416,000 of investment securities, other than temporary cash investments.
| | | | |
| | Six Months Ended | | Year Ended |
| | March 31, 2018 | September 30, 2017 |
| | Amount | Shares | Amount | Shares |
| | ($000) | (000) | ($000) | (000) |
| Investor Shares | | | | |
| Issued | 167,953 | 3,480 | 277,033 | 6,367 |
| Issued in Lieu of Cash Distributions | 135,225 | 2,849 | 179,760 | 4,259 |
| Redeemed | (465,831) | (9,758) | (569,608) | (12,950) |
| Net Increase (Decrease)—Investor Shares | (162,653) | (3,429) | (112,815) | (2,324) |
| Admiral Shares | | | | |
| Issued | 695,149 | 8,894 | 3,081,615 | 41,593 |
| Issued in Lieu of Cash Distributions | 354,859 | 4,580 | 247,827 | 3,595 |
| Redeemed | (528,239) | (6,712) | (604,359) | (8,482) |
| Net Increase (Decrease)—Admiral Shares | 521,769 | 6,762 | 2,725,083 | 36,706 |
G. Management has determined that no material events or transactions occurred subsequent to March 31, 2018, that would require recognition or disclosure in these financial statements.
35
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.
36
| | | |
| Six Months Ended March 31, 2018 | | | |
| | Beginning | Ending | Expenses |
| | Account Value | Account Value | Paid During |
| Growth and Income Fund | 9/30/2017 | 3/31/2018 | Period |
| Based on Actual Fund Return | | | |
| Investor Shares | $1,000.00 | $1,059.06 | $1.75 |
| Admiral Shares | 1,000.00 | 1,059.67 | 1.18 |
| Based on Hypothetical 5% Yearly Return | | | |
| Investor Shares | $1,000.00 | $1,023.24 | $1.72 |
| Admiral Shares | 1,000.00 | 1,023.78 | 1.16 |
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 0.34% for Investor Shares and 0.23% for Admiral 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 (182/365).
37
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.
38
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.
39
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.
40
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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 208 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 Trustees1
F. William McNabb III
Born in 1957. Trustee since July 2009. Principal occupation(s) during the past five years and other experience: chairman of the board (January 2010–present) of Vanguard and of each of the investment companies served by Vanguard, trustee (2009–present) of each of the investment companies served by Vanguard, and director (2008–present) of Vanguard. Chief executive officer and president (2008–2017) of Vanguard and each of the investment companies served by Vanguard, managing director (1995–2008) of Vanguard, and director (1997–2018) of Vanguard Marketing Corporation. Director (2018–present) of UnitedHealth Group.
Mortimer J. Buckley
Born in 1969. Trustee since January 2018. Principal occupation(s) during the past five years and other experience: chief executive officer (January 2018–present) of Vanguard; chief executive officer, president, and trustee (January 2018–present) of each of the investment companies served by Vanguard; president and director (2017–present) of Vanguard; and president (February 2018–present) of Vanguard Marketing Corporation. Chief investment officer (2013–2017), managing director (2002–2017), head of the Retail Investor Group (2006–2012), and chief information officer (2001–2006) of Vanguard. Chairman of the board (2011–2017) of the Children’s Hospital of Philadelphia.
Independent Trustees
Emerson U. Fullwood
Born in 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). Former president of the Worldwide Channels Group, Latin America, and Worldwide Customer Service and executive chief staff officer of Developing Markets of Xerox. 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 University of Rochester Medical Center, the Monroe Community College Foundation, the United Way of Rochester, North Carolina A&T University, and Roberts Wesleyan College. Trustee of the University of Rochester.
Amy Gutmann
Born in 1949. Trustee since June 2006. Principal occupation(s) during the past five years and other experience: president (2004–present) 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.
1 Mr. McNabb and Mr. Buckley are considered “interested persons,” as defined in the Investment Company Act of 1940, because they are officers of the Vanguard funds.
JoAnn Heffernan Heisen
Born in 1950. Trustee since July 1998. Principal occupation(s) during the past five years and other experience: corporate vice president of Johnson & Johnson (pharmaceuticals/medical devices/consumer products) and member of its 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. 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 in 1949. Trustee since October 2009. Principal occupation(s) during the past five years and other experience: president and chief operating officer (retired 2009) and vice chairman of the board (2008–2009) 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 in 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) of IBM (information technology services). Fiduciary member of IBM’s Retirement Plan Committee (2004–2013), senior vice president and general manager (2002–2004) of IBM Global Financing, vice president and controller (1998–2002) of IBM, and a variety of other prior management roles at IBM. Member of the Council on Chicago Booth.
Scott C. Malpass
Born in 1962. Trustee since March 2012. Principal occupation(s) during the past five years and other experience: chief investment officer (1989–present) and vice president (1996–present) of the University of Notre Dame. Assistant professor of finance at the Mendoza College of Business, University of Notre Dame, and member of the Notre Dame 403(b) Investment Committee. Chairman of the board of TIFF Advisory Services, Inc. Member of the board of Catholic Investment Services, Inc. (investment advisors), the board of advisors for Spruceview Capital Partners, and the board of superintendence of the Institute for the Works of Religion.
Deanna Mulligan
Born in 1963. Trustee since January 2018. Principal occupation(s) during the past five years and other experience: president (2010–present) and chief executive officer (2011–present) of The Guardian Life Insurance Company of America. Chief operating officer (2010–2011) and executive vice president (2008–2010) of Individual Life and Disability of The Guardian Life Insurance Company of America. Member of the board of The Guardian Life Insurance Company of America, the American Council of Life Insurers, the Partnership for New York City (business leadership), and the Committee Encouraging Corporate Philanthropy. Trustee of the Economic Club of New York and the Bruce Museum (arts and science). Member of the Advisory Council for the Stanford Graduate School of Business.
André F. Perold
Born in 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.
Sarah Bloom Raskin
Born in 1961. Trustee since January 2018. Principal occupation(s) during the past five years and other experience: deputy secretary (2014–2017) of the United States Department of the Treasury. Governor (2010–2014) of the Federal Reserve Board. Commissioner (2007–2010) of financial regulation for the State of Maryland. Member of the board of directors (2012–2014) of Neighborhood Reinvestment Corporation. Director of i(x) Investments, LLC.
Peter F. Volanakis
Born in 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) and director of Corning Incorporated (2000–2010) and Dow Corning (2001–2010). Director (2012) of SPX Corporation (multi-industry manufacturing). Overseer of the Amos Tuck School of Business Administration, Dartmouth College (2001–2013). 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 in 1967. Principal occupation(s) during the past five years and other experience: principal of Vanguard. Investment stewardship officer (2017–present), treasurer (2015–2017), controller (2010–2015), and assistant controller (2001–2010) of each of the investment companies served by Vanguard.
Christine M. Buchanan
Born in 1970. Principal occupation(s) during the past five years and other experience: principal of Vanguard and global head of Fund Administration at Vanguard. Treasurer (2017–present) of each of the investment companies served by Vanguard. Partner (2005–2017) at KPMG LLP (audit, tax, and advisory services).
Brian Dvorak
Born in 1973. Principal occupation(s) during the past five years and other experience: principal of Vanguard. Chief compliance officer (2017–present) of Vanguard and each of the investment companies served by Vanguard. Assistant vice president (2017–present) of Vanguard Marketing Corporation. Vice president and director of Enterprise Risk Management (2011–2013) at Oppenheimer Funds, Inc.
Thomas J. Higgins
Born in 1957. Principal occupation(s) during the past five years and other experience: principal of Vanguard. Chief financial officer (2008–present) and treasurer (1998–2008) of each of the investment companies served by Vanguard.
Peter Mahoney
Born in 1974. Principal occupation(s) during the past five years and other experience: principal of Vanguard. Controller (2015–present) of each of the investment companies served by Vanguard. Head of International Fund Services (2008–2014) at Vanguard.
Anne E. Robinson
Born in 1970. Principal occupation(s) during the past five years and other experience: general counsel (2016–present) of Vanguard. Secretary (2016–present) of Vanguard and of each of the investment companies served by Vanguard. Managing director (2016–present) of Vanguard. Director and senior vice president (2016–2018) of Vanguard Marketing Corporation. Managing director and general counsel of Global Cards and Consumer Services (2014–2016) at Citigroup. Counsel (2003–2014) at American Express.
Michael Rollings
Born in 1963. Principal occupation(s) during the past five years and other experience: finance director (2017–present) and treasurer (2017) of each of the investment companies served by Vanguard. Managing director (2016–present) of Vanguard. Chief financial officer (2016–present) of Vanguard. Director (2016–present) of Vanguard Marketing Corporation. Executive vice president and chief financial officer (2006–2016) of MassMutual Financial Group.
| |
| Vanguard Senior Management Team |
| |
| Mortimer J. Buckley | James M. Norris |
| Gregory Davis | Thomas M. Rampulla |
| John James | Karin A. Risi |
| Martha G. King | Anne E. Robinson |
| John T. Marcante | Michael Rollings |
| 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
| |
| | P.O. Box 2600 |
| | Valley Forge, PA 19482-2600 |
| |
| |
| |
| Connect with Vanguard® > vanguard.com |
| |
| |
| |
| Fund Information > 800-662-7447 | Source for Bloomberg Barclays indexes: Bloomberg |
| Direct Investor Account Services > 800-662-2739 | Index Services Limited. Copyright 2018, Bloomberg. All |
| | rights reserved. |
| Institutional Investor Services > 800-523-1036 | |
| | CFA® is a registered trademark owned by CFA Institute. |
| Text Telephone for People | |
| Who Are Deaf or Hard of Hearing > 800-749-7273 | |
| |
| This material may be used in conjunction | |
| with the offering of shares of any Vanguard | |
| fund only if preceded or accompanied by | |
| the fund’s current prospectus. | |
| |
| All comparative mutual fund data are from Lipper, a | |
| Thomson Reuters Company, or Morningstar, Inc., unless | |
| otherwise noted. | |
| |
| You can obtain a free copy of Vanguard’s proxy voting | |
| guidelines by visiting vanguard.com/proxyreporting or by | |
| calling Vanguard at 800-662-2739. The guidelines are | |
| also available from the SEC’s website, sec.gov. In | |
| addition, you may obtain a free report on how your fund | |
| voted the proxies for securities it owned during the 12 | |
| months ended June 30. To get the report, visit either | |
| vanguard.com/proxyreporting or sec.gov. | |
| |
| You can review and copy information about your fund at | |
| the SEC’s Public Reference Room in Washington, D.C. To | |
| find out more about this public service, call the SEC at | |
| 202-551-8090. Information about your fund is also | |
| available on the SEC’s website, and you can receive | |
| copies of this information, for a fee, by sending a | |
| request in either of two ways: via email addressed to | |
| publicinfo@sec.gov or via regular mail addressed to the | |
| Public Reference Section, Securities and Exchange | |
| Commission, Washington, DC 20549-1520. | |
| | © 2018 The Vanguard Group, Inc. |
| | All rights reserved. |
| | Vanguard Marketing Corporation, Distributor. |
| |
| | Q932 052018 |
Item 2: Code of Ethics.
Not Applicable.
Item 3: Audit Committee Financial Expert.
Not Applicable.
Item 4: Principal Accountant Fees and Services.
(a) Audit Fees.
Not Applicable.
Item 5: Audit Committee of Listed Registrants.
Not Applicable.
Item 6: Investments.
Not Applicable.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not Applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not Applicable.
Item 9: Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not Applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 11: Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control Over Financial Reporting. There were no significant changes in Registrant’s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not Applicable.
Item 13: Exhibits.
(a) Certifications.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | VANGUARD QUANTITATIVE FUNDS |
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| /s/ MORTIMER J. BUCKLEY* |
BY: | MORTIMER J. BUCKLEY CHIEF EXECUTIVE OFFICER |
Date: May 17, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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| | VANGUARD QUANTITATIVE FUNDS |
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| /s/ MORTIMER J. BUCKLEY* |
BY: | MORTIMER J. BUCKLEY CHIEF EXECUTIVE OFFICER |
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| | VANGUARD QUANTITATIVE FUNDS |
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| /s/ THOMAS J. HIGGINS* |
BY: | THOMAS J. HIGGINS CHIEF FINANCIAL OFFICER |
Date: May 17, 2018
* By: /s/ Anne E. Robinson
Anne E. Robinson, pursuant to a Power of Attorney filed on January 18, 2018 see file Number 33-32216, Incorporated by Reference.
