(PUB) Investing 2016

7

July 2 016

Morningstar FundInvestor

Data through June 30, 2016 FINRA members: For internal or institutional use only. Vanguard Long-Term Investment-Grade Inv

Ticker VWESX

Yield 4.0%

Total Assets $15,271 mil

Mstar Category Corporate Bond

Benchmark 1: Barclays US Corp IG TR USD Benchmark 2: Barclays US Agg Bond TR USD Morningstar Analyst Rating 06-24-16 „

Investment Style Equity

Historical Profile Return Risk Rating High High QQQQQ Highest

15.0 17.5 20.0

Growth of $10,000

Investment Values of Fund Investment Values of Benchmark 1

Morningstar Pillars Process

12.5

∞ Positive ∞ Positive ∞ Positive ∞ Positive ∞ Positive

Performance

10.0

People Parent

Performance Quartile (within Category)

) ( & ) * & * ) & ( & 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 06-16 9.25 9.06 8.72 8.92 9.34 10.29 10.85 9.65 10.75 9.90 10.95 2.86 3.75 2.29 8.75 10.71 17.18 11.66 -5.87 18.17 -2.21 13.24 -1.44 -0.81 7.23 -9.93 1.72 9.03 1.84 -4.33 10.70 -1.53 5.55 -1.48 -3.21 -2.95 2.82 4.17 9.34 7.44 -3.84 12.20 -2.76 7.92 5.61 5.81 5.84 6.19 6.02 5.74 4.99 4.56 4.95 4.26 2.24 -2.76 -2.06 -3.54 2.56 4.69 11.44 6.67 -10.43 13.21 -6.47 11.00 0.52 0.52 0.51 0.52 0.52 0.52 0.50 0.48 0.47 0.45 0.22 0.00 0.00 0.00 0.00 0.00 0.08 0.12 0.09 0.15 0.18 0.03 0.25 0.25 0.22 0.23 0.26 0.24 0.22 0.22 0.22 0.22 0.21 5.35 5.73 5.78 6.09 6.01 5.53 5.25 4.57 4.64 4.30 4.18 96 53 6 97 46 1 39 97 1 75 2

Price

History

Morningstar Analyst Rating Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ „ ´ ‰ Á

NAV

Total Return % +/- Bmark 1 +/- Bmark 2 Income Return % Capital Return % Capital Gains $ Expense Ratio % Income Ratio % Turnover Rate % Net Assets $mil Total Rtn % Rank Cat Income $

Pillar Spectrum ∞ Positive

§ Negative

¶ Neutral

Performance 06-30-16 1st Qtr 2nd Qtr

3rd Qtr

4th Qtr

Total

2012 2013 2014 2015 2016

0.44 5.57 4.66 0.62 11.66 -0.61 -6.17 -0.30 1.25 -5.87 6.34 4.62 0.82 5.35 18.17 3.07 -7.63 2.63 0.09 -2.21

9

15

15

24

21

19

29

21

26

21

35

4,187 4,273 3,658 4,035 3,836 4,121 4,472 3,962 4,482 3,984 4,235

Rating and Risk Time Period Load-Adj Return %

Portfolio Analysis 03-31-16 Total Stocks: 0 Share change since 12-31-15

6.77 6.05

— — —

Morningstar Rtn vs Cat

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

Sector

YTD Ret % % Assets

Trailing

Total Return%

+/- Bmark 1

+/- Bmark 2

%Rank Cat

Growth of $10,000

1 Yr 3 Yr 5 Yr

16.31

3 Mo 6 Mo

6.05 2.48 3.84 13.24 5.56 7.92 16.31 8.37 10.31 9.72 4.30 5.66 9.31 3.88 5.55 8.40 2.16 3.27 7.80 1.77 3.32

3 10,605 2 11,324 1 11,631 1 13,208 1 15,607 9 22,400 9 30,842

High QQQQQ High QQQQQ High QQQQ

9.72 9.31 8.40 8.62

High High High

Current Investment Style

Sector Weightings h Cyclical r BasicMat t CnsmrCyc y FinanSvcs u Real Est j Sensitive i CommSrvs o Energy p Industrl a Technlgy k Defensive s CnsmrDef d Hlthcare f Utilities

% of Stocks

Rel Bmark 1

Market Cap % Giant — Large — Mid — Small — Micro — Avg $mil: —

Value Blend Growth

1 Yr

10 Yr Incept

Large Mid Small

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

— — — — — — — — — — — — — —

3 Yr Avg 5 Yr Avg 10 Yr Avg 15 Yr Avg

Other Measures

Standard Index

Best Fit Index

Alpha

-0.4 2.50

1.0

Beta

0.93

Tax Analysis

Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

R-Squared

82

96

3 Yr (estimated) 5 Yr (estimated) 10 Yr (estimated)

7.26 6.99 6.16

1 1 8

2.24 2.12 2.07

96 85 81

Standard Deviation

7.30 9.72 1.30

Value Measures Price/Earnings

Rel Category

Mean

— — — —

Sharpe Ratio

Price/Book Price/Sales

Potential Capital Gain Exposure: 15% of assets

— — Price/Cash Flow — — Dividend Yield % — — Growth Measures % Rel Category Long-Term Erngs — — Book Value — — Sales — — Cash Flow — — Historical Erngs — —

Morningstar's Take by Elizabeth Foos 06-24-16 On June 1, 2016, the lead manager of Vanguard Long- Term Investment-Grade, L.T. Hill, retired from Wellington Management Company, this fund's longtime subadvisor. Comanager Scott St. John, who has worked closely with Hill for a decade and was named to this fund in May 2014, assumed responsibility for the Wellington-run portion of the fund (90% of assets). St. John joined the firm in 2003 with prior experience as a fixed-income analyst. Because this duo worked together for some time, we don’t expect the change to cause significant disruption to the team or its process. The fund's solid long-term record, strong team, and low expenses earn it a Morningstar Analyst Rating of Silver. This fund has been successful at what it's designed to do. It was added to the new corporate-bond Morningstar Category in November 2013, but its defining featuresareunchanged.Among itsnewpeersand former cohorts in the long-term bond category, this portfolio still stands out with a duration of 13.1 years (April 2016), well above the average for both categories. It places itself there mainly by staying within a year of its Barclays U.S. Long Credit A or Better Index's duration. That trait and the

emphasis on higher-quality debt makes it sensitive to interest-rate shifts. When yields ticked sharply upward in 2013's second quarter, its 5.9% loss was among the worst in the category. When Treasury yields dipped in 2014, the fund gained 18.2% through year-end, which beat all of its rivals. Over time, the fund's significant interest-rate sensitivity has helped it in a market of generally falling yields. The team also stays close to home with regard to the fund's sector weightings, which won't typically tilt more than 10% from its bogy's. As spreads have tightened since 2012, the fund’s managers increased its credit quality. As of mid-2016, it had roughly 80% of assets in bonds ratedAorAA,while itsaveragepeersockednearly half its assets in BBB rated debt and invests in below- investment-grade fare, which this fund avoids. The team notes that this fund is attractive to institutional investors looking to match long-dated liabilities.

Composition - Net

Cash 4.7 Stocks 0.0 Bonds 95.3 Other 0.0 Foreign — (% of Stock)

Profitability

%

Return on Equity Return on Assets

— — —

Net Margin

Address:

Vanguard Fixed Income Securities Funds

Minimum Purchase: Min Auto Inv Plan:

$3000 Add: $1 — Add: —

IRA: —

Valley Forge PA 19482

800-662-7447

Sales Fees:

No-load

Web Address:

www.vanguard.com

Management Fee:

0.19%

Inception:

07-09-73

Actual Fees:

Mgt:0.19% Dist:—

Advisor:

Wellington Management Company LLP

Expense Projections: 3Yr:$68 5Yr:$118 10Yr:$268

Subadvisor:

None

Income Distribution:

Monthly

A

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©2016Morningstar, Inc.All rights reserved. The information herein is not represented orwarranted to be accurate, complete or timely. Past performance is no guarantee of future results.Access updated reports at www.morningstar.com . To order reprints, email reprints@morningstar.com