-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IMZVPQSzhl59SmW7E5bgnaqt8xyDsW2XF/PCX3mCfJaUtXLitbo7Th7Gr6ktzV69 379fgpEc3T8XxLUdOrnabg== 0000932471-10-001375.txt : 20100225 0000932471-10-001375.hdr.sgml : 20100225 20100225112042 ACCESSION NUMBER: 0000932471-10-001375 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100225 DATE AS OF CHANGE: 20100225 EFFECTIVENESS DATE: 20100225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VANGUARD MALVERN FUNDS CENTRAL INDEX KEY: 0000836906 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-05628 FILM NUMBER: 10632167 BUSINESS ADDRESS: STREET 1: P.O. BOX 2600 STREET 2: V26 CITY: VALLEY FORGE STATE: PA ZIP: 19482 BUSINESS PHONE: 6106696295 MAIL ADDRESS: STREET 1: P.O. BOX 2600 STREET 2: V26 CITY: VALLEY FORGE STATE: PA ZIP: 19482 FORMER COMPANY: FORMER CONFORMED NAME: VANGUARD ASSET ALLOCATION FUND INC DATE OF NAME CHANGE: 19920703 0000836906 S000002867 Vanguard Asset Allocation Fund C000007883 Investor Shares VAAPX C000007884 Admiral Shares VAARX 0000836906 S000002868 Vanguard Capital Value Fund C000007885 Investor Shares VCVLX 0000836906 S000002869 Vanguard U.S. Value Fund C000007886 Investor Shares VUVLX N-Q 1 malvernfinal.htm FORM N-Q malvernfinal.htm - Generated by SEC Publisher for SEC Filing

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

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT COMPANY

Investment Company Act file number: 811-5628

Name of Registrant: Vanguard Malvern Funds

Address of Registrant:

P.O. Box 2600
Valley Forge, PA 19482

Name and address of agent for service:

Heidi Stam, Esquire
P.O. Box 876
Valley Forge, PA 19482

Date of fiscal year end: September 30

Date of reporting period: December 31, 2009

Item 1: Schedule of Investments


Vanguard Asset Allocation Fund

Schedule of Investments
As of December 31, 2009

    Market
    Value
  Shares  ($000)
Common Stocks (58.8%)1     
Consumer Discretionary (5.6%)     
McDonald's Corp.  592,302  36,983
Walt Disney Co.  1,054,262  34,000
Home Depot Inc.  933,059  26,993
Comcast Corp. Class A  1,566,575  26,412
* Amazon.com Inc.  183,030  24,621
Target Corp.  414,146  20,032
Lowe's Cos. Inc.  813,465  19,027
Time Warner Inc.  640,987  18,678
* Ford Motor Co.  1,771,124  17,711
* DIRECTV Class A  518,130  17,280
News Corp. Class A  1,236,783  16,932
NIKE Inc. Class B  213,706  14,120
* Viacom Inc. Class B  333,621  9,919
Staples Inc.  400,463  9,847
Johnson Controls Inc.  358,904  9,777
* Starbucks Corp.  411,462  9,488
* Kohl's Corp.  167,641  9,041
Yum! Brands Inc.  255,697  8,942
TJX Cos. Inc.  230,557  8,427
Time Warner Cable Inc.  193,126  7,993
* Carnival Corp.  239,888  7,602
Best Buy Co. Inc.  185,910  7,336
Omnicom Group Inc.  172,272  6,744
Coach Inc.  173,621  6,342
McGraw-Hill Cos. Inc.  171,205  5,737
* Bed Bath & Beyond Inc.  144,456  5,580
Gap Inc.  260,238  5,452
CBS Corp. Class B  372,338  5,231
* priceline.com Inc.  23,347  5,101
* Apollo Group Inc. Class A  70,304  4,259
H&R Block Inc.  184,506  4,174
Mattel Inc.  199,091  3,978
Macy's Inc.  223,396  3,744
Marriott International Inc. Class A  136,719  3,726
Fortune Brands Inc.  85,331  3,686
Starwood Hotels & Resorts Worldwide Inc.  100,287  3,668
VF Corp.  49,330  3,613
JC Penney Co. Inc.  132,302  3,521
Nordstrom Inc.  90,994  3,420
Genuine Parts Co.  89,709  3,405
Whirlpool Corp.  41,806  3,372
Sherwin-Williams Co.  52,449  3,233
Harley-Davidson Inc.  125,397  3,160
International Game Technology  164,724  3,092
* O'Reilly Automotive Inc.  77,431  2,952
* Expedia Inc.  111,149  2,858
Tiffany & Co.  66,209  2,847
Darden Restaurants Inc.  78,279  2,745
Ltd Brands Inc.  141,884  2,730


*  AutoZone Inc.  16,506  2,609 
  Polo Ralph Lauren Corp. Class A  31,344  2,538 
  Ross Stores Inc.  56,527  2,414 
  Hasbro Inc.  72,440  2,322 
  Newell Rubbermaid Inc.  149,609  2,246 
*,^ Sears Holdings Corp.  26,801  2,237 
  Family Dollar Stores Inc.  75,324  2,096 
  Black & Decker Corp.  32,323  2,096 
  Wynn Resorts Ltd.  35,568  2,071 
  Scripps Networks Interactive Inc. Class A  48,801  2,025 
  DeVry Inc.  35,276  2,001 
*  Interpublic Group of Cos. Inc.  270,911  1,999 
  Wyndham Worldwide Corp.  98,643  1,990 
*  GameStop Corp. Class A  87,468  1,919 
  Gannett Co. Inc.  126,539  1,879 
*  Goodyear Tire & Rubber Co.  123,465  1,741 
  Pulte Homes Inc.  172,178  1,722 
  Leggett & Platt Inc.  84,054  1,715 
  Abercrombie & Fitch Co.  47,891  1,669 
  DR Horton Inc.  148,268  1,612 
  Washington Post Co. Class B  3,183  1,399 
  RadioShack Corp.  71,479  1,394 
*  Big Lots Inc.  45,715  1,325 
  Harman International Industries Inc.  34,287  1,210 
*  Office Depot Inc.  155,150  1,001 
*  AutoNation Inc.  51,617  988 
  Lennar Corp. Class A  72,707  928 
*  New York Times Co. Class A  64,734  800 
  Meredith Corp.  24,791  765 
*  Eastman Kodak Co.  156,319  660 
      520,902 
Consumer Staples (6.7%)     
  Procter & Gamble Co.  1,602,682  97,171 
  Coca-Cola Co.  1,271,242  72,461 
  Wal-Mart Stores Inc.  1,171,026  62,591 
  PepsiCo Inc.  856,068  52,049 
  Philip Morris International Inc.  1,045,465  50,381 
  CVS Caremark Corp.  774,522  24,947 
  Colgate-Palmolive Co.  272,830  22,413 
  Altria Group Inc.  1,141,142  22,401 
  Kraft Foods Inc.  812,681  22,089 
  Walgreen Co.  542,649  19,926 
  Kimberly-Clark Corp.  227,994  14,526 
  Costco Wholesale Corp.  239,242  14,156 
  General Mills Inc.  178,758  12,658 
  Archer-Daniels-Midland Co.  352,355  11,032 
  Sysco Corp.  323,800  9,047 
  Kellogg Co.  140,618  7,481 
  HJ Heinz Co.  173,407  7,415 
  Avon Products Inc.  233,851  7,366 
  Kroger Co.  356,596  7,321 
  Lorillard Inc.  88,267  7,082 
  ConAgra Foods Inc.  241,029  5,556 
  Reynolds American Inc.  91,785  4,862 
  Safeway Inc.  226,530  4,823 
  Clorox Co.  77,120  4,704 
  Sara Lee Corp.  377,846  4,602 


Mead Johnson Nutrition Co. Class A  105,193  4,597 
JM Smucker Co.  66,275  4,092 
Dr Pepper Snapple Group Inc.  143,474  4,060 
Molson Coors Brewing Co. Class B  82,856  3,742 
Coca-Cola Enterprises Inc.  174,709  3,704 
Campbell Soup Co.  105,683  3,572 
Hershey Co.  90,092  3,224 
Estee Lauder Cos. Inc. Class A  66,526  3,217 
Brown-Forman Corp. Class B  56,416  3,022 
Pepsi Bottling Group Inc.  75,657  2,837 
McCormick & Co. Inc.  70,406  2,544 
* Whole Foods Market Inc.  75,541  2,074 
Tyson Foods Inc. Class A  162,246  1,991 
* Dean Foods Co.  100,096  1,806 
* Constellation Brands Inc. Class A  113,133  1,802 
Hormel Foods Corp.  38,629  1,485 
SUPERVALU Inc.  109,162  1,387 
    618,216 
Energy (6.8%)     
Exxon Mobil Corp.  2,601,307  177,383 
Chevron Corp.  1,100,544  84,731 
Schlumberger Ltd.  658,746  42,878 
ConocoPhillips  814,008  41,571 
Occidental Petroleum Corp.  445,316  36,226 
Apache Corp.  184,828  19,069 
Devon Energy Corp.  244,286  17,955 
Anadarko Petroleum Corp.  270,044  16,856 
Halliburton Co.  496,070  14,927 
XTO Energy Inc.  319,170  14,851 
EOG Resources Inc.  138,386  13,465 
Marathon Oil Corp.  388,997  12,144 
National Oilwell Varco Inc.  229,503  10,119 
Hess Corp.  159,554  9,653 
Chesapeake Energy Corp.  357,564  9,254 
* Southwestern Energy Co.  188,714  9,096 
Spectra Energy Corp.  355,438  7,290 
Baker Hughes Inc.  173,562  7,026 
Noble Energy Inc.  96,108  6,845 
Williams Cos. Inc.  316,599  6,674 
Peabody Energy Corp.  145,999  6,601 
Murphy Oil Corp.  106,816  5,789 
Valero Energy Corp.  317,805  5,323 
* Cameron International Corp.  122,302  5,112 
Consol Energy Inc.  98,183  4,890 
Range Resources Corp.  84,784  4,226 
El Paso Corp.  396,317  3,896 
* FMC Technologies Inc.  65,842  3,808 
Diamond Offshore Drilling Inc.  37,411  3,682 
* Nabors Industries Ltd.  161,080  3,526 
Smith International Inc.  120,470  3,273 
BJ Services Co.  166,037  3,088 
Pioneer Natural Resources Co.  61,077  2,942 
Cabot Oil & Gas Corp.  55,305  2,411 
* Denbury Resources Inc.  142,969  2,116 
Massey Energy Co.  43,922  1,845 
Sunoco Inc.  65,864  1,719 
* Rowan Cos. Inc.  63,232  1,432 


Tesoro Corp.  74,877  1,015 
    624,707 
Financials (8.4%)     
JPMorgan Chase & Co.  2,161,540  90,071 
Bank of America Corp.  5,451,141  82,094 
Wells Fargo & Co.  2,782,152  75,090 
Goldman Sachs Group Inc.  282,269  47,658 
Citigroup Inc.  10,537,570  34,879 
American Express Co.  655,346  26,555 
US Bancorp  1,053,753  23,720 
Morgan Stanley  749,119  22,174 
Bank of New York Mellon Corp.  662,532  18,531 
MetLife Inc.  450,715  15,933 
Travelers Cos. Inc.  300,193  14,968 
PNC Financial Services Group Inc.  253,568  13,386 
Prudential Financial Inc.  254,513  12,665 
Simon Property Group Inc.  156,479  12,487 
CME Group Inc.  36,485  12,257 
Aflac Inc.  256,765  11,875 
State Street Corp.  272,113  11,848 
Charles Schwab Corp.  523,419  9,851 
Capital One Financial Corp.  248,245  9,518 
BB&T Corp.  374,149  9,492 
Chubb Corp.  187,632  9,228 
Allstate Corp.  294,171  8,837 
Franklin Resources Inc.  82,045  8,643 
T Rowe Price Group Inc.  141,033  7,510 
Loews Corp.  198,313  7,209 
Northern Trust Corp.  132,202  6,927 
* Progressive Corp.  370,555  6,666 
Marsh & McLennan Cos. Inc.  290,344  6,411 
Public Storage  76,169  6,204 
Vornado Realty Trust  85,531  5,982 
AON Corp.  149,960  5,749 
SunTrust Banks Inc.  281,057  5,703 
Invesco Ltd.  234,452  5,507 
Ameriprise Financial Inc.  141,625  5,498 
Boston Properties Inc.  77,861  5,222 
Equity Residential  151,198  5,107 
Hartford Financial Services Group Inc.  209,753  4,879 
HCP Inc.  154,809  4,728 
* IntercontinentalExchange Inc.  39,420  4,427 
Discover Financial Services  298,432  4,390 
Fifth Third Bancorp  445,618  4,345 
Principal Financial Group Inc.  176,526  4,244 
Host Hotels & Resorts Inc.  349,954  4,084 
Lincoln National Corp.  163,131  4,059 
Ventas Inc.  86,395  3,779 
AvalonBay Communities Inc.  44,516  3,655 
Unum Group  186,615  3,643 
NYSE Euronext  141,165  3,571 
Regions Financial Corp.  668,171  3,535 
Hudson City Bancorp Inc.  253,855  3,485 
Plum Creek Timber Co. Inc.  89,681  3,386 
XL Capital Ltd. Class A  183,517  3,364 
People's United Financial Inc.  194,985  3,256 
ProLogis  236,098  3,232 


*  Genworth Financial Inc. Class A  268,487  3,047 
*  SLM Corp.  262,701  2,961 
  Health Care REIT Inc.  65,102  2,885 
^  M&T Bank Corp.  42,761  2,860 
  Kimco Realty Corp.  210,545  2,849 
  Moody's Corp.  106,035  2,842 
  Legg Mason Inc.  90,170  2,720 
  KeyCorp  480,993  2,670 
  Comerica Inc.  85,345  2,524 
  Cincinnati Financial Corp.  90,432  2,373 
*  Leucadia National Corp.  97,011  2,308 
*,^ American International Group Inc.  75,497  2,263 
  Torchmark Corp.  48,433  2,129 
  Assurant Inc.  67,370  1,986 
*  First Horizon National Corp.  129,785  1,739 
*  CB Richard Ellis Group Inc. Class A  125,057  1,697 
*  NASDAQ OMX Group Inc.  75,596  1,498 
  Federated Investors Inc. Class B  47,982  1,319 
  Marshall & Ilsley Corp.  222,672  1,214 
  Huntington Bancshares Inc.  310,706  1,134 
  Janus Capital Group Inc.  82,528  1,110 
*  E*Trade Financial Corp.  621,115  1,087 
  Apartment Investment & Management Co.  61,692  982 
  Zions Bancorporation  62,809  806 
      780,520 
Health Care (7.4%)     
  Johnson & Johnson  1,513,461  97,482 
  Pfizer Inc.  4,426,895  80,525 
  Merck & Co. Inc.  1,675,643  61,228 
  Abbott Laboratories  848,586  45,815 
*  Amgen Inc.  555,328  31,415 
  Medtronic Inc.  609,972  26,827 
  Bristol-Myers Squibb Co.  936,445  23,645 
*  Gilead Sciences Inc.  493,931  21,377 
  Eli Lilly & Co.  556,853  19,885 
  UnitedHealth Group Inc.  639,828  19,502 
  Baxter International Inc.  331,942  19,478 
*  Medco Health Solutions Inc.  260,720  16,663 
*  WellPoint Inc.  251,800  14,678 
*  Celgene Corp.  252,340  14,050 
*  Express Scripts Inc.  150,783  13,035 
*  Thermo Fisher Scientific Inc.  223,968  10,681 
  Allergan Inc.  168,867  10,640 
  Becton Dickinson and Co.  131,304  10,355 
  McKesson Corp.  145,886  9,118 
*  Biogen Idec Inc.  158,883  8,500 
  Stryker Corp.  157,144  7,915 
  Aetna Inc.  238,711  7,567 
*  Boston Scientific Corp.  826,551  7,439 
*  Genzyme Corp.  148,151  7,261 
*  Zimmer Holdings Inc.  117,103  6,922 
*  St Jude Medical Inc.  183,742  6,758 
  Cardinal Health Inc.  201,584  6,499 
*  Intuitive Surgical Inc.  20,996  6,369 
*  Forest Laboratories Inc.  164,296  5,276 
  CIGNA Corp.  148,178  5,226 
  Quest Diagnostics Inc.  85,390  5,156 


* Life Technologies Corp.  95,220  4,973 
* Hospira Inc.  89,333  4,556 
* Laboratory Corp. of America Holdings  58,386  4,370 
CR Bard Inc.  53,123  4,138 
AmerisourceBergen Corp. Class A  158,499  4,132 
* Humana Inc.  93,841  4,119 
* DaVita Inc.  56,278  3,306 
* Varian Medical Systems Inc.  70,245  3,291 
* Waters Corp.  52,144  3,231 
* Mylan Inc.  171,354  3,158 
DENTSPLY International Inc.  83,736  2,945 
* Cephalon Inc.  41,167  2,569 
* CareFusion Corp.  100,770  2,520 
* Watson Pharmaceuticals Inc.  58,382  2,313 
* Millipore Corp.  31,912  2,309 
IMS Health Inc.  100,689  2,121 
* Coventry Health Care Inc.  86,662  2,105 
* King Pharmaceuticals Inc.  135,881  1,667 
PerkinElmer Inc.  71,585  1,474 
* Patterson Cos. Inc.  51,573  1,443 
* Tenet Healthcare Corp.  237,336  1,279 
    689,306 
Industrials (6.0%)     
General Electric Co.  5,840,411  88,365 
United Technologies Corp.  514,447  35,708 
3M Co.  385,113  31,837 
United Parcel Service Inc. Class B  544,748  31,252 
Boeing Co.  400,298  21,668 
Caterpillar Inc.  342,084  19,495 
Union Pacific Corp.  277,583  17,738 
Emerson Electric Co.  413,715  17,624 
Honeywell International Inc.  413,989  16,228 
General Dynamics Corp.  211,862  14,443 
FedEx Corp.  171,029  14,272 
Burlington Northern Santa Fe Corp.  143,919  14,193 
Lockheed Martin Corp.  175,588  13,231 
Deere & Co.  232,133  12,556 
Raytheon Co.  210,426  10,841 
Danaher Corp.  142,094  10,685 
Norfolk Southern Corp.  201,576  10,567 
CSX Corp.  214,046  10,379 
Illinois Tool Works Inc.  211,209  10,136 
Northrop Grumman Corp.  174,475  9,744 
Waste Management Inc.  269,936  9,127 
Precision Castparts Corp.  76,806  8,476 
PACCAR Inc.  203,467  7,380 
Eaton Corp.  92,068  5,857 
L-3 Communications Holdings Inc.  63,539  5,525 
CH Robinson Worldwide Inc.  92,310  5,421 
Republic Services Inc. Class A  181,872  5,149 
Cummins Inc.  111,266  5,103 
ITT Corp.  100,353  4,992 
Rockwell Collins Inc.  86,480  4,787 
Parker Hannifin Corp.  87,345  4,706 
Southwest Airlines Co.  411,511  4,704 
Fluor Corp.  100,810  4,540 
Goodrich Corp.  69,972  4,496 


  Dover Corp.  103,987  4,327 
  Expeditors International of Washington Inc.  117,713  4,088 
  Rockwell Automation Inc.  78,735  3,699 
*,^ First Solar Inc.  26,789  3,627 
  WW Grainger Inc.  34,633  3,353 
  Fastenal Co.  72,320  3,011 
  Textron Inc.  154,682  2,910 
  Flowserve Corp.  29,916  2,828 
*  Stericycle Inc.  48,176  2,658 
  Masco Corp.  191,698  2,647 
  Roper Industries Inc.  49,893  2,613 
  Pitney Bowes Inc.  113,612  2,586 
  RR Donnelley & Sons Co.  113,225  2,521 
*  Jacobs Engineering Group Inc.  65,179  2,451 
  Dun & Bradstreet Corp.  28,672  2,419 
  Pall Corp.  65,017  2,354 
*  Iron Mountain Inc.  102,897  2,342 
*  Quanta Services Inc.  110,429  2,301 
  Equifax Inc.  73,703  2,277 
  Robert Half International Inc.  83,335  2,228 
  Stanley Works  42,450  2,187 
  Avery Dennison Corp.  54,653  1,994 
  Cintas Corp.  73,358  1,911 
  Snap-On Inc.  33,284  1,407 
  Ryder System Inc.  31,930  1,315 
*  Monster Worldwide Inc.  67,579  1,176 
      558,455 
Information Technology (11.7%)     
  Microsoft Corp.  4,237,898  129,214 
*  Apple Inc.  493,413  104,041 
  International Business Machines Corp.  720,539  94,319 
*  Google Inc. Class A  132,275  82,008 
*  Cisco Systems Inc.  3,156,002  75,555 
  Hewlett-Packard Co.  1,300,812  67,005 
  Intel Corp.  3,030,788  61,828 
  Oracle Corp.  2,145,230  52,644 
  QUALCOMM Inc.  917,496  42,443 
  Visa Inc. Class A  239,441  20,942 
*  EMC Corp.  1,113,661  19,456 
  Texas Instruments Inc.  687,647  17,920 
  Corning Inc.  855,053  16,511 
*  eBay Inc.  617,618  14,539 
*  Dell Inc.  947,036  13,599 
  Mastercard Inc. Class A  52,209  13,364 
  Automatic Data Processing Inc.  276,191  11,827 
*  Yahoo! Inc.  655,644  11,002 
*  Adobe Systems Inc.  288,002  10,593 
  Applied Materials Inc.  731,827  10,202 
  Motorola Inc.  1,260,297  9,780 
*  Symantec Corp.  447,343  8,003 
*  Juniper Networks Inc.  287,042  7,655 
*  Broadcom Corp. Class A  236,043  7,424 
*  Cognizant Technology Solutions Corp. Class A  161,343  7,309 
  Western Union Co.  377,025  7,107 
*  NetApp Inc.  186,111  6,400 
*  Agilent Technologies Inc.  191,743  5,957 
*  NVIDIA Corp.  297,770  5,562 


* Western Digital Corp.  122,545  5,410 
Paychex Inc.  176,493  5,408 
* Intuit Inc.  174,316  5,353 
* Micron Technology Inc.  473,052  4,995 
Analog Devices Inc.  158,050  4,991 
CA Inc.  218,109  4,899 
* Computer Sciences Corp.  84,887  4,884 
Amphenol Corp. Class A  94,454  4,362 
* Salesforce.com Inc.  57,712  4,257 
* Citrix Systems Inc.  100,691  4,190 
* Fiserv Inc.  84,705  4,107 
Xerox Corp.  478,381  4,047 
Fidelity National Information Services Inc.  172,151  4,035 
* BMC Software Inc.  99,132  3,975 
* Sun Microsystems Inc.  417,961  3,916 
Xilinx Inc.  156,155  3,913 
Linear Technology Corp.  122,798  3,750 
Altera Corp.  162,257  3,672 
* SanDisk Corp.  122,437  3,549 
* McAfee Inc.  86,617  3,514 
Harris Corp.  72,540  3,449 
* Red Hat Inc.  108,453  3,351 
* Affiliated Computer Services Inc. Class A  55,881  3,336 
KLA-Tencor Corp.  91,579  3,312 
* Autodesk Inc.  125,769  3,196 
* Electronic Arts Inc.  179,342  3,183 
Microchip Technology Inc.  106,200  3,086 
* Advanced Micro Devices Inc.  314,666  3,046 
* Teradata Corp.  94,437  2,968 
* FLIR Systems Inc.  84,465  2,764 
* VeriSign Inc.  110,091  2,669 
* SAIC Inc.  140,083  2,653 
* Akamai Technologies Inc.  94,530  2,394 
* LSI Corp.  355,150  2,134 
National Semiconductor Corp.  129,620  1,991 
Jabil Circuit Inc.  100,769  1,750 
Total System Services Inc.  99,692  1,722 
* MEMC Electronic Materials Inc.  126,239  1,719 
Molex Inc.  76,326  1,645 
* Tellabs Inc.  236,476  1,343 
* QLogic Corp.  71,156  1,343 
* Novellus Systems Inc.  54,027  1,261 
* Lexmark International Inc. Class A  44,635  1,160 
* Teradyne Inc.  106,526  1,143 
* Compuware Corp.  128,257  927 
* JDS Uniphase Corp.  103,053  850 
* Novell Inc.  181,769  754 
    1,080,585 
Materials (2.1%)     
Monsanto Co.  299,084  24,450 
* Freeport-McMoRan Copper & Gold Inc.  230,681  18,521 
Dow Chemical Co.  629,507  17,393 
EI du Pont de Nemours & Co.  497,518  16,751 
Praxair Inc.  168,789  13,555 
Newmont Mining Corp.  269,228  12,737 
Air Products & Chemicals Inc.  115,205  9,339 
Alcoa Inc.  533,154  8,594 


Nucor Corp.  172,397  8,042 
International Paper Co.  242,410  6,492 
Ecolab Inc.  128,323  5,721 
PPG Industries Inc.  92,611  5,421 
Weyerhaeuser Co.  116,546  5,028 
United States Steel Corp.  80,821  4,455 
Vulcan Materials Co.  67,474  3,554 
Sigma-Aldrich Corp.  67,057  3,388 
* Owens-Illinois Inc.  95,099  3,126 
Ball Corp.  53,564  2,769 
Cliffs Natural Resources Inc.  59,924  2,762 
MeadWestvaco Corp.  94,383  2,702 
Allegheny Technologies Inc.  55,014  2,463 
CF Industries Holdings Inc.  26,832  2,436 
Eastman Chemical Co.  40,082  2,415 
Airgas Inc.  46,824  2,229 
FMC Corp.  39,558  2,206 
International Flavors & Fragrances Inc.  44,728  1,840 
Sealed Air Corp.  83,701  1,830 
Bemis Co. Inc.  59,043  1,751 
* Pactiv Corp.  72,229  1,744 
AK Steel Holding Corp.  58,704  1,253 
* Titanium Metals Corp.  49,032  614 
    195,581 
Telecommunication Services (1.9%)     
AT&T Inc.  3,237,018  90,734 
Verizon Communications Inc.  1,558,470  51,632 
* American Tower Corp. Class A  216,153  9,340 
* Sprint Nextel Corp.  1,634,248  5,981 
CenturyTel Inc.  162,155  5,872 
Qwest Communications International Inc.  806,921  3,397 
Windstream Corp.  236,471  2,599 
Frontier Communications Corp.  173,520  1,355 
* MetroPCS Communications Inc.  144,306  1,101 
    172,011 
Utilities (2.2%)     
Exelon Corp.  362,935  17,737 
Southern Co.  438,012  14,595 
Dominion Resources Inc.  325,518  12,669 
Duke Energy Corp.  712,289  12,259 
FPL Group Inc.  226,156  11,946 
Public Service Enterprise Group Inc.  279,556  9,295 
American Electric Power Co. Inc.  261,228  9,088 
PG&E Corp.  203,208  9,073 
Entergy Corp.  103,824  8,497 
FirstEnergy Corp.  166,935  7,754 
Sempra Energy  134,823  7,547 
Consolidated Edison Inc.  152,487  6,928 
PPL Corp.  207,196  6,695 
Progress Energy Inc.  156,700  6,426 
Edison International  181,744  6,321 
Xcel Energy Inc.  251,049  5,327 
* AES Corp.  374,266  4,981 
DTE Energy Co.  90,877  3,961 
Questar Corp.  95,264  3,960 
Constellation Energy Group Inc.  111,835  3,933 
Ameren Corp.  130,158  3,638 


Wisconsin Energy Corp.        65,852 3,281
EQT Corp.        74,299 3,263
CenterPoint Energy Inc.        205,601 2,983
Northeast Utilities        96,423 2,487
SCANA Corp.        61,189 2,306
NiSource Inc.        149,874 2,305
Allegheny Energy Inc.        91,721 2,154
Pepco Holdings Inc.        125,256 2,111
Pinnacle West Capital Corp.        55,894 2,045
CMS Energy Corp.        121,571 1,904
TECO Energy Inc.        115,046 1,866
Integrys Energy Group Inc.        41,564 1,745
Nicor Inc.        20,862 878
          201,958
Total Common Stocks (Cost $3,560,510)          5,442,241
        Face Market
      Maturity  Amount Value
  Coupon   Date  ($000) ($000)
U.S. Government and Agency Obligations (17.2%)1           
U.S. Government Securities (17.2%)           
United States Treasury Note/Bond  8.500 %  2/15/20  18,156 25,172
United States Treasury Note/Bond  8.750 %  8/15/20  56,290 79,650
United States Treasury Note/Bond  7.875 %  2/15/21  19,205 25,825
United States Treasury Note/Bond  8.125 %  8/15/21  46,000 63,113
United States Treasury Note/Bond  8.000 %  11/15/21  70,515 96,055
United States Treasury Note/Bond  7.250 %  8/15/22  16,629 21,553
United States Treasury Note/Bond  7.625 %  11/15/22  8,000 10,674
United States Treasury Note/Bond  7.125 %  2/15/23  22,978 29,484
United States Treasury Note/Bond  6.250 %  8/15/23  75,765 90,527
United States Treasury Note/Bond  7.500 %  11/15/24  28,500 38,119
United States Treasury Note/Bond  7.625 %  2/15/25  16,827 22,745
United States Treasury Note/Bond  6.875 %  8/15/25  55,780 70,806
United States Treasury Note/Bond  6.000 %  2/15/26  21,282 24,903
United States Treasury Note/Bond  6.750 %  8/15/26  24,000 30,289
United States Treasury Note/Bond  6.500 %  11/15/26  15,805 19,492
United States Treasury Note/Bond  6.625 %  2/15/27  13,826 17,272
United States Treasury Note/Bond  6.375 %  8/15/27  24,000 29,314
United States Treasury Note/Bond  6.125 %  11/15/27  50,471 60,139
United States Treasury Note/Bond  5.500 %  8/15/28  16,119 17,970
United States Treasury Note/Bond  5.250 %  11/15/28  15,553 16,860
United States Treasury Note/Bond  5.250 %  2/15/29  15,790 17,115
United States Treasury Note/Bond  6.125 %  8/15/29  12,867 15,454
United States Treasury Note/Bond  6.250 %  5/15/30  45,823 56,011
United States Treasury Note/Bond  5.375 %  2/15/31  58,529 64,711
United States Treasury Note/Bond  4.500 %  2/15/36  91,614 90,297
United States Treasury Note/Bond  4.750 %  2/15/37  60,434 61,803
United States Treasury Note/Bond  5.000 %  5/15/37  60,004 63,773
United States Treasury Note/Bond  4.375 %  2/15/38  64,536 62,005
United States Treasury Note/Bond  4.500 %  5/15/38  80,451 78,855
United States Treasury Note/Bond  3.500 %  2/15/39  68,680 56,318
United States Treasury Note/Bond  4.250 %  5/15/39  88,000 82,610
United States Treasury Note/Bond  4.500 %  8/15/39  99,700 97,535
United States Treasury Note/Bond  4.375 %  11/15/39  61,700 59,117
Total U.S. Government and Agency Obligations (Cost $1,647,710)       1,595,566


        Shares  
Temporary Cash Investments (24.3%)1           
Money Market Fund (20.7%)           
2,3 Vanguard Market Liquidity Fund  0.187 %    1,912,613,425 1,912,613
 
        Face  
        Amount  
        ($000)  
U.S. Government and Agency Obligations (1.4%)        
4 United States Treasury Bill  0.020%–0.025%   3/11/10  130,225 130,212
 
Commercial Paper (2.2%)           
Bank of Nova Scotia  0.210 %  2/1/10  20,000 19,998
Calyon North America Inc.  0.205 %  3/24/10  40,000 39,981
CBA (Delaware) Finance Inc.  0.260 %  1/22/10  10,615 10,615
CBA (Delaware) Finance Inc.  0.200 %  2/10/10  20,000 19,997
Lloyds TSB Bank PLC  0.240 %  2/26/10  20,000 19,993
Nestle Finance International Ltd.  0.070 %  1/26/10  16,000 15,999
Rabobank USA Financial Corp.  0.300 %  2/18/10  20,000 19,996
Societe Generale N.A. Inc.  0.200 %  1/22/10  20,000 19,998
Societe Generale N.A. Inc.  0.300 %  2/8/10  35,000 34,993
          201,570
Total Temporary Cash Investments (Cost $2,244,389)       2,244,395
Total Investments (100.3%) (Cost $7,452,609)          9,282,202
Other Assets and Liabilities-Net (-0.3%)3          (30,073)
Net Assets (100%)          9,252,129

* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $7,137,000.
1 The fund invests a portion of its cash reserves in equity and bond markets through the use of futures contracts.
After giving effect to futures investments, the fund's effective positions in common stock, U.S. government
obligations, and temporary cash investments represent 71.9%, 30.1%, and (1.7%), respectively, of net assets.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by
Vanguard. Rate shown is the 7-day yield.
3 Includes $7,426,000 of collateral received for securities on loan.
4 Securities with a value of $130,212,000 have been segregated as initial margin for open futures contracts.
REIT—Real Estate Investment Trust.

A. 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. Bonds, and temporary cash investments acquired over 60 days to maturity, 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. Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value. Other temporary cash investments are valued at amortized cost, which approximates market value. Securities for which market quotations a re 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.


Asset Allocation Fund

B. Various inputs may be used to determine the value of the fund's investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments).

The following table summarizes the fund's investments as of December 31, 2009, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments  ($000) ($000) ($000)
Common Stocks  5,442,241 — —
U.S. Government and Agency Obligations  — 1,595,566 —
Temporary Cash Investments  1,912,613 331,782 —
Futures Contracts—Assets1  306 — —
Futures Contracts—Liabilities1  (18,027 — —
Total  7,337,133 1,927,348 —
1 Represents variation margin on the last day of the reporting period.

C. Futures Contracts: The fund may use S&P 500 Index and U.S. Treasury futures contracts, with the objectives of maintaining full exposure to the stock and bond markets, enhancing returns, maintaining liquidity, and minimizing transaction costs. The fund may purchase futures contracts to immediately invest incoming cash in the market, or sell futures in response to cash outflows, thereby simulating a fully invested position in the underlying securities while maintaining a cash balance for liquidity. The fund may seek to enhance returns by using futures contracts instead of the underlying securities when futures are believed to be priced more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of securities held by the fund and the prices of futures contracts, and the possibility of an illiquid market.

Futures contracts are valued based upon their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Schedule of Investments. Fluctuations in the value of the contracts are recorded in the Schedule of Investments as an asset (liability).

At December 31, 2009, the aggregate settlement value of open futures contracts and the related

unrealized appreciation (depreciation) were:               
          ($ 000 ) 
    Number of   Aggregate    Unrealized  
    Long (Short)   Settlement    Appreciation  
Futures Contracts  Expiration  Contracts   Value (Depreciation)  
S&P 500 Index  March 2010  4,510   1,252,314    16,635  
30-Year U.S. Treasury Bond  March 2010  10,346   1,193,670    (58,273 ) 
E-mini S&P 500 Index  March 2010  (750 )  41,651    301  

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


Asset Allocation Fund

D. At December 31, 2009, the cost of investment securities for tax purposes was $7,452,609,000. Net unrealized appreciation of investment securities for tax purposes was $1,829,593,000, consisting of unrealized gains of $2,304,882,000 on securities that had risen in value since their purchase and $475,289,000 in unrealized losses on securities that had fallen in value since their purchase.


Vanguard U.S. Value Fund

Schedule of Investments
As of December 31, 2009

    Market
    Value
  Shares  ($000)
Common Stocks (97.1%)1     
Consumer Discretionary (9.0%)     
* Viacom Inc. Class B  103,400  3,074
Comcast Corp. Class A  170,589  2,876
Walt Disney Co.  84,600  2,728
* Ford Motor Co.  254,100  2,541
Ltd Brands Inc.  106,410  2,047
DISH Network Corp. Class A  96,330  2,001
Home Depot Inc.  66,600  1,927
News Corp. Class A  137,900  1,888
RadioShack Corp.  81,450  1,588
Newell Rubbermaid Inc.  102,200  1,534
Time Warner Inc.  51,766  1,508
* Big Lots Inc.  43,300  1,255
Time Warner Cable Inc.  27,900  1,155
* Rent-A-Center Inc.  58,000  1,028
Gap Inc.  48,350  1,013
Wyndham Worldwide Corp.  44,100  889
Gannett Co. Inc.  55,800  829
Jarden Corp.  24,900  770
Lowe's Cos. Inc.  30,400  711
Harley-Davidson Inc.  28,090  708
Bob Evans Farms Inc.  24,145  699
* DIRECTV Class A  20,800  694
Comcast Corp.  41,300  661
* TRW Automotive Holdings Corp.  26,670  637
* Beazer Homes USA Inc.  120,000  581
Scholastic Corp.  18,600  555
^ Barnes & Noble Inc.  27,700  528
Phillips-Van Heusen Corp.  11,700  476
Regis Corp.  29,714  463
* Talbots Inc.  48,000  428
DR Horton Inc.  39,200  426
Unifirst Corp.  8,780  422
* Cabela's Inc.  26,700  381
* Genesco Inc.  13,100  360
* Interpublic Group of Cos. Inc.  46,100  340
* Jo-Ann Stores Inc.  9,300  337
Cracker Barrel Old Country Store Inc.  8,800  334
* Ruby Tuesday Inc.  38,370  276
Autoliv Inc.  5,800  251
* Valassis Communications Inc.  13,400  245
* GameStop Corp. Class A  10,900  239
Harte-Hanks Inc.  22,100  238
* Sally Beauty Holdings Inc.  27,200  208
* Core-Mark Holding Co. Inc.  6,300  208
Finish Line Inc. Class A  16,300  205
* Carnival Corp.  6,400  203
* Dollar General Corp.  8,700  195
Cablevision Systems Corp. Class A  7,400  191
* Standard Motor Products Inc.  18,200  155


*  Knology Inc.  13,797  151 
*  Red Robin Gourmet Burgers Inc.  7,700  138 
*  Retail Ventures Inc.  15,400  137 
  Speedway Motorsports Inc.  7,700  136 
  Jones Apparel Group Inc.  8,100  130 
  Spartan Motors Inc.  22,300  126 
*  Stein Mart Inc.  11,100  118 
*  Mediacom Communications Corp. Class A  26,289  118 
*  G-III Apparel Group Ltd.  4,730  103 
  CSS Industries Inc.  4,900  95 
*  Lithia Motors Inc. Class A  11,580  95 
*  Dana Holding Corp.  8,700  94 
  Systemax Inc.  5,970  94 
*  Tenneco Inc.  5,200  92 
*  La-Z-Boy Inc.  9,300  89 
*  Perry Ellis International Inc.  5,800  87 
  Jackson Hewitt Tax Service Inc.  18,200  80 
*  HOT Topic Inc.  12,000  76 
*  Liberty Media Corp. - Starz  1,500  69 
*  Career Education Corp.  2,800  65 
*  Hawk Corp. Class A  2,900  51 
*,^ Conn's Inc.  6,691  39 
  Frisch's Restaurants Inc.  1,300  31 
  Books-A-Million Inc.  4,200  28 
*  Dorman Products Inc.  1,800  28 
*  LodgeNet Interactive Corp.  4,500  25 
*  Mac-Gray Corp.  2,400  25 
*  Bluegreen Corp.  2,400  6 
      45,332 
Consumer Staples (6.5%)     
  CVS Caremark Corp.  173,300  5,582 
  Safeway Inc.  198,140  4,218 
  Sara Lee Corp.  344,950  4,201 
  Procter & Gamble Co.  46,859  2,841 
  Del Monte Foods Co.  162,400  1,842 
  Kraft Foods Inc.  58,618  1,593 
  Lorillard Inc.  16,300  1,308 
  PepsiAmericas Inc.  37,800  1,106 
  General Mills Inc.  14,900  1,055 
  Dr Pepper Snapple Group Inc.  36,000  1,019 
  Coca-Cola Co.  17,100  975 
  Kimberly-Clark Corp.  13,100  835 
  Coca-Cola Enterprises Inc.  38,100  808 
  Hershey Co.  21,300  762 
  Pepsi Bottling Group Inc.  20,200  758 
  Mead Johnson Nutrition Co. Class A  17,146  749 
  Corn Products International Inc.  21,900  640 
  Altria Group Inc.  32,060  629 
  Casey's General Stores Inc.  13,600  434 
  Nash Finch Co.  8,500  315 
  Andersons Inc.  11,700  302 
  Spartan Stores Inc.  12,400  177 
*  Pantry Inc.  12,500  170 
*  Energizer Holdings Inc.  2,612  160 
*  Whole Foods Market Inc.  5,700  156 
*  Seneca Foods Corp. Class A  5,600  134 
  Inter Parfums Inc.  9,670  118 


* American Oriental Bioengineering Inc.  24,500  114 
    33,001 
Energy (15.6%)     
Exxon Mobil Corp.  293,500  20,014 
Chevron Corp.  166,050  12,784 
Marathon Oil Corp.  219,237  6,844 
ConocoPhillips  104,990  5,362 
Williams Cos. Inc.  211,200  4,452 
Occidental Petroleum Corp.  39,700  3,229 
Apache Corp.  26,900  2,775 
Devon Energy Corp.  31,100  2,286 
* Nabors Industries Ltd.  94,790  2,075 
* Rowan Cos. Inc.  85,960  1,946 
Schlumberger Ltd.  25,780  1,678 
Southern Union Co.  68,100  1,546 
Anadarko Petroleum Corp.  23,100  1,442 
* SEACOR Holdings Inc.  18,600  1,418 
* Oil States International Inc.  27,800  1,092 
National Oilwell Varco Inc.  24,700  1,089 
* Newfield Exploration Co.  20,300  979 
Murphy Oil Corp.  17,800  965 
* Pride International Inc.  28,400  906 
Halliburton Co.  28,900  870 
Tidewater Inc.  15,700  753 
XTO Energy Inc.  15,918  741 
Spectra Energy Corp.  23,800  488 
CARBO Ceramics Inc.  5,600  382 
* Global Industries Ltd.  52,000  371 
* ATP Oil & Gas Corp.  15,800  289 
El Paso Corp.  29,200  287 
* Cal Dive International Inc.  29,000  219 
Berry Petroleum Co. Class A  7,200  210 
* Tetra Technologies Inc.  18,933  210 
Chesapeake Energy Corp.  8,000  207 
* International Coal Group Inc.  47,860  185 
* Petroleum Development Corp.  9,900  180 
* USEC Inc.  40,020  154 
* Harvest Natural Resources Inc.  19,900  105 
* Bristow Group Inc.  2,300  88 
* PHI Inc.  3,900  81 
EOG Resources Inc.  800  78 
* Venoco Inc.  4,200  55 
* Geokinetics Inc.  4,700  45 
* Bolt Technology Corp.  3,800  42 
* Gulfport Energy Corp.  3,400  39 
    78,961 
Financials (23.9%)     
JPMorgan Chase & Co.  388,500  16,189 
Goldman Sachs Group Inc.  60,337  10,187 
Wells Fargo & Co.  364,053  9,826 
Bank of America Corp.  531,776  8,009 
Travelers Cos. Inc.  151,555  7,557 
US Bancorp  335,000  7,541 
Prudential Financial Inc.  106,900  5,319 
Ameriprise Financial Inc.  105,620  4,100 
Unum Group  201,499  3,933 
New York Community Bancorp Inc.  191,510  2,779 


American Express Co.  58,500  2,370 
Hudson City Bancorp Inc.  162,396  2,230 
Platinum Underwriters Holdings Ltd.  55,830  2,138 
Hospitality Properties Trust  79,700  1,890 
PartnerRe Ltd.  25,060  1,871 
Allied World Assurance Co. Holdings Ltd.  40,390  1,861 
Endurance Specialty Holdings Ltd.  47,600  1,772 
American Financial Group Inc.  59,620  1,488 
Aspen Insurance Holdings Ltd.  57,945  1,475 
Discover Financial Services  98,950  1,456 
Assurant Inc.  43,300  1,276 
HRPT Properties Trust  196,800  1,273 
Morgan Stanley  37,500  1,110 
Validus Holdings Ltd.  38,000  1,024 
Franklin Resources Inc.  9,500  1,001 
Chubb Corp.  19,900  979 
BlackRock Inc.  4,000  929 
Bank of New York Mellon Corp.  31,700  887 
Montpelier Re Holdings Ltd.  47,800  828 
Reinsurance Group of America Inc. Class A  17,300  824 
* CNA Financial Corp.  33,500  804 
PNC Financial Services Group Inc.  14,100  744 
Citigroup Inc.  207,714  688 
First Citizens BancShares Inc. Class A  3,400  558 
State Street Corp.  12,300  536 
* Conseco Inc.  105,400  527 
Unitrin Inc.  23,400  516 
Medical Properties Trust Inc.  51,300  513 
Ventas Inc.  11,200  490 
Oriental Financial Group Inc.  42,690  461 
* World Acceptance Corp.  12,700  455 
Bank of Hawaii Corp.  9,100  428 
Macerich Co.  11,900  428 
Annaly Capital Management Inc.  23,900  415 
Nelnet Inc. Class A  23,700  408 
Highwoods Properties Inc.  12,000  400 
Cash America International Inc.  10,700  374 
Rayonier Inc.  8,500  358 
BOK Financial Corp.  7,500  356 
Brandywine Realty Trust  30,600  349 
Torchmark Corp.  7,400  325 
Cullen/Frost Bankers Inc.  6,000  300 
ProLogis  20,400  279 
BB&T Corp.  10,900  277 
American Equity Investment Life Holding Co.  34,600  257 
Duke Realty Corp.  20,200  246 
Banco Latinoamericano de Comercio Exterior SA  17,310  241 
* Encore Capital Group Inc.  12,500  217 
Sun Communities Inc.  9,700  192 
Mid-America Apartment Communities Inc.  3,900  188 
Allstate Corp.  5,800  174 
Commerce Bancshares Inc.  4,410  171 
Max Capital Group Ltd.  7,190  160 
* Ashford Hospitality Trust Inc.  32,800  152 
* St Joe Co.  5,200  150 
Ramco-Gershenson Properties Trust  14,672  140 
* American Safety Insurance Holdings Ltd.  9,400  136 
Cedar Shopping Centers Inc.  19,322  131 


Simon Property Group Inc.  1,610  128 
* First Horizon National Corp.  9,436  126 
Calamos Asset Management Inc. Class A  10,950  126 
Mission West Properties Inc.  17,198  124 
Southside Bancshares Inc.  6,200  122 
* MBIA Inc.  29,900  119 
Transatlantic Holdings Inc.  2,200  115 
* Progressive Corp.  6,300  113 
DuPont Fabros Technology Inc.  6,034  109 
Student Loan Corp.  2,200  102 
* Forest City Enterprises Inc. Class A  8,600  101 
* Jefferies Group Inc.  4,200  100 
International Bancshares Corp.  5,200  98 
Vornado Realty Trust  1,359  95 
Agree Realty Corp.  3,940  92 
Plum Creek Timber Co. Inc.  2,300  87 
Horace Mann Educators Corp.  6,800  85 
Camden National Corp.  2,400  78 
BGC Partners Inc. Class A  16,900  78 
ESB Financial Corp.  5,800  77 
* Penson Worldwide Inc.  8,429  76 
Associated Estates Realty Corp.  6,400  72 
* AmeriCredit Corp.  3,600  69 
Advance America Cash Advance Centers Inc.  11,900  66 
* Argo Group International Holdings Ltd.  2,262  66 
* China Housing & Land Development Inc.  15,000  62 
* Dollar Financial Corp.  2,600  62 
Equity Residential  1,800  61 
Fifth Third Bancorp  6,200  60 
First Industrial Realty Trust Inc.  11,300  59 
Smithtown Bancorp Inc.  9,200  55 
Bar Harbor Bankshares  1,900  52 
Everest Re Group Ltd.  600  51 
First Financial Bancorp  3,500  51 
Century Bancorp Inc. Class A  2,300  51 
Kohlberg Capital Corp.  9,720  44 
Alliance Financial Corp.  1,594  43 
U-Store-It Trust  5,200  38 
Porter Bancorp Inc.  1,890  28 
* Hallmark Financial Services  3,100  25 
Universal Insurance Holdings Inc.  3,700  22 
Gladstone Commercial Corp.  1,520  20 
Great Southern Bancorp Inc.  900  19 
Suffolk Bancorp  500  15 
California First National Bancorp  713  9 
Northrim BanCorp Inc.  477  8 
Host Hotels & Resorts Inc.  661  8 
One Liberty Properties Inc.  224  2 
Enterprise Bancorp Inc.  5  — 
    120,935 
Health Care (11.4%)     
Pfizer Inc.  823,025  14,971 
Merck & Co. Inc.  250,953  9,170 
* Forest Laboratories Inc.  136,600  4,386 
CIGNA Corp.  103,520  3,651 
McKesson Corp.  53,200  3,325 
Johnson & Johnson  49,900  3,214 


  UnitedHealth Group Inc.  72,000  2,195 
*  Humana Inc.  45,600  2,001 
*  WellPoint Inc.  29,700  1,731 
*  Mylan Inc.  89,600  1,651 
*  Health Net Inc.  63,900  1,488 
*  Life Technologies Corp.  22,996  1,201 
  Omnicare Inc.  48,720  1,178 
  Eli Lilly & Co.  31,100  1,111 
*  Kinetic Concepts Inc.  25,100  945 
  AmerisourceBergen Corp. Class A  26,200  683 
*  Coventry Health Care Inc.  24,010  583 
*  Community Health Systems Inc.  15,500  552 
*  Par Pharmaceutical Cos. Inc.  19,900  539 
  Bristol-Myers Squibb Co.  16,459  416 
*  Kindred Healthcare Inc.  21,800  403 
*,^ Amedisys Inc.  7,400  359 
*  LifePoint Hospitals Inc.  8,100  263 
*  Odyssey HealthCare Inc.  16,900  263 
  Invacare Corp.  8,800  220 
*  Universal American Corp.  15,800  185 
*  Res-Care Inc.  14,200  159 
*  RehabCare Group Inc.  5,165  157 
*  Tenet Healthcare Corp.  24,700  133 
*  Kendle International Inc.  6,400  117 
*  Skilled Healthcare Group Inc.  12,100  90 
*  Greatbatch Inc.  3,150  61 
*  Cantel Medical Corp.  2,200  44 
*  NovaMed Inc.  3,300  13 
*  Cambrex Corp.  1,600  9 
*  Medical Action Industries Inc.  430  7 
*  Allied Healthcare International Inc.  1,500  4 
      57,478 
Industrials (9.1%)     
  General Electric Co.  717,600  10,857 
  L-3 Communications Holdings Inc.  44,000  3,826 
  RR Donnelley & Sons Co.  100,100  2,229 
*  EMCOR Group Inc.  55,300  1,488 
  Ryder System Inc.  35,000  1,441 
  Raytheon Co.  26,800  1,381 
  General Dynamics Corp.  20,200  1,377 
  SPX Corp.  23,700  1,296 
  Boeing Co.  22,078  1,195 
*  General Cable Corp.  40,200  1,183 
  CSX Corp.  23,400  1,135 
  Manpower Inc.  18,600  1,015 
  United Technologies Corp.  13,800  958 
  FedEx Corp.  10,400  868 
*  Alaska Air Group Inc.  24,650  852 
*  United Stationers Inc.  14,470  823 
*  Owens Corning  31,200  800 
  Joy Global Inc.  15,300  789 
  Skywest Inc.  45,500  770 
  Union Pacific Corp.  10,700  684 
*  Dollar Thrifty Automotive Group Inc.  25,700  658 
*  Avis Budget Group Inc.  47,400  622 
  Northrop Grumman Corp.  9,900  553 
  Universal Forest Products Inc.  13,800  508 


Burlington Northern Santa Fe Corp.  5,000  493 
Triumph Group Inc.  8,770  423 
KBR Inc.  21,400  407 
* Atlas Air Worldwide Holdings Inc.  10,200  380 
Avery Dennison Corp.  10,202  372 
* Genco Shipping & Trading Ltd.  16,400  367 
Comfort Systems USA Inc.  27,480  339 
* Hertz Global Holdings Inc.  28,400  338 
Deluxe Corp.  21,600  319 
Aircastle Ltd.  32,400  319 
* EnPro Industries Inc.  11,400  301 
* Thomas & Betts Corp.  8,200  293 
* WESCO International Inc.  10,000  270 
* URS Corp.  5,900  263 
* Tutor Perini Corp.  14,193  257 
Encore Wire Corp.  12,000  253 
Ampco-Pittsburgh Corp.  7,995  252 
* Armstrong World Industries Inc.  6,400  249 
* M&F Worldwide Corp.  6,000  237 
* Republic Airways Holdings Inc.  26,800  198 
* EnerSys  8,900  195 
Apogee Enterprises Inc.  12,980  182 
* Esterline Technologies Corp.  4,200  171 
Federal Signal Corp.  25,680  155 
Hubbell Inc. Class B  3,200  151 
Trinity Industries Inc.  8,120  142 
International Shipholding Corp.  4,400  137 
* Volt Information Sciences Inc.  11,800  118 
Ducommun Inc.  6,200  116 
* Sterling Construction Co. Inc.  5,900  113 
Briggs & Stratton Corp.  5,800  108 
* Fushi Copperweld Inc.  10,400  105 
Alamo Group Inc.  4,700  81 
Mueller Industries Inc.  3,232  80 
* ATC Technology Corp.  3,200  76 
Caterpillar Inc.  1,300  74 
* Miller Industries Inc.  6,300  71 
Crane Co.  2,244  69 
Twin Disc Inc.  6,400  67 
Pitney Bowes Inc.  2,800  64 
* Metalico Inc.  11,900  59 
* Willis Lease Finance Corp.  3,169  48 
ITT Corp.  900  45 
Kimball International Inc. Class B  3,385  29 
VSE Corp.  600  27 
* DXP Enterprises Inc.  1,900  25 
* United Capital Corp.  964  23 
* GeoEye Inc.  800  22 
* Kirby Corp.  600  21 
* Cornell Cos. Inc.  900  20 
* Air Transport Services Group Inc.  6,200  16 
* Ultrapetrol Bahamas Ltd.  1,540  7 
Standard Register Co.  1,060  5 
    46,260 
Information Technology (6.9%)     
* Computer Sciences Corp.  111,300  6,403 
Intel Corp.  134,400  2,742 


Hewlett-Packard Co.  46,900  2,416 
* Micron Technology Inc.  184,500  1,948 
* Affiliated Computer Services Inc. Class A  27,570  1,646 
CA Inc.  69,600  1,563 
* Brocade Communications Systems Inc.  191,700  1,463 
* Lexmark International Inc. Class A  49,000  1,273 
* Synopsys Inc.  53,950  1,202 
* EMC Corp.  63,900  1,116 
Harris Corp.  22,200  1,056 
* Unisys Corp.  25,070  967 
* Marvell Technology Group Ltd.  43,800  909 
* CACI International Inc. Class A  16,200  791 
* Convergys Corp.  68,940  741 
Fair Isaac Corp.  32,995  703 
* Western Digital Corp.  15,700  693 
* Skyworks Solutions Inc.  46,800  664 
* Multi-Fineline Electronix Inc.  19,300  547 
* Advanced Micro Devices Inc.  54,900  531 
Earthlink Inc.  59,100  491 
United Online Inc.  48,824  351 
* SYNNEX Corp.  11,000  337 
Black Box Corp.  11,013  312 
* Teradata Corp.  9,600  302 
* Arris Group Inc.  24,917  285 
Seagate Technology  14,500  264 
International Business Machines Corp.  2,000  262 
* Tech Data Corp.  5,300  247 
CTS Corp.  24,900  239 
Motorola Inc.  30,048  233 
* SonicWALL Inc.  30,500  232 
* SanDisk Corp.  8,000  232 
* Compuware Corp.  22,700  164 
* Ciber Inc.  44,673  154 
* RF Micro Devices Inc.  31,800  152 
* CSG Systems International Inc.  7,900  151 
* Digi International Inc.  15,700  143 
* Mercury Computer Systems Inc.  12,502  138 
* Ness Technologies Inc.  26,500  130 
* Photronics Inc.  28,900  129 
* JDA Software Group Inc.  4,800  122 
* Quest Software Inc.  5,790  106 
* infoGROUP Inc.  11,100  89 
* AOL Inc.  3,651  85 
* OSI Systems Inc.  2,600  71 
* Oplink Communications Inc.  4,000  66 
* Dynamics Research Corp.  5,200  55 
* China Security & Surveillance Technology Inc.  4,970  38 
* Super Micro Computer Inc.  3,000  33 
* PC Connection Inc.  4,845  33 
* ePlus Inc.  1,950  32 
* PC Mall Inc.  5,000  26 
* EMS Technologies Inc.  1,720  25 
* Anaren Inc.  1,300  20 
* Pervasive Software Inc.  1,391  7 
* Computer Task Group Inc.  700  6 
    35,136 


Materials (2.8%)     
EI du Pont de Nemours & Co.  39,700  1,337 
Ashland Inc.  33,610  1,332 
* Owens-Illinois Inc.  34,800  1,144 
* Freeport-McMoRan Copper & Gold Inc.  14,100  1,132 
International Paper Co.  39,700  1,063 
Dow Chemical Co.  36,900  1,020 
Lubrizol Corp.  11,500  839 
Sealed Air Corp.  31,380  686 
* Coeur d'Alene Mines Corp.  37,680  680 
* Buckeye Technologies Inc.  57,637  563 
Eastman Chemical Co.  8,910  537 
PPG Industries Inc.  9,150  536 
* OM Group Inc.  16,800  527 
* Clearwater Paper Corp.  8,566  471 
Koppers Holdings Inc.  11,900  362 
Glatfelter  22,500  273 
Temple-Inland Inc.  11,400  241 
Innophos Holdings Inc.  9,700  223 
* Pactiv Corp.  9,000  217 
Rock-Tenn Co. Class A  3,200  161 
* Solutia Inc.  12,300  156 
* KapStone Paper and Packaging Corp.  14,400  142 
Innospec Inc.  13,300  134 
* Boise Inc.  10,200  54 
* Bway Holding Co.  2,766  53 
* General Steel Holdings Inc.  6,300  28 
* Sutor Technology Group Ltd.  4,400  12 
* AEP Industries Inc.  240  9 
    13,932 
Telecommunication Services (5.0%)     
AT&T Inc.  441,410  12,373 
Verizon Communications Inc.  150,902  4,999 
CenturyTel Inc.  134,242  4,861 
Qwest Communications International Inc.  529,200  2,228 
Windstream Corp.  27,992  308 
* Sprint Nextel Corp.  58,900  216 
* NII Holdings Inc.  2,100  70 
* Premiere Global Services Inc.  8,276  68 
* SureWest Communications  5,147  51 
USA Mobility Inc.  1,700  19 
    25,193 
Utilities (6.9%)     
PG&E Corp.  141,300  6,309 
DTE Energy Co.  72,400  3,156 
NiSource Inc.  185,810  2,858 
CMS Energy Corp.  175,200  2,744 
Ameren Corp.  97,100  2,714 
Exelon Corp.  48,800  2,385 
* NRG Energy Inc.  92,210  2,177 
Pinnacle West Capital Corp.  45,800  1,675 
Dominion Resources Inc.  32,900  1,280 
* Mirant Corp.  79,100  1,208 
Public Service Enterprise Group Inc.  34,800  1,157 
CenterPoint Energy Inc.  76,900  1,116 
American Electric Power Co. Inc.  23,300  811 
Southern Co.  24,200  806 


Constellation Energy Group Inc.        22,400 788
* AES Corp.        59,100 787
Edison International        17,200 598
Atmos Energy Corp.        18,400 541
NorthWestern Corp.        17,700 460
Unisource Energy Corp.        12,822 413
MDU Resources Group Inc.        11,540 272
Oneok Inc.        5,600 250
FirstEnergy Corp.        1,700 79
DPL Inc.        1,800 50
Chesapeake Utilities Corp.        600 19
          34,653
Total Common Stocks (Cost $473,615)          490,881
          Market
          Value
  Coupon     Shares ($000)
Temporary Cash Investments (1.6%)1           
Money Market Fund (0.8%)           
2,3 Vanguard Market Liquidity Fund  0.187 %    4,012,143 4,012
 
        Face Market
      Maturity  Amount Value
  Coupon   Date  ($000)

($000)

U.S. Government and Agency Obligations (0.8%)           
4,5 Federal Home Loan Bank Discount Notes  0.275 %  2/19/10  4,000 4,000
4,5 Federal Home Loan Bank Discount Notes  0.220 %  3/26/10  100 100
          4,100
Total Temporary Cash Investments (Cost $8,111)          8,112
Total Investments (98.7%) (Cost $481,726)          498,993
Other Assets and Liabilities-Net (1.3%)3          6,760
Net Assets (100%)          505,753

* Non-income-producing security.
^ Part of security position is on loan to broker-dealers. The total value of securities on loan is $369,000.
1 The fund invests a portion of its cash reserves in equity markets through the use of index futures contracts. After
giving effect to futures investments, the fund's effective common stock and temporary cash investment positions
represent 100.0% and -1.3%, respectively, of net assets.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by
Vanguard. Rate shown is the 7-day yield.
3 Includes $386,000 of collateral received for securities on loan.
4 The issuer operates under a congressional charter; its securities are not backed by the full faith and credit of the
U.S. government.
5 Securities with a value of $4,100,000 have been segregated as initial margin for open futures contracts.


U.S. Value Fund

A. 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 acquired over 60 days to maturity 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. Other temporary cash investments are valued at amortized cost, which approximates market value.

B. 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.

Futures contracts are valued at their quoted daily settlement prices. The aggregate principal amounts of the contracts are not recorded in the Schedule of Investments. Fluctuations in the value of the contracts are recorded in the Schedule of Investments as an asset (liability).

At December 31, 2009, the aggregate settlement value of open futures contracts and the related unrealized appreciation (depreciation) were:

      ($000)
    Number of  Aggregate  Unrealized
    Long (Short)  Settlement  Appreciation
Futures Contracts  Expiration  Contracts  Value (Depreciation) 
E-mini S&P 500 Index  March 2010  172  9,552  (71)
S&P 500 Index  March 2010  19  5,276  65

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


U.S. Value Fund

C. Various inputs may be used to determine the value of the fund's investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments).

The following table summarizes the fund's investments as of December 31, 2009, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments  ($000) ($000) ($000)
Common Stocks  490,881 — —
Temporary Cash Investments  4,012 4,100 —
Futures Contracts—Liabilities1  (134) — —
Total  494,759 4,100 —
1 Represents variation margin on the last day of the reporting period.

D. At December 31, 2009, the cost of investment securities for tax purposes was $481,726,000. Net unrealized appreciation of investment securities for tax purposes was $17,267,000, consisting of unrealized gains of $64,364,000 on securities that had risen in value since their purchase and $47,097,000 in unrealized losses on securities that had fallen in value since their purchase.


Vanguard Capital Value Fund

Schedule of Investments
As of December 31, 2009

    Market
    Value
  Shares  ($000)
Common Stocks (97.8%)     
Consumer Discretionary (13.1%)     
* Apollo Group Inc. Class A  218,610  13,243
* TRW Automotive Holdings Corp.  508,600  12,145
Pulte Homes Inc.  893,500  8,935
1 Buck Holdings LP Private Placement Shares  4,130,622  8,521
Johnson Controls Inc.  287,300  7,826
Lennar Corp. Class A  551,700  7,045
Comcast Corp. Class A  405,000  6,828
Harley-Davidson Inc.  247,900  6,247
* Ford Motor Co.  624,350  6,244
Lowe's Cos. Inc.  255,500  5,976
* Toll Brothers Inc.  221,300  4,163
Thomas Cook Group PLC  1,095,343  4,070
Home Depot Inc.  140,400  4,062
Black & Decker Corp.  57,000  3,695
Comcast Corp.  224,300  3,591
MDC Holdings Inc.  66,400  2,061
Virgin Media Inc.  119,400  2,010
Staples Inc.  18,400  452
    107,114
Consumer Staples (2.3%)     
BRF - Brasil Foods SA ADR  97,000  5,080
Japan Tobacco Inc.  1,445  4,879
Sysco Corp.  146,000  4,079
Kroger Co.  100,000  2,053
Chaoda Modern Agriculture Holdings Ltd.  1,102,816  1,170
* Dean Foods Co.  62,100  1,121
    18,382
Energy (13.2%)     
Consol Energy Inc.  216,730  10,793
Gazprom OAO ADR  401,542  10,010
Cameco Corp.  288,170  9,271
Canadian Natural Resources Ltd.  119,600  8,605
Total SA ADR  131,800  8,441
Noble Energy Inc.  112,600  8,019
Peabody Energy Corp.  146,900  6,641
* Weatherford International Ltd.  329,700  5,905
Halliburton Co.  169,700  5,106
* Cobalt International Energy Inc.  327,800  4,537
Smith International Inc.  157,600  4,282
Baker Hughes Inc.  104,600  4,234
Exxon Mobil Corp.  58,900  4,016
* Newfield Exploration Co.  80,600  3,887
SBM Offshore NV  159,157  3,110
Tsakos Energy Navigation Ltd.  187,200  2,744
Anadarko Petroleum Corp.  41,500  2,591
Apache Corp.  20,100  2,074
Frontline Ltd.  68,500  1,871


  Suncor Energy Inc.  45,242  1,598 
      107,735 
Financials (17.3%)     
  Wells Fargo & Co.  1,071,250  28,913 
  Bank of America Corp.  807,197  12,156 
  ACE Ltd.  164,800  8,306 
  Ameriprise Financial Inc.  211,800  8,222 
  Reinsurance Group of America Inc. Class A  172,300  8,210 
  Unum Group  420,200  8,202 
  Fidelity National Financial Inc. Class A  590,080  7,942 
*  UBS AG  514,330  7,894 
  Principal Financial Group Inc.  254,400  6,116 
*  UBS AG  390,600  6,058 
  Everest Re Group Ltd.  70,100  6,006 
  Hartford Financial Services Group Inc.  234,900  5,464 
*  TD Ameritrade Holding Corp.  219,600  4,256 
  Bank of New York Mellon Corp.  150,300  4,204 
2  Solar Cayman Ltd.  370,800  3,397 
*  Iguatemi Empresa de Shopping Centers SA  158,300  3,088 
  Platinum Underwriters Holdings Ltd.  75,700  2,899 
  JPMorgan Chase & Co.  68,800  2,867 
  First American Corp.  83,700  2,771 
  Citigroup Inc.  723,600  2,395 
  White Mountains Insurance Group Ltd.  6,000  1,996 
      141,362 
Health Care (11.3%)     
*  King Pharmaceuticals Inc.  944,800  11,593 
  Pfizer Inc.  571,870  10,402 
*  Elan Corp. PLC ADR  1,555,390  10,141 
*  Gilead Sciences Inc.  200,000  8,656 
  Daiichi Sankyo Co. Ltd.  377,500  7,904 
*  Amgen Inc.  108,100  6,115 
*,^ Novavax Inc.  2,180,400  5,800 
*  St Jude Medical Inc.  131,200  4,826 
*  Alkermes Inc.  450,500  4,239 
  Medtronic Inc.  93,000  4,090 
  UCB SA  96,193  4,023 
*  Hologic Inc.  258,070  3,742 
  Covidien PLC  60,100  2,878 
*  Impax Laboratories Inc.  151,800  2,064 
  UnitedHealth Group Inc.  63,800  1,945 
  Biovail Corp.  130,800  1,826 
  CIGNA Corp.  45,000  1,587 
*  Genzyme Corp.  9,260  454 
      92,285 
Industrials (16.6%)     
*  Delta Air Lines Inc.  2,167,195  24,663 
*  BE Aerospace Inc.  434,442  10,209 
*  Terex Corp.  466,890  9,249 
  Ingersoll-Rand PLC  201,010  7,184 
  Masco Corp.  497,400  6,869 
*  Monster Worldwide Inc.  360,450  6,272 
  PACCAR Inc.  167,700  6,082 
*  Owens Corning  228,000  5,846 
*  SunPower Corp. Class B  271,930  5,697 
*,^ First Solar Inc.  39,820  5,392 
  Boeing Co.  97,900  5,299 


Pentair Inc.  126,200  4,076 
General Dynamics Corp.  58,900  4,015 
United Parcel Service Inc. Class B  69,400  3,981 
AMETEK Inc.  103,000  3,939 
General Electric Co.  258,000  3,904 
Barnes Group Inc.  175,800  2,971 
* AGCO Corp.  90,700  2,933 
Dover Corp.  69,000  2,871 
* Moog Inc. Class A  97,900  2,862 
* Vestas Wind Systems A/S  42,861  2,619 
Stanley Works  46,100  2,375 
* US Airways Group Inc.  441,500  2,137 
TNT NV  67,933  2,076 
Deere & Co.  36,700  1,985 
* AirAsia Bhd.  550,090  221 
    135,727 
Information Technology (15.8%)     
* Apple Inc.  89,300  18,830 
QUALCOMM Inc.  388,500  17,972 
Oracle Corp.  453,700  11,134 
* Cisco Systems Inc.  450,420  10,783 
* eBay Inc.  450,400  10,602 
* Yahoo! Inc.  594,000  9,967 
* Arrow Electronics Inc.  216,500  6,411 
* Flextronics International Ltd.  715,900  5,233 
* Cadence Design Systems Inc.  854,900  5,121 
Microsoft Corp.  159,600  4,866 
Hewlett-Packard Co.  82,090  4,229 
Corning Inc.  217,900  4,208 
* Avnet Inc.  138,200  4,168 
* CACI International Inc. Class A  84,300  4,118 
* Emulex Corp.  302,800  3,301 
* JDS Uniphase Corp.  357,600  2,950 
* Varian Semiconductor Equipment Associates Inc.  78,600  2,820 
Accenture PLC Class A  52,680  2,186 
    128,899 
Materials (6.3%)     
Mosaic Co.  220,140  13,149 
* Freeport-McMoRan Copper & Gold Inc.  114,500  9,193 
Vulcan Materials Co.  121,200  6,384 
* Xstrata PLC  327,306  5,767 
* Teck Resources Ltd. Class B  153,570  5,370 
Rexam PLC  1,089,760  5,094 
* Owens-Illinois Inc.  124,800  4,102 
HeidelbergCement AG  40,683  2,795 
    51,854 
Utilities (1.9%)     
Entergy Corp.  96,900  7,930 
Allegheny Energy Inc.  205,000  4,813 
NV Energy Inc.  227,200  2,813 
    15,556 
Total Common Stocks (Cost $704,972)    798,914 


            Market
            Value
    Coupon     Shares ($000)
Preferred Stocks (2.0%)            
3 Bank of America Corp. Pfd. (Cost $16,112)   10.000 %    1,073,900 16,022
Temporary Cash Investments (2.3%)            
Money Market Fund (0.8%)            
4,5 Vanguard Market Liquidity Fund   0.187 %    6,943,100 6,943
 
          Face Market
        Maturity  Amount Value
    Coupon   Date  ($000) ($000)
Repurchase Agreements (1.5%)            
Credit Suisse Securities (USA) LLC (Dated            
12/31/09, Repurchase Value $10,700,000,           
collateralized by Federal National Mortgage            
Assn. 5.000%, 7/1/37)   0.005 %  1/4/10  10,700 10,700
Deutsche Bank Securities, Inc. (Dated            
12/31/09, Repurchase Value $1,400,000,           
collateralized by Federal National Mortgage            
Assn. 6.500%, 12/1/37)   0.010 %  1/4/10  1,400 1,400
            12,100
Total Temporary Cash Investments (Cost $19,043)           19,043
Total Investments (102.1%) (Cost $740,127)           833,979
Other Assets and Liabilities-Net (-2.1%)4           (17,410)
Net Assets (100%)           816,569

*      Non-income-producing security.
^      Part of security position is on loan to broker-dealers. The total value of securities on loan is $6,512,000.
1      Restricted security represents 1.0% of net assets.
2      Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2009, the value of this security represented 0.4% of net assets.
3      Non-income producing security – new issue that has not paid a dividend as of December 31, 2009.
4      Includes $6,943,000 of collateral received for securities on loan.
5      Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
  ADR—American Depositary Receipt.
 

Capital Value Fund

A. 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 affected by events occurring before the fund's pricing time but after the close of the securities’ primary markets, are valued at their fair values calculated according to procedures adopted by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of for eign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund's pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments acquired over 60 days to maturity 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. Other temporary cash investments are valued at amortized cost, which approximates market value.

B. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund's pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).

C. Various inputs may be used to determine the value of the fund's investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments).

The following table summarizes the fund's investments as of December 31, 2009, based on the inputs used to value them:

  Level 1 Level 2 Level 3
Investments  ($000) ($000) ($000)
Common Stocks  725,367 61,630 11,917
Preferred Stocks  16,022 — —
Temporary Cash Investments  6,943 12,100 —
Total  748,332 73,730 11,917


Capital Value Fund

The following table summarizes changes in investments valued based on Level 3 inputs during the period ended December 31, 2009:

  Investments in
  Common Stocks
Amount Valued Based on Level 3 Inputs  ($000)
Balance as of September 30, 2009  9,815
Change in Unrealized Appreciation (Depreciation)  2,103
Balance as of December 31, 2009  11,918

D. At December 31, 2009, the cost of investment securities for tax purposes was $740,127,000. Net unrealized appreciation of investment securities for tax purposes was $93,852,000, consisting of unrealized gains of $97,618,000 on securities that had risen in value since their purchase and $3,766,000 in unrealized losses on securities that had fallen in value since their purchase.


Item 2: 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. During the last fiscal quarter, there was no significant change in the Registrant’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3: Exhibits

(a) Certifications

  VANGUARD MALVERN FUNDS 
 
By:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
 
Date: February 22, 2010   

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.

  VANGUARD MALVERN FUNDS
By:  /s/ F. WILLIAM MCNABB III* 
  F. WILLIAM MCNABB III 
  CHIEF EXECUTIVE OFFICER 
Date: February 22, 2010   
  VANGUARD MALVERN FUNDS
By:  /s/ THOMAS J. HIGGINS* 
  THOMAS J. HIGGINS 
  CHIEF FINANCIAL OFFICER 
Date: February 22, 2010   

*By: /s/ Heidi Stam
Heidi Stam, pursuant to a Power of Attorney filed on July 24, 2009, see File Number 2-88373,
and a Power of Attorney filed on October 16, 2009, see File Number 2-52698,
both Incorporated by Reference.

 EX-99.CERT 2 malverncert.htm CERTIFICATIONS malverncert.htm - Generated by SEC Publisher for SEC Filing

CERTIFICATIONS

 

I, F. William McNabb III, certify that:

 

1. I have reviewed this report on Form N-Q of Vanguard Malvern Funds;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 22, 2010

/s/ F. William McNabb III

 

F. William McNabb III

 

Chief Executive Officer

 

CERTIFICATIONS

 

I, Thomas J. Higgins, certify that:

 

1. I have reviewed this report on Form N-Q of Vanguard Malvern Funds;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: February 22, 2010

/s/ Thomas J Higgins

 

Thomas J. Higgins

 

Chief Financial Officer

 

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