(PUB) Morningstar FundInvestor

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September 2 014

Morningstar FundInvestor

Data through August 31, 2014 Vanguard Inflation-Protected Secs Inv

Ticker Status Yield SEC Yield Total Assets Mstar Category VIPSX Open 2.3% -0.25% $26,110 mil Inflation-Protected Bond

Morningstar Analyst Rating 08-18-14

Investment Style Fixed Income Income Rtn %Rank Cat

Historical Profile Return Risk Rating Above Avg Above Avg Above Avg

Manager Change Partial Manager Change

14.0 16.0 18.0

Morningstar Pillars Process Performance

Positive Positive Positive Positive Positive

∞ ∞ ∞ ∞

Growth of $10,000

Investment Values of Fund Investment Values of BC Agg Bnd Performance Quartile (within Category) History

12.0

People Parent Price

10.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 08-14

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 „ ´ˇ ¨

12.21 8.00 3.90 -0.40 3.85 4.15

12.57 8.27 3.93 -0.19 4.70 3.57

12.16 2.59 0.16 -0.25 5.53 -2.94

11.78 0.43 -3.90 0.02 3.54 -3.11

12.45 11.59 4.62 -0.05 5.60 5.99

11.52 -2.85 -8.09 -0.50 5.01 -7.86

12.55 10.80 4.87 -0.61 1.86 8.94

13.00 6.17 -0.37 -0.14 2.55 3.62

14.11 13.24 5.40 -0.32 4.43 8.81

14.53 6.78 2.57 -0.20 2.61

12.98 -8.92 -6.90 -0.31

13.68

NAV

6.33 5.94 0.01 0.93 5.41 0.12 0.00 20

Total Return % +/-BC Agg Bnd

+/-BC US Tr US TIPS Income Return % Capital Return % Total Rtn % Rank Cat

1.50

-10.42 4.17

Pillar Spectrum Positive ∞

0.45 0.12 0.22 4.55 108

0.57 0.07 0.18 3.46

0.68 0.05 0.17 4.83

0.43 0.00 0.20 4.83

0.65 0.00 0.20 3.87

0.61 0.00 0.20 5.02

0.21 0.00 0.25 2.00

0.32 0.00 0.22 2.48

0.57 0.02 0.20 4.21

0.37 0.17 0.20 2.55

0.22 0.05 0.20 1.33

Income $

§ Negative

¶ Neutral

Capital Gains $ Expense Ratio % Income Ratio % Turnover Rate % Net Assets $mil

. . .

Performance 08-31-14 1st Qtr 2nd Qtr

3rd Qtr

4th Qtr

Total 6.17

2010 2011 2012 2013 2014

0.36 3.90 1.85 3.40 0.68 3.24 -0.34 -7.34 1.99 3.72 0.83 0.67 3.77 3.46 5.74 5.17 2.00 1.45 5.24 4.52 4.68 2.43 Total +/- BC

2.57 -0.74

4,746

7,182

6,332

5,440

6,662

16,075 15,220 12,979 12,946 8,593

6,577

6,263

4.84 2.56 13.24

2.14 0.57

6.78

Portfolio Analysis 06-30-14

Rating and Risk Time Load-Adj

0.84 -2.19 -8.92 . . .

Date of Maturity

Amount

Value % Net $000 Assets

Morningstar

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

Period Return % Rtn vs Cat

Total Fixed-Income:37

$000

1 Yr 3 Yr 5 Yr

5.74 2.00 5.24 4.68 6.35

Trailing

+/- BC %Rank Growth of

US Treasury TIP US Treasury TIP US Treasury TIP US TREASURY TIP US Treasury TIP US Treasury TIP

04-15-18 1,416,846 1,500,300 5.75 04-15-17 1,279,831 1,381,348 5.29 04-15-16 1,140,286 1,256,666 4.82 01-15-23 1,200,545 1,227,852 4.70 07-15-23 1,170,000 1,213,869 4.65 07-15-22 1,159,978 1,202,936 4.61 01-15-22 1,135,279 1,196,378 4.58 01-15-24 1,115,000 1,172,705 4.49 07-15-21 1,000,026 1,107,280 4.24 01-15-21 901,289 1,057,356 4.05 01-15-25 646,940 984,654 3.77 07-15-20 794,600 946,243 3.63 04-15-29 328,121 690,625 2.65 01-15-26 476,198 669,136 2.56 07-15-16 504,666 642,784 2.46 04-15-19 615,000 640,408 2.45 01-15-20 512,000 615,337 2.36 01-15-17 444,389 571,391 2.19 04-15-28 267,390 549,619 2.11 01-15-27 378,539 545,266 2.09 0 US Treasury Inflation-Protected 36 Non US Inflation-Protected 0 Government Related 0 Corporate 0 Agency MBS 0 Non-Agency Residential MBS 0 Commercial MBS 0 Asset-Backed 0 Covered Bond 0 Municipal 0 Sector Breakdown % of assets US Treasury 63 Non US Treasury

Return% Agg BndUS Tr US TIPS

Cat

$10,000

+Avg +Avg +Avg

3 Mo 6 Mo 1 Yr

0.06 -0.03 0.04 -0.12 -0.21 -0.24

18 10,083 18 10,377 22 10,574 26 10,612 19 12,909

10 Yr Incept

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

Other Measures

Standard Index Best Fit Index BC Agg Bnd BC US Tr US TIPS

25 15,799 . . . . . Tax Analysis Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

US Treasury TIP 0.125%

Alpha

-2.9 1.73

-0.1 1.02

US TREASURY TIP US Treasury TIP

Beta

R-Squared

US Treasury TIP 1.125%

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

0.99 4.16 3.34

26 19 19

0.99 1.02 1.28

49 53 44

Standard Deviation

5.17 2.00 0.40

US TREASURY TIP

Mean

US Treasury TIP 1.25% US TREASURY TIP US Treasury TIP 2% US TREASURY TIP US Treasury Note US TREASURY TIP US TREASURY TIP US Treasury TIP 3.625% US Treasury TIP 2.375%

Sharpe Ratio

Potential Capital Gain Exposure: 7% of assets

Morningstar’s Take by Kiran Lalani 08-18-14 Vanguard Inflation-Protected Securities lets its low expenses do the heavy lifting. Gemma Wright-Casparius employs a straightforward approach that sticks strictly to Treasury Inflation-Protected Securities, unlike some of its peers in the inflation-protected bond category that regularly employ other instruments like mortgage-backed securities, emerging-markets debt, or even corporate bonds. In keeping this fund closely aligned with its Barclays U.S. TIPS Index benchmark, she does, however, make subtle moves between various maturity bonds as relative-value opportunities arise based on her team’s quantitative models and market availability. While the fund steers clear of credit risk, it is no stranger to interest-rate risk. At 7.9 years, its duration runs higher than the 7.5 years for its benchmark and also ran higher than its average peer’s duration as of June 2014. The longer duration stance has exposed the fund to higher short-term price volatility than its peers. For instance, in August 2012, when yields rose on positive macroeconomic news, the fund lost 0.2% and

underperformed its peer group. And in 2013, when yields spiked again, the fund’s 8.9% loss was worse than both its benchmark’s 8.6% slide and the category median’s 7.9% loss. That said, the fund has delivered over the long haul. Its 10-year net annualized return of 4.9% through June 2014 ranks near the top quartile of its peers. That strong showing is partly driven by its low expenses. The 0.10% expense ratio for its Admiral share class is much lower than the median of 0.60% for similarly distributed funds. The impact is evident in the fund’s 10-year annualized return before expenses of 5.1%, which ranks in the bottom third of its peers. In the end, the fund provides straightforward TIPS exposure at a low cost and has proved itself over time. It merits a Morningstar Analyst Rating of Gold.

Current Investment Style

Duration Ltd Mod Ext

Quality High Med Low

figure provided by fund

1 Avg Eff Duration Avg Eff Maturity Avg Credit Quality Avg Wtd Coupon Avg Wtd Price Coupon Range

7.9 Yrs 8.6 Yrs

AAA

1.20%

121.61% of par

% of Bonds Rel Cat

0% PIK 0% to 6% 6% to 8% 8% to 10%

0.0 0.0 100.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0

Composition - Net Cash 1.2

Bonds 98.8

More than 10%

Stocks 0.0

Other

0.0

Address:

PO Box 2600 Valley Forge, PA 19482 800-662-7447 www.vanguard.com

Minimum Purchase: Min Auto Inv Plan:

$3000

Add: $100 IRA: $0

1.00=Category Average

Add: .

Credit Analysis

Special Securities Restricted/Illiquid Secs Exotic Mortgage-Backed Emerging-Markets Secs Options/Futures/Warrants

% bonds 06-30-14

Sales Fees:

No-load 0.17% 3Yr:$64 Quarterly

AAA

100

Web Address: Inception: Advisor: Subadvisor: NTF Plans:

Management Fee:

B 0 Below B 0 NR/NA 0

0 0 0

06-29-00

Actual Fees:

Mgt:0.17% Dist: .

Vanguard Group, Inc.

Expense Projections: Income Distribution:

5Yr:$113 10Yr:$255

None

BBB

Vanguard NTF

Mutual Funds ß ®

© 2014Morningstar, Inc.All rights reserved. The information herein isnot representedorwarranted to be accurate, correct, complete or timely. Pastperformance isnoguarantee of future results.Access updated reports at To order reprints, call 312-696-6100. mfb.morningstar.com.

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