Vanguard PRIMECAP Core Fund As of June 30, 2013

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Vanguard Style View Large Blend n Expected range of fund

holdings

n Central tendency Stocks: Diversified multi-cap portfolio of growth and value stocks across industry sectors. Product Summary

• Multi-cap equity, investing in a broad spectrum of stocks covering both growth and value stocks and a range of industries.

• Seeks long-term capital appreciation.

• Invests in out-of-favor companies at attractive valuations. • Fundamental, research-driven stock selection process. • Five managers develop separate subportfolios. Note: This fund is closed to new investors.

People and Process

Vanguard PRIMECAP Core Fund seeks to provide long-term capital appreciation through investments in companies at attractive valuation levels. The fund employs a fundamental, research-driven approach in seeking to identify companies with long-term potential overlooked by the market. The fund has the flexibility to invest across all industry sectors and market capitalizations. Each of six portfolio managers independently manages a portion of the fund, searching out stocks that offer a balance between reasonable valuations and attractive earnings-growth prospects.

PRIMECAP Management Company

Founded in 1983, PRIMECAP Management Company, Pasadena, California, is recognized for its long-term approach to growth equity investing. The firm has advised Vanguard PRIMECAP Core Fund since 2004.

Investment Manager Biographies Joel P. Fried, President

• Portfolio manager.

• Advised the fund since 2004.

• Worked in investment management since 1985. • B.S., University of California, Los Angeles. • M.B.A., Anderson Graduate School of Business,

University of California, Los Angeles.

Theo A. Kolokotrones, Vice Chairman • Portfolio manager.

• Worked in investment management since 1970. • B.A., University of Chicago.

• M.B.A., Harvard Business School. Mitchell J. Milias, Chairman • Portfolio manager.

• Worked in investment management since 1964. • B.S., Stanford University.

• M.B.A., Harvard Business School.

Alfred W. Mordecai, Executive Vice President • Portfolio manager.

• Worked in investment management since 1997. • B.S.E., Duke University.

• M.E.A., Virginia Polytechnic Institute and State University.

• M.B.A., Harvard Business School. M. Mohsin Ansari, Senior Vice President • Portfolio manager.

• Worked in investment management since 2000. • B.A., Colgate University.

• B.S., Washington University. • M.B.A., Harvard Business School.

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Vanguard® PRIMECAP Core Fund

As of June 30, 2013

Quarterly Commentary

• U.S. equity markets delivered modest gains for the second quarter despite the volatility seen in June after Federal Reserve Chairman Ben Bernanke indicated that the Fed might begin tapering off its bond buying program later this year. The MSCI US Prime Market 750 Index returned 2.70% for the three months. The PRIMECAP Core Fund rose 3.20%, outperforming both its benchmark and the average return of its peers. • The fund’s relative outperformance was primarily

attributable to good stock selection in information technology. An overweight allocation to the relatively strong health care sector and underweightings of the weaker energy and consumer staples sectors also helped. Tempering relative performance were poor stock selection in health care and underweight exposure to the financial sector, which had a strong quarter.

• Relative to the index, the fund benefited most from its underweighting of Apple (–10%), as investors remained concerned about the company’s future product offerings and increasing competition from Google and Samsung. Also helpful were an overweight position in Electronic Arts (+30%) and an underweighting of IBM (–10%). Intuit (–7%) and Research in Motion (–28%) subtracted

from performance in the information technology sector, however.

• Despite the overall poor stock selection in health care, Biogen (+12%) was a top contributor to the fund’s performance, rising on the launch of a new multiple sclerosis drug. On the other hand, Eli Lilly (–13%) and Amgen (–3%) were among the fund’s top detractors for the quarter.

• For the 12 months ended June 30, the PRIMECAP Core Fund returned 27.50%, outperforming its benchmark index (+20.85%) and peer average (+21.45%). Very strong stock selection in information technology contributed most, especially the

underweighting of Apple (–31%) and overweighting of Google (+52%). Solid selection in health care combined with an overweighting of the relatively strong sector also contributed notably to the fund’s outperformance. Biogen (+49%), Amgen (+38%), and Roche (+49%) were among top contributors. Restraining performance slightly were overweight exposure to the relatively weak information technology sector and an underweighting of the very strong financial sector.

Total Returns

Quarter to DateYear 1 Year 3 Years 5 Years InceptionSince

PRIMECAP Core Fund

(12/9/2004) 3.20% 16.81% 27.50% 18.19% 8.59% 8.31% MSCI US Prime Market 750 Index 2.70 13.77 20.85 18.56 7.11 6.211 Multi-Cap Core Funds Average 2.54 13.24 21.45 16.03 5.52 5.152 1 Since the fund’s inception, 12/9/2004.

2 Since the fund’s inception, 12/9/2004.

Figures for periods of less than one year are cumulative returns. All other figures represent average annual returns. Performance figures include the reinvestment of all dividends and any capital gains distributions. All returns are net of expenses.

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Quarterly Returns

Year-End

Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter PRIMECAPCore Fund

MSCI US Prime Market

750 Index (Millions)Assets

2013 13.19% 3.20% — — — — $5,377 2012 9.27 -3.93 5.79% 3.17% 14.57% 16.18% 4,652 2011 5.16 0.97 -15.39 10.36 -0.86 1.65 4,628 2010 4.79 -11.90 11.90 11.21 14.88 15.92 5,035 2009 -3.48 14.07 16.41 6.86 36.96 27.80 4,637 2008 -7.15 2.29 -8.65 -20.85 -31.32 -37.06 2,681 2007 0.95 8.09 1.96 -3.79 7.04 6.38 3,270 2006 5.61 -2.16 4.16 4.35 12.31 15.68 2,556 2005 -0.88 2.76 5.17 4.63 12.08 6.26 1,220 20043 _— _— _— _2.50 _2.50 _2.21 238

3 Since inception of the share class, 12/9/2004.

Fund Facts

Fund Number 1220

Ticker VPCCX

Newspaper Listing PrmcpCor CUSIP Number 921921508 Assets (millions) $5,377 Inception 12/9/2004 Expense Ratio

(as of 1/2013) 0.50% SEC 30-Day Yield 1.33%

Risk Statement

The fund will typically be diversified across the

capitalization spectrum. However, as much as 30% to 40% of fund assets may be concentrated in the top 10 holdings at times. In addition, the advisor’s emphasis on identifying companies with long-term potential overlooked by the market may lead to concentrations in certain industries. The fund is exposed to the generally higher risks inherent with investments in mid- and small-cap stocks, relative to large-cap stocks. The fund may invest up to 20% of assets in international stocks, which carry added risks not found in domestic investments.

Volatility Measures

R-squared Beta

MSCI US Prime Market 750 Index 0.96 1.00 Dow Jones U.S. Total Stock

Market Float Adjusted Index 0.97 0.97 R-squared and beta are calculated from trailing 36-month fund returns relative to the associated benchmark.

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Vanguard® PRIMECAP Core Fund As of June 30, 2013 Equity Characteristics PRIMECAP Core Fund MSCI US Prime Market 750 Index Number of Stocks 146 754 Median Market Cap $51.6 Billion $49.7 Billion P/E Ratio 19.9x 17.7x

P/B Ratio 3.1x 2.4x

Return on Equity 18.5% 17.4% Earnings Growth Rate 13.0% 10.8% Foreign Holdings 13.9% 0.0% Short-Term Reserves 4.1% — Turnover Rate

(Fiscal Year End 9/2012) 10.1% —

Top 10 Largest Holdings

% of Total Net Assets

Amgen Inc. 5.2%

Roche Holding AG 5.0 Biogen Idec Inc. 3.5

Google Inc. 3.4

Eli Lilly & Co. 3.2

Novartis AG 2.9

Marsh & McLennan Cos. Inc. 2.8 Johnson & Johnson 2.7 Texas Instruments Inc. 2.4 Medtronic Inc. 2.4

Total 33.5%

The holdings listed exclude any temporary cash investments and equity index products.

Sector Diversification (% of Stocks)

PRIMECAP Core Fund

MSCI US Prime Market

750 Index Overweight/Underweight

Consumer Discretionary 10.6% 12.8% -2.2 Consumer Staples 1.6 9.9 -8.3 Energy 3.4 10.3 -6.9 Financials 8.2 16.7 -8.5 Health Care 30.6 12.4 18.2 Industrials 14.2 10.5 3.7 Information Technology 26.0 17.8 8.2 Materials 4.8 3.5 1.3 Telecommunication Services 0.0 2.7 -2.7 Utilities 0.6 3.4 -2.8 Total 100.0% 100.0%

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Past performance—especially short-term past performance—cannot be used to predict future returns. Investment returns and principal value (with the exception of money market funds, which seek to maintain a stable $1 per share net asset value) will fluctuate, so that investors’ shares, when sold, may be worth more or less than their original cost. 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 www.vanguard.com/performance.

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