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, 2022—September 30, 2023
Item 1: Reports to Shareholders
Annual Report | September 30, 2023
Vanguard Growth
and Income Fund
See the inside front cover
for important information about your fund’s annual and semiannual shareholder reports.
Important information about shareholder
reports
Beginning in July 2024,
amendments adopted by the Securities and Exchange Commission will substantially impact the design, content, and transmission of shareholder reports. Shareholder reports will provide key fund information in a clear and
concise format and must be mailed to each shareholder that has not elected to receive the reports electronically. Financial statements will no longer be included in the shareholder report but will be available at
vanguard.com, can be mailed upon request, or can be accessed on the SEC’s website at www.sec.gov.
You may elect to receive
shareholder reports and other communications from the fund electronically by contacting your financial intermediary (such as a broker-dealer or bank) or, if you invest directly with the fund, by calling Vanguard at
one of the phone numbers on the back cover of this report or by logging on to vanguard.com.
Contents
Your Fund’s Performance at a Glance | 1 |
Advisors' Report | 2 |
About Your Fund’s Expenses | 5 |
Performance Summary | 7 |
Financial Statements | 9 |
Trustees Approve Advisory Arrangements | 32 |
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.
Your Fund’s Performance at a Glance
| • | For the 12 months ended September 30, 2023, Vanguard Growth and Income Fund returned 19.81% for Investor Shares and 19.93% for Admiral Shares. Fund performance trailed that of its benchmark, which returned 21.62%. |
| • | Early on, inflation began to ease off multidecade highs amid aggressive interest rate hikes by the Federal Reserve. Unexpected resilience in the labor market and consumer spending helped dial back expectations of a sustained recession, but the prospect of higher rates for longer weighed on market sentiment toward the close of the period. |
| • | The fund’s underweight to the poorly performing utilities sector was the greatest contributor to relative performance. Energy also contributed to relative performance because of a combination of security selection and a slight overweight to the sector. Real estate also contributed somewhat. The greatest detractor was information technology, due primarily to stock selection within the sector. A more moderate detractor was industrials. |
| • | For the 10 years ended September 30, 2023, the fund’s average annual return was roughly in line with its benchmark. |
Market Barometer
| Average Annual Total Returns Periods Ended September 30, 2023 | |||
| One Year | Three Years | Five Years | |
| Stocks | |||
| Russell 1000 Index (Large-caps) | 21.19% | 9.53% | 9.63% |
| Russell 2000 Index (Small-caps) | 8.93 | 7.16 | 2.40 |
| Russell 3000 Index (Broad U.S. market) | 20.46 | 9.38 | 9.14 |
| FTSE All-World ex US Index (International) | 20.67 | 4.23 | 3.00 |
| Bonds | |||
| Bloomberg U.S. Aggregate Float Adjusted Index (Broad taxable market) | 0.78% | -5.18% | 0.18% |
| Bloomberg Municipal Bond Index (Broad tax-exempt market) | 2.66 | -2.30 | 1.05 |
| FTSE Three-Month U.S. Treasury Bill Index | 4.71 | 1.78 | 1.74 |
| CPI | |||
| Consumer Price Index | 3.70% | 5.75% | 4.04% |
1
Advisors’ Report
2
Vanguard Growth And
Income Fund Investment Advisors
| Fund Assets Managed | |||
| Investment Advisor | % | $ Million | Investment Strategy |
| D. E. Shaw Investment Management, L.L.C. | 34 | 3,971 | Employs quantitative models that seek to capture 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 Management LLC | 33 | 3,949 | 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. |
| Wellington Management Company LLP | 31 | 3,716 | Allocates the assets in its portion of the fund to a team of global analysts who seek to add value through in-depth fundamental research and understanding of their industries. By covering the same companies over a period of many years, these investment professionals gain comprehensive insight to guide decisions for their subportfolios. |
| Cash Investments | 2 | 262 | These short-term reserves are invested by Vanguard in equity index products to simulate investment in stocks. Each advisor may also maintain a modest cash position. |
3
Los Angeles Capital Management
LLC
Portfolio Managers:
Hal W. Reynolds, CFA,
Co-Chief Investment Officer and Principal
Kristin J. Ceglar, CFA,
Senior Portfolio Manager
Amid resilient consumer
spending and corporate earnings growth, global equities rose for the 12 months ended September 30. However, equities slipped in the third quarter as commodity prices spiked, interest rates rose, and central banks
signaled their intent to raise rates further. With rates continuing to increase, rate-sensitive real estate investment trusts and utilities struggled, while energy stocks rallied strongly on rising oil prices, thanks
to supply cuts from OPEC+ and surprisingly resilient demand for energy. Much of the increase in interest rates can be attributed to higher real rates as inflation quickly moderates. As rates rise, the cost of debt is
increasing. This reduces corporate appetite for taking on debt, and leads to fewer share buybacks, which have been a support to the stock prices of many U.S. companies in recent years.
We largely seek to avoid
companies with risky balance sheets and instead lean on large companies with conservative debt profiles. Larger-capitalization companies are better-positioned in terms of their debt structures because many were able
to arrange excellent financing terms before the Federal Reserve began its hiking cycle.
Many of the largest U.S.
companies also have positive net cash positions, and therefore are better insulated from rising rates. The market has clearly rewarded these firms.
While the performance of the
“Magnificent Seven”-Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA, and Tesla-took a breather in the third quarter, they are still responsible for outsized return over the year. The portfolio’s
small average underweight to larger-cap companies detracted from performance for the year because of the strong performance of mega-caps.
Over the 12-month period, the
portfolio shifted into consumer cyclicals and capital goods and shifted out of technology and real estate. At the end of the period, the portfolio’s largest overweight allocations were to capital goods and
consumer cyclicals, while the largest underweights were to utilities and health care. The portfolio shifted out of value, particularly dividend yield, as investors shifted allocations to cash instruments for yield.
The portfolio is positioned toward higher-quality assets, favoring successful companies with strong management and cash flows, positive analyst sentiment, and momentum that is supported by fundamentals and earnings
news (good momentum).
4
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.
5
| Six Months Ended September 30, 2023 | |||
| Beginning Account Value 3/31/2023 | Ending Account Value 9/30/2023 | Expenses Paid During Period | |
| Based on Actual Fund Return | |||
| Growth and Income Fund | |||
| Investor Shares | $1,000.00 | $1,050.20 | $1.64 |
| Admiral™ Shares | 1,000.00 | 1,050.60 | 1.13 |
| Based on Hypothetical 5% Yearly Return | |||
| Growth and Income Fund | |||
| Investor Shares | $1,000.00 | $1,023.46 | $1.62 |
| Admiral Shares | 1,000.00 | 1,023.97 | 1.12 |
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 0.32% for Investor Shares and 0.22% 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 (183/365).
6
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.
Cumulative Performance:
September 30, 2013, Through September 30, 2023
Initial Investment of
$10,000
| Average Annual Total Returns Periods Ended September 30, 2023 | |||||
| One Year | Five Years | Ten Years | Final Value of a $10,000 Investment | ||
| Growth and Income Fund Investor Shares | 19.81% | 9.38% | 11.71% | $30,251 |
| S&P 500 Index | 21.62 | 9.92 | 11.91 | 30,821 |
| Dow Jones U.S. Total Stock Market Float Adjusted Index | 20.49 | 9.01 | 11.19 | 28,891 |
| One Year | Five Years | Ten Years | Final Value of a $50,000 Investment | ||
| Growth and Income Fund Admiral Shares | 19.93% | 9.49% | 11.82% | $152,827 | |
| S&P 500 Index | 21.62 | 9.92 | 11.91 | 154,103 | |
| Dow Jones U.S. Total Stock Market Float Adjusted Index | 20.49 | 9.01 | 11.19 | 144,456 | |
See Financial
Highlights for dividend and capital gains information.
7
Growth and Income Fund
Fund Allocation
As of September 30, 2023
| Communication Services | 8.2% |
| Consumer Discretionary | 14.6 |
| Consumer Staples | 4.2 |
| Energy | 5.2 |
| Financials | 12.5 |
| Health Care | 12.9 |
| Industrials | 9.3 |
| Information Technology | 28.7 |
| Materials | 1.5 |
| Real Estate | 1.1 |
| Utilities | 1.3 |
| Other | 0.5 |
The table reflects the fund’s
investments, except for short-term investments and derivatives. 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.
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.
8
Growth and Income Fund
Financial Statements
Schedule of Investments
As of September 30, 2023
The fund files its complete
schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s Form N-PORT reports
are available on the SEC’s website at www.sec.gov.
9
Growth and Income Fund
10
Growth and Income Fund
11
Growth and Income Fund
12
Growth and Income Fund
13
Growth and Income Fund
14
Growth and Income Fund
15
Growth and Income Fund
16
Growth and Income Fund
17
Growth and Income Fund
Derivative Financial
Instruments Outstanding as of Period End
| Futures Contracts | ||||
| ($000) | ||||
| Expiration | Number of Long (Short) Contracts | Notional Amount | Value and Unrealized Appreciation (Depreciation) | |
| Long Futures Contracts | ||||
| E-mini S&P 500 Index | December 2023 | 1,217 | 263,207 | (11,298) |
See accompanying
Notes, which are an integral part of the Financial Statements.
18
Growth and Income Fund
Statement of Assets and Liabilities
As of September 30, 2023
| ($000s, except shares, footnotes, and per-share amounts) | Amount |
| Assets | |
| Investments in Securities, at Value1 | |
| Unaffiliated Issuers (Cost $9,002,141) | 11,594,841 |
| Affiliated Issuers (Cost $297,097) | 297,197 |
| Total Investments in Securities | 11,892,038 |
| Investment in Vanguard | 418 |
| Cash | 11,199 |
| Cash Collateral Pledged—Futures Contracts | 13,942 |
| Receivables for Investment Securities Sold | 46,531 |
| Receivables for Accrued Income | 7,221 |
| Receivables for Capital Shares Issued | 3,652 |
| Total Assets | 11,975,001 |
| Liabilities | |
| Payables for Investment Securities Purchased | 65,519 |
| Collateral for Securities on Loan | 1,009 |
| Payables to Investment Advisor | 2,713 |
| Payables for Capital Shares Redeemed | 6,544 |
| Payables to Vanguard | 819 |
| Variation Margin Payable—Futures Contracts | 745 |
| Total Liabilities | 77,349 |
| Net Assets | 11,897,652 |
| 1 Includes $586,000 of securities on loan. | |
| At September 30, 2023, net assets consisted of: | |
| Paid-in Capital | 8,436,442 |
| Total Distributable Earnings (Loss) | 3,461,210 |
| Net Assets | 11,897,652 |
| Investor Shares—Net Assets | |
| Applicable to 55,189,350 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 2,955,481 |
| Net Asset Value Per Share—Investor Shares | $53.55 |
| Admiral Shares—Net Assets | |
| Applicable to 102,308,976 outstanding $.001 par value shares of beneficial interest (unlimited authorization) | 8,942,171 |
| Net Asset Value Per Share—Admiral Shares | $87.40 |
See accompanying
Notes, which are an integral part of the Financial Statements.
19
Growth and Income Fund
Statement of Operations
| Year Ended September 30, 2023 | |
| ($000) | |
| Investment Income | |
| Income | |
| Dividends1 | 176,907 |
| Interest2 | 14,315 |
| Securities Lending—Net | 43 |
| Total Income | 191,265 |
| Expenses | |
| Investment Advisory Fees—Note B | |
| Basic Fee | 11,309 |
| Performance Adjustment | (1,039) |
| The Vanguard Group—Note C | |
| Management and Administrative—Investor Shares | 6,366 |
| Management and Administrative—Admiral Shares | 10,868 |
| Marketing and Distribution—Investor Shares | 143 |
| Marketing and Distribution—Admiral Shares | 325 |
| Custodian Fees | 184 |
| Auditing Fees | 36 |
| Shareholders’ Reports—Investor Shares | 115 |
| Shareholders’ Reports—Admiral Shares | 73 |
| Trustees’ Fees and Expenses | 7 |
| Other Expenses | 19 |
| Total Expenses | 28,406 |
| Fees Waived/Expenses Reimbursed—Note B | (107) |
| Net Expenses | 28,299 |
| Net Investment Income | 162,966 |
| Realized Net Gain (Loss) | |
| Investment Securities Sold2 | 1,014,165 |
| Futures Contracts | 23,930 |
| Realized Net Gain (Loss) | 1,038,095 |
| Change in Unrealized Appreciation (Depreciation) | |
| Investment Securities2 | 796,332 |
| Futures Contracts | 17,099 |
| Change in Unrealized Appreciation (Depreciation) | 813,431 |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 2,014,492 |
| 1 | Dividends are net of foreign withholding taxes of $155,000. |
| 2 | Interest income, realized net gain (loss), capital gain distributions received, and change in unrealized appreciation (depreciation) from an affiliated company of the fund were $13,638,000, $23,000, $1,000, and $35,000, respectively. Purchases and sales are for temporary cash investment purposes. |
See accompanying
Notes, which are an integral part of the Financial Statements.
20
Growth and Income Fund
Statement of Changes in Net Assets
| Year Ended September 30, | ||
| 2023 ($000) | 2022 ($000) | |
| Increase (Decrease) in Net Assets | ||
| Operations | ||
| Net Investment Income | 162,966 | 165,162 |
| Realized Net Gain (Loss) | 1,038,095 | 869,130 |
| Change in Unrealized Appreciation (Depreciation) | 813,431 | (2,647,244) |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 2,014,492 | (1,612,952) |
| Distributions | ||
| Investor Shares | (243,419) | (464,158) |
| Admiral Shares | (740,469) | (1,454,297) |
| Total Distributions | (983,888) | (1,918,455) |
| Capital Share Transactions | ||
| Investor Shares | 127,575 | 244,229 |
| Admiral Shares | 492,457 | 508,275 |
| Net Increase (Decrease) from Capital Share Transactions | 620,032 | 752,504 |
| Total Increase (Decrease) | 1,650,636 | (2,778,903) |
| Net Assets | ||
| Beginning of Period | 10,247,016 | 13,025,919 |
| End of Period | 11,897,652 | 10,247,016 |
See accompanying
Notes, which are an integral part of the Financial Statements.
21
Growth and Income Fund
Financial Highlights
| Investor Shares | |||||
| For a Share Outstanding Throughout Each Period | Year Ended September 30, | ||||
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Net Asset Value, Beginning of Period | $49.02 | $66.16 | $54.15 | $49.46 | $52.17 |
| Investment Operations | |||||
| Net Investment Income1 | .701 | .746 | .761 | .787 | .823 |
| Net Realized and Unrealized Gain (Loss) on Investments | 8.483 | (8.155) | 14.991 | 6.024 | (.204) |
| Total from Investment Operations | 9.184 | (7.409) | 15.752 | 6.811 | .619 |
| Distributions | |||||
| Dividends from Net Investment Income | (.775) | (.777) | (.770) | (.815) | (.766) |
| Distributions from Realized Capital Gains | (3.879) | (8.954) | (2.972) | (1.306) | (2.563) |
| Total Distributions | (4.654) | (9.731) | (3.742) | (2.121) | (3.329) |
| Net Asset Value, End of Period | $53.55 | $49.02 | $66.16 | $54.15 | $49.46 |
| Total Return2 | 19.81% | -13.94% | 30.22% | 14.07% | 2.21% |
| Ratios/Supplemental Data | |||||
| Net Assets, End of Period (Millions) | $2,955 | $2,570 | $3,205 | $2,779 | $2,860 |
| Ratio of Total Expenses to Average Net Assets3 | 0.32%4 | 0.32% | 0.32% | 0.32% | 0.33% |
| Ratio of Net Investment Income to Average Net Assets | 1.34% | 1.25% | 1.22% | 1.57% | 1.73% |
| Portfolio Turnover Rate | 94% | 62% | 62% | 58% | 68% |
| 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 (0.01%), (0.01%), (0.00%), 0.00%, and 0.01%. |
| 4 | The ratio of total expenses to average net assets before basic fees waived was 0.32% for 2023. See Note B in the Notes to Financial Statements. |
See accompanying
Notes, which are an integral part of the Financial Statements.
22
Growth and Income Fund
Financial Highlights
| Admiral Shares | |||||
| For a Share Outstanding Throughout Each Period | Year Ended September 30, | ||||
| 2023 | 2022 | 2021 | 2020 | 2019 | |
| Net Asset Value, Beginning of Period | $80.01 | $108.01 | $88.40 | $80.74 | $85.16 |
| Investment Operations | |||||
| Net Investment Income1 | 1.230 | 1.315 | 1.344 | 1.364 | 1.421 |
| Net Realized and Unrealized Gain (Loss) on Investments | 13.845 | (13.315) | 24.466 | 9.842 | (.330) |
| Total from Investment Operations | 15.075 | (12.000) | 25.810 | 11.206 | 1.091 |
| Distributions | |||||
| Dividends from Net Investment Income | (1.353) | (1.380) | (1.347) | (1.414) | (1.326) |
| Distributions from Realized Capital Gains | (6.332) | (14.620) | (4.853) | (2.132) | (4.185) |
| Total Distributions | (7.685) | (16.000) | (6.200) | (3.546) | (5.511) |
| Net Asset Value, End of Period | $87.40 | $80.01 | $108.01 | $88.40 | $80.74 |
| Total Return2 | 19.93% | -13.85% | 30.34% | 14.19% | 2.32% |
| Ratios/Supplemental Data | |||||
| Net Assets, End of Period (Millions) | $8,942 | $7,677 | $9,821 | $9,086 | $8,412 |
| Ratio of Total Expenses to Average Net Assets3 | 0.22%4 | 0.22% | 0.22% | 0.22% | 0.23% |
| Ratio of Net Investment Income to Average Net Assets | 1.44% | 1.34% | 1.33% | 1.66% | 1.83% |
| Portfolio Turnover Rate | 94% | 62% | 62% | 58% | 68% |
| 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 (0.01%), (0.01%), (0.00%), 0.00%, and 0.01%. |
| 4 | The ratio of total expenses to average net assets before basic fees waived was 0.22% for 2023. See Note B in the Notes to Financial Statements. |
See accompanying
Notes, which are an integral part of the Financial Statements.
23
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. Each of the share classes has
different eligibility and minimum purchase requirements, and is designed for different types of investors.
| 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 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 valuation designee to represent fair value and subject to oversight by the board of trustees.
Investments in Vanguard Market Liquidity Fund
are valued at that fund's net asset value.
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. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued
at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of
Assets and Liabilities 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 gains (losses) on futures
contracts.
During the year ended
September 30, 2023, the fund’s average investments in long and short futures contracts represented 3% 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 virtually all of its taxable income. The fund’s tax returns are open to examination by the relevant tax authorities until
expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund’s tax positions taken for all open federal and state
income tax years, and has concluded that no provision for income tax is required in the fund’s financial statements.
24
Growth and Income Fund
4. Distributions:
Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial
reporting purposes.
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 before the opening of the market 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 Assets and Liabilities for the return of the collateral, during the period
the securities are on loan. Collateral investments in Vanguard Market Liquidity Fund are subject to market appreciation or depreciation. 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 Facilities and
Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit
agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be
utilized for temporary or emergency purposes and are subject to the fund’s regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged
administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which 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 either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate,
the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based
upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an
exemptive order (the “Order”) from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each
other for temporary or emergency purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund’s investment
objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day’s notice. The interest rate to
be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
25
Growth and Income Fund
For the year ended September
30, 2023, the fund did not utilize the credit facilities or the Interfund Lending Program.
7. Other: Dividend
income is recorded on the ex-dividend date. Non-cash dividends included in income, if any, are recorded at the fair value of the securities received. Interest income includes income distributions received from
Vanguard Market Liquidity Fund and is accrued daily. 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) and
shareholder reporting. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on
investments are allocated to each class of shares based on its relative net assets.
| B. | The investment advisory firms D. E. Shaw Investment Management, L.L.C., Los Angeles Capital Management LLC, and, beginning August 2023, Wellington Management Company llp 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 LLC is subject to quarterly adjustments based on performance relative to the S&P 500 Index for the preceding five years. In accordance with the advisory contract entered into with Wellington Management Company llp, beginning October 1, 2024, the investment advisory fee will be subject to quarterly adjustment based on performance relative to the S&P 500 Index since September 30, 2023. |
Until August 2023, Vanguard
provided investment advisory services to a portion of the fund. The fund paid Vanguard advisory fees of $925,000 for the year ended September 30, 2023. Vanguard manages the cash reserves of the fund as described
below.
For the year ended September
30, 2023, 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 a net decrease of $1,039,000 (0.01%) based on
performance.
Vanguard and Wellington
Management Company LLC have agreed to temporarily waive a percentage of Wellington Management Company LLC’s basic fee. For the year ended September 30, 2023, the fund’s basic fees were reduced by $107,000
(an effective annual rate of less than 0.01% of the fund’s average net assets); the fund is not obligated to repay this amount to Wellington Management Company LLC.
| C. | In accordance with the terms of a Funds' Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund corporate management, administrative, marketing, distribution and cash management 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 and 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 September 30, 2023, the fund had contributed to Vanguard capital in the amount of
26
Growth and Income Fund
$418,000, representing less than 0.01% of the
fund’s net assets and 0.17% of Vanguard’s capital received pursuant to the FSA. 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 and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities. |
Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant
unobservable inputs are noted on the Schedule of Investments.
The following table summarizes
the market value of the fund’s investments and derivatives as of September 30, 2023, based on the inputs used to value them:
| Level 1 ($000) | Level 2 ($000) | Level 3 ($000) | Total ($000) | |
| Investments | ||||
| Assets | ||||
| Common Stocks | 11,594,839 | — | 2 | 11,594,841 |
| Temporary Cash Investments | 297,197 | — | — | 297,197 |
| Total | 11,892,036 | — | 2 | 11,892,038 |
| Derivative Financial Instruments | ||||
| Liabilities | ||||
| Futures Contracts1 | 11,298 | — | — | 11,298 |
| 1 | Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities. |
| E. | Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for applicable passive foreign investment companies, and distributions in connection with fund share redemptions were reclassified between the following accounts: |
| Amount ($000) | |
| Paid-in Capital | 8,898 |
| Total Distributable Earnings (Loss) | (8,898) |
Temporary differences between
book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these
differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; the recognition of unrealized gains or losses from certain derivative contracts;
and the recognition of unrealized gains
27
Growth and Income Fund
from passive foreign investment companies. As
of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
| Amount ($000) | |
| Undistributed Ordinary Income | 36,578 |
| Undistributed Long-Term Gains | 907,191 |
| Net Unrealized Gains (Losses) | 2,517,441 |
| Capital Loss Carryforwards | — |
| Qualified Late-Year Losses | — |
| Other Temporary Differences | — |
| Total | 3,461,210 |
The tax character of
distributions paid was as follows:
| Year Ended September 30, | ||
| 2023 Amount ($000) | 2022 Amount ($000) | |
| Ordinary Income* | 174,913 | 630,157 |
| Long-Term Capital Gains | 808,975 | 1,288,298 |
| Total | 983,888 | 1,918,455 |
| * | Includes short-term capital gains, if any. |
As of September 30, 2023,
gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
| Amount ($000) | |
| Tax Cost | 9,374,597 |
| Gross Unrealized Appreciation | 2,984,673 |
| Gross Unrealized Depreciation | (467,232) |
| Net Unrealized Appreciation (Depreciation) | 2,517,441 |
| F. | During the year ended September 30, 2023, the fund purchased $10,547,230,000 of investment securities and sold $10,783,092,000 of investment securities, other than temporary cash investments. |
The fund purchased securities
from and sold securities to other funds or accounts managed by its investment advisors or their affiliates, in accordance with procedures adopted by the board of trustees in compliance with Rule 17a-7 of the
Investment Company Act of 1940. For the year ended September 30, 2023, such purchases were $4,307,000 and sales were $21,534,000, resulting in net realized loss of $906,000; these amounts, other than temporary cash
investments, are included in the purchases and sales of investment securities noted above.
28
Growth and Income Fund
| G. | Capital share transactions for each class of shares were: |
| Year Ended September 30, | |||||
| 2023 | 2022 | ||||
| Amount ($000) | Shares (000) | Amount ($000) | Shares (000) | ||
| Investor Shares | |||||
| Issued | 263,616 | 5,018 | 391,145 | 6,383 | |
| Issued in Lieu of Cash Distributions | 233,527 | 4,825 | 443,121 | 7,314 | |
| Redeemed | (369,568) | (7,075) | (590,037) | (9,716) | |
| Net Increase (Decrease)—Investor Shares | 127,575 | 2,768 | 244,229 | 3,981 | |
| Admiral Shares | |||||
| Issued | 779,730 | 9,121 | 954,123 | 9,627 | |
| Issued in Lieu of Cash Distributions | 674,540 | 8,535 | 1,336,857 | 13,524 | |
| Redeemed | (961,813) | (11,299) | (1,782,705) | (18,122) | |
| Net Increase (Decrease)—Admiral Shares | 492,457 | 6,357 | 508,275 | 5,029 | |
| H. | Significant market disruptions, such as those caused by pandemics (e.g., COVID-19 pandemic), natural or environmental disasters, war (e.g., Russia’s invasion of Ukraine), acts of terrorism, or other events, can adversely affect local and global markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund’s investments and fund performance. |
To the extent the fund’s
investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to
increased price volatility and other risks.
The use of derivatives may
expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A
relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding
the fund’s use of derivative(s) and the specific risks associated is described under significant accounting policies.
| I. | Management has determined that no events or transactions occurred subsequent to September 30, 2023, that would require recognition or disclosure in these financial statements. |
29
Report of Independent Registered Public Accounting
Firm
To the Board of Trustees of Vanguard
Quantitative Funds and Shareholders of Vanguard Growth and Income Fund
Opinion on the Financial
Statements
We have audited the
accompanying statement of assets and liabilities, including the schedule of investments, of Vanguard Growth and Income Fund (the "Fund") as of September 30, 2023, the related statement of operations for the year ended
September 30, 2023, the statement of changes in net assets for each of the two years in the period ended September 30, 2023, including the related notes, and the financial highlights for each of the five years in the
period ended September 30, 2023 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of
September 30, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended September 30, 2023 and the financial highlights for each of the
five years in the period ended September 30, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are
the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits of
these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of September 30, 2023 by correspondence with the custodian, transfer agent and brokers; when replies
were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers
LLP
Philadelphia, Pennsylvania
November 16, 2023
Philadelphia, Pennsylvania
November 16, 2023
We have served as the auditor
of one or more investment companies in The Vanguard Group of Funds since 1975.
30
Tax information
(unaudited)
For corporate shareholders,
99.2%, or if subsequently determined to be different, the maximum percentage allowable by law, of ordinary income (dividend income plus short-term gains, if any) for the fiscal year qualified for the
dividends-received deduction.
The fund hereby designates
$174,917,000, or if subsequently determined to be different, the maximum amount allowable by law, as qualified dividend income for individual shareholders for the fiscal year.
The fund hereby designates
$3,450,000, or if subsequently determined to be different, the maximum amount allowable by law, of interest earned from obligations of the U.S. government which is generally exempt from state income tax.
The fund distributed
$817,790,000 as capital gain dividends (20% rate gain distributions) to shareholders during the fiscal year.
31
Trustees Approve Advisory Arrangements
The board of trustees of Vanguard Growth and
Income Fund renewed the fund’s investment advisory arrangements with D. E. Shaw Investment Management, L.L.C. (DESIM); Los Angeles Capital Management LLC (LA Capital); and The Vanguard Group, Inc. (Vanguard),
through its Quantitative Equity Group. The board determined that renewing each of the fund’s advisory arrangements was in the best interests of the fund and its shareholders.
The board also approved a
restructuring of the fund’s advisory arrangements effective August 28, 2023, whereby Wellington Management Company llp (Wellington) has been added and Vanguard has been removed as advisors to the fund. The board determined the foregoing actions were in the best interests of the fund and its
shareholders. As of August 28, 2023, DESIM, LA Capital, and Wellington are advisors to the fund.
The board based its decisions
upon an evaluation of each advisor’s investment staff, portfolio management process, and performance. This evaluation included information provided to the board by Vanguard’s Portfolio Review Department,
which is responsible for fund and advisor oversight and product management. The Portfolio Review Department met regularly with the advisors and made presentations to the board during the fiscal year that directed the
board’s focus to relevant information and topics.
The board, or an investment
committee made up of board members, also received information throughout the year during advisor presentations. For each advisor presentation, the board was provided with letters and reports that included information
about, among other things, the advisory firm and the advisor’s assessment of the investment environment, portfolio performance, and portfolio characteristics.
In addition, the board
received periodic reports throughout the year, which included information about the fund’s performance relative to its peers and benchmark, as applicable, and updates, as needed, on the Portfolio Review
Department’s ongoing assessment of the advisors.
Prior to their meetings, the
trustees were provided with a memo and materials that summarized the information they received over the course of the year. They also considered the factors discussed below, among others. However, no single factor
determined whether the board approved the arrangements. Rather, it was the totality of the circumstances that drove the board’s decisions.
Nature, extent, and quality of
services
The board reviewed the quality of each
advisor’s investment management services provided to the fund over both the short and long term, and considered the quality of the investment management services to be provided to the fund by Wellington; it also
took into account the organizational depth and stability of each advisor. The board considered the following:
DESIM. Founded in 2005, DESIM is a global investment management and technology development firm. The advisor employs quantitative models that seek to capture predominantly “bottom-up”
stock-specific return opportunities while aiming to control overall portfolio risk and characteristics, such as size, sector weights, and style, to be similar to those of the benchmark. DESIM focuses on return drivers
that it considers “idiosyncratic,” or those that other quantitative managers tend to overlook, and de-emphasizes the use of traditional factors such as value,
32
growth, and momentum, as these factors are
more subject to crowding from other quantitative managers. DESIM has managed a portion of the fund since 2011.
LA Capital. LA Capital was formed in 2002 from the equity portion of Wilshire Asset Management. The advisor employs a controlled, dynamic investment model, gradually assigning new prices to key equity
risks as market conditions evolve and investor preferences shift. The price of factor risk evolves over time in a way that can be captured in a model, similar to changes in cost of capital. The model uses more than 50
factors to actively weight stocks, including value, momentum, quality, sector, and market capitalization factors. The advisor applies statistical techniques to reduce noise in the factor returns and it looks for
velocity and acceleration of the cleansed factor performance over the prior six months. LA Capital has managed a portion of the fund since 2011.
Vanguard. Vanguard has been managing investments for more than four decades. The Quantitative Equity Group adheres to a sound, disciplined investment management process; the team has considerable
experience, stability, and depth. Vanguard has managed a portion of the fund since 2011.
Wellington. Wellington, based in Boston, Massachusetts, is among the nation’s oldest and most respected institutional investment managers. The firm began managing assets in 1928 and manages $1.2
trillion in AUM. Wellington has managed a portion of the fund since August 2023.
The board concluded that each
advisor’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangements with DESIM, LA Capital, and Vanguard, and approval of the advisory arrangement
with Wellington.
Investment performance
The board considered the short-term and
long-term investment performance of DESIM, LA Capital, and Vanguard’s respective subportfolios, including any periods of outperformance or underperformance compared with a relevant benchmark index and peer
group. The board concluded that the performance was such that the advisory arrangements should continue.
The board also considered that
Wellington, in its management of other funds and portfolios, has successfully operated the recommended strategy since 2020.
Cost
In considering the renewal of the advisory
arrangements with DESIM, LA Capital, and Vanguard, the board concluded that the fund’s expense ratio was below the average expense ratio charged by funds in its peer group and that the fund’s advisory
expense rates were also below the peer-group average. In considering the approval of the advisory arrangement with Wellington, the board considered the cost of services to be provided and competitive fee rates and
concluded that the fund’s advisory fee rate and expense ratio under the new advisory arrangement would remain below the average advisory fee rates and expense ratios of the fund’s peers.
The board did not consider the
profitability of DESIM, LA Capital, or Wellington in determining whether to approve the advisory fees, because the firms are independent of Vanguard, and the advisory fees are the result of arm’s-length
negotiations. The board does not conduct a profitability
33
analysis of Vanguard because of
Vanguard’s unique structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees.
The benefit of economies of
scale
The board concluded that the fund’s
shareholders benefit from economies of scale because of breakpoints in the advisory fee schedules for DESIM, LA Capital, and Wellington. The breakpoints reduce the effective rate of the fees as the fund’s assets
managed by each advisor increase. The board also concluded that the fund’s arrangement with Vanguard ensures that the fund will realize economies of scale as it grows, with the cost to shareholders declining as
fund assets managed by Vanguard increase.
The board will consider
whether to renew the advisory arrangements with DESIM and LA Capital again after a one-year period, and will consider whether to renew the advisory arrangement with Wellington within a two-year period.
34
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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.
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 205 Vanguard funds.
Information for each trustee
and executive officer of the fund appears below. That information, as well as the Vanguard fund count, is as of the date on the cover of this fund report. 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.
1 Mr. Buckley is considered an “interested
person,” as defined in the Investment Company Act of 1940, because he is an officer of the Vanguard funds.
Connect with
Vanguard®>vanguard.com
Item 2: Code of Ethics.
The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics was amended during the reporting period covered by this report to make certain technical, non-material changes.
Item 3: Audit Committee Financial Expert.
All members of the Audit Committee have been determined by the Registrant’s Board of Trustees to be Audit Committee Financial Experts and to be independent: F. Joseph Loughrey, Mark Loughridge, Sarah Bloom Raskin, and Peter F. Volanakis.
Item 4: Principal Accountant Fees and Services.
| (a) | Audit Fees. |
Audit Fees of the Registrant.
Fiscal Year
Ended September 30, 2023: $36,000
Fiscal Year Ended September 30, 2022: $35,000
Aggregate Audit Fees of Registered Investment Companies in the Vanguard Group.
Fiscal Year
Ended September 30, 2023: $9,326,156
Fiscal Year Ended September 30, 2022: $10,494,508
Includes fees billed in connection with audits of the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
| (b) | Audit-Related Fees. |
Fiscal Year
Ended September 30, 2023: $3,295,934
Fiscal Year Ended September 30, 2022: $2,757,764
Includes fees billed in connection with assurance and related services provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
| (c) | Tax Fees. |
Fiscal Year
Ended September 30, 2023: $1,678,928
Fiscal Year Ended September 30, 2022: $5,202,689
Includes fees billed in connection with tax compliance, planning, and advice services provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
| (d) | All Other Fees. |
Fiscal Year
Ended September 30, 2023: $25,000
Fiscal Year Ended September 30, 2022: $298,000
Includes fees billed for services related to tax reported information provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
(e) (1) Pre-Approval Policies. The policy of the Registrant’s Audit Committee is to consider, and, if appropriate, approve before the principal accountant is engaged for such services, all specific audit and non-audit services provided to: the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant. In making a determination, the Audit Committee considers whether the services are consistent with maintaining the principal accountant’s independence.
In the event of a contingency situation in which the principal accountant is needed to provide services in between scheduled Audit Committee meetings, the Chairman of the Audit Committee would be called on to consider and, if appropriate, pre-approve audit or permitted non-audit services in an amount sufficient to complete services through the next Audit Committee meeting, and to determine if such services would be consistent with maintaining the accountant’s independence. At the next scheduled Audit Committee meeting, services and fees would be presented to the Audit Committee for formal consideration, and, if appropriate, approval by the entire Audit Committee. The Audit Committee would again consider whether such services and fees are consistent with maintaining the principal accountant’s independence.
The Registrant’s Audit Committee is informed at least annually of all audit and non-audit services provided by the principal accountant to the Vanguard complex, whether such services are provided to: the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., or other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant.
(2) No percentage of the principal accountant’s fees or services were approved pursuant to the waiver provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) For the most recent fiscal year, over 50% of the hours worked under the principal accountant’s engagement were not performed by persons other than full-time, permanent employees of the principal accountant.
(g) Aggregate Non-Audit Fees.
Fiscal Year
Ended September 30, 2023: $1,703,928
Fiscal Year Ended September 30, 2022: $5,500,689
Includes fees billed for non-audit services provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
(h) For the most recent fiscal year, the Audit Committee has determined that the provision of all non-audit services was consistent with maintaining the principal accountant’s independence.
Item 5: Audit Committee of Listed Registrants.
The Registrant is a listed issuer as defined in rule 10A-3 under the Securities Exchange Act of 1934 (“Exchange Act”). The Registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are: F. Joseph Loughrey, Mark Loughridge, Sarah Bloom Raskin, and Peter F. Volanakis.
Item 6: Investments.
Not applicable. The complete schedule of investments is included as part of the report to shareholders filed under Item 1 of this Form.
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 the 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)(1) | Code of Ethics filed herewith. |
| (a)(2) | Certifications filed herewith. |
| (a)(2) | Certifications filed herewith. |
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.
| VANGUARD QUANTITATIVE FUNDS | ||
| BY: | /s/ MORTIMER J. BUCKLEY* | |
| MORTIMER J. BUCKLEY | ||
| CHIEF EXECUTIVE OFFICER |
Date: November 21, 2023
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 QUANTITATIVE FUNDS | ||
| BY: | /s/ MORTIMER J. BUCKLEY* | |
| MORTIMER J. BUCKLEY | ||
| CHIEF EXECUTIVE OFFICER |
Date: November 21, 2023
| VANGUARD QUANTITATIVE FUNDS | ||
| BY: | /s/ CHRISTINE BUCHANAN* | |
| CHRISTINE BUCHANAN | ||
| CHIEF FINANCIAL OFFICER |
Date: November 21, 2023
| * By: | /s/ Anne E. Robinson |
Anne E. Robinson, pursuant to a Power of Attorney filed on July 21, 2023 (see File Number 33-53683) and to a Power of Attorney filed on March 29, 2023 (see File Number 2-11444), Incorporated by Reference.
