Form 485BPOS VANGUARD CMT FUNDS

December 20, 2018 6:04 AM EST


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form N-1A

REGISTRATION STATEMENT (NO. 333-111362) UNDER
THE SECURITIES ACT OF 1933		[X]
Post-Effective Amendment No. 28		[X]
and

REGISTRATION STATEMENT (NO. 811-21478) UNDER THE INVESTMENT COMPANY ACT
OF 1940
Amendment No. 29		[X]


VANGUARD CMT FUNDS
(Exact Name of Registrant as Specified in Declaration of Trust)

P.O. Box 2600, Valley Forge, PA 19482
(Address of Principal Executive Office)

Registrant’s Telephone Number (610) 669-1000

Anne E Robinson, Esquire
P.O. Box 876
Valley Forge, PA 19482

Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)
[ ]	immediately upon filing pursuant to paragraph (b)
[X]	on December 20, 2018, pursuant to paragraph (b)
[ ]	60 days after filing pursuant to paragraph (a)(1)
[ ]	on (date) pursuant to paragraph (a)(1)
[ ]	75 days after filing pursuant to paragraph (a)(2)
[ ]	on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ]	This post-effective amendment designates a new effective date for a
	previously filed post-effective amendment.

Vanguard Market Liquidity Fund

Prospectus

December 20, 2018

Investor Shares

Vanguard Market Liquidity Fund

This prospectus contains financial data for the Fund through the fiscal year ended August 31, 2018.

The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or

passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.


Contents


Fund Summary	1	Financial Highlights	19
Investing in Money Market Funds	5	Investing With Vanguard	20
More on the Fund	7	Additional Information	21
The Fund and Vanguard	14	Glossary of Investment Terms	22
Investment Advisor	14
Dividends, Capital Gains, and Taxes	15
Share Price	17

Fund Summary

Investment Objective

The Fund seeks to provide current income while maintaining liquidity.

Fees and Expenses

The following table describes the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees
(Fees paid directly from your investment)

Sales Charge (Load) Imposed on Purchases	None
Purchase Fee	None
Sales Charge (Load) Imposed on Reinvested Dividends	None
Redemption Fee	None

Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)

Management Fees	None
12b-1 Distribution Fee	None
Other Expenses	0.005%
Total Annual Fund Operating Expenses	0.005%

Example

The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. It illustrates the hypothetical expenses that you would incur over various periods if you were to invest $10,000 in the Fund’s shares. This example assumes that the Fund provides a return of 5% each year and that total annual fund operating expenses remain as stated in the preceding table. You would incur these hypothetical expenses whether or not you redeem your investment at the end of the given period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


1 Year	3 Years	5 Years	10 Years
$1	$2	$3	$6

Principal Investment Strategies

The Fund invests in high-quality, short-term money market instruments, including certificates of deposit, banker’s acceptances, commercial paper, Eurodollar and Yankee obligations, and other money market securities. To be considered high quality, a security must be determined by Vanguard to present minimal credit risk based in part on a consideration of maturity, portfolio diversification, portfolio liquidity, and credit quality. The Fund invests more than 25% of its assets in securities issued by companies in the financial services industry. The Fund maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less.

Principal Risks

On August 12, 2016, the Fund, as an institutional money market fund, was required to transition to a floating net asset value (NAV) as a result of the SEC’s money market fund reforms. The Fund is designed for investors with a low tolerance for risk; however, the Fund is subject to the following risks, which could affect the Fund’s performance:

• Income risk, which is the chance that the Fund’s income will decline because of falling interest rates. Because the Fund’s income is based on short-term interest rates—which can fluctuate significantly over short periods—income risk is expected to be high.

• Manager risk, which is the chance that poor security selection will cause the Fund to underperform relevant benchmarks or other funds with a similar investment objective.

• Credit risk, which is the chance that the issuer of a security will fail to pay interest or principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of that security to decline. Credit risk should be very low for the Fund because it invests primarily in securities that are considered to be of high quality.

• Industry concentration risk, which is the chance that there will be overall problems affecting a particular industry. Because the Fund invests more than 25% of its assets in securities issued by companies in the financial services industry, the Fund’s performance depends to a greater extent on the overall condition of that industry and is more susceptible to events affecting that industry.

A sale or exchange of Fund shares is a taxable event. This means that you may have a capital gain to report as income, or a capital loss to report as a deduction, when you complete your tax return.

You could lose money by investing in the Fund. Because the share price of the Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

Annual Total Returns

The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Fund has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns of the Fund compare with those of a comparative benchmark, which has investment characteristics similar to those of the Fund. Returns for the Institutional Money Market Funds Average are derived from data provided by Lipper, a Thomson Reuters Company. Keep in mind that the Fund’s past performance does not indicate how the Fund will perform in the future. Updated performance information is available on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447.

Annual Total Returns — Vanguard Market Liquidity Fund Investor Shares¹

1 The year-to-date return as of the most recent calendar quarter, which ended on September 30, 2018, was 1.42%.

During the periods shown in the bar chart, the highest return for a calendar quarter was 0.96% (quarter ended March 31, 2008), and the lowest return for a quarter was 0.03% (quarter ended March 31, 2012).


Average Annual Total Returns for Periods Ended December 31, 2017
	1 Year	5 Years	10 Years
Vanguard Market Liquidity Fund Investor Shares	1.11%	0.42%	0.57%
Institutional Money Market Funds Average	0.82%	0.22%	0.41%

Investment Advisor

The Vanguard Group, Inc. (Vanguard)

Portfolio Manager

John C. Lanius, Portfolio Manager at Vanguard. He has managed the Fund since 2006.

Purchase and Sale of Fund Shares

The Fund has been established by Vanguard as a cash management vehicle for the Vanguard funds and certain trusts and accounts managed by Vanguard or its affiliates. The Fund is not available to other investors. As a result of the Fund’s transition to a floating NAV, subscription orders in the Fund can only be placed in dollars, while redemption orders can be placed in units or dollars. When a trade is processed depends on the day and time Vanguard receives the request in good order and the manner in which it is submitted. Generally, trades placed after the close of business are processed during the next business day.

Tax Information

The Fund’s distributions may be taxable as ordinary income or capital gain. If you are investing through a tax-deferred retirement account, such as an IRA, special tax rules apply.

Payments to Financial Intermediaries

The Fund and its investment advisor do not pay financial intermediaries for sales of Fund shares.

Investing in Money Market Funds

What is Money Market Reform?

In July 2014, the Securities and Exchange Commission (SEC) implemented a number of regulatory changes designed to enhance the stability and resilience of all money market funds. The reforms have created three categories of money market funds:

• Retail money market funds, which may maintain a stable net asset value (NAV) but are subject to liquidity fees and redemption gates.

• Government money market funds, which may maintain a stable NAV but are not required to implement liquidity fees and redemption gates.

• Institutional money market funds, which are required to have a floating NAV and are subject to liquidity fees and redemption gates.

The board of trustees of Vanguard CMT Funds (the Board), in accordance with the best interest of the shareholders, approved a number of changes in response to the SEC’s 2014 amendments to the rules governing money market funds. These changes—including the Fund’s transition to a floating NAV and the Board’s ability to implement liquidity fees and redemption gates if the Fund’s weekly liquid assets fall below established thresholds—are now in effect. As part of these changes, information regarding the Fund’s weekly liquid assets for the prior six months (by day, as of the close of business) is available on the Fund’s Portfolio page at vanguard.com.

How Does This Affect Vanguard Money Market Funds?

The money market fund reforms impact money market funds differently depending on the types of investors permitted to invest in a fund and the types of securities in which a fund may invest.

Vanguard Market Liquidity Fund

Vanguard has designated Vanguard Market Liquidity Fund as an institutional money market fund.

Institutional money market funds are not limited to “natural persons” and may be held by institutional as well as retail investors. An institutional money market fund generally is not permitted to use amortized cost or penny rounding methods to calculate NAV. Rather, an institutional money market fund is required to transact at a floating NAV, a market-based NAV calculated to four decimal places or an equivalent value for funds with a different share price (e.g., $10.000 or $100.00). If an institutional money market fund’s weekly liquid assets fall below a certain threshold, the institutional money market fund is subject to liquidity fees and redemption gates.

There are two types of liquidity fees: discretionary liquidity fees and default liquidity fees. Liquidity fees are designed to transfer the costs of liquidating securities from shareholders who remain in the Fund to those who leave the Fund during periods when liquidity is limited.

Discretionary liquidity fee. The Fund may impose a liquidity fee of up to 2% on all redemptions in the event that the Fund’s weekly liquid assets fall below 30% of its total assets if the Board determines that it is in the best interest of the Fund. Subject to practical limitations necessary to implement the fee, the discretionary liquidity fee may be implemented the same day that the Board determines to impose a fee. Once the Fund has restored its weekly liquid assets to 30% of total assets, any liquidity fee must be suspended.

Default liquidity fee. The Fund is required to impose a liquidity fee of 1% on all redemptions in the event that the Fund’s weekly liquid assets fall below 10% of its total assets unless the Board determines that (1) the fee is not in the best interest of the Fund or (2) a lesser/higher fee (up to 2%) is in the best interest of the Fund. A default liquidity fee is required to be implemented the business day after the Board determines to impose a fee.

In addition to, or in lieu of, the liquidity fee, the Fund is permitted to implement temporarily a redemption gate (i.e., suspend redemptions) if the Fund’s weekly liquid assets fall below 30% of its total assets. The gate could remain in effect for no longer than 10 days in any 90-day period. Once the Fund has restored its weekly liquid assets to 30% of total assets, the gate must be lifted.

Once the Fund imposes a redemption gate, then unprocessed orders to redeem or exchange will be canceled and the Fund will not accept redemption or exchange orders until the gate is no longer in effect. If you still wish to redeem or exchange once the gate is lifted, you will need to submit a new redemption or exchange request to the Fund.

The Board also may determine that it would not be in the interests of the Fund to continue operating if the Fund’s weekly liquid assets fall below 10% of its total assets. In the event that the Board approves liquidation of the Fund under these circumstances, the Fund may permanently suspend redemptions and liquidate.

Notices regarding liquidity fees or redemption gates will be filed with the SEC on Form N-CR. In addition, announcements will also be made in supplements to the Fund’s prospectus and on the Fund’s website.

The Fund is subject to money market fund reform regulatory risk, which is the chance that 2014 SEC reforms will affect the Fund’s investment strategy, fees and expenses, portfolio, share liquidity, and return potential as a result of the implemented rules.

More on the Fund

Vanguard Municipal Cash Management Fund has been established by Vanguard as a cash management vehicle for the Vanguard funds and certain trusts and accounts managed by Vanguard or its affiliates. The Fund is not available to other investors. Vanguard reserves the right to change the availability of the Fund at any time without prior notice to shareholders. The Fund operates under an exemption issued by the SEC.

A Similar but Distinct Vanguard Fund

The Fund offered by this prospectus should not be confused with Vanguard Municipal Money Market Fund, a separate Vanguard fund available only to retail investors that has a similar investment objective and similar policies but seeks to maintain a stable NAV through the use of amortized cost accounting. The respective municipal securities held by the funds will differ. The funds’ holdings, combined with differences in the funds’ respective cash flows and expenses, are expected to produce different investment returns. Although Vanguard Municipal Cash Management Fund has lower expenses, investors should not expect this Fund necessarily to outperform Vanguard Municipal Money Market Fund.

Vanguard Municipal Money Market Fund offers its shares through a separate prospectus. To obtain the prospectus for that fund, please call 800-662-7447.

Plain Talk About Fund Expenses

All mutual funds have operating expenses. These expenses, which are deducted

from a fund’s gross income, are expressed as a percentage of the net assets of

the fund. Assuming that operating expenses remain as stated in the Fees and

Expenses section, Vanguard Municipal Cash Management Fund’s expense ratio

would be 0.01%, or $0.10 per $1,000 of average net assets. The average expense

ratio for tax-exempt money market funds in 2017 was 0.41%, or $4.10 per $1,000

of average net assets (derived from data provided by Lipper, a Thomson Reuters

Company, which reports on the mutual fund industry).

Plain Talk About Costs of Investing

Costs are an important consideration in choosing a mutual fund. That is because

you, as a shareholder, pay a proportionate share of the costs of operating a fund

and any transaction costs incurred when the fund buys or sells securities. These

costs can erode a substantial portion of the gross income or the capital

appreciation a fund achieves. Even seemingly small differences in expenses can,

over time, have a dramatic effect on a fund‘s performance.

Market Exposure

The Fund invests mainly in state and local municipal securities that provide tax-exempt income. As a result, it is subject to certain risks.

A low interest rate environment could adversely affect the Fund’s return. Low interest rates could prevent the Fund from providing a positive yield.

The Fund is subject to credit risk, which is the chance that the issuer of a security will fail to pay interest or principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of that security to decline. Credit risk should be very low for the Fund because it invests primarily in securities that are considered to be of high quality.

The Fund tries to minimize credit risk by purchasing a wide selection of municipal securities. As a result, there is less chance that the Fund will be seriously affected by a particular bond issuer’s failure to pay either interest or principal.

Plain Talk About Credit Quality

A money market instrument’s credit quality is an assessment of the issuer’s ability

to pay interest and, ultimately, to repay the principal. The lower the credit quality,

the greater the perceived chance that the issuer will default, or fail to meet its

payment obligations. Direct U.S. Treasury obligations, along with other securities

backed by the “full faith and credit” of the U.S. government, generally are

determined to have the highest credit quality. All things being equal, money market

instruments with greater credit risk offer higher yields.

Up to 100% of the Fund’s assets may be invested in securities that are subject to the alternative minimum tax (AMT).

Plain Talk About Alternative Minimum Tax

Certain tax-exempt bonds whose proceeds are used to fund private, for-profit

organizations may be considered “tax-preference items” for purposes of the

alternative minimum tax (AMT)—a special tax system designed to ensure that

individuals pay at least a certain level of federal taxes. Although AMT bond

income is exempt from federal income tax, taxpayers may have to pay AMT on

the income from bonds considered “tax-preference items.”

The Fund is subject to tax risk, which is the chance that all or a portion of the tax-exempt income from municipal bonds held by the Fund will be declared taxable, possibly with retroactive effect, because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state or local tax authorities, or noncompliant conduct of a bond issuer.

Security Selection

Vanguard, advisor to the Fund, uses a top-down investment management approach to select a variety of high-quality, short-term municipal securities. This means that the advisor sets, and periodically adjusts, a duration target for the Fund based upon expectations about the direction of interest rates and other economic factors. The advisor then buys and sells securities to achieve the greatest relative value within the Fund’s targeted duration.

The Fund is subject to manager risk, which is the chance that poor security selection will cause the Fund to underperform relevant benchmarks or other funds with a similar investment objective.

The Fund invests in securities with effective maturities of 397 days or less and maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less.

Plain Talk About Weighted Average Maturity and Weighted Average Life

A money market fund will maintain a dollar-weighted average maturity (WAM) of 60

days or less and a dollar-weighted average life (WAL) of 120 days or less. For

purposes of calculating a fund’s WAM, the maturity of certain longer-term

adjustable-rate securities held in the portfolio will generally be the period remaining

until the next interest rate adjustment. When calculating its WAL, the maturity for

these adjustable-rate securities will generally be the final maturity date—the date

on which principal is expected to be returned in full. Maintaining a WAL of 120 days

or less limits a fund’s ability to invest in longer-term adjustable-rate securities,

which are generally more sensitive to changes in interest rates, particularly in

volatile markets.

Other Investment Policies and Risks

In addition to investing in municipal securities, the Fund may make other kinds of investments to achieve its objective.

The Fund may purchase tax-exempt securities on a “when-issued” basis. When investing in “when-issued” securities, the Fund agrees to buy the securities at a certain price on a certain date, even if the market price of the securities at the time of delivery is higher or lower than the agreed-upon purchase price.

The Fund may invest in derivatives. In general, investments in derivatives may involve risks different from, and possibly greater than, those of investments directly in the underlying securities or assets.

The Fund may invest in derivative securities that, in the advisor’s opinion, are consistent with the Fund’s objective of producing current tax-exempt income while maintaining liquidity. The Fund intends to use derivatives to increase diversification while maintaining its quality standards. There are many types of derivatives, including those in which the tax-exempt interest rate is determined by reference to an index or swap agreement or by some other formula.

In addition, the Fund may invest in tender option bond programs, a type of municipal bond derivative that allows the purchaser to receive a variable rate of tax-exempt income from a trust entity that holds long-term municipal bonds. The Fund may also invest in long-term municipal bonds combined with a demand feature (i.e., variable rate demand notes, or VRDNs), which represent the right to sell the instrument back to the remarketer or liquidity provider, usually a bank, for repurchase on short notice, normally one day or seven days. The Fund may invest in these derivatives if, in the advisor’s opinion, they are consistent with the Fund’s objective. Derivative securities are subject to certain structural risks that, in unexpected circumstances, could cause the Fund’s shareholders to lose money or receive taxable income.

Plain Talk About Derivatives

A derivative is a financial contract whose value is based on the value of a financial

asset (such as a stock, a bond, or a currency), a money market benchmark (such

as U.S. Treasury bill rates or the federal funds effective rate), a physical asset

(such as gold, oil, or wheat), a market index, or a reference rate.

Methods Used to Meet Redemption Requests

conditions and if available under board-approved procedures) through an interfund lending facility or through a bank line-of-credit, including a joint committed credit facility, in order to meet redemption requests.

Temporary Investment Measures

The Fund may temporarily depart from its normal investment policies and strategies—for instance, by allocating substantial assets to cash equivalent investments, U.S. Treasury securities, or other taxable securities—in response to adverse or unusual market, economic, political, or other conditions. Such conditions could include a temporary decline in the availability of municipal money market obligations. By temporarily departing from its normal investment policies, the Fund may distribute income subject to federal personal income tax and may otherwise fail to achieve its investment objective.

Plain Talk About Cash Equivalent Investments

For mutual funds that hold cash equivalent investments, “cash” does not mean

literally that the fund holds a stack of currency. Rather, cash refers to short-term,

interest-bearing securities that can easily and quickly be converted to currency.

Frequent Trading or Market-Timing

The Fund and Vanguard

Investment Advisor

The Fund has two agreements with Vanguard, each of which is described below.

Management and Distribution Agreement. Vanguard serves as the Fund’s advisor and provides a range of administrative services to the Fund under the terms of the Management and Distribution Agreement. As part of this agreement, the Fund pays Vanguard monthly based on the actual costs incurred in providing the services under the agreement.

Shareholder Services Agreement. Vanguard provides a range of transfer agency and shareholder services to the Fund under the terms of the Shareholder Services Agreement. As part of this agreement, the Fund pays Vanguard monthly based on the actual costs incurred in providing the services under the agreement.

For the fiscal year ended August 31, 2018, the amounts paid to Vanguard represented an effective annual rate of less than 0.01% of the Fund’s average net assets.

For a discussion of why the board of trustees approved the Fund’s investment advisory arrangement, see the most recent annual report to shareholders covering the fiscal year ended August 31.

The manager primarily responsible for the day-to-day management of the Fund is:

John Grimes, CFA, Portfolio Manager at Vanguard. He has been with Vanguard since 1998; has worked in investment management since 2008; and has managed investment portfolios, including the Fund, since 2017. Education: B.A., Marquette University; M.B.A., Saint Joseph’s University.

The Statement of Additional Information provides information about the portfolio manager’s compensation, other accounts under management, and ownership of shares of the Fund.

Dividends and Taxes

Fund Distributions

The Fund distributes to shareholders virtually all of its net income (interest less expenses). The Fund may also realize capital gains from the sale of its holdings and distribute these gains (net of losses) to shareholders as capital gains distributions. As a money market fund, the Fund’s distributions are expected to consist primarily of income dividends. Income dividends generally are declared daily and distributed monthly. In addition, the Fund may occasionally make a supplemental distribution at

some other time during the year. You can receive distributions of income or capital gains in cash, or you can have them automatically reinvested in more shares of the Fund.

Basic Tax Points

A majority of the income dividends you receive from the Fund are expected to be exempt from federal income taxes. In addition, you should be aware of the following basic federal income tax points about tax-exempt mutual funds:

• Exempt-interest dividends from a tax-exempt fund are taken into account in determining the taxable portion of any Social Security or railroad retirement benefits that you receive.

• Income paid from tax-exempt bonds whose proceeds are used to fund private, for-profit organizations may be subject to the federal alternative minimum tax.

• Distributions of capital gains and any investment income that is not exempt from federal income tax are taxable to you whether or not you reinvest these amounts in additional Fund shares.

• Distributions declared in December—if paid to you by the end of January—are taxable as if received in December.

• Any short-term capital gains distribution that you receive is taxable to you as ordinary income.

• If you redeem or exchange shares when the Fund has imposed a liquidity fee, then the amount you receive for your redemption will be reduced by the amount of the liquidity fee and will generally cause you to recognize a loss for tax purposes equal to the amount of that fee. If the Fund has imposed a liquidity fee, it is possible that the Fund may need to distribute to its remaining shareholders all or a portion of the amount of the fee collected. This distribution may be taxable to you as ordinary income or may constitute a non-taxable return of capital.

Income dividends and capital gains distributions that you receive, as well as your gains or losses from any sale or exchange of Fund shares, may be subject to state and local income taxes.

This prospectus provides general tax information only. Please consult your tax advisor for detailed information about any tax consequences for you.

General Information

Backup withholding. By law, Vanguard must withhold 24% of any taxable distributions or redemptions from your account if you do not:

• Provide your correct taxpayer identification number.

• Certify that the taxpayer identification number is correct.

• Confirm that you are not subject to backup withholding.

Similarly, Vanguard must withhold taxes from your account if the IRS instructs us to do so. The backup withholding rules may also apply to distributions that are designated as exempt-interest dividends.

Share Price

The NAV of Vanguard retail and government money market funds is expected to remain relatively stable. Instruments are purchased and managed with that goal in mind.

Vanguard fund share prices are published daily; share prices, along with money market fund yields, are available on our website at vanguard.com/prices.

Financial Highlights

Municipal Cash Management Fund


				Year Ended August 31,
For a Share Outstanding Throughout Each Period	2018	2017	2016¹	2015¹	2014¹
Net Asset Value, Beginning of Period	$100.01	$100.01	$100.00	$100.00	$100.00
Investment Operations
Net Investment Income	1.190	.718	.190	.040	.100
Net Realized and Unrealized Gain (Loss)
on Investments	—	—	.010	—	—
Total from Investment Operations	1.190	.718	.200	.040	.100
Distributions
Dividends from Net Investment Income	(1.190)	(.718)	(.190)	(.040)	(.100)
Distributions from Realized Capital Gains	—	—	—	—	—
Total Distributions	(1.190)	(.718)	(.190)	(.040)	(.100)
Net Asset Value, End of Period	$100.01	$100.01	$100.01	$100.00	$100.00
Total Return	1.20%	0.72%	0.20%	0.04%	0.06%
Ratios/Supplemental Data
Net Assets, End of Period (Millions)	$1,935	$2,456	$3,110	$3,197	$4,247
Ratio of Total Expenses to Average
Net Assets	0.01%	0.01%	0.01%	0.01%	0.01%
Ratio of Net Investment Income to Average
Net Assets	1.18%	0.72%	0.19%	0.04%	0.06%
1 Adjusted to reflect a 1-for-100 reverse share split as of the close of business on August 12, 2016.

Investing With Vanguard

Vanguard Municipal Cash Management Fund has been established by Vanguard as a cash management vehicle for the Vanguard funds and certain trusts and accounts managed by Vanguard or its affiliates. The Fund is not available to other investors. As a result of the Fund’s transition to a floating NAV, subscription orders in Vanguard Municipal Cash Management Fund can only be placed in dollars, while redemption orders can be placed in units or dollars. Vanguard reserves the right to change the availability of Vanguard Municipal Cash Management Fund or offer additional funds at any time without prior notice to shareholders.

Purchases, redemptions, and exchanges of shares issued by Vanguard Municipal Cash Management Fund are conducted by Vanguard or its affiliates on behalf of the participating funds, trusts, and accounts based on a determination of the participant’s daily cash management requirements. There is no minimum amount required to open, to maintain, or to add to an existing account.

Portfolio Holdings

Please consult the Fund’s Statement of Additional Information or our website for a description of the policies and procedures that govern disclosure of the Fund’s portfolio holdings.


Additional Information
	Inception	Vanguard	CUSIP
	Date	Fund Number	Number
Municipal Cash Management Fund	7/19/2004	1143	92202X308

CFA^®is a registered trademark owned by CFA Institute.

Glossary of Investment Terms

Capital Gains Distributions. Payments to mutual fund shareholders of gains realized on securities that a fund has sold at a profit, minus any realized losses.

Dividend Distributions. Payments to mutual fund shareholders of income from interest or dividends generated by a fund’s investments.

Floating Net Asset Value (NAV). A share price that fluctuates in response to the current market-based value of the securities in a fund’s underlying portfolio.

Municipal Bond. A bond issued by a state or local government or by other governmental authorities. Interest income from municipal bonds, and therefore dividend income from municipal bond funds, is generally free from federal income taxes and generally exempt from taxes in the state in which the bonds were issued.

Mutual Fund. An investment company that pools the money of many people and invests it in a variety of securities in an effort to achieve a specific objective over time.

Principal. The face value of a debt instrument or the amount of money put into an investment.

Securities. Stocks, bonds, money market instruments, and other investments.

Stable Net Asset Value (NAV). A share price that maintains a consistent value (e.g., $1.00 or $100.00) using special pricing and valuation conventions.

Total Return. A percentage change, over a specified time period, in a mutual fund’s net asset value, assuming the reinvestment of all distributions of dividends and capital gains.

Volatility. The fluctuations in value of a mutual fund or other security. The greater a fund’s volatility, the wider the fluctuations in its returns.

Yield. Income (interest or dividends) earned by an investment, expressed as a percentage of the investment’s price.

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Connect with Vanguard^®> vanguard.com

For More Information

If you would like more information about Vanguard Municipal Cash Management Fund, the following documents are available free upon request:

Annual/Semiannual Reports to Shareholders

Statement of Additional Information (SAI)

The SAI provides more detailed information about the Fund and is incorporated by reference into (and thus legally a part of) this prospectus.

If you are an individual investor:

The Vanguard Group

Investor Information Department P.O. Box 2900 Valley Forge, PA 19482-2900

Telephone: 800-662-7447; Text telephone for people with hearing impairment: 800-749-7273

If you are a client of Vanguard’s Institutional Division:

The Vanguard Group

Institutional Investor Information Department P.O. Box 2900 Valley Forge, PA 19482-2900 Telephone: 888-809-8102; Text telephone for people with hearing impairment: 800-749-7273

If you are a current Vanguard shareholder and would like information about your account, account transactions, and/or account statements, please call:

Client Services Department

Telephone: 800-662-2739; Text telephone for people with hearing impairment: 800-749-7273

Information Provided by the Securities and Exchange Commission (SEC)

Fund’s Investment Company Act file number: 811-21478

Vanguard Marketing Corporation, Distributor.

I 1143 122018

PART B

VANGUARD^®CMT FUNDS

STATEMENT OF ADDITIONAL INFORMATION

December 20, 2018

This Statement of Additional Information is not a prospectus but should be read in conjunction with a Fund’s current prospectus (dated December 20, 2018). To obtain, without charge, a prospectus or the most recent Annual Report to Shareholders, which contains the Fund’s financial statements as hereby incorporated by reference, please contact The Vanguard Group, Inc. (Vanguard).

Phone: Institutional Investor Information Department at 888-809-8102 Online: vanguard.com


TABLE OF CONTENTS
Description of the Trust	B-1
Fundamental Policies	B-3
Investment Strategies, Risks, and Nonfundamental Policies	B-4
Share Price	B-17
Purchase and Redemption of Shares	B-18
Management of the Funds	B-19
Investment Advisory and Other Services	B-31
Portfolio Transactions	B-32
Vanguard’s Proxy Voting Guidelines	B-34
Financial Statements	B-40

DESCRIPTION OF THE TRUST

Vanguard CMT Funds (the Trust) currently offers the following funds:


	Investor
Fund¹	Shares
Vanguard Market Liquidity Fund	Yes
Vanguard Municipal Cash Management Fund	Yes
1 Individually, a Fund; collectively, the Funds.

The Trust has the ability to offer additional funds or classes of shares. There is no limit on the number of full and fractional shares that may be issued for a single fund or class of shares.

Each Fund offers only one class of shares. Throughout this document, any references to “class” indicate how a Fund would operate if, in the future, the Fund issued more than one class of shares.

Organization

The Trust was organized as a Delaware statutory trust in 2003. The Trust changed its name from Vanguard Cash Management Trust to Vanguard CMT Funds in 2004. The Trust is registered with the United States Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. Both Funds within the Trust are classified as diversified within the meaning of the 1940 Act.

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Service Providers

Custodians. The Bank of New York Mellon, 240 Greenwich Street, New York, NY 10286 and State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111 (for Vanguard Market Liquidity Fund); and State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111 (for Vanguard Municipal Cash Management Fund), serve as the Funds’ custodians. The custodians are responsible for maintaining the Funds‘ assets, keeping all necessary accounts and records of Fund assets, and appointing any foreign subcustodians or foreign securities depositories. The Bank of New York Mellon and State Street Bank and Trust Company also may serve as special purpose custodians of certain assets in connection with repurchase agreement transactions for Vanguard Market Liquidity Fund.

Independent Registered Public Accounting Firm. PricewaterhouseCoopers LLP, Two Commerce Square, Suite 1800, 2001 Market Street, Philadelphia, PA 19103-7042, serves as the Funds‘ independent registered public accounting firm. The independent registered public accounting firm audits the Funds‘ annual financial statements and provides other related services.

Transfer and Dividend-Paying Agent. The Funds‘ transfer agent and dividend-paying agent is Vanguard, P.O. Box 2600, Valley Forge, PA 19482.

Characteristics of the Funds‘ Shares

Restrictions on Holding or Disposing of Shares. There are no restrictions on the right of shareholders to retain or dispose of a Fund’s shares, other than those described in the Fund’s current prospectus and elsewhere in this Statement of Additional Information. Each Fund or class may be terminated by reorganization into another mutual fund or class or by liquidation and distribution of the assets of the Fund or class. Unless terminated by reorganization or liquidation, each Fund and share class will continue indefinitely.

Shareholder Liability. The Trust is organized under Delaware law, which provides that shareholders of a statutory trust are entitled to the same limitations of personal liability as shareholders of a corporation organized under Delaware law. This means that a shareholder of a Fund generally will not be personally liable for payment of the Fund’s debts. Some state courts, however, may not apply Delaware law on this point. We believe that the possibility of such a situation arising is remote.

Dividend Rights. The shareholders of each class of a Fund are entitled to receive any dividends or other distributions declared by the Fund for each such class. No shares of a Fund have priority or preference over any other shares of the Fund with respect to distributions. Distributions will be made from the assets of the Fund and will be paid ratably to all shareholders of a particular class according to the number of shares of the class held by shareholders on the record date. The amount of dividends per share may vary between separate share classes of the Fund based upon differences in the net asset values of the different classes and differences in the way that expenses are allocated between share classes pursuant to a multiple class plan approved by the Fund’s board of trustees.

Voting Rights. Shareholders are entitled to vote on a matter if (1) the matter concerns an amendment to the Declaration of Trust that would adversely affect to a material degree the rights and preferences of the shares of a Fund or any class; (2) the trustees determine that it is necessary or desirable to obtain a shareholder vote; (3) a merger or consolidation, share conversion, share exchange, or sale of assets is proposed and a shareholder vote is required by the 1940 Act to approve the transaction; or (4) a shareholder vote is required under the 1940 Act. The 1940 Act requires a shareholder vote under various circumstances, including to elect or remove trustees upon the written request of shareholders representing 10% or more of a Fund’s net assets, to change any fundamental policy of a Fund (please see Fundamental Policies), and to enter into certain merger transactions. Unless otherwise required by applicable law, shareholders of a Fund receive one vote for each dollar of net asset value owned on the record date and a fractional vote for each fractional dollar of net asset value owned on the record date. However, only the shares of the Fund or class affected by a particular matter are entitled to vote on that matter. In addition, each class has exclusive voting rights on any matter submitted to shareholders that relates solely to that class, and each class has separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of another. Voting rights are noncumulative and cannot be modified without a majority vote by the shareholders.

Liquidation Rights. In the event that a Fund is liquidated, shareholders will be entitled to receive a pro rata share of the Fund’s net assets. In the event that a class of shares is liquidated, shareholders of that class will be entitled to receive a

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pro rata share of the Fund’s net assets that are allocated to that class. Shareholders may receive cash, securities, or a combination of the two.

Preemptive Rights. There are no preemptive rights associated with the Funds‘ shares.

Conversion Rights. There are no conversion rights associated with the Funds‘ shares.

Redemption Provisions. Each Fund’s redemption provisions are described in its current prospectus and elsewhere in this Statement of Additional Information.

Sinking Fund Provisions. The Funds have no sinking fund provisions.

Calls or Assessment. Each Fund’s shares, when issued, are fully paid and non-assessable.

Tax Status of the Funds

Each Fund expects to qualify each year for treatment as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended (the IRC). This special tax status means that the Fund will not be liable for federal tax on income and capital gains distributed to shareholders. In order to preserve its tax status, each Fund must comply with certain requirements relating to the source of its income and the diversification of its assets. If a Fund fails to meet these requirements in any taxable year, the Fund will, in some cases, be able to cure such failure, including by paying a fund-level tax, paying interest, making additional distributions, and/or disposing of certain assets. If the Fund is ineligible to or otherwise does not cure such failure for any year, it will be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, will be taxable to shareholders as ordinary income. In addition, a Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make substantial distributions before regaining its tax status as a regulated investment company.

Each Fund may declare a capital gain dividend consisting of the excess (if any) of net realized long-term capital gains over net realized short-term capital losses. Net capital gains for a fiscal year are computed by taking into account any capital loss carryforwards of the Fund. For Fund fiscal years beginning on or after December 22, 2010, capital losses may be carried forward indefinitely and retain their character as either short-term or long-term. Under prior law, net capital losses could be carried forward for eight tax years and were treated as short-term capital losses. A Fund is required to use capital losses arising in fiscal years beginning on or after December 22, 2010, before using capital losses arising in fiscal years beginning prior to December 22, 2010.

FUNDAMENTAL POLICIES

Each Fund is subject to the following fundamental investment policies, which cannot be changed in any material way without the approval of the holders of a majority of the Fund’s shares. For these purposes, a “majority” of shares means shares representing the lesser of (1) 67% or more of the Fund’s net assets voted, so long as shares representing more than 50% of the Fund’s net assets are present or represented by proxy or (2) more than 50% of the Fund’s net assets.

80% Policy. Vanguard Municipal Cash Management Fund will invest at least 80% of its assets in tax-exempt municipal securities (including securities that may be subject to alternative minimum tax (AMT)) under normal market conditions.

Borrowing. Each Fund may borrow money only as permitted by the 1940 Act or other governing statute, by the Rules thereunder, or by the SEC or other regulatory agency with authority over the Fund.

Commodities. Each Fund may invest in commodities only as permitted by the 1940 Act or other governing statute, by the Rules thereunder, or by the SEC or other regulatory agency with authority over the Fund.

Diversification. Each Fund may not change its classification as a “management company” or its subclassifications as an “open-end company” and as a “diversified company” as each such term is defined in the 1940 Act.

Industry Concentration. Vanguard Market Liquidity Fund will concentrate its investments in the securities of issuers whose principal business activities are in the financial services industry. For the purposes of this policy, the financial services industry is deemed to include the group of industries within the financial services sector. In addition, Vanguard Market Liquidity Fund reserves the right to concentrate its investments in government securities, as defined in the 1940 Act.

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Vanguard Municipal Cash Management Fund will not concentrate its investments in the securities of issuers whose principal business activities are in the same industry.

Loans. Each Fund may make loans to another person only as permitted by the 1940 Act or other governing statute, by the Rules thereunder, or by the SEC or other regulatory agency with authority over the Fund.

Real Estate. Each Fund may not invest directly in real estate unless it is acquired as a result of ownership of securities or other instruments. This restriction shall not prevent the Fund from investing in securities or other instruments (1) issued by companies that invest, deal, or otherwise engage in transactions in real estate or (2) backed or secured by real estate or interests in real estate.

Senior Securities. Each Fund may not issue senior securities except as permitted by the 1940 Act or other governing statute, by the Rules thereunder, or by the SEC or other regulatory agency with authority over the Fund.

Underwriting. Each Fund may not act as an underwriter of another issuer’s securities, except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933 (the 1933 Act), in connection with the purchase and sale of portfolio securities.

Compliance with the fundamental policies previously described is generally measured at the time the securities are purchased. Unless otherwise required by the 1940 Act (as is the case with borrowing), if a percentage restriction is adhered to at the time the investment is made, a later change in percentage resulting from a change in the market value of assets will not constitute a violation of such restriction. All fundamental policies must comply with applicable regulatory requirements. For more details, see Investment Strategies, Risks, and Nonfundamental Policies.

INVESTMENT STRATEGIES, RISKS, AND NONFUNDAMENTAL POLICIES

Some of the investment strategies and policies described on the following pages and in each Fund’s prospectus set forth percentage limitations on a Fund’s investment in, or holdings of, certain securities or other assets. Unless otherwise required by law, compliance with these strategies and policies will be determined immediately after the acquisition of such securities or assets by the Fund. Subsequent changes in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the Fund’s investment strategies and policies.

The following investment strategies, risks, and policies supplement each Fund’s investment strategies, risks, and policies set forth in the prospectus. With respect to the different investments discussed as follows, a Fund may acquire such investments to the extent consistent with its investment strategies and policies.

Borrowing. A fund’s ability to borrow money is limited by its investment policies and limitations; by the 1940 Act; and by applicable exemptions, no-action letters, interpretations, and other pronouncements issued from time to time by the SEC and its staff or any other regulatory authority with jurisdiction. Under the 1940 Act, a fund is required to maintain continuous asset coverage (that is, total assets including borrowings, less liabilities exclusive of borrowings) of 300% of the amount borrowed, with an exception for borrowings not in excess of 5% of the fund’s total assets made for temporary or emergency purposes. Any borrowings for temporary purposes in excess of 5% of the fund’s total assets must maintain continuous asset coverage. If the 300% asset coverage should decline as a result of market fluctuations or for other reasons, a fund may be required to sell some of its portfolio holdings within three days (excluding Sundays and holidays) to reduce the debt and restore the 300% asset coverage, even though it may be disadvantageous from an investment standpoint to sell securities at that time.

Borrowing will tend to exaggerate the effect on net asset value of any increase or decrease in the market value of a fund’s portfolio. Money borrowed will be subject to interest costs that may or may not be recovered by earnings on the securities purchased with the proceeds of such borrowing. A fund also may be required to maintain minimum average balances in connection with a borrowing or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.

The SEC takes the position that transactions that have a leveraging effect on the capital structure of a fund or are economically equivalent to borrowing can be viewed as constituting a form of borrowing by the fund for purposes of the 1940 Act. These transactions can include entering into reverse repurchase agreements; engaging in mortgage-dollar-roll transactions; selling securities short (other than short sales “against-the-box”); buying and selling certain derivatives (such as futures contracts); selling (or writing) put and call options; engaging in sale-buybacks; entering into firm-commitment and standby-commitment agreements; engaging in when-issued, delayed-delivery, or forward-commitment transactions; and participating in other similar trading practices. (Additional discussion about a number of these transactions can be

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found on the following pages.) A borrowing transaction will not be considered to constitute the issuance, by a fund, of a “senior security,” as that term is defined in Section 18(g) of the 1940 Act, and therefore such transaction will not be subject to the 300% asset coverage requirement otherwise applicable to borrowings by a fund, if the fund maintains an offsetting financial position; segregates liquid assets (with such liquidity determined by the advisor in accordance with procedures established by the board of trustees) equal (as determined on a daily mark-to-market basis) in value to the fund’s potential economic exposure under the borrowing transaction; or otherwise “covers” the transaction in accordance with applicable SEC guidance (collectively, “covers” the transaction). A fund may have to buy or sell a security at a disadvantageous time or price in order to cover a borrowing transaction. In addition, segregated assets may not be available to satisfy redemptions or to fulfill other obligations.

Cybersecurity Risks. The increased use of technology to conduct business could subject a fund and its third-party service providers (including, but not limited to, investment advisors and custodians) to risks associated with cybersecurity. In general, a cybersecurity incident can occur as a result of a deliberate attack designed to gain unauthorized access to digital systems. If the attack is successful, an unauthorized person or persons could misappropriate assets or sensitive information, corrupt data, or cause operational disruption. A cybersecurity incident could also occur unintentionally if, for example, an authorized person inadvertently released proprietary or confidential information. Vanguard has developed robust technological safeguards and business continuity plans to prevent, or reduce the impact of, potential cybersecurity incidents. Additionally, Vanguard has a process for assessing the information security and/or cybersecurity programs implemented by a fund’s third-party service providers, which helps minimize the risk of potential incidents. Despite these measures, a cybersecurity incident still has the potential to disrupt business operations, which could negatively impact a fund and/or its shareholders. Some examples of negative impacts that could occur as a result of a cybersecurity incident include, but are not limited to, the following: a fund may be unable to calculate its net asset value (NAV), a fund’s shareholders may be unable to transact business, a fund may be unable to process transactions on behalf of its shareholders, or a fund may be unable to safeguard its data or the personal information of its shareholders.

Debt Securities. A debt security, sometimes called a fixed income security, consists of a certificate or other evidence of a debt (secured or unsecured) on which the issuing company or governmental body promises to pay the holder thereof a fixed, variable, or floating rate of interest for a specified length of time and to repay the debt on the specified maturity date. Some debt securities, such as zero-coupon bonds, do not make regular interest payments but are issued at a discount to their principal or maturity value. Debt securities include a variety of fixed income obligations, including, but not limited to, corporate bonds, government securities, municipal securities, convertible securities, mortgage-backed securities, and asset-backed securities. Debt securities include investment-grade securities, non-investment-grade securities, and unrated securities. Debt securities are subject to a variety of risks, such as interest rate risk, income risk, call risk, prepayment risk, extension risk, inflation risk, credit risk, liquidity risk, and (in the case of foreign securities) country risk and currency risk. The reorganization of an issuer under the federal bankruptcy laws or an out-of-court restructuring of an issuer’s capital structure may result in the issuer’s debt securities being cancelled without repayment, repaid only in part, or repaid in part or in whole through an exchange thereof for any combination of cash, debt securities, convertible securities, equity securities, or other instruments or rights in respect to the same issuer or a related entity.

Debt Securities—Commercial Paper. Commercial paper refers to short-term, unsecured promissory notes issued by corporations to finance short-term credit needs. It is usually sold on a discount basis and has a maturity at the time of issuance not exceeding 9 months. High-quality commercial paper typically has the following characteristics: (1) liquidity ratios are adequate to meet cash requirements; (2) long-term senior debt is also high credit quality; (3) the issuer has access to at least two additional channels of borrowing; (4) basic earnings and cash flow have an upward trend with allowance made for unusual circumstances; (5) typically, the issuer’s industry is well established and the issuer has a strong position within the industry; and (6) the reliability and quality of management are unquestioned. In assessing the credit quality of commercial paper issuers, the following factors may be considered: (1) evaluation of the management of the issuer; (2) economic evaluation of the issuer’s industry or industries and the appraisal of speculative-type risks that may be inherent in certain areas; (3) evaluation of the issuer’s products in relation to competition and customer acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over a period of ten years; (7) financial strength of a parent company and the relationships that exist with the issuer; and (8) recognition by the management of obligations that may be present or may arise as a result of public-interest questions and preparations to meet such obligations. The short-term nature of a commercial paper investment makes it less susceptible to interest rate risk than longer-term fixed income securities because interest rate risk typically increases as maturity lengths

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increase. Additionally, an issuer may expect to repay commercial paper obligations at maturity from the proceeds of the issuance of new commercial paper. As a result, investment in commercial paper is subject to the risk the issuer cannot issue enough new commercial paper to satisfy its outstanding commercial paper payment obligations, also known as rollover risk. Commercial paper may suffer from reduced liquidity due to certain circumstances, in particular, during stressed markets. In addition, as with all fixed income securities, an issuer may default on its commercial paper obligation.

Variable-amount master-demand notes are demand obligations that permit the investment of fluctuating amounts at varying market rates of interest pursuant to an arrangement between the issuer and a commercial bank acting as agent for the payees of such notes, whereby both parties have the right to vary the amount of the outstanding indebtedness on the notes. Because variable-amount master-demand notes are direct lending arrangements between a lender and a borrower, it is not generally contemplated that such instruments will be traded, and there is no secondary market for these notes, although they are redeemable (and thus immediately repayable by the borrower) at face value, plus accrued interest, at any time. In connection with a fund’s investment in variable-amount master-demand notes, Vanguard’s investment management staff will monitor, on an ongoing basis, the earning power, cash flow, and other liquidity ratios of the issuer, along with the borrower’s ability to pay principal and interest on demand.

Debt Securities—U.S. Government Securities. The term “U.S. government securities” refers to a variety of debt securities that are issued or guaranteed by the U.S. Treasury, by various agencies of the U.S. government, or by various instrumentalities that have been established or sponsored by the U.S. government. The term also refers to repurchase agreements collateralized by such securities.

U.S. Treasury securities are backed by the full faith and credit of the U.S. government, meaning that the U.S. government is required to repay the principal in the event of default. Other types of securities issued or guaranteed by federal agencies and U.S. government-sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. government. The U.S. government, however, does not guarantee the market price of any U.S. government securities. In the case of securities not backed by the full faith and credit of the U.S. government, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the United States itself in the event the agency or instrumentality does not meet its commitment.

Some of the U.S. government agencies that issue or guarantee securities include the Government National Mortgage Association, the Export-Import Bank of the United States, the Federal Housing Administration, the Maritime Administration, the Small Business Administration, and the Tennessee Valley Authority. An instrumentality of the U.S. government is a government agency organized under federal charter with government supervision. Instrumentalities issuing or guaranteeing securities include, among others, the Federal Deposit Insurance Corporation, the Federal Home Loan Banks, and the Federal National Mortgage Association.

Debt Securities—Variable and Floating Rate Securities. Variable and floating rate securities are debt securities that provide for periodic adjustments in the interest rate paid on the security. Variable rate securities provide for a specified periodic adjustment in the interest rate, while floating rate securities have interest rates that change whenever there is a change in a designated benchmark rate or the issuer’s credit quality. There is a risk that the current interest rate on variable and floating rate securities may not accurately reflect current market interest rates or adequately compensate the holder for the current creditworthiness of the issuer. Some variable or floating rate securities are structured with liquidity features such as (1) put options or tender options that permit holders (sometimes subject to conditions) to demand payment of the unpaid principal balance plus accrued interest from the issuers or certain financial intermediaries or (2) auction-rate features, remarketing provisions, or other maturity-shortening devices designed to enable the issuer to refinance or redeem outstanding debt securities (market-dependent liquidity features). Variable or floating rate securities that include market-dependent liquidity features may have greater liquidity risk than other securities. The greater liquidity risk may exist, for example, because of the failure of a market-dependent liquidity feature to operate as intended (as a result of the issuer’s declining creditworthiness, adverse market conditions, or other factors) or the inability or unwillingness of a participating broker-dealer to make a secondary market for such securities. As a result, variable or floating rate securities that include market-dependent liquidity features may lose value, and the holders of such securities may be required to retain them until the later of the repurchase date, the resale date, or the date of maturity. Such liquidity risk may be heightened for certain types of variable rate securities called “extendible municipal securities,” in which the holder of a security is required to retain the investment for the length of the remarketing period (the time frame in which a remarketing agent seeks a new buyer for the security). Extendible municipal securities typically have extended remarketing periods of up to 13 months

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after a tender date. A demand instrument with a demand notice exceeding seven days may be considered illiquid if there is no secondary market for such security. Extendible municipal securities that have been “extended” into a longer remarketing period may also be considered illiquid.

Derivatives. A derivative is a financial instrument that has a value based on—or “derived from”—the values of other assets, reference rates, or indexes. Derivatives may relate to a wide variety of underlying references, such as commodities, stocks, bonds, interest rates, currency exchange rates, and related indexes. Derivatives include futures contracts and options on futures contracts, certain forward-commitment transactions, options on securities, caps, floors, collars, swap agreements, and certain other financial instruments. Some derivatives, such as futures contracts and certain options, are traded on U.S. commodity and securities exchanges, while other derivatives, such as swap agreements, may be privately negotiated and entered into in the over-the-counter market (OTC Derivatives) or may be cleared through a clearinghouse (Cleared Derivatives) and traded on an exchange or swap execution facility. As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), certain swap agreements, such as certain standardized credit default and interest rate swap agreements, must be cleared through a clearinghouse and traded on an exchange or swap execution facility. This could result in an increase in the overall costs of such transactions. While the intent of derivatives regulatory reform is to mitigate risks associated with derivatives markets, the new regulations could, among other things, increase liquidity and decrease pricing for more standardized products while decreasing liquidity and increasing pricing for less standardized products. The risks associated with the use of derivatives are different from, and possibly greater than, the risks associated with investing directly in the securities or assets on which the derivatives are based.

Derivatives may be used for a variety of purposes including—but not limited to—hedging, managing risk, seeking to stay fully invested, seeking to reduce transaction costs, seeking to simulate an investment in equity or debt securities or other investments, and seeking to add value by using derivatives to more efficiently implement portfolio positions when derivatives are favorably priced relative to equity or debt securities or other investments. Some investors may use derivatives primarily for speculative purposes while other uses of derivatives may not constitute speculation. There is no assurance that any derivatives strategy used by a fund’s advisor will succeed. The other parties to the funds’ OTC Derivatives contracts (usually referred to as “counterparties”) will not be considered the issuers thereof for purposes of certain provisions of the 1940 Act and the IRC, although such OTC Derivatives may qualify as securities or investments under such laws. The funds’ advisors, however, will monitor and adjust, as appropriate, the funds’ credit risk exposure to OTC Derivative counterparties.

Derivative products are highly specialized instruments that require investment techniques and risk analyses different from those associated with stocks, bonds, and other traditional investments. The use of a derivative requires an understanding not only of the underlying instrument but also of the derivative itself, without the benefit of observing the performance of the derivative under all possible market conditions.

When the fund enters into a Cleared Derivative, an initial margin deposit with a Futures Commission Merchant (FCM) is required. Initial margin deposits are typically calculated as an amount equal to the volatility in market value of a Cleared Derivative over a fixed period. If the value of the fund’s Cleared Derivatives declines, the fund will be required to make additional “variation margin” payments to the FCM to settle the change in value. If the value of the fund’s Cleared Derivatives increases, the FCM will be required to make additional “variation margin” payments to the fund to settle the change in value. This process is known as “marking-to-market” and is calculated on a daily basis.

For OTC Derivatives, the fund is subject to the risk that a loss may be sustained as a result of the insolvency or bankruptcy of the counterparty or the failure of the counterparty to make required payments or otherwise comply with the terms of the contract. Additionally, the use of credit derivatives can result in losses if a fund’s advisor does not correctly evaluate the creditworthiness of the issuer on which the credit derivative is based.

Derivatives may be subject to liquidity risk, which exists when a particular derivative is difficult to purchase or sell. If a derivative transaction is particularly large or if the relevant market is illiquid (as is the case with certain OTC Derivatives), it may not be possible to initiate a transaction or liquidate a position at an advantageous time or price.

Derivatives may be subject to pricing or “basis” risk, which exists when a particular derivative becomes extraordinarily expensive relative to historical prices or the prices of corresponding cash market instruments. Under certain market conditions, it may not be economically feasible to initiate a transaction or liquidate a position in time to avoid a loss or take advantage of an opportunity.

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Because certain derivatives have a leverage component, adverse changes in the value or level of the underlying asset, reference rate, or index can result in a loss substantially greater than the amount invested in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. A derivative transaction will not be considered to constitute the issuance, by a fund, of a “senior security,” as that term is defined in Section 18(g) of the 1940 Act, and therefore such transaction will not be subject to the 300% asset coverage requirement otherwise applicable to borrowings by a fund, if the fund covers the transaction in accordance with the requirements described under the heading “Borrowing.”

Like most other investments, derivative instruments are subject to the risk that the market value of the instrument will change in a way detrimental to a fund’s interest. A fund bears the risk that its advisor will incorrectly forecast future market trends or the values of assets, reference rates, indexes, or other financial or economic factors in establishing derivative positions for the fund. If the advisor attempts to use a derivative as a hedge against, or as a substitute for, a portfolio investment, the fund will be exposed to the risk that the derivative will have or will develop imperfect or no correlation with the portfolio investment. This could cause substantial losses for the fund. Although hedging strategies involving derivative instruments can reduce the risk of loss, they can also reduce the opportunity for gain or even result in losses by offsetting favorable price movements in other fund investments. Many derivatives (in particular, OTC Derivatives) are complex and often valued subjectively. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to a fund.

Each Fund intends to comply with Rule 4.5 under the Commodity Exchange Act (CEA), under which a mutual fund may be excluded from the definition of the term “Commodity Pool Operator” (CPO) if the fund meets certain conditions such as limiting its investments in certain CEA-regulated instruments (for example, futures, options, or swaps) and complying with certain marketing restrictions. Accordingly, Vanguard is not subject to registration or regulation as a CPO with respect to the Funds under the CEA.

Eurodollar and Yankee Obligations. Eurodollar bank obligations are dollar-denominated certificates of deposit and time deposits issued outside the U.S. capital markets by foreign branches of U.S. banks and by foreign banks. Yankee bank obligations are dollar-denominated obligations issued in the U.S. capital markets by foreign banks.

Eurodollar and Yankee obligations are subject to the same risks that pertain to domestic issuers, most notably income risk (and, to a lesser extent, credit risk, market risk, and liquidity risk). Additionally, Eurodollar (and, to a limited extent, Yankee) obligations are subject to certain sovereign risks. One such risk is the possibility that a sovereign country might prevent capital, in the form of dollars, from flowing across its borders. Other risks include adverse political and economic developments, the extent and quality of government regulation of financial markets and institutions, the imposition of foreign withholding taxes, and expropriation or nationalization of foreign issuers. However, Eurodollar and Yankee obligations will undergo the same type of credit analysis as domestic issuers in which a Vanguard fund invests, and they will have at least the same financial strength as the domestic issuers approved for the fund.

Interfund Borrowing and Lending. The SEC has granted an exemption permitting registered open-end Vanguard funds to participate in Vanguard’s interfund lending program. This program allows the Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes. The program is subject to a number of conditions, including, among other things, the requirements that (1) no fund may borrow or lend money through the program unless it receives a more favorable interest rate than is typically available from a bank for a comparable transaction, (2) no fund may lend money if the loan would cause its aggregate outstanding loans through the program to exceed 15% of its net assets at the time of the loan, and (3) a fund’s interfund loans to any one fund shall not exceed 5% of the lending fund’s net assets. In addition, a Vanguard fund may participate in the program only if and to the extent that such participation is consistent with the fund’s investment objective and investment policies. The boards of trustees of the Vanguard funds are responsible for overseeing the interfund lending program. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs.

Money Market Fund Reform. The money market fund reforms adopted by the SEC in July 2014 became effective on October 14, 2016. The reforms impact money market funds differently depending on the types of investors permitted to invest in a fund, the types of securities in which a fund may invest, and the principal investments of a money market fund. The reforms impose new liquidity-related requirements on money market funds (including the potential implementation of liquidity fees and redemption gates). Other changes required by the reforms relate to diversification, disclosure, and stress testing requirements. The imposition and termination of a liquidity fee or redemption gate and/or the provision of financial support by an affiliated person of a money market fund will be reported by a money market

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fund to the SEC on Form N-CR. A money market fund’s designation as institutional, retail, or government determines whether the fund is required to have a floating NAV or is permitted to have a stable NAV. These changes may have significant adverse effects upon a money market fund’s investment strategy, fees and expenses, portfolio (including the liquidity of investments), and return potential.

Municipal Bonds. Municipal bonds are debt obligations issued by states, municipalities, U.S. jurisdictions or territories, and other political subdivisions and by agencies, authorities, and instrumentalities of states and multistate agencies or authorities (collectively, municipalities). Typically, the interest payable on municipal bonds is, in the opinion of bond counsel to the issuer at the time of issuance, exempt from federal income tax.

Municipal bonds include securities from a variety of sectors, each of which has unique risks, and can be divided into governmental bonds (i.e., bonds issued to provide funding for governmental projects, such as public roads or schools) and conduit bonds (i.e., bonds issued to provide funding for a third-party permitted to use municipal bond proceeds, such as airports or hospitals). Vanguard Municipal Cash Management Fund will not concentrate in any one industry; tax-exempt securities issued by states, municipalities, and their political subdivisions are not considered to be part of an industry. However, if a municipal bond’s income is derived from a specific project, the securities will be considered to be from the industry of that project. Municipal bonds include, but are not limited to, general obligation bonds, limited obligation bonds, and revenue bonds, including industrial development bonds issued pursuant to federal tax law.

General obligation bonds are secured by the issuer’s pledge of its full faith, credit, and taxing power for the payment of principal and interest. Limited obligation bonds are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source. Revenue or special tax bonds are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other tax, but not from general tax revenues.

Revenue bonds involve the credit risk of the underlying project or enterprise (or its corporate user) rather than the credit risk of the issuing municipality. Under the IRC, certain limited obligation bonds are considered “private activity bonds,” and interest paid on such bonds is treated as an item of tax preference for purposes of calculating federal alternative minimum tax liability. Tax-exempt private activity bonds and industrial development bonds generally are also classified as revenue bonds and thus are not payable from the issuer’s general revenues. The credit and quality of private activity bonds and industrial development bonds are usually related to the credit of the corporate user of the facilities. Payment of interest on and repayment of principal of such bonds are the responsibility of the corporate user (and/or any guarantor). Some municipal bonds may be issued as variable or floating rate securities and may incorporate market-dependent liquidity features (see discussion of “Debt Securities—Variable and Floating Rate Securities”). A tax-exempt fund will generally invest only in securities deemed tax-exempt by a nationally recognized bond counsel, but there is no guarantee that the interest payments on municipal bonds will continue to be tax-exempt for the life of the bonds.

Some longer-term municipal bonds give the investor a “put option,” which is the right to sell the security back to the issuer at par (face value) prior to maturity, within a specified number of days following the investor’s request—usually one to seven days. This demand feature enhances a security’s liquidity by shortening its maturity and enables it to trade at a price equal to or very close to par. If a demand feature terminates prior to being exercised, a fund would hold the longer-term security, which could experience substantially more volatility. Municipal bonds that are issued as variable or floating rate securities incorporating market-dependent liquidity features may have greater liquidity risk than other municipal bonds (see discussion of “Debt Securities—Variable and Floating Rate Securities”).

Some municipal bonds feature credit enhancements, such as lines of credit, letters of credit, municipal bond insurance, and standby bond purchase agreements (SBPAs). SBPAs include lines of credit that are issued by a third party, usually a bank, to enhance liquidity and ensure repayment of principal and any accrued interest if the underlying municipal bond should default. Municipal bond insurance (which is usually purchased by the bond issuer from a private, nongovernmental insurance company) provides an unconditional and irrevocable guarantee that the insured bond’s principal and interest will be paid when due. Insurance does not guarantee the price of the bond or the share price of any fund. The credit quality of an insured bond reflects the higher of the credit quality of the insurer, based on its claims-paying ability, or the credit quality of the underlying bond issuer or obligor. The obligation of a municipal bond insurance company to pay a claim extends over the life of each insured bond. Although defaults on insured municipal bonds have been historically low and municipal bond insurers historically have met their claims, there is no assurance this will continue. A higher-than-expected default rate could strain the insurer’s loss reserves and adversely affect its ability to pay claims to bondholders. The number of municipal bond insurers is relatively small, and not all of them are assessed as

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high credit quality. An SBPA can include a liquidity facility that is provided to pay the purchase price of any bonds that cannot be remarketed. The obligation of the liquidity provider (usually a bank) is only to advance funds to purchase tendered bonds that cannot be remarketed and does not cover principal or interest under any other circumstances. The liquidity provider’s obligations under the SBPA are usually subject to numerous conditions, including the continued creditworthiness of the underlying borrower or bond issuer.

Municipal bonds also include tender option bonds, which are municipal derivatives created by dividing the income stream provided by an underlying municipal bond to create two securities issued by a special-purpose trust, one short-term and one long-term. The interest rate on the short-term component is periodically reset. The short-term component has negligible interest rate risk, while the long-term component has all of the interest rate risk of the original bond. After income is paid on the short-term securities at current rates, the residual income goes to the long-term securities. Therefore, rising short-term interest rates result in lower income for the longer-term portion, and vice versa. The longer-term components can be very volatile and may be less liquid than other municipal bonds of comparable maturity. These securities have been developed in the secondary market to meet the demand for short-term, tax-exempt securities.

Municipal securities also include a variety of structures geared toward accommodating municipal-issuer short-term cash-flow requirements. These structures include, but are not limited to, general market notes, commercial paper, put bonds, and variable-rate demand obligations (VRDOs). VRDOs comprise a significant percentage of the outstanding debt in the short-term municipal market. VRDOs can be structured to provide a wide range of maturity options (1 day to over 360 days) to the underlying issuing entity and are typically issued at par. The longer the maturity option, the greater the degree of liquidity risk (the risk of not receiving an asking price of par or greater) and reinvestment risk (the risk that the proceeds from maturing bonds must be reinvested at a lower interest rate).

Although most municipal bonds are exempt from federal income tax, some are not. Taxable municipal bonds include Build America Bonds (BABs). The borrowing costs of BABs are subsidized by the federal government, but BABs are subject to state and federal income tax. BABs were created pursuant to the American Recovery and Reinvestment Act of 2009 (ARRA) to offer an alternative form of financing to state and local governments whose primary means for accessing the capital markets had been through the issuance of tax-exempt municipal bonds. BABs also include Recovery Zone Economic Development Bonds, which are subsidized more heavily by the federal government than other BABs and are designed to finance certain types of projects in distressed geographic areas.

Under ARRA, an issuer of a BAB is entitled to receive payments from the U.S. Treasury over the life of the BAB equal to 35% of the interest paid (or 45% of the interest paid in the case of a Recovery Zone Economic Development Bond). For example, if a state or local government were to issue a BAB at a taxable interest rate of 10% of the par value of the bond, the U.S. Treasury would make a payment directly to the issuing government of 35% of that interest (3.5% of the par value of the bond) or 45% of the interest (4.5% of the par value of the bond) in the case of a Recovery Zone Economic Development Bond. Thus, the state or local government’s net borrowing cost would be 6.5% or 5.5%, respectively, on BABs that pay 10% interest. In other cases, holders of a BAB receive a 35% or 45% tax credit, respectively. The BAB program expired on December 31, 2010. BABs outstanding prior to the expiration of the program continue to be eligible for the federal interest rate subsidy or tax credit, which continues for the life of the BABs; however, the federal interest rate subsidy or tax credit has been reduced by the government sequester. Additionally, bonds issued following expiration of the program are not eligible for federal payment or tax credit. In addition to BABs, a fund may invest in other municipal bonds that pay taxable interest.

The reorganization under the federal bankruptcy laws of an issuer of, or payment obligor with respect to, municipal bonds may result in the municipal bonds being canceled without repayment; repaid only in part; or repaid in part or whole through an exchange thereof for any combination of cash, municipal bonds, debt securities, convertible securities, equity securities, or other instruments or rights in respect to the same issuer or payment obligor or a related entity. Certain issuers are not eligible to file for bankruptcy.

Municipal Bonds—Risks. Municipal bonds are subject to credit risk. The yields of municipal bonds depend on, among other things, general money market conditions, conditions in the municipal bond market, size of a particular offering, maturity of the obligation, and credit quality of the issue. Consequently, municipal bonds with the same maturity, coupon, and credit quality may have different yields, while municipal bonds of the same maturity and coupon, but with different credit quality, may have the same yield. It is the responsibility of a fund’s investment management advisor to appraise independently the fundamental quality of bonds held by the fund. Information about the financial condition of an issuer of municipal bonds may not be as extensive as that which is made available by corporations whose securities are

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publicly traded. Obligations of issuers of municipal bonds are generally subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors.

Congress, state legislatures, or other governing authorities may seek to extend the time for payment of principal or interest, or both, or to impose other constraints upon enforcement of such obligations. For example, from time to time, proposals have been introduced before Congress to restrict or eliminate the federal income tax exemption for interest on municipal bonds. Also, from time to time, proposals have been introduced before state and local legislatures to restrict or eliminate the state and local income tax exemption for interest on municipal bonds. Similar proposals may be introduced in the future. If any such proposal were enacted, it might restrict or eliminate the ability of a fund to achieve its respective investment objective. In that event, the fund’s trustees and officers would reevaluate its investment objective and policies and consider recommending to its shareholders changes in such objective and policies.

There is also the possibility that, as a result of litigation or other conditions, the power or ability of issuers to meet their obligations for the payment of interest and principal on their municipal bonds may be materially affected or their obligations may be found to be invalid or unenforceable. Such litigation or conditions may, from time to time, have the effect of introducing uncertainties in the market for municipal bonds or certain segments thereof or of materially affecting the credit risk with respect to particular bonds. Adverse economic, business, legal, or political developments might affect all or a substantial portion of a fund’s municipal bonds in the same manner. For example, a state specific tax-exempt fund is subject to state-specific risk, which is the chance that the fund, because it invests primarily in securities issued by a particular state and its municipalities, is more vulnerable to unfavorable developments in that state than are funds that invest in municipal securities of many states. Unfavorable developments in any economic sector may have far-reaching ramifications on a state’s overall municipal market. In the event that a particular obligation held by a fund is assessed at a credit quality below the minimum investment level permitted by the investment policies of such fund, the fund’s investment advisor, pursuant to oversight from the trustees, will carefully assess the creditworthiness of the obligation to determine whether it continues to meet the policies and objective of the fund.

Municipal bonds are subject to interest rate risk, which is the chance that bond prices will decline over short or even long periods because of rising interest rates. Interest rate risk is higher for long-term bonds, whose prices are much more sensitive to interest rate changes than are the prices of shorter-term bonds. Generally, prices of longer-maturity issues tend to fluctuate more than prices of shorter-maturity issues. Prices and yields on municipal bonds are dependent on a variety of factors, such as the financial condition of the issuer, the general conditions of the municipal bond market, the size of a particular offering, the maturity of the obligation, and the rating of the issue. A number of these factors, including the ratings of particular issues, are subject to change from time to time.

Municipal bonds are subject to call risk, which is the chance that during periods of falling interest rates, issuers of callable bonds may call (redeem) securities with higher coupons or interest rates before their maturity dates. A fund would then lose any price appreciation above the bond’s call price and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the fund’s income. Some of these investments may generate taxable income, and thus the Fund may need to distribute income subject to federal personal income tax or the alternative minimum tax. Call risk is generally high for long-term bonds. Conversely, municipal bonds are also subject to extension risk, which is the chance that during periods of rising interest rates, certain debt securities will be paid off substantially more slowly than originally anticipated, and the value of those securities may fall. Extension risk is generally high for long-term bonds.

Municipal bonds may be deemed to be illiquid as determined by or in accordance with methods adopted by a fund’s board of trustees. In determining the liquidity and appropriate valuation of a municipal bond, a fund’s advisor may consider the following factors relating to the security, among others: (1) the frequency of trades and quotes; (2) the number of dealers willing to purchase or sell the security; (3) the willingness of dealers to undertake to make a market; (4) the nature of the marketplace trades, including the time needed to dispose of the security, the method of soliciting offers, and the mechanics of transfer; and (5) the factors unique to a particular security, including general creditworthiness of the issuer and the likelihood that the marketability of the securities will be maintained throughout the time the security is held by the fund.

Other Investment Companies. The Funds were established to be used by the Vanguard funds and certain trusts and accounts managed by Vanguard or its affiliates. The Funds were created and operate under an exemption granted by the SEC. The exemption permits the Funds to acquire securities of any investment company or any company relying on

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Section 3(c)(1) or 3(c)(7) of the 1940 Act in excess of the limits contained in section 12(d)(1)(A) of the 1940 Act. In addition, each of the Vanguard funds may invest in, and hold shares of, a Fund.

A fund may invest in other investment companies to the extent permitted by applicable law or SEC exemption. Under Section 12(d)(1) of the 1940 Act, a fund generally may invest up to 10% of its assets in shares of investment companies and up to 5% of its assets in any one investment company, as long as no investment represents more than 3% of the voting stock of an acquired investment company. In addition, no funds for which Vanguard acts as an advisor may, in the aggregate, own more than 10% of the voting stock of a closed-end investment company. The 1940 Act and related rules provide certain exemptions from these restrictions, for example, funds that invest in other funds within the same group of investment companies. If a fund invests in other investment companies, shareholders will bear not only their proportionate share of the fund’s expenses (including operating expenses and the fees of the advisor), but they also may indirectly bear the similar expenses of the underlying investment companies. Certain investment companies, such as business development companies (BDCs), are more akin to operating companies and, as such, their expenses are not direct expenses paid by fund shareholders and are not used to calculate the fund’s net asset value. SEC rules nevertheless require that any expenses incurred by a BDC be included in a fund’s expense ratio as “Acquired Fund Fees and Expenses.” The expense ratio of a fund that holds a BDC will thus overstate what the fund actually spends on portfolio management, administrative services, and other shareholder services by an amount equal to these Acquired Fund Fees and Expenses. The Acquired Fund Fees and Expenses are not included in a fund’s financial statements, which provide a clearer picture of a fund’s actual operating expenses. Because preferred shares of closed-end investment companies are not allocated any operating or advisory expenses, the Vanguard funds will not bear any expenses from investments in certain variable-rate demand-preferred securities issued by closed-end municipal bond funds. Shareholders would also be exposed to the risks associated not only with the investments of the fund but also with the portfolio investments of the underlying investment companies. Certain types of investment companies, such as closed-end investment companies, issue a fixed number of shares that typically trade on a stock exchange or over-the-counter at a premium or discount to their net asset value. Others are continuously offered at net asset value but also may be traded on the secondary market.

Repurchase Agreements. A repurchase agreement is an agreement under which a fund acquires a debt security (generally a security issued by the U.S. government or an agency thereof, a banker’s acceptance, or a certificate of deposit) from a bank, a broker, or a dealer and simultaneously agrees to resell such security to the seller at an agreed-upon price and date (normally, the next business day). Because the security purchased constitutes collateral for the repurchase obligation, a repurchase agreement may be considered a loan that is collateralized by the security purchased. The resale price reflects an agreed-upon interest rate effective for the period the instrument is held by a fund and is unrelated to the interest rate on the underlying instrument. In these transactions, the securities acquired by a fund (including accrued interest earned thereon) must have a total value in excess of the value of the repurchase agreement and be held by a custodian bank until repurchased. When entering into a repurchase agreement with the Federal Reserve, the collateral received will equal 100% of the value of the repurchase agreement. In addition, the investment advisor will monitor a fund’s repurchase agreement transactions generally and will evaluate the creditworthiness of any bank, broker, or dealer party to a repurchase agreement relating to a fund. The aggregate amount of any such agreements is not limited, except to the extent required by law.

The use of repurchase agreements involves certain risks. One risk is the seller’s ability to pay the agreed-upon repurchase price on the repurchase date. If the seller defaults, the fund may incur costs in disposing of the collateral, which would reduce the amount realized thereon. If the seller seeks relief under bankruptcy laws, the disposition of the collateral may be delayed or limited. For example, if the other party to the agreement becomes insolvent and subject to liquidation or reorganization under bankruptcy or other laws, a court may determine that the underlying security is collateral for a loan by the fund not within its control, and therefore the realization by the fund on such collateral may be automatically stayed. Finally, it is possible that the fund may not be able to substantiate its interest in the underlying security and may be deemed an unsecured creditor of the other party to the agreement.

Restricted and Illiquid Securities. Illiquid securities are investments that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The SEC generally limits aggregate holdings of illiquid securities by a mutual fund to 15% of its net assets (5% for money market funds). A fund may experience difficulty valuing and selling illiquid securities and, in some cases, may be unable to value or sell certain illiquid securities for an indefinite period of time. Illiquid securities may include a wide variety of investments, such as (1) repurchase agreements maturing in more

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than seven days (unless the agreements have demand/redemption features), (2) OTC options contracts and certain other derivatives (including certain swap agreements), (3) fixed time deposits that are not subject to prepayment or do not provide for withdrawal penalties upon prepayment (other than overnight deposits), (4) certain loan interests and other direct debt instruments, (5) certain municipal lease obligations, (6) private equity investments, (7) commercial paper issued pursuant to Section 4(a)(2) of the 1933 Act, and (8) securities whose disposition is restricted under the federal securities laws. Illiquid securities include restricted, privately placed securities that, under the federal securities laws, generally may be resold only to qualified institutional buyers. If a substantial market develops for a restricted security held by a fund, it may be treated as a liquid security in accordance with procedures and guidelines approved by the board of trustees. This generally includes securities that are unregistered, that can be sold to qualified institutional buyers in accordance with Rule 144A under the 1933 Act, or that are exempt from registration under the 1933 Act, such as commercial paper. Although a fund’s advisor monitors the liquidity of restricted securities, the board of trustees oversees and retains ultimate responsibility for the advisor’s liquidity determinations. Several factors that the trustees consider in monitoring these decisions include the valuation of a security; the availability of qualified institutional buyers, brokers, and dealers that trade in the security; and the availability of information about the security’s issuer.

Reverse Repurchase Agreements. In a reverse repurchase agreement, a fund sells a security to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase that security at an agreed-upon price and time. Under a reverse repurchase agreement, the fund continues to receive any principal and interest payments on the underlying security during the term of the agreement. Reverse repurchase agreements involve the risk that the market value of securities retained by the fund may decline below the repurchase price of the securities sold by the fund that it is obligated to repurchase. In addition to the risk of such a loss, fees charged to the fund may exceed the return the fund earns from investing the proceeds received from the reverse repurchase agreement transaction. A reverse repurchase agreement may be considered a borrowing transaction for purposes of the 1940 Act. A reverse repurchase agreement transaction will not be considered to constitute the issuance, by a fund, of a “senior security,” as that term is defined in Section 18(g) of the 1940 Act, and therefore such transaction will not be subject to the 300% asset coverage requirement otherwise applicable to borrowings by a fund, if the fund covers the transaction in accordance with the requirements described under the heading “Borrowing.” A fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been reviewed and found satisfactory by the advisor. If the buyer in a reverse repurchase agreement becomes insolvent or files for bankruptcy, a fund’s use of proceeds from the sale may be restricted while the other party or its trustee or receiver determines if it will honor the fund’s right to repurchase the securities. If the fund is unable to recover the securities it sold in a reverse repurchase agreement, it would realize a loss equal to the difference between the value of the securities and the payment it received for them.

Securities Lending. A fund may lend its investment securities to qualified institutional investors (typically brokers, dealers, banks, or other financial institutions) who may need to borrow securities in order to complete certain transactions, such as covering short sales, avoiding failures to deliver securities, or completing arbitrage operations. By lending its investment securities, a fund attempts to increase its net investment income through the receipt of interest on the securities lent. Any gain or loss in the market price of the securities lent that might occur during the term of the loan would be for the account of the fund. If the borrower defaults on its obligation to return the securities lent because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities lent or in gaining access to the collateral. These delays and costs could be greater for foreign securities. If a fund is not able to recover the securities lent, the fund may sell the collateral and purchase a replacement investment in the market. The value of the collateral could decrease below the value of the replacement investment by the time the replacement investment is purchased. Cash received as collateral through loan transactions may be invested in other eligible securities. Investing this cash subjects that investment to market appreciation or depreciation. Currently, Vanguard funds that lend securities invest the cash collateral received in one or more of the Funds.

The terms and the structure of the loan arrangements, as well as the aggregate amount of securities loans, must be consistent with the 1940 Act and the rules or interpretations of the SEC thereunder. These provisions limit the amount of securities a fund may lend to 33 1/3% of the fund’s total assets and require that (1) the borrower pledge and maintain with the fund collateral consisting of cash, an irrevocable letter of credit, or securities issued or guaranteed by the U.S. government having at all times not less than 100% of the value of the securities lent; (2) the borrower add to such collateral whenever the price of the securities lent rises (i.e., the borrower “marks to market” on a daily basis); (3) the loan be made subject to termination by the fund at any time; and (4) the fund receives reasonable interest on the loan (which may include the fund investing any cash collateral in interest-bearing short-term investments), any distribution on

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the lent securities, and any increase in their market value. Loan arrangements made by a fund will comply with all other applicable regulatory requirements, including the requirement to redeliver the securities within the standard settlement time applicable to the relevant trading market. The advisor will consider the creditworthiness of the borrower, among other things, in making decisions with respect to the lending of securities, subject to oversight by the board of trustees. At the present time, the SEC does not object if an investment company pays reasonable negotiated fees in connection with lent securities, so long as such fees are set forth in a written contract and approved by the investment company’s trustees. In addition, voting rights pass with the lent securities, but if a fund has knowledge that a material event will occur affecting securities on loan, and in respect to which the holder of the securities will be entitled to vote or consent, the lender must be entitled to call the loaned securities in time to vote or consent. A fund bears the risk that there may be a delay in the return of the securities, which may impair the fund’s ability to vote on such a matter.

Pursuant to Vanguard’s securities lending policy, Vanguard’s fixed income and money market funds are not permitted to, and do not, lend their investment securities.

Tax Matters—Federal Tax Discussion. Discussion herein of U.S. federal income tax matters summarizes some of the important, generally applicable U.S. federal tax considerations relevant to investment in a fund based on the IRC, U.S. Treasury regulations, and other applicable authorities. These authorities are subject to change by legislative, administrative, or judicial action, possibly with retroactive effect. Each Fund has not requested and will not request an advance ruling from the Internal Revenue Service (IRS) as to the U.S. federal income tax matters discussed in this Statement of Additional Information. In some cases, a fund’s tax position may be uncertain under current tax law and an adverse determination or future guidance by the IRS with respect to such a position could adversely affect the fund and its shareholders, including the fund’s ability to continue to qualify as a regulated investment company or to continue to pursue its current investment strategy. A shareholder should consult his or her tax professional for information regarding the particular situation and the possible application of U.S. federal, state, local, foreign, and other taxes.

Tax Matters—Federal Tax Treatment of Derivatives, Hedging, and Related Transactions. A fund’s transactions in derivative instruments (including, but not limited to, options, futures, forward contracts, and swap agreements), as well as any of the fund’s hedging, short sale, securities loan, or similar transactions, may be subject to one or more special tax rules that accelerate income to the fund, defer losses to the fund, cause adjustments in the holding periods of the fund’s securities, convert long-term capital gains into short-term capital gains, or convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing, and character of distributions to shareholders.

Because these and other tax rules applicable to these types of transactions are in some cases uncertain under current law, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether a fund has made sufficient distributions, and otherwise satisfied the relevant requirements, to maintain its qualification as a regulated investment company and avoid a fund-level tax.

Tax Matters—Federal Tax Treatment of Exempt-Interest Dividends. If, at the end of each quarter of a fund’s taxable year, at least 50% of the fund’s total asset value consists of securities generating interest that is exempt from federal tax under IRC section 103(a), the fund may pay dividends that pass through to shareholders the tax-exempt character of exempt interest earned by the fund. These dividends generally are not taxable to fund shareholders for U.S. federal income tax purposes, but they may result in liability for the federal alternative minimum tax.

Tax Matters—Federal Tax Treatment of Futures Contracts. For federal income tax purposes, a fund generally must recognize, as of the end of each taxable year, any net unrealized gains and losses on certain futures contracts, as well as any gains and losses actually realized during the year. In these cases, any gain or loss recognized with respect to a futures contract is considered to be 60% long-term capital gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the contract. Gains and losses on certain other futures contracts (primarily non-U.S. futures contracts) are not recognized until the contracts are closed and are treated as long-term or short-term, depending on the holding period of the contract. Sales of futures contracts that are intended to hedge against a change in the value of securities held by a fund may affect the holding period of such securities and, consequently, the nature of the gain or loss on such securities upon disposition. A fund may be required to defer the recognition of losses on one position, such as futures contracts, to the extent of any unrecognized gains on a related offsetting position held by the fund.

A fund will distribute to shareholders annually any net capital gains that have been recognized for federal income tax purposes on futures transactions. Such distributions will be combined with distributions of capital gains realized on the fund’s other investments, and shareholders will be advised on the nature of the distributions.

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Tax Matters—Market Discount or Premium. The price of a bond purchased after its original issuance may reflect market discount or premium. Depending on the particular circumstances, market discount may affect the tax character and amount of income required to be recognized by a fund holding the bond. In determining whether a bond is purchased with market discount, certain de minimis rules apply. Premium is generally amortizable over the remaining term of the bond. Depending on the type of bond, premium may affect the amount of income required to be recognized by a fund holding the bond and the fund’s basis in the bond.

Tax Matters—Real Estate Mortgage Investment Conduits. If a fund invests directly or indirectly, including through a REIT or other pass-through entity, in residual interests in real estate mortgage investment conduits (REMICs) or equity interests in taxable mortgage pools (TMPs), a portion of the fund’s income that is attributable to a residual interest in a REMIC or an equity interest in a TMP (such portion referred to in the IRC as an “excess inclusion”) will be subject to U.S. federal income tax in all events—including potentially at the fund level—under a notice issued by the IRS in October 2006 and U.S. Treasury regulations that have yet to be issued but may apply retroactively. This notice also provides, and the regulations are expected to provide, that excess inclusion income of a registered investment company will be allocated to shareholders of the registered investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related interest directly. In general, excess inclusion income allocated to shareholders (1) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions); (2) will constitute unrelated business taxable income (UBTI) to entities (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan, or other tax-exempt entity) subject to tax on UBTI, thereby potentially requiring such an entity, which otherwise might not be required, to file a tax return and pay tax on such income; and (3) in the case of a non-U.S. investor, will not qualify for any reduction in U.S. federal withholding tax. A shareholder will be subject to U.S. federal income tax on such inclusions notwithstanding any exemption from such income tax otherwise available under the IRC. As a result, a fund investing in such interests may not be suitable for charitable remainder trusts. See “Tax Matters—Tax-Exempt Investors.”

Tax Matters—Sale or Exchange of Money Market Fund Shares by Investors. Although the Funds have adopted a floating NAV in response to the money market fund reforms adopted by the SEC, each of the Funds will continue to seek to maintain a stable NAV of $1 per share; however, there can be no guarantee that it will do so. Accordingly, in general, shareholders are not expected to incur taxable gains or losses on the sale or exchange of their shares. However, in the event a Fund’s NAV goes above or below $1, and a shareholder sells or exchanges shares at that price, the shareholder may recognize gain or loss on the sale or exchange of shares. Also, if one of the Funds determines to impose a liquidity fee on redemptions of its shares, a shareholder will generally recognize a loss on the sale or exchange of shares equal to the amount of that fee. Assuming a shareholder holds the shares as a capital asset, any gain or loss recognized on a sale or exchange of shares will be treated as capital in nature.

Unless a shareholder chooses to adopt the simplified “NAV method” of accounting (described below), any capital gain or loss generally will be treated as short-term if the shareholder held Fund shares for one year or less or long-term if the shareholder held Fund shares longer. If a shareholder sells or exchanges shares at a loss, the loss will generally be disallowed under the “wash sale” rule of the IRC where other substantially identical shares are purchased (including by dividend reinvestment) within 30 days before or after the sale or exchange.

If the shareholder elects to adopt the NAV method of accounting, rather than compute any gain or loss on every taxable sale or exchange of Fund shares, the shareholder would determine the gain or loss based on the change in the aggregate value of the Fund shares during a computation period (e.g., the shareholder’s taxable year or certain shorter periods), reduced by the net investment (purchases minus taxable sales or exchanges) in those Fund shares during the period. Under the NAV method, if a shareholder holds the shares as a capital asset, any resulting net gain or loss (including any loss arising from the shareholder’s payment of a liquidity fee on redemption of the shares) would be treated as short-term capital gain or loss. If a shareholder uses the NAV method, the wash sale rules will generally not apply to disallow a loss incurred for a computation period.

Shareholders are permitted to use different methods of accounting for shares of a single Fund that are held in different accounts or for shares of different money market funds held in the same account.

Please consult your tax advisor for more information concerning these rules.

Tax Matters—Tax Considerations for Non-U.S. Investors. U.S. withholding and estate taxes and certain U.S. tax reporting requirements may apply to any investments made by non-U.S. investors in Vanguard funds. Certain properly

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reported distributions of qualifying interest income or short-term capital gain made by a fund to its non-U.S. investors are exempt from U.S. withholding taxes, provided the investors furnish valid tax documentation (i.e., IRS Form W-8) certifying as to their non-U.S. status.

A fund is permitted, but is not required, to report any of its distributions as eligible for such relief, and some distributions (e.g., distributions of interest a fund receives from non-U.S. issuers) are not eligible for this relief. For some funds, Vanguard has chosen to report qualifying distributions and apply the withholding exemption to those distributions when made to non-U.S. shareholders who invest directly with Vanguard. For other funds, Vanguard may choose not to apply the withholding exemption to qualifying fund distributions made to direct shareholders, but may provide the reporting to such shareholders. In these cases, a shareholder may be able to reclaim such withholding tax directly from the IRS.

If shareholders hold fund shares (including ETF shares) through a broker or intermediary, their broker or intermediary may apply this relief to properly reported qualifying distributions made to shareholders with respect to those shares. If a shareholder’s broker or intermediary instead collects withholding tax where the fund has provided the proper reporting, the shareholder may be able to reclaim such withholding tax from the IRS. Please consult your broker or intermediary regarding the application of these rules.

This relief does not apply to any withholding required under the Foreign Account Tax Compliance Act (FATCA), which generally requires a fund to obtain information sufficient to identify the status of each of its shareholders. If a shareholder fails to provide this information or otherwise fails to comply with FATCA, a fund may be required to withhold under FATCA at a rate of 30% with respect to that shareholder on fund distributions and on the proceeds of the sale, redemption, or exchange of fund shares. Please consult your tax advisor for more information about these rules.

Tax Matters—Tax-Exempt Investors. Income of a fund that would be UBTI if earned directly by a tax-exempt entity will not generally be attributed as UBTI to a tax-exempt shareholder of the fund. Notwithstanding this “blocking” effect, a tax-exempt shareholder could realize UBTI by virtue of its investment in a fund if shares in the fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of IRC Section 514(b).

A tax-exempt shareholder may also recognize UBTI if a fund recognizes “excess inclusion income” derived from direct or indirect investments in residual interests in REMICs or equity interests in TMPs. See “Tax Matters—Real Estate Mortgage Investment Conduits.”

In addition, special tax consequences apply to charitable remainder trusts that invest in a fund that invests directly or indirectly in residual interests in REMICs or equity interests in TMPs. Charitable remainder trusts and other tax-exempt investors are urged to consult their tax advisors concerning the consequences of investing in a fund.

Time Deposits. Time deposits are subject to the same risks that pertain to domestic issuers of money market instruments, most notably credit risk (and, to a lesser extent, income risk, market risk, and liquidity risk). Additionally, time deposits of foreign branches of U.S. banks and foreign branches of foreign banks may be subject to certain sovereign risks. One such risk is the possibility that a sovereign country might prevent capital, in the form of U.S. dollars, from flowing across its borders. Other risks include adverse political and economic developments, the extent and quality of government regulation of financial markets and institutions, the imposition of foreign withholding taxes, and expropriation or nationalization of foreign issuers. However, time deposits of such issuers will undergo the same type of credit analysis as domestic issuers in which a Vanguard fund invests and will have at least the same financial strength as the domestic issuers approved for the fund.

Tender Option Bond Programs. Tender option bond programs are a type of municipal bond derivative structure, which is taxed as a partnership for federal income tax purposes. These programs provide for tax-exempt income at a variable rate. In such programs, high-quality longer-term municipal bonds are held inside a trust and varying economic interests in the bonds are created and sold to investors. One class of investors earns interest at a rate based on current short-term tax-exempt interest rates and may tender its holdings at par to the program sponsor at agreed-upon intervals. This class is an eligible security for municipal money market fund investments. A second class of investors has a residual income interest (earning any net income produced by the underlying bonds that exceeds the variable income paid to the other class of investors) and bears the risk that the underlying bonds will decline in value because of changes in market interest rates. These holdings will generally underperform the fixed-rate municipal securities market in a rising interest rate environment. The Funds do not invest in this second class of investors. Under the terms of such programs, both investor classes bear the risk of loss that would result from a payment default on the underlying bonds as well as from

B-16

other potential, yet remote, credit or structural events. If a tender option bond program would fail to qualify as a partnership for federal income tax purposes, any Fund invested in that program could receive taxable ordinary income.

Variable-Rate Demand-Preferred Securities. The Funds may purchase certain variable-rate demand-preferred securities (VRDPs) issued by closed-end municipal bond funds, which, in turn, invest primarily in portfolios of tax-exempt municipal bonds. The Funds may invest in securities issued by single-state or national closed-end municipal bond funds. VRDPs are issued by closed-end funds to leverage returns for common shareholders. Under the 1940 Act, a closed-end fund that issues preferred shares must maintain an asset coverage ratio of at least 200% at all times in order to issue preferred shares. It is anticipated that the interest on the VRDPs will be exempt from federal income tax and, with respect to any such securities issued by single-state municipal bond funds, exempt from the applicable state’s income tax. The VRDPs will pay a variable dividend rate, determined weekly, typically through a remarketing process, and include a demand feature that provides a fund with a contractual right to tender the securities to a liquidity provider. The Funds could lose money if the liquidity provider fails to honor its obligation, becomes insolvent, or files for bankruptcy. The Funds have no right to put the securities back to the closed-end municipal bond funds or demand payment or redemption directly from the closed-end municipal bond funds. Further, the VRDPs are not freely transferable, and therefore the Funds may only transfer the securities to another investor in compliance with certain exemptions under the 1933 Act, including Rule 144A.

A fund’s purchase of VRDPs issued by closed-end municipal bond funds is subject to the restrictions set forth under the heading “Other Investment Companies.”

When-Issued, Delayed-Delivery, and Forward-Commitment Transactions. When-issued, delayed-delivery, and forward-commitment transactions involve a commitment to purchase or sell specific securities at a predetermined price or yield in which payment and delivery take place after the customary settlement period for that type of security. Typically, no interest accrues to the purchaser until the security is delivered. When purchasing securities pursuant to one of these transactions, payment for the securities is not required until the delivery date. However, the purchaser assumes the rights and risks of ownership, including the risks of price and yield fluctuations and the risk that the security will not be issued as anticipated. When a fund has sold a security pursuant to one of these transactions, the fund does not participate in further gains or losses with respect to the security. If the other party to a delayed-delivery transaction fails to deliver or pay for the securities, the fund could miss a favorable price or yield opportunity or suffer a loss. A fund may renegotiate a when-issued or forward-commitment transaction and may sell the underlying securities before delivery, which may result in capital gains or losses for the fund. When-issued, delayed-delivery, and forward-commitment transactions will not be considered to constitute the issuance, by a fund, of a “senior security,” as that term is defined in Section 18(g) of the 1940 Act, and therefore such transaction will not be subject to the 300% asset coverage requirement otherwise applicable to borrowings by the fund, if the fund covers the transaction in accordance with the requirements described under the heading “Borrowing.”

SHARE PRICE

A Fund’s share price, called its net asset value, or NAV, is calculated each business day as of the close of regular trading on the New York Stock Exchange (the Exchange), generally 4 p.m., Eastern time. NAV per share is computed by dividing the total assets, minus liabilities, of the Fund by the number of Fund shares outstanding. On U.S. holidays or other days when the Exchange is closed, the NAV is not calculated, and the Funds do not sell or redeem shares.

The Exchange typically observes the following holidays: New Year’s Day; Martin Luther King, Jr., Day; Presidents’ Day (Washington’s Birthday); Good Friday; Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day. Although each Fund expects the same holidays to be observed in the future, the Exchange may modify its holiday schedule or hours of operation at any time.

On August 12, 2016, Vanguard Market Liquidity Fund and Vanguard Municipal Cash Management Fund ceased to value their securities based on amortized cost, and each Fund’s NAV is now calculated using available market quotations.

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PURCHASE AND REDEMPTION OF SHARES

Purchase of Shares

The purchase price of shares of each Fund is the NAV per share next determined after the purchase request is received in good order, as defined in the Fund’s prospectus.

Exchange of Securities for Shares of a Fund. Shares of a Fund may be purchased “in kind” (i.e., in exchange for securities, rather than for cash) at the discretion of the Fund’s portfolio manager. Such securities must not be restricted as to transfer and must have a value that is readily ascertainable. Securities accepted by the Fund will be valued, as set forth in the Fund’s prospectus, as of the time of the next determination of NAV after such acceptance. All dividend, subscription, or other rights that are reflected in the market price of accepted securities at the time of valuation become the property of the Fund and must be delivered to the Fund by the investor upon receipt from the issuer. A gain or loss for federal income tax purposes, depending upon the cost of the securities tendered, would be realized by the investor upon the exchange. Investors interested in purchasing Fund shares in kind should contact Vanguard.

Redemption of Shares

The redemption price of shares of each Fund is the NAV per share next determined after the redemption request is received in good order, as defined in the Fund’s prospectus.

Each Fund can postpone payment of redemption proceeds for up to seven calendar days. In addition, each Fund can suspend redemptions and/or postpone payments of redemption proceeds beyond seven calendar days (1) during any period that the Exchange is closed or trading on the Exchange is restricted as determined by the SEC; (2) during any period when an emergency exists, as defined by the SEC, as a result of which it is not reasonably practicable for the Fund to dispose of securities it owns or to fairly determine the value of its assets; or (3) for such other periods as the SEC may permit, including in connection with a determination by the board of a money market fund under Rule 22e-3 under the 1940 Act to suspend redemptions and postpone payment of redemption proceeds in order to facilitate an orderly liquidation of a money market fund. In addition, in accordance with Rule 2a-7 under the 1940 Act, the board of trustees of a retail or institutional money market fund may implement liquidity fees and redemption gates if a retail or institutional money market fund’s weekly liquid assets fall below established thresholds.

If Vanguard determines that it would be detrimental to the best interests of the remaining shareholders of a Fund to make payment wholly or partly in cash, a Fund may pay the redemption price in whole or in part by a distribution in kind of readily marketable securities held by a Fund in lieu of cash in conformity with applicable rules of the SEC. Investors may incur brokerage charges on the sale of such securities received in payment of redemptions.

The Funds do not charge redemption fees other than the potential liquidity fees that may be imposed in accordance with the rules discussed above. Shares redeemed may be worth more or less than what was paid for them, depending on the market value of the securities held by the Funds.

Vanguard processes purchase and redemption requests through a pooled account. Pending investment direction or distribution of redemption proceeds, the assets in the pooled account are invested and any earnings (the “float”) are allocated proportionately among the Vanguard funds in order to offset fund expenses. Other than the float, Vanguard treats assets held in the pooled account as the assets of each shareholder making such purchase or redemption request.

Right to Change Policies

Vanguard reserves the right, without notice, to (1) alter, add, or discontinue any conditions of purchase (including eligibility requirements), redemption, exchange, service, or privilege at any time; (2) accept initial purchases by telephone; (3) freeze any account and/or suspend account services if Vanguard has received reasonable notice of a dispute regarding the assets in an account, including notice of a dispute between the registered or beneficial account owners, or if Vanguard reasonably believes a fraudulent transaction may occur or has occurred; (4) temporarily freeze any account and/or suspend account services upon initial notification to Vanguard of the death of the shareholder until Vanguard receives required documentation in good order; (5) alter, impose, discontinue, or waive any purchase fee, redemption fee, account service fee, or other fees charged to a shareholder or a group of shareholders; and (6) redeem an account or suspend account privileges, without the owner’s permission to do so, in cases of threatening conduct or activity Vanguard believes to be suspicious, fraudulent, or illegal. Changes may affect any or all investors. These actions

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will be taken when, at the sole discretion of Vanguard management, Vanguard reasonably believes they are in the best interest of a fund.

Investing with Vanguard Through Other Firms

Each Fund has authorized certain agents to accept on its behalf purchase and redemption orders, and those agents are authorized to designate other intermediaries to accept purchase and redemption orders on the Fund’s behalf (collectively, Authorized Agents). A Fund will be deemed to have received a purchase or redemption order when an Authorized Agent accepts the order in accordance with the Fund’s instructions. In most instances, a customer order that is properly transmitted to an Authorized Agent will be priced at the Fund’s NAV per share next determined after the order is received by the Authorized Agent.

MANAGEMENT OF THE FUNDS

Vanguard

The Funds employ Vanguard to provide investment advisory, administrative, and shareholder services. Vanguard is a jointly owned subsidiary of a group of over 200 funds (member funds) that obtain at cost virtually all of their corporate management, administrative, and distribution services. Vanguard also provides investment advisory services to certain Vanguard funds. The Funds are not member funds and, therefore, separately contract with Vanguard for the services provided.

Vanguard, Vanguard Marketing Corporation (VMC), the funds, and the funds’ advisors have adopted codes of ethics designed to prevent employees who may have access to nonpublic information about the trading activities of the funds (access persons) from profiting from that information. The codes of ethics permit access persons to invest in securities for their own accounts, including securities that may be held by a fund, but place substantive and procedural restrictions on the trading activities of access persons. For example, the codes of ethics require that access persons receive advance approval for most securities trades to ensure that there is no conflict with the trading activities of the funds.

Management and Distribution Agreement. The Trust has entered into a Management and Distribution Agreement with Vanguard and VMC, 100 Vanguard Boulevard, Malvern, PA 19355, on behalf of the Funds. Under this Agreement, Vanguard manages the investment and reinvestment of each Fund’s assets; continuously reviews, supervises, and administers each Fund’s investment program; and provides a range of other administrative services necessary to each Fund’s day-to-day operations. In return, each Fund pays Vanguard a management fee, computed on an at-cost basis, at the end of each month. Vanguard discharges its responsibilities as investment advisor subject to the control of each Fund’s officers and trustees.

Corporate management and administrative services include: (1) executive staff; (2) accounting and financial; (3) legal and regulatory; (4) shareholder account maintenance; (5) monitoring and control of custodian relationships; (6) shareholder reporting; and (7) review and evaluation of advisory and other services provided to the Funds by third parties.

Shareholder Services Agreement. Each Fund receives certain services from Vanguard pursuant to a Shareholder Services Agreement between Vanguard and the Trust. In return, each Fund pays Vanguard a shareholder services fee at the end of each month, computed on an at-cost basis.

Under the terms of these agreements, the Funds paid the following approximate amounts to Vanguard for management and shareholder services during the fiscal years ended August 31, 2016, 2017, and 2018:


Vanguard Fund	2016	2017	2018
Market Liquidity Fund	$2,338,000	$2,564,000	$2,962,000
Municipal Cash Management Fund	308,000	259,000	215,000

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Officers and Trustees

Each Vanguard fund is governed by the board of trustees of its trust and a single set of officers. Consistent with the board’s corporate governance principles, the trustees believe that their primary responsibility is oversight of the management of each fund for the benefit of its shareholders, not day-to-day management. The trustees set broad policies for the funds; select investment advisors; monitor fund operations, regulatory compliance, performance, and costs; nominate and select new trustees; and elect fund officers. Vanguard manages the day-to-day operations of the funds under the direction of the board of trustees.

The trustees play an active role, as a full board and at the committee level, in overseeing risk management for the funds. The trustees delegate the day-to-day risk management of the funds to various groups, including portfolio review, investment management, risk management, compliance, legal, fund accounting, and fund financial services. These groups provide the trustees with regular reports regarding investment, valuation, liquidity, and compliance, as well as the risks associated with each. The trustees also oversee risk management for the funds through regular interactions with the funds’ internal and external auditors.

The full board participates in the funds’ risk oversight, in part, through the Vanguard funds’ compliance program, which covers the following broad areas of compliance: investment and other operations; recordkeeping; valuation and pricing; communications and disclosure; reporting and accounting; oversight of service providers; fund governance; and codes of ethics, insider trading controls, and protection of nonpublic information. The program seeks to identify and assess risk through various methods, including through regular interdisciplinary communications between compliance professionals and business personnel who participate on a daily basis in risk management on behalf of the funds. The funds’ chief compliance officer regularly provides reports to the board in writing and in person.

The audit committee of the board, which is composed of JoAnn Heffernan Heisen, F. Joseph Loughrey, Mark Loughridge, Sarah Bloom Raskin, and Peter F. Volanakis, each of whom is an independent trustee, oversees management of financial risks and controls. The audit committee serves as the channel of communication between the independent auditors of the funds and the board with respect to financial statements and financial reporting processes, systems of internal control, and the audit process. Vanguard’s head of internal audit reports directly to the audit committee and provides reports to the committee in writing and in person on a regular basis. Although the audit committee is responsible for overseeing the management of financial risks, the entire board is regularly informed of these risks through committee reports.

All of the trustees bring to each fund’s board a wealth of executive leadership experience derived from their service as executives (in many cases chief executive officers), board members, and leaders of diverse public operating companies, academic institutions, and other organizations. In determining whether an individual is qualified to serve as a trustee of the funds, the board considers a wide variety of information about the trustee, and multiple factors contribute to the board’s decision. Each trustee is determined to have the experience, skills, and attributes necessary to serve the funds and their shareholders because each trustee demonstrates an exceptional ability to consider complex business and financial matters, evaluate the relative importance and priority of issues, make decisions, and contribute effectively to the deliberations of the board. The board also considers the individual experience of each trustee and determines that the trustee’s professional experience, education, and background contribute to the diversity of perspectives on the board. The business acumen, experience, and objective thinking of the trustees are considered invaluable assets for Vanguard management and, ultimately, the Vanguard funds’ shareholders. The specific roles and experience of each board member that factor into this determination are presented on the following pages. The mailing address of the trustees and officers is P.O. Box 876, Valley Forge, PA 19482.

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			Principal Occupation(s)	Number of
		Vanguard	During the Past Five Years,	Vanguard Funds
	Position(s)	Funds’ Trustee/	Outside Directorships,	Overseen by
Name, Year of Birth	Held With Funds	Officer Since	and Other Experience	Trustee/Officer
Interested Trustees¹
F. William McNabb III	Chairman of the	July 2009	Chairman of the board (January 2010–present) of	212
(1957)	Board		Vanguard and of each of the investment companies
			served by Vanguard, trustee (2009–present) of each of
			the investment companies served by Vanguard, and
			director (2008–present) of Vanguard. Chief executive
			officer and president (2008–2017) of Vanguard and of
			each of the investment companies served by
			Vanguard, managing director (1995–2008) of Vanguard,
			and director (1997–2018) of Vanguard Marketing
			Corporation. Director (2018–present) of UnitedHealth
Group.

Mortimer J. Buckley	Chief Executive	January 2018	Chief executive officer (January 2018–present) of	212
(1969)	Officer and		Vanguard; chief executive officer, president, and
	President		trustee (January 2018–present) of each of the
			investment companies served by Vanguard; president
			and director (2017–present) of Vanguard; and president
			(February 2018–present) of Vanguard Marketing
			Corporation. Chief investment officer (2013–2017),
			managing director (2002–2017), head of the Retail
			Investor Group (2006–2012), and chief information
			officer (2001–2006) of Vanguard. Chairman of the
			board (2011–2017) of the Children’s Hospital of
			Philadelphia.

1 Mr. McNabb and Mr. Buckley are considered “interested persons,” as defined in the 1940 Act, because they are officers of the Trust.
Independent Trustees
Emerson U. Fullwood	Trustee	January 2008	Executive chief staff and marketing officer for North	212
(1948)			America and corporate vice president (retired 2008) of
			Xerox Corporation (document management products
			and services). Former president of the Worldwide
			Channels Group, Latin America, and Worldwide
			Customer Service and executive chief staff officer of
			Developing Markets of Xerox. Executive in residence
			and 2009–2010 Distinguished Minett Professor at the
			Rochester Institute of Technology. Lead director of SPX
			FLOW, Inc. (multi-industry manufacturing). Director of
			the University of Rochester Medical Center, the
			Monroe Community College Foundation, the United
			Way of Rochester, North Carolina A&T University, and
			Roberts Wesleyan College. Trustee of the University of
			Rochester.

Amy Gutmann	Trustee	June 2006	President (2004–present) of the University of	212
(1949)			Pennsylvania. Christopher H. Browne Distinguished
			Professor of Political Science, School of Arts and
			Sciences, and professor of communication,
			Annenberg School for Communication, with secondary
			faculty appointments in the Department of Philosophy,
			School of Arts and Sciences, and at the Graduate
			School of Education, University of Pennsylvania.
			Trustee of the National Constitution Center.

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			Principal Occupation(s)	Number of
		Vanguard	During the Past Five Years,	Vanguard Funds
	Position(s)	Funds’ Trustee/	Outside Directorships,	Overseen by
Name, Year of Birth	Held With Funds	Officer Since	and Other Experience	Trustee/Officer
JoAnn Heffernan Heisen	Trustee	July 1998	Corporate vice president of Johnson & Johnson	212
(1950)			(pharmaceuticals/medical devices/consumer products)
			and member of its executive committee (1997–2008).
			Chief global diversity officer (retired 2008), vice
			president and chief information officer (1997–2006),
			controller (1995–1997), treasurer (1991–1995), and
			assistant treasurer (1989–1991) of Johnson &
			Johnson. Director of Skytop Lodge Corporation
			(hotels) and the Robert Wood Johnson Foundation.
			Member of the advisory board of the Institute for
			Women’s Leadership at Rutgers University.

F. Joseph Loughrey	Trustee	October 2009	President and chief operating officer (retired 2009) and	212
(1949)			vice chairman of the board (2008–2009) of Cummins
			Inc. (industrial machinery). Chairman of the board of
			Hillenbrand, Inc. (specialized consumer services),
			Oxfam America, and the Lumina Foundation for
			Education. Director of the V Foundation for Cancer
			Research. Member of the advisory council for the
			College of Arts and Letters and chair of the advisory
			board to the Kellogg Institute for International Studies,
			both at the University of Notre Dame.

Mark Loughridge	Lead Independent	March 2012	Senior vice president and chief financial officer (retired	212
(1953)	Trustee		2013) of IBM (information technology services).
			Fiduciary member of IBM’s Retirement Plan
			Committee (2004–2013), senior vice president and
			general manager (2002–2004) of IBM Global
			Financing, vice president and controller (1998–2002) of
			IBM, and a variety of other prior management roles at
			IBM. Member of the Council on Chicago Booth.

Scott C. Malpass	Trustee	March 2012	Chief investment officer (1989–present) and vice	212
(1962)			president (1996–present) of the University of Notre
			Dame. Assistant professor of finance at the Mendoza
			College of Business, University of Notre Dame, and
			member of the Notre Dame 403(b) Investment
			Committee. Chairman of the board of TIFF Advisory
			Services, Inc. Member of the board of Catholic
			Investment Services, Inc. (investment advisors), the
			board of advisors for Spruceview Capital Partners, and
			the board of superintendence of the Institute for the
			Works of Religion.

Deanna Mulligan	Trustee	January 2018	President (2010–present) and chief executive officer	212
(1963)			(2011–present) of The Guardian Life Insurance
			Company of America. Chief operating officer (2010–
			2011) and executive vice president (2008–2010) of
			Individual Life and Disability of The Guardian Life
			Insurance Company of America (Guardian Life).
			Member of the board of The Guardian Life Insurance
			Company of America, the American Council of Life
			Insurers, the Partnership for New York City (business
			leadership), and the Committee Encouraging
			Corporate Philanthropy. Trustee of the Economic Club
			of New York and the Bruce Museum (arts and
			science). Member of the Advisory Council for the
			Stanford Graduate School of Business.

B-22


			Principal Occupation(s)	Number of
		Vanguard	During the Past Five Years,	Vanguard Funds
	Position(s)	Funds’ Trustee/	Outside Directorships,	Overseen by
Name, Year of Birth	Held With Funds	Officer Since	and Other Experience	Trustee/Officer
André F. Perold	Trustee	December 2004	George Gund Professor of Finance and Banking,	212
(1952)			Emeritus at the Harvard Business School (retired
			2011). Chief investment officer and co-managing
			partner of HighVista Strategies LLC (private
			investment firm). Overseer of the Museum of Fine
			Arts Boston.

Sarah Bloom Raskin	Trustee	January 2018	Deputy secretary (2014–2017) of the United States	212
(1961)			Department of the Treasury. Governor (2010–2014) of
			the Federal Reserve Board. Commissioner (2007–
			2010) of financial regulation for the State of Maryland.
			Member of the board of directors (2012–2014) of
			Neighborhood Reinvestment Corporation. Director of
			i(x) Investments, LLC.

Peter F. Volanakis	Trustee	July 2009	President and chief operating officer (retired 2010) of	212
(1955)			Corning Incorporated (communications equipment)
			and director of Corning Incorporated (2000–2010) and
			Dow Corning (2001–2010). Director (2012) of SPX
			Corporation (multi-industry manufacturing). Overseer
			of the Amos Tuck School of Business Administration,
			Dartmouth College (2001–2013). Chairman of the
			board of trustees of Colby-Sawyer College. Member of
			the Board of Hypertherm Inc. (industrial cutting
			systems, software, and consumables).

Executive Officers
Glenn Booraem	Investment	February 2001	Principal of Vanguard. Investment stewardship officer	212
(1967)	Stewardship		(2017–present), treasurer (2015–2017), controller
	Officer		(2010–2015), and assistant controller (2001–2010) of
			each of the investment companies served by
			Vanguard.

Christine M. Buchanan	Treasurer	November 2017	Principal of Vanguard and global head of Fund	212
(1970)			Administration at Vanguard. Treasurer (2017–present)
			of each of the investment companies served by
			Vanguard. Partner (2005–2017) at KPMG LLP (audit,
			tax, and advisory services).

Brian Dvorak	Chief Compliance	June 2017	Principal of Vanguard. Chief compliance officer (2017–	212
(1973)	Officer		present) of Vanguard and of each of the investment
			companies served by Vanguard. Assistant vice
			president (2017–present) of Vanguard Marketing
			Corporation. Vice president and director of Enterprise
			Risk Management (2011–2013) at Oppenheimer Funds,
Inc.

Thomas J. Higgins	Chief Financial	July 1998	Principal of Vanguard. Chief financial officer (2008–	212
(1957)	Officer		present) and treasurer (1998–2008) of each of the
			investment companies served by Vanguard.

Peter Mahoney	Controller	May 2015	Principal of Vanguard. Controller (2015–present) of	212
(1974)			each of the investment companies served by
			Vanguard. Head of International Fund Services (2008–
			2014) at Vanguard.

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			Principal Occupation(s)	Number of
		Vanguard	During the Past Five Years,	Vanguard Funds
	Position(s)	Funds’ Trustee/	Outside Directorships,	Overseen by
Name, Year of Birth	Held With Funds	Officer Since	and Other Experience	Trustee/Officer
Anne E. Robinson	Secretary	September 2016	General counsel (2016–present) of Vanguard.	212
(1970)			Secretary (2016–present) of Vanguard and of each of
			the investment companies served by Vanguard.
			Managing director (2016–present) of Vanguard.
			Director and senior vice president (2016–2018) of
			Vanguard Marketing Corporation. Managing director
			and general counsel of Global Cards and Consumer
			Services (2014–2016) at Citigroup. Counsel (2003–
			2014) at American Express.

Michael Rollings	Finance Director	February 2017	Finance director (2017–present) and treasurer (2017) of	212
(1963)			each of the investment companies served by
			Vanguard. Managing director (2016–present) of
			Vanguard. Chief financial officer (2016–present) of
			Vanguard. Director (2016–present) of Vanguard
			Marketing Corporation. Executive vice president and
			chief financial officer (2006–2016) of MassMutual
			Financial Group.

All but two of the trustees are independent. The independent trustees designate a lead independent trustee and appoint the chairman of the board. The lead independent trustee is a spokesperson and principal point of contact for the independent trustees and is responsible for coordinating the activities of the independent trustees, including calling regular executive sessions of the independent trustees; developing the agenda of each meeting together with the chairman; and chairing the meetings of the independent trustees. The lead independent trustee also chairs the meetings of the audit, compensation, and nominating committees. The board also has two investment committees, which consist of independent trustees and the interested trustees.

Board Committees: The Trust‘s board has the following committees:

n Audit Committee: This committee oversees the accounting and financial reporting policies, the systems of internal controls, and the independent audits of each fund. The following independent trustees serve as members of the committee: Ms. Heisen, Mr. Loughrey, Mr. Loughridge, Ms. Raskin, and Mr. Volanakis. The committee held six meetings during the Funds‘ fiscal year ended August 31, 2018.

n Compensation Committee: This committee oversees the compensation programs established by each fund for the benefit of its trustees. All independent trustees serve as members of the committee. The committee held one meeting during the Funds‘ fiscal year ended August 31, 2018.

n Investment Committees: These committees assist the board in its oversight of investment advisors to the funds and in the review and evaluation of materials relating to the board’s consideration of investment advisory agreements with the funds. Each trustee serves on one of two investment committees. Each investment committee held five meetings during the Funds‘ fiscal year ended August 31, 2018.

n Nominating Committee: This committee nominates candidates for election to the board of trustees of each fund. The committee also has the authority to recommend the removal of any trustee. All independent trustees serve as members of the committee. The committee held four meetings during the Funds‘ fiscal year ended August 31, 2018.

The Nominating Committee will consider shareholder recommendations for trustee nominees. Shareholders may send recommendations to Mr. Loughridge, chairman of the committee.

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Trustee Compensation

The same individuals serve as trustees of all Vanguard funds. The Vanguard CMT Funds’ trustees receive no compensation directly from the Funds. However, Vanguard is responsible for paying the trustees for their service to the Funds under the terms of the Management and Distribution Agreement described under the heading “Management and Distribution Agreement.” Vanguard funds also employ their officers on a shared basis; however, officers are compensated by Vanguard, not the Funds.

Independent Trustees. The funds compensate their independent trustees (i.e., the ones who are not also officers of the funds) in three ways:

n The independent trustees receive an annual fee for their service to the funds, which is subject to reduction based on absences from scheduled board meetings.

n The independent trustees are reimbursed for the travel and other expenses that they incur in attending board meetings.

n Upon retirement (after attaining age 65 and completing five years of service), the independent trustees who began their service prior to January 1, 2001, receive a retirement benefit under a separate account arrangement. As of January 1, 2001, the opening balance of each eligible trustee’s separate account was generally equal to the net present value of the benefits he or she had accrued under the trustees’ former retirement plan. Each eligible trustee’s separate account will be credited annually with interest at a rate of 7.5% until the trustee receives his or her final distribution. Those independent trustees who began their service on or after January 1, 2001, are not eligible to participate in the plan.

“Interested” Trustees. Mr. McNabb and Mr. Buckley serve as trustees, but are not paid in this capacity. They are, however, paid in their roles as officers of Vanguard.

Compensation Table. The following table provides compensation details for each of the trustees. The table shows the total amount of benefits that we expect each trustee to receive from all Vanguard funds upon retirement, and the total amount of compensation paid to each trustee by all Vanguard funds.

VANGUARD CMT FUNDS
TRUSTEES’ COMPENSATION TABLE


		Pension or Retirement	Accrued Annual	Total Compensation
	Aggregate	Benefits Accrued	Retirement	From All Vanguard
	Compensation	as Part of the	Benefit at	Funds Paid
Trustee	From the Funds	Funds’ Expenses	January 1, 2018¹	to Trustees²
F. William McNabb III	—	—	—	—
Mortimer J. Buckley ³	—	—	—	—
Emerson U. Fullwood	—	—	—	$244,000
Rajiv L. Gupta ⁴	—	—	—	262,500
Amy Gutmann	—	—	—	244,000
JoAnn Heffernan Heisen	—	—	$8,073	264,000
F. Joseph Loughrey	—	—	—	264,000
Mark Loughridge	—	—	—	296,000
Scott C. Malpass	—	—	—	237,030
Deanna Mulligan ³	—	—	—	—
André F. Perold	—	—	—	244,000
Sarah Bloom Raskin ³	—	—	—	—
Peter F. Volanakis	—	—	—	264,000

1 Each trustee is eligible to receive retirement benefits only after completing at least 5 years (60 consecutive months) of service as a trustee for the Vanguard funds. The annual retirement benefit will be paid in monthly installments, beginning with the month following the trustee’s retirement from service, and will cease after 10 years of payments (120 monthly installments). Trustees who began their service on or after January 1, 2001, are not eligible to participate in the retirement benefit plan.

2 The amounts reported in this column reflect the total compensation paid to each trustee for his or her service as trustee of 201 Vanguard funds for the 2017 calendar year.

3 Mr. Buckley, Ms. Mulligan, and Ms. Raskin became members of the Funds’ board effective January 1, 2018.

4 Mr. Gupta retired from the Funds’ board effective December 31, 2017.

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Ownership of Fund Shares

All current trustees (including Mr. Buckley, Ms. Mulligan, and Ms. Raskin, who began service as trustees effective January 1, 2018) allocate their investments among the various Vanguard funds based on their own investment needs. The following table shows each trustee’s ownership of shares of each Fund and of all Vanguard funds served by the trustee as of December 31, 2017.


		Dollar Range of	Aggregate Dollar Range of
		Fund Shares Owned	Vanguard Fund Shares
Vanguard Fund	Trustee	by Trustee	Owned by Trustee
Market Liquidity Fund	Mortimer J. Buckley	—	Over $100,000
	Emerson U. Fullwood	—	Over $100,000
	Amy Gutmann	—	Over $100,000
	JoAnn Heffernan Heisen	—	Over $100,000
	F. Joseph Loughrey	—	Over $100,000
	Mark Loughridge	—	Over $100,000
	Scott C. Malpass	—	Over $100,000
	F. William McNabb III	—	Over $100,000
	Deanna Mulligan	—	Over $100,000
	André F. Perold	—	Over $100,000
	Sarah Bloom Raskin	—	Over $100,000
	Peter F. Volanakis	—	Over $100,000

Municipal Cash Management Fund	Mortimer J. Buckley	—	Over $100,000
	Emerson U. Fullwood	—	Over $100,000
	Amy Gutmann	—	Over $100,000
	JoAnn Heffernan Heisen	—	Over $100,000
	F. Joseph Loughrey	—	Over $100,000
	Mark Loughridge	—	Over $100,000
	Scott C. Malpass	—	Over $100,000
	F. William McNabb III	—	Over $100,000
	Deanna Mulligan	—	Over $100,000
	André F. Perold	—	Over $100,000
	Sarah Bloom Raskin	—	Over $100,000
	Peter F. Volanakis	—	Over $100,000

As of November 30, 2018, the trustees and officers of the funds owned, in the aggregate, less than 1% of each class of each fund’s outstanding shares.

As of November 30, 2018, the following owned of record 5% or more of the outstanding shares of each class:

Vanguard Market Liquidity Fund—Investor Shares: Vanguard International Stock Index Fund, Valley Forge, PA (11.65%), Vanguard Total International Stock Index Fund, Valley Forge, PA (5.34%), Vanguard Total Stock Market Index Fund, Valley Forge, PA (5.25%), Vanguard Developed Markets Index Fund, Valley Forge, PA (5.07%); Vanguard Municipal Cash Management Fund—Investor Shares: Vanguard Municipal Money Market Fund, Valley Forge, PA (35.56%), Vanguard Short-Term Tax-Exempt Fund, Valley Forge, PA (15.64%), Vanguard High-Yield Tax-Exempt Fund, Valley Forge, PA (15.34%), Vanguard Intermediate-Term Tax-Exempt Fund, Valley Forge, PA (13.65%), Vanguard Limited-Term Tax-Exempt Fund, Valley Forge, PA (9.17%), Vanguard Long-Term Tax-Exempt Fund, Valley Forge, PA (8.38%).

A shareholder who owns more than 25% of a Fund’s voting shares may be considered a controlling person. As of November 30, 2018, Vanguard Municipal Money Market Fund (a series of Vanguard Municipal Bond Funds, which is organized as a Delaware statutory trust) owned 35.56% of the voting shares of the Municipal Cash Management Fund.

The Municipal Money Market Fund must echo vote these shares in proportionately the same manner as shares voted by the Municipal Cash Management Fund’s other shareholders.

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Portfolio Holdings Disclosure Policies and Procedures

Introduction

Vanguard and the boards of trustees of the Vanguard funds (Boards) have adopted Portfolio Holdings Disclosure Policies and Procedures (Policies and Procedures) to govern the disclosure of the portfolio holdings of each Vanguard fund. Vanguard and the Boards considered each of the circumstances under which Vanguard fund portfolio holdings may be disclosed to different categories of persons under the Policies and Procedures. Vanguard and the Boards also considered actual and potential material conflicts that could arise in such circumstances between the interests of Vanguard fund shareholders, on the one hand, and those of the fund’s investment advisor, distributor, or any affiliated person of the fund, its investment advisor, or its distributor, on the other. After giving due consideration to such matters and after the exercise of their fiduciary duties and reasonable business judgment, Vanguard and the Boards determined that the Vanguard funds have a legitimate business purpose for disclosing portfolio holdings to the persons described in each of the circumstances set forth in the Policies and Procedures and that the Policies and Procedures are reasonably designed to ensure that disclosure of portfolio holdings and information about portfolio holdings is in the best interests of fund shareholders and appropriately addresses the potential for material conflicts of interest.

The Boards exercise continuing oversight of the disclosure of Vanguard fund portfolio holdings by (1) overseeing the implementation and enforcement of the Policies and Procedures, the Code of Ethics, and the Policies and Procedures Designed to Prevent the Misuse of Inside Information (collectively, the portfolio holdings governing policies) by the chief compliance officer of Vanguard and the Vanguard funds; (2) considering reports and recommendations by the chief compliance officer concerning any material compliance matters (as defined in Rule 38a-1 under the 1940 Act and Rule 206(4)-7 under the Investment Advisers Act of 1940) that may arise in connection with any portfolio holdings governing policies; and (3) considering whether to approve or ratify any amendment to any portfolio holdings governing policies. Vanguard and the Boards reserve the right to amend the Policies and Procedures at any time and from time to time without prior notice at their sole discretion. For purposes of the Policies and Procedures, the term “portfolio holdings” means the equity and debt securities (e.g., stocks and bonds) held by a Vanguard fund and does not mean the cash investments, derivatives, and other investment positions (collectively, other investment positions) held by the fund.

Online Disclosure of Ten Largest Stock Holdings

Each actively managed Vanguard fund generally will seek to disclose the fund’s ten largest stock portfolio holdings and the percentage of the fund’s total assets that each of these holdings represents as of the end of the most recent calendar quarter (quarter-end ten largest stock holdings with weightings) online at vanguard.com, in the “Portfolio” section of the fund’s Portfolio & Management page, 15 calendar days after the end of the calendar quarter. Each Vanguard index fund generally will seek to disclose the fund’s ten largest stock portfolio holdings and the percentage of the fund’s total assets that each of these holdings represents as of the end of the most recent month (month-end ten largest stock holdings with weightings) online at vanguard.com, in the “Portfolio” section of the fund’s Portfolio & Management page, 15 calendar days after the end of the month. In addition, Vanguard funds generally will seek to disclose the fund’s ten largest stock portfolio holdings and the aggregate percentage of the fund’s total assets (and, for balanced funds, the aggregate percentage of the fund’s equity securities) that these holdings represent as of the end of the most recent month (month-end ten largest stock holdings) online at vanguard.com, in the “Portfolio” section of the fund’s Portfolio & Management page, 10 business days after the end of the month. Together, the quarter-end and month-end ten largest stock holdings are referred to as the ten largest stock holdings. Online disclosure of the ten largest stock holdings is made to all categories of persons, including individual investors, institutional investors, intermediaries, third-party service providers, rating and ranking organizations, affiliated persons of a Vanguard fund, and all other persons.

Online Disclosure of Complete Portfolio Holdings

Each actively managed Vanguard fund, unless otherwise stated, generally will seek to disclose the fund’s complete portfolio holdings as of the end of the most recent calendar quarter online at vanguard.com, in the “Portfolio” section of the fund’s Portfolio & Management page, 30 calendar days after the end of the calendar quarter. In accordance with Rule 2a-7 under the 1940 Act, each of the Vanguard money market funds will disclose the fund’s complete portfolio holdings as of the last business day of the prior month online at vanguard.com, in the “Portfolio” section of the fund’s Portfolio & Management page, no later than the fifth business day of the current month. The complete portfolio holdings information for money market funds will remain available online for at least six months after the initial posting. Vanguard Market

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Neutral Fund and Vanguard Alternative Strategies Fund generally will seek to disclose the Fund’s complete portfolio holdings as of the end of the most recent calendar quarter online at vanguard.com, in the “Portfolio” section of the Fund’s Portfolio & Management page, 60 calendar days after the end of the calendar quarter. Each Vanguard index fund generally will seek to disclose the fund’s complete portfolio holdings as of the end of the most recent month online at vanguard.com, in the “Portfolio” section of the fund’s Portfolio & Management page, 15 calendar days after the end of the month. Online disclosure of complete portfolio holdings is made to all categories of persons, including individual investors, institutional investors, intermediaries, third-party service providers, rating and ranking organizations, affiliated persons of a Vanguard fund, and all other persons. Vanguard will review complete portfolio holdings before disclosure is made and, except with respect to the complete portfolio holdings of the Vanguard money market funds, may withhold any portion of the fund’s complete portfolio holdings from disclosure when deemed to be in the best interests of the fund after consultation with a Vanguard fund’s investment advisor.

Disclosure of Complete Portfolio Holdings to Service Providers Subject to Confidentiality and Trading Restrictions

Vanguard, for legitimate business purposes, may disclose Vanguard fund complete portfolio holdings at times it deems necessary and appropriate to rating and ranking organizations; financial printers; proxy voting service providers; pricing information vendors; issuers of guaranteed investment contracts for stable value portfolios; third parties that deliver analytical, statistical, or consulting services; and other third parties that provide services (collectively, Service Providers) to Vanguard, Vanguard subsidiaries, and/or the Vanguard funds. Disclosure of complete portfolio holdings to a Service Provider is conditioned on the Service Provider being subject to a written agreement imposing a duty of confidentiality, including a duty not to trade on the basis of any material nonpublic information.

The frequency with which complete portfolio holdings may be disclosed to a Service Provider, and the length of the lag, if any, between the date of the information and the date on which the information is disclosed to the Service Provider, is determined based on the facts and circumstances, including, without limitation, the nature of the portfolio holdings information to be disclosed, the risk of harm to the funds and their shareholders, and the legitimate business purposes served by such disclosure. The frequency of disclosure to a Service Provider varies and may be as frequent as daily, with no lag. Disclosure of Vanguard fund complete portfolio holdings by Vanguard to a Service Provider must be authorized by a Vanguard fund officer or a Principal in Vanguard’s Portfolio Review Department or Legal and Compliance Division. Any disclosure of Vanguard fund complete portfolio holdings to a Service Provider as previously described may also include a list of the other investment positions that make up the fund, such as cash investments and derivatives.

Currently, Vanguard discloses Vanguard fund complete portfolio holdings to the following Service Providers as part of ongoing arrangements that serve legitimate business purposes: Abel/Noser Corporation; Advisor Software, Inc.; Alcom Printing Group Inc.; Apple Press, L.C.; Bloomberg L.P.; Brilliant Graphics, Inc.; Broadridge Financial Solutions, Inc.; Brown Brothers Harriman & Co.; Canon Business Process Services; FactSet Research Systems Inc.; Innovation Printing & Communications; Institutional Shareholder Services, Inc.; Intelligencer Printing Company; Investment Technology Group, Inc.; Lipper, Inc.; Markit WSO Corporation; McMunn Associates Inc.; Reuters America Inc.; R.R. Donnelley, Inc.; State Street Bank and Trust Company; Trade Informatics LLC, Triune Color Corporation; and Tursack Printing Inc.

Disclosure of Complete Portfolio Holdings to Vanguard Affiliates and Certain Fiduciaries Subject to Confidentiality and Trading Restrictions

Vanguard fund complete portfolio holdings may be disclosed between and among the following persons (collectively, Affiliates and Fiduciaries) for legitimate business purposes within the scope of their official duties and responsibilities, subject to such persons’ continuing legal duty of confidentiality and legal duty not to trade on the basis of any material nonpublic information, as such duties are imposed under the Code of Ethics, the Policies and Procedures Designed to Prevent the Misuse of Inside Information, by agreement, or under applicable laws, rules, and regulations: (1) persons who are subject to the Code of Ethics or the Policies and Procedures Designed to Prevent the Misuse of Inside Information; (2) an investment advisor, distributor, administrator, transfer agent, or custodian to a Vanguard fund; (3) an accounting firm, an auditing firm, or outside legal counsel retained by Vanguard, a Vanguard subsidiary, or a Vanguard fund; (4) an investment advisor to whom complete portfolio holdings are disclosed for due diligence purposes when the advisor is in merger or acquisition talks with a Vanguard fund’s current advisor; and (5) a newly hired investment advisor or sub-advisor to whom complete portfolio holdings are disclosed prior to the time it commences its duties.

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The frequency with which complete portfolio holdings may be disclosed between and among Affiliates and Fiduciaries, and the length of the lag, if any, between the date of the information and the date on which the information is disclosed between and among the Affiliates and Fiduciaries, is determined by such Affiliates and Fiduciaries based on the facts and circumstances, including, without limitation, the nature of the portfolio holdings information to be disclosed, the risk of harm to the funds and their shareholders, and the legitimate business purposes served by such disclosure. The frequency of disclosure between and among Affiliates and Fiduciaries varies and may be as frequent as daily, with no lag. Any disclosure of Vanguard fund complete portfolio holdings to any Affiliates and Fiduciaries as previously described may also include a list of the other investment positions that make up the fund, such as cash investments and derivatives. Disclosure of Vanguard fund complete portfolio holdings or other investment positions by Vanguard, Vanguard Marketing Corporation, or a Vanguard fund to Affiliates and Fiduciaries must be authorized by a Vanguard fund officer or a Principal of Vanguard.

Currently, Vanguard discloses Vanguard fund complete portfolio holdings to the following Affiliates and Fiduciaries as part of ongoing arrangements that serve legitimate business purposes: Vanguard and each investment advisor, custodian, and independent registered public accounting firm identified in each fund’s Statement of Additional Information.

Disclosure of Portfolio Holdings to Broker-Dealers in the Normal Course of Managing a Fund’s Assets

An investment advisor, administrator, or custodian for a Vanguard fund may, for legitimate business purposes within the scope of its official duties and responsibilities, disclose portfolio holdings (whether partial portfolio holdings or complete portfolio holdings) and other investment positions that make up the fund to one or more broker-dealers during the course of, or in connection with, normal day-to-day securities and derivatives transactions with or through such broker-dealers subject to the broker-dealer’s legal obligation not to use or disclose material nonpublic information concerning the fund’s portfolio holdings, other investment positions, securities transactions, or derivatives transactions without the consent of the fund or its agents. The Vanguard funds have not given their consent to any such use or disclosure and no person or agent of Vanguard is authorized to give such consent except as approved in writing by the Boards of the Vanguard funds. Disclosure of portfolio holdings or other investment positions by Vanguard to broker-dealers must be authorized by a Vanguard fund officer or a Principal of Vanguard.

Disclosure of Nonmaterial Information

The Policies and Procedures permit Vanguard fund officers, Vanguard fund portfolio managers, and other Vanguard representatives (collectively, Approved Vanguard Representatives) to disclose any views, opinions, judgments, advice, or commentary, or any analytical, statistical, performance, or other information, in connection with or relating to a Vanguard fund or its portfolio holdings and/or other investment positions (collectively, commentary and analysis) or any changes in the portfolio holdings of a Vanguard fund that occurred after the end of the most recent calendar quarter (recent portfolio changes) to any person if (1) such disclosure serves a legitimate business purpose, (2) such disclosure does not effectively result in the disclosure of the complete portfolio holdings of any Vanguard fund (which can be disclosed only in accordance with the Policies and Procedures), and (3) such information does not constitute material nonpublic information. Disclosure of commentary and analysis or recent portfolio changes by Vanguard, Vanguard Marketing Corporation, or a Vanguard fund must be authorized by a Vanguard fund officer or a Principal of Vanguard.

An Approved Vanguard Representative must make a good faith determination whether the information constitutes material nonpublic information, which involves an assessment of the particular facts and circumstances. Vanguard believes that in most cases recent portfolio changes that involve a few or even several securities in a diversified portfolio or commentary and analysis would be immaterial and would not convey any advantage to a recipient in making an investment decision concerning a Vanguard fund. Nonexclusive examples of commentary and analysis about a Vanguard fund include (1) the allocation of the fund’s portfolio holdings and other investment positions among various asset classes, sectors, industries, and countries; (2) the characteristics of the stock and bond components of the fund’s portfolio holdings and other investment positions; (3) the attribution of fund returns by asset class, sector, industry, and country; and (4) the volatility characteristics of the fund. Approved Vanguard Representatives may, at their sole discretion, deny any request for information made by any person, and may do so for any reason or for no reason. Approved Vanguard Representatives include, for purposes of the Policies and Procedures, persons employed by or associated with Vanguard or a subsidiary of Vanguard who have been authorized by Vanguard’s Portfolio Review

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Department to disclose recent portfolio changes and/or commentary and analysis in accordance with the Policies and Procedures.

Disclosure of Portfolio Holdings Related Information to the Issuer of a Security for Legitimate Business Purposes

Vanguard, at its sole discretion, may disclose portfolio holdings information concerning a security held by one or more Vanguard funds to the issuer of such security if the issuer presents, to the satisfaction of Vanguard’s Fund Financial Services unit, convincing evidence that the issuer has a legitimate business purpose for such information. Disclosure of this information to an issuer is conditioned on the issuer being subject to a written agreement imposing a duty of confidentiality, including a duty not to trade on the basis of any material nonpublic information. The frequency with which portfolio holdings information concerning a security may be disclosed to the issuer of such security, and the length of the lag, if any, between the date of the information and the date on which the information is disclosed to the issuer, is determined based on the facts and circumstances, including, without limitation, the nature of the portfolio holdings information to be disclosed, the risk of harm to the funds and their shareholders, and the legitimate business purposes served by such disclosure. The frequency of disclosure to an issuer cannot be determined in advance of a specific request and will vary based upon the particular facts and circumstances and the legitimate business purposes, but in unusual situations could be as frequent as daily, with no lag. Disclosure of portfolio holdings information concerning a security held by one or more Vanguard funds to the issuer of such security must be authorized by a Vanguard fund officer or a Principal in Vanguard’s Portfolio Review Department or Legal and Compliance Division.

Disclosure of Portfolio Holdings as Required by Applicable Law

Vanguard fund portfolio holdings (whether partial portfolio holdings or complete portfolio holdings) and other investment positions that make up a fund shall be disclosed to any person as required by applicable laws, rules, and regulations. Examples of such required disclosure include, but are not limited to, disclosure of Vanguard fund portfolio holdings (1) in a filing or submission with the SEC or another regulatory body, (2) in connection with seeking recovery on defaulted bonds in a federal bankruptcy case, (3) in connection with a lawsuit, or (4) as required by court order. Disclosure of portfolio holdings or other investment positions by Vanguard, Vanguard Marketing Corporation, or a Vanguard fund as required by applicable laws, rules, and regulations must be authorized by a Vanguard fund officer or a Principal of Vanguard.

Prohibitions on Disclosure of Portfolio Holdings

No person is authorized to disclose Vanguard fund portfolio holdings or other investment positions (whether online at vanguard.com, in writing, by fax, by email, orally, or by other means) except in accordance with the Policies and Procedures. In addition, no person is authorized to make disclosure pursuant to the Policies and Procedures if such disclosure is otherwise unlawful under the antifraud provisions of the federal securities laws (as defined in Rule 38a-1 under the 1940 Act). Furthermore, Vanguard’s management, at its sole discretion, may determine not to disclose portfolio holdings or other investment positions that make up a Vanguard fund to any person who would otherwise be eligible to receive such information under the Policies and Procedures, or may determine to make such disclosures publicly as provided by the Policies and Procedures.

Prohibitions on Receipt of Compensation or Other Consideration

The Policies and Procedures prohibit a Vanguard fund, its investment advisor, and any other person or entity from paying or receiving any compensation or other consideration of any type for the purpose of obtaining disclosure of Vanguard fund portfolio holdings or other investment positions. “Consideration” includes any agreement to maintain assets in the fund or in other investment companies or accounts managed by the investment advisor or by any affiliated person of the investment advisor.

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INVESTMENT ADVISORY AND OTHER SERVICES

The Funds receive investment advisory services from Vanguard, through its Fixed Income Group. These services are provided on an at-cost basis by an experienced investment advisory staff employed directly by Vanguard. The compensation and other expenses of the advisory staff are allocated among the funds utilizing these services.

1. Other Accounts Managed

John C. Lanius manages Vanguard Market Liquidity Fund; as of August 31, 2018, the Fund held assets of $55 billion. As of August 31, 2018, Mr. Lanius also managed 2 other registered investment companies with total assets of $101 billion (neither of which had advisory fees based on account performance).

John Grimes manages Vanguard Municipal Cash Management Fund; as of August 31, 2018, the Fund held assets of $1.9 billion. As of August 31, 2018, Mr. Grimes also managed 1 other registered investment company with total assets of $3 billion (no advisory fees based on account performance).

2. Material Conflicts of Interest

At Vanguard, individual portfolio managers may manage multiple accounts for multiple clients. In addition to mutual funds, these accounts may include separate accounts, collective trusts, and offshore funds. Managing multiple funds or accounts may give rise to potential conflicts of interest including, for example, conflicts among investment strategies and conflicts in the allocation of investment opportunities. Vanguard manages potential conflicts between funds or accounts through allocation policies and procedures, internal review processes, and oversight by trustees and independent third parties. Vanguard has developed trade allocation procedures and controls to ensure that no one client, regardless of type, is intentionally favored at the expense of another. Allocation policies are designed to address potential conflicts in situations where two or more funds or accounts participate in investment decisions involving the same securities.

3. Description of Compensation

All Vanguard portfolio managers are Vanguard employees. This section describes the compensation of the Vanguard employees who manage Vanguard mutual funds. As of August 31, 2018, a Vanguard portfolio manager’s compensation generally consists of base salary, bonus, and payments under Vanguard’s long-term incentive compensation program. In addition, portfolio managers are eligible for the standard retirement benefits and health and welfare benefits available to all Vanguard employees. Also, certain portfolio managers may be eligible for additional retirement benefits under several supplemental retirement plans that Vanguard adopted in the 1980s to restore dollar-for-dollar the benefits of management employees that had been cut back solely as a result of tax law changes. These plans are structured to provide the same retirement benefits as the standard retirement plans.

In the case of portfolio managers responsible for managing multiple Vanguard funds or accounts, the method used to determine their compensation is the same for all funds and investment accounts. A portfolio manager’s base salary is determined by the manager’s experience and performance in the role, taking into account the ongoing compensation benchmark analyses performed by Vanguard’s Human Resources Department. A portfolio manager’s base salary is generally a fixed amount that may change as a result of an annual review, upon assumption of new duties, or when a market adjustment of the position occurs.

A portfolio manager’s bonus is determined by a number of factors. One factor is gross, pre-tax performance of the fund relative to expectations for how the fund should have performed, given the fund’s investment objective, policies, strategies, and limitations, and the market environment during the measurement period. This performance factor is not based on the amount of assets held in the fund’s portfolio. For each Fund, the performance factor depends on how successfully the portfolio manager maintains the credit quality of the Fund and, consequently, how the Fund performs relative to the expectations described above over a one-year period. Additional factors include the portfolio manager’s contributions to the investment management functions within the sub-asset class, contributions to the development of other investment professionals and supporting staff, and overall contributions to strategic planning and decisions for the investment group. The target bonus is expressed as a percentage of base salary. The actual bonus paid may be more or less than the target bonus, based on how well the manager satisfies the objectives previously described. The bonus is paid on an annual basis.

Under the long-term incentive compensation program, all full-time employees receive a payment from Vanguard’s long-term incentive compensation plan based on their years of service, job level and, if applicable, management

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responsibilities. Each year, Vanguard’s independent directors determine the amount of the long-term incentive compensation award for that year based on the investment performance of the Vanguard funds relative to competitors and Vanguard’s operating efficiencies in providing services to the Vanguard funds.

4. Ownership of Securities

Vanguard employees, including portfolio managers, allocate their investments among the various Vanguard funds or collective investment trusts that may invest in Vanguard funds based on their own individual investment needs and goals. Vanguard employees, as a group, invest a sizable portion of their personal assets in Vanguard funds. As of August 31, 2018, Vanguard employees collectively invested more than $6.8 billion in Vanguard funds or collective investment trusts that may invest in Vanguard funds.

As of August 31, 2018, the named portfolio managers did not own any shares of the Funds they managed because the Funds are only available as cash management vehicles to other Vanguard funds and certain trusts and accounts managed by Vanguard or its affiliates. However, because the portfolio managers own shares of other Vanguard funds that invest in the Vanguard Market Liquidity and Vanguard Municipal Cash Management Funds as cash management vehicles, the portfolio managers indirectly have an interest in the Funds.

Duration and Termination of Investment Advisory Agreement

The Management and Distribution Agreement with the advisor, which governs the investment advisory services provided to each Fund, is renewable for successive one-year periods, only if (1) each renewal is specifically approved by a vote of the Fund’s board of trustees, including the affirmative votes of a majority of trustees who are not parties to the contract or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of considering such approval, or (2) each renewal is specifically approved by a vote of a majority of the Fund’s outstanding voting securities. The Agreement is automatically terminated if assigned, and may be terminated without penalty at any time either (1) by vote of the board of trustees of the Fund upon sixty (60) days’ written notice to Vanguard and VMC, (2) by a vote of a majority of the Fund’s outstanding voting securities upon 60 days’ written notice to Vanguard and VMC, or (3) by Vanguard or VMC upon ninety (90) days’ written notice to the Fund.

PORTFOLIO TRANSACTIONS

The advisor decides which securities to buy and sell on behalf of a Fund and then selects the brokers or dealers that will execute the trades on an agency basis or the dealers with whom the trades will be effected on a principal basis. For each trade, the advisor must select a broker-dealer that it believes will provide “best execution.” Best execution does not necessarily mean paying the lowest spread or commission rate available. In seeking best execution, the SEC has said that an advisor should consider the full range of a broker-dealer’s services. The factors considered by the advisor in seeking best execution include, but are not limited to, the broker-dealer’s execution capability, clearance and settlement services, commission rate, trading expertise, willingness and ability to commit capital, ability to provide anonymity, financial responsibility, reputation and integrity, responsiveness, access to underwritten offerings and secondary markets, and access to company management, as well as the value of any research provided by the broker-dealer. In assessing which broker-dealer can provide best execution for a particular trade, the advisor also may consider the timing and size of the order and available liquidity and current market conditions. Subject to applicable legal requirements, the advisor may select a broker based partly on brokerage or research services provided to the advisor and its clients, including the Fund. The advisor may cause the Fund to pay a higher commission than other brokers would charge if the advisor determines in good faith that the amount of the commission is reasonable in relation to the value of services provided. The advisor also may receive brokerage or research services from broker-dealers that are provided at no charge in recognition of the volume of trades directed to the broker. To the extent research services or products may be a factor in selecting brokers, services and products may include written research reports analyzing performance or securities, discussions with research analysts, meetings with corporate executives to obtain oral reports on company performance, and market data, and other products and services that will assist the advisor in its investment decision-making process. The research services provided by brokers through which the Fund effects securities transactions may be used by the advisor in servicing all of its accounts, and some of the services may not be used by the advisor in connection with the Fund.

The types of securities in which the Funds invest are generally purchased and sold through principal transactions, meaning that the Fund normally purchases securities directly from the issuer or a primary market-maker acting as

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principal for the securities on a net basis. Explicit brokerage commissions are not paid on these transactions, although purchases of new issues from underwriters of securities typically include a commission or concession paid by the issuer to the underwriter, and purchases from dealers serving as market-makers typically include a dealer’s mark-up (i.e., a spread between the bid and the asked prices).

As previously explained, the types of securities that the Fund purchases do not normally involve the payment of explicit brokerage commissions. If any such brokerage commissions are paid, however, the advisor will evaluate their reasonableness by considering (1) historical commission rates; (2) rates which other institutional investors are paying, based upon publicly available information; (3) rates quoted by brokers and dealers; (4) the size of a particular transaction, in terms of the number of shares, dollar amount, and number of clients involved; (5) the complexity of a particular transaction in terms of both execution and settlement; (6) the level and type of business done with a particular firm over a period of time; and (7) the extent to which the broker or dealer has capital at risk in the transaction.

Some securities that are considered for investment by a Fund may also be appropriate for other Vanguard funds or for other clients served by the advisor. If such securities are compatible with the investment policies of a Fund and one or more of the advisor’s other clients and are considered for purchase or sale at or about the same time, then transactions in such securities may be aggregated by the advisor, and the purchased securities or sale proceeds may be allocated among the participating Vanguard funds and the other participating clients of the advisor in a manner deemed equitable by the advisor. Although there may be no specified formula for allocating such transactions, the allocation methods used, and the results of such allocations, will be subject to periodic review by the Funds‘ board of trustees.

The ability of Vanguard and external advisors to purchase or dispose of investments in regulated industries, certain derivatives markets, certain international markets, and certain issuers that limit ownership by a single shareholder or group of related shareholders, or to exercise rights on behalf of a Fund, may be restricted or impaired because of limitations on the aggregate level of investment unless regulatory or corporate consents or ownership waivers are obtained. As a result, Vanguard and external advisors on behalf of a Fund may be required to limit purchases, sell existing investments, or otherwise restrict or limit the exercise of shareholder rights by the Fund, including voting rights. If a Fund is required to limit its investment in a particular issuer, the Fund may seek to obtain economic exposure to that issuer through alternative means, such as through a derivative, which may be more costly than owning securities of the issuer directly.

As of August 31, 2018, each Fund held securities of its “regular brokers or dealers,” as that term is defined in Rule 10b-1 of the 1940 Act, as follows:


Vanguard Fund	Regular Broker or Dealer (or Parent)	Aggregate Holdings
Market Liquidity Fund	Citigroup Global Markets Inc.	$196,276
	Federal Reserve Bank of NY	—
	J.P. Morgan Securities Inc.	168,000
	Merrill Lynch, Pierce, Fenner & Smith Inc.	382,230
	National Australia Bank Limited	617,185
	Rabobank International	—
	RBC Dominion Sec Intl	15,000

Municipal Cash Management Fund	—	—

During the fiscal years ended August 31, 2016, 2017, and 2018, the Funds did not pay any brokerage commissions.

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VANGUARD‘S PROXY VOTING GUIDELINES

The Board of Trustees (the Board) of each Vanguard fund has adopted proxy voting procedures and guidelines to govern proxy voting by the fund. The Board has delegated oversight of proxy voting to the Investment Stewardship Oversight Committee (the Committee), made up of senior officers of Vanguard and subject to the procedures and guidelines described below. The Committee reports directly to the Board. Vanguard is subject to these procedures and guidelines to the extent that they call for Vanguard to administer the voting process and implement the resulting voting decisions, and for these purposes the guidelines have also been approved by the Board of Directors of Vanguard.

The overarching objective in voting is simple: to support proposals and director nominees that maximize the value of a fund’s investments—and those of fund shareholders—over the long term. Although the goal is simple, the proposals the funds receive are varied and frequently complex. As such, the guidelines adopted by the Board provide a rigorous framework for assessing each proposal. Under the guidelines, each proposal must be evaluated on its merits, based on the particular facts and circumstances as presented.

For ease of reference, the procedures and guidelines often refer to all funds. However, our processes and practices seek to ensure that proxy voting decisions are suitable for individual funds. For most proxy proposals, particularly those involving corporate governance, the evaluation will result in the same position being taken across all of the funds and the funds voting as a block. In some cases, however, a fund may vote differently, depending upon the nature and objective of the fund, the composition of its portfolio, and other factors.

The guidelines do not permit the Board to delegate voting responsibility to a third party that does not serve as a fiduciary for the funds. Because many factors bear on each decision, the guidelines incorporate factors the Committee should consider in each voting decision. A fund may refrain from voting some or all of its shares or vote in a particular way if doing so would be in the fund’s and its shareholders’ best interests. These circumstances may arise, for example, if the expected cost of voting exceeds the expected benefits of voting, if exercising the vote would result in the imposition of trading or other restrictions, or if a fund (or all Vanguard funds in the aggregate) were to own more than the permissible maximum percentage of a company’s stock (as determined by the company’s governing documents or by applicable law, regulation, or regulatory agreement).

In evaluating proxy proposals, we consider information from many sources, including, but not limited to, the investment advisor for the fund, the management or shareholders of a company presenting a proposal, and independent proxy research services. We will give substantial weight to the recommendations of the company’s board, absent guidelines or other specific facts that would support a vote against management. In all cases, however, the ultimate decision rests with the members of the Committee, who are accountable to the fund’s Board.

While serving as a framework, the following guidelines cannot contemplate all possible proposals with which a fund may be presented. In the absence of a specific guideline for a particular proposal (e.g., in the case of a transactional issue or contested proxy), the Committee will evaluate the issue and cast the fund’s vote in a manner that, in the Committee’s view, will maximize the value of the fund’s investment, subject to the individual circumstances of the fund.

I. The Board of Directors

A. Election of directors

Good governance starts with a majority-independent board, whose key committees are made up entirely of independent directors. As such, companies should attest to the independence of directors who serve on the Compensation, Nominating, and Audit committees. In any instance in which a director is not categorically independent, the basis for the independence determination should be clearly explained in the proxy statement.

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While the funds will generally support the board’s nominees, we will consider a company’s specific circumstances in the context of relevant exchange rules and local governance codes, where applicable, in determining the fund’s vote. The following factors will be taken into account in determining each fund’s vote:


Factors for approval	Factors against approval
Nominated slate results in board made up of a majority of	Nominated slate results in board made up of a majority of
independent directors.	non-independent directors.
All members of Audit, Nominating, and Compensation	Audit, Nominating, and/or Compensation committees include
committees are independent of management.	non-independent members.
	Incumbent board member failed to attend at least 75% of meetings
	in the previous year.
	Actions of committee(s) on which nominee serves are inconsistent with
	other guidelines (e.g., excessive equity grants, substantial non-audit fees,
	lack of board independence).
	Actions of committee(s) on which nominee serves demonstrate serious
	failures of governance (e.g., unilaterally acting to significantly reduce
	shareholder rights, failure to respond to previous vote results for directors
	and shareholder proposals).


B. Contested director elections

In the case of contested board elections, we will evaluate the nominees’ qualifications, the performance of the incumbent board, and the rationale behind the dissidents’ campaign, to determine the outcome that we believe will maximize shareholder value.

C. Classified boards

The funds will generally support proposals to declassify existing boards (whether proposed by management or shareholders), and will block efforts by companies to adopt classified board structures in which only part of the board is elected each year.

D. Proxy access

We believe that long-term investors may benefit from having proxy access, or the opportunity to place director nominees on a company’s proxy ballot. In our view, this improves shareholders’ ability to participate in director elections while potentially enhancing boards’ accountability and responsiveness to shareholders.

That said, we also believe that proxy access provisions should be appropriately limited to avoid abuse by investors who lack a meaningful long-term interest in the company. As such, we generally believe that a shareholder or group of shareholders representing 3% of a company’s outstanding shares held for at least three years should be able to nominate directors for up to 20% of the seats on the board.

We will review proposals regarding proxy access case by case. The funds will be most likely to support access provisions with the terms described above, but they may support different thresholds based on a company’s other governance provisions, as well as other relevant factors.

II. Approval of Independent Auditors

The relationship between the company and its auditors should be limited primarily to the audit, although it may include certain closely related activities that do not, in the aggregate, raise any appearance of impaired independence. The funds will generally support management’s recommendation for the ratification of the auditor, except in instances in which audit and audit-related fees make up less than 50% of the total fees paid by the company to the audit firm. We will evaluate on a case-by-case basis instances in which the audit firm has a substantial non-audit relationship with the company (regardless of its size relative to the audit fee) to determine whether independence has been compromised.

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III. Compensation Issues

A. Stock-based compensation plans

Appropriately designed stock-based compensation plans, administered by an independent committee of the board and approved by shareholders, can be an effective way to align the interests of long-term shareholders with the interests of management, employees, and directors. The funds oppose plans that substantially dilute their ownership interest in the company, provide participants with excessive awards, or have inherently objectionable structural features.

An independent compensation committee should have significant latitude to deliver varied compensation to motivate the company’s employees. However, we will evaluate compensation proposals in the context of several factors (a company’s industry, market capitalization, competitors for talent, etc.) to determine whether a particular plan or proposal balances the perspectives of employees and the company’s other shareholders. We will evaluate each proposal on a case-by-case basis, taking all material facts and circumstances into account.

The following factors will be among those considered in evaluating these proposals:


Factors for approval	Factors against approval
Company requires senior executives to hold a minimum amount	Total potential dilution (including all stock-based plans) exceeds 15% of
of company stock (frequently expressed as a multiple of salary).	shares outstanding.
Company requires stock acquired through equity awards to be	Annual equity grants have exceeded 2% of shares outstanding.
held for a certain period of time.
Compensation program includes performance-vesting awards,	Plan permits repricing or replacement of options without
indexed options, or other performance-linked grants.	shareholder approval.
Concentration of equity grants to senior executives is limited	Plan provides for the issuance of reload options.
(indicating that the plan is very broad-based).
Stock-based compensation is clearly used as a substitute for	Plan contains automatic share replenishment (evergreen) feature.
cash in delivering market-competitive total pay.

B. Bonus plans

Bonus plans, which must be periodically submitted for shareholder approval to qualify for deductibility under Section 162(m) of the Internal Revenue Code, should have clearly defined performance criteria and maximum awards expressed in dollars. Bonus plans with awards that are excessive, in both absolute terms and relative to a comparative group, generally will not be supported.

C. Employee stock purchase plans

The funds will generally support the use of employee stock purchase plans to increase company stock ownership by employees, provided that shares purchased under the plan are acquired for no less than 85% of their market value and that shares reserved under the plan amount to less than 5% of the outstanding shares.

D. Advisory votes on executive compensation (Say on Pay)

In addition to proposals on specific equity or bonus plans, the funds are required to cast advisory votes approving many companies’ overall executive compensation plans (so-called Say on Pay votes). In evaluating these proposals, we consider a number of factors, including the amount of compensation that is at risk, the amount of equity-based compensation that is linked to the company’s performance, and the level of compensation as compared to industry peers. The funds will generally support pay programs that demonstrate effective linkage between pay and performance over time and that provide compensation opportunities that are competitive relative to industry peers. On the other hand, pay programs in which significant compensation is guaranteed or insufficiently linked to performance will be less likely to earn our support.

E. Executive severance agreements (“golden parachutes”)

Although executives’ incentives for continued employment should be more significant than severance benefits, there are instances—particularly in the event of a change in control—in which severance arrangements may be appropriate. Severance benefits payable upon a change of control AND an executive’s termination (so-called “double trigger” plans) are generally acceptable to the extent that benefits paid do not exceed three times salary and bonus. Arrangements in

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which the benefits exceed three times salary and bonus should be justified and submitted for shareholder approval. We do not generally support guaranteed severance absent a change in control or arrangements that do not require the termination of the executive (so-called “single trigger” plans).

IV. Corporate Structure and Shareholder Rights

The exercise of shareholder rights, in proportion to economic ownership, is a fundamental privilege of stock ownership that should not be unnecessarily limited. Such limits may be placed on shareholders’ ability to act by corporate charter or by-law provisions, or by the adoption of certain takeover provisions. In general, the market for corporate control should be allowed to function without undue interference from these artificial barriers.

The funds’ positions on a number of the most commonly presented issues in this area are as follows:

A. Shareholder rights plans (“poison pills”)

A company’s adoption of a so-called poison pill effectively limits a potential acquirer’s ability to buy a controlling interest

without the approval of the target’s board of directors. Such a plan, in conjunction with other takeover defenses, may serve to entrench incumbent management and directors. However, in other cases, a poison pill may force a suitor to negotiate with the board and result in the payment of a higher acquisition premium.

In general, shareholders should be afforded the opportunity to approve shareholder rights plans within a year of their adoption. This provides the board with the ability to put a poison pill in place for legitimate defensive purposes, subject to subsequent approval by shareholders. In evaluating the approval of proposed shareholder rights plans, we will consider the following factors:


Factors for approval	Factors against approval
Plan is relatively short term (3-5 years).	Plan is long term (>5 years).
Plan requires shareholder approval for renewal.	Renewal of plan is automatic or does not require shareholder approval.
Plan incorporates review by a committee of independent	Board with limited independence.
directors at least every three years (so-called TIDE provisions).
Ownership trigger is reasonable (15-20%).	Ownership trigger is less than 15%.
Highly independent, non-classified board.	Classified board.
Plan includes permitted-bid/qualified-offer feature (chewable
pill) that mandates a shareholder vote in certain situations.

B. Increase in authorized shares

The funds are supportive of companies seeking to increase authorized share amounts that do not potentially expose shareholders to excessive dilution. We will generally approve increases of up to 50% of the current share authorization, but will also consider a company’s specific circumstances and market practices.

C. Cumulative voting

The funds are generally opposed to cumulative voting under the premise that it allows shareholders a voice in director elections that is disproportionate to their economic investment in the corporation.

D. Supermajority vote requirements

The funds support shareholders’ ability to approve or reject matters presented for a vote based on a simple majority. Accordingly, the funds will support proposals to remove supermajority requirements and oppose proposals to impose them.

E. Right to call meetings and act by written consent

The funds support shareholders’ right to call special meetings of the board (for good cause and with ample representation) and to act by written consent. The funds will generally vote for proposals to grant these rights to shareholders and against proposals to abridge them.

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F. Confidential voting

The integrity of the voting process is enhanced substantially when shareholders (both institutions and individuals) can vote without fear of coercion or retribution based on their votes. As such, the funds support proposals to provide confidential voting.

G. Dual classes of stock

We are opposed to dual class capitalization structures that provide disparate voting rights to different groups of shareholders with similar economic investments. We will oppose the creation of separate classes with different voting rights and will support the dissolution of such classes.

V. Environmental and Social Proposals

Proposals in this category, initiated primarily by shareholders, typically request that a company enhance its disclosure or amend certain business practices. The funds will evaluate these resolutions in the context of our view that a company’s board has ultimate responsibility for providing effective ongoing oversight of relevant sector- and company-specific risks, including those related to environmental and social matters. The funds will evaluate each proposal on its merits and support those where we believe there is a logically demonstrable linkage between the specific proposal and long-term shareholder value of the company. Some of the factors considered when evaluating these proposals include the materiality of the issue, the quality of the current disclosures/business practices, and any progress by the company toward the adoption of best practices and/or industry norms.

VI. Voting in Markets Outside the United States

Corporate governance standards, disclosure requirements, and voting mechanics vary greatly among the markets outside the United States in which the funds may invest. Each fund’s votes will be used, where applicable, to advocate for improvements in governance and disclosure by each fund’s portfolio companies. We will evaluate issues presented to shareholders for each fund’s foreign holdings in the context with the guidelines described above, as well as local market standards and best practices. The funds will cast their votes in a manner believed to be philosophically consistent with these guidelines, while taking into account differing practices by market. In addition, there may be instances in which the funds elect not to vote, as described below.

Many other markets require that securities be “blocked” or reregistered to vote at a company’s meeting. Absent an issue of compelling economic importance, we will generally not subject the fund to the loss of liquidity imposed by these requirements.

The costs of voting (e.g., custodian fees, vote agency fees) in other markets may be substantially higher than for U.S. holdings. As such, the fund may limit its voting on foreign holdings in instances in which the issues presented are unlikely to have a material impact on shareholder value.

VII. Voting Shares of a Company That Has an Ownership Limitation

Certain companies have provisions in their governing documents that restrict stock ownership in excess of a specified limit. Typically, these ownership restrictions are included in the governing documents of real estate investment trusts, but may be included in other companies’ governing documents.

A company’s governing documents normally allow the company to grant a waiver of these ownership limits, which would allow a fund (or all Vanguard-advised funds) to exceed the stated ownership limit. Sometimes a company will grant a waiver without restriction. From time to time, a company may grant a waiver only if a fund (or funds) agrees to not vote the company’s shares in excess of the normal specified limit. In such a circumstance, a fund may refrain from voting shares if owning the shares beyond the company’s specified limit is in the best interests of the fund and its shareholders.

In addition, applicable law may require prior regulatory approval to permit ownership of certain regulated issuer’s voting securities above certain limits or may impose other restrictions on owners of more than a certain percentage of a regulated issuer’s voting shares. The Board has authorized the funds to vote shares above these limits in the same proportion as votes cast by the issuer’s entire shareholder base (i.e., mirror vote) or to refrain from voting excess shares if mirror voting is not practicable.

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VIII. Voting on a Fund’s Holdings of Other Vanguard Funds

Certain Vanguard funds (owner funds) may, from time to time, own shares of other Vanguard funds (underlying funds). If an underlying fund submits a matter to a vote of its shareholders, votes for and against such matters on behalf of the owner funds will be cast in the same proportion as the votes of the other shareholders in the underlying fund.

IX. Investment Stewardship Team

The Board has delegated the day-to-day operation of the funds’ proxy voting process to the Investment Stewardship Team, which the Committee oversees. Although most votes will be determined, subject to the individual circumstances of each fund, by reference to the guidelines as separately adopted by each of the funds, there may be circumstances when Investment Stewardship will refer proxy issues to the Committee for consideration. In addition, at any time, the Board has the authority to vote proxies, when, at the Board’s or the Committee’s discretion, such action is warranted.

The Investment Stewardship Team performs the following functions: (1) managing and conducting due diligence of proxy voting vendors; (2) reconciling share positions; (3) analyzing proxy proposals using factors described in the guidelines; (4) determining and addressing potential or actual conflicts of interest that may be presented by a particular proxy; and (5) voting proxies. The Investment Stewardship Team also prepares periodic and special reports to the Board, and any proposed amendments to the procedures and guidelines.

X. Investment Stewardship Oversight Committee

The Board, including a majority of the independent trustees, appoints the members of the Committee who are senior officers of Vanguard.

The Committee does not include anyone whose primary duties include external client relationship management or sales. This clear separation between the proxy voting and client relationship functions is intended to eliminate any potential conflict of interest in the proxy voting process. In the unlikely event that a member of the Committee believes he or she might have a conflict of interest regarding a proxy vote, that member must recuse himself or herself from the committee meeting at which the matter is addressed, and not participate in the voting decision.

The Committee works with the Investment Stewardship Team to provide reports and other guidance to the Board regarding proxy voting by the funds. The Committee has an obligation to conduct its meetings and exercise its decision-making authority subject to the fiduciary standards of good faith, fairness, and Vanguard’s Code of Ethics. The Committee shall authorize proxy votes that the Committee determines, at its sole discretion, to be in the best interests of each fund’s shareholders. In determining how to apply the guidelines to a particular factual situation, the Committee may not take into account any interest that would conflict with the interest of fund shareholders in maximizing the value of their investments.

The Board may review these procedures and guidelines and modify them from time to time.

To obtain a free copy of a report that details how the funds voted the proxies relating to the portfolio securities held by the funds for the prior 12-month period ended June 30, log on to vanguard.com or visit the SEC’s website at

www.sec.gov.

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FINANCIAL STATEMENTS

Each Fund’s Financial Statements for the fiscal year ended August 31, 2018, appearing in the Funds‘ 2018 Annual Report to Shareholders, and the report thereon of PricewaterhouseCoopers LLP, an independent registered public accounting firm, also appearing therein, are incorporated by reference into this Statement of Additional Information. For a more complete discussion of each Fund’s performance, please see the Funds‘ Annual and Semiannual Reports to Shareholders, which may be obtained without charge.

SAI 1142 122018

B-40

PART C

VANGUARD CMT FUNDS

OTHER INFORMATION

Item 28. Exhibits

(a) Articles of Incorporation, Amended and Restated Agreement and Declaration of Trust, filed with Post-Effective Amendment No. 6 dated December 15, 2008, is hereby incorporated by reference.

(b) By-Laws, filed with Post-Effective Amendment No. 26 Dated December 21, 2017, is hereby incorporated by reference.

(c) Instruments Defining Rights of Security Holders, Reference is made to Articles III and V of the Registrant’s Amended and Restated Agreement and Declaration of Trust, refer to Exhibit (a) above.

(d) Investment Advisory Contracts, The Vanguard Group, Inc., provides investment advisory services to the Funds pursuant to the Management and Distribution Agreement, filed with Post-Effective Amendment No. 7 on October 23, 2009, is hereby incorporated by reference.

(e) Underwriting Contracts, not applicable.

(f) Bonus or Profit Sharing Contracts, reference is made to the section entitled “Management of the Funds” in Part B of this Registration Statement.

(g) Custodian Agreements, for The Bank of New York Mellon, and for State Street Bank and Trust Company, are filed herewith.

(h) Other Material Contracts, Shareholder Service Agreement, filed with Post-Effective Amendment No. 7 on October 23, 2009, is is hereby incorporated by reference.

(i) Legal Opinion, not applicable.

(j) Other Opinions, Consent of Independent Registered Public Accounting Firm, is filed herewith.

(k) Omitted Financial Statement, not applicable.

(l) Initial Capital Agreements, not applicable.

(m) Rule 12b-1 Plan, not applicable.

(n) Rule 18f-3 Plan, not applicable.

(o) Reserved.

(p) Codes of Ethics, for The Vanguard Group, Inc., filed with Post-Effective Amendment No. 26 dated December 21, 2017, is hereby incorporated by reference.

Item 29. Persons Controlled by or under Common Control with Registrant

None.

Item 30. Indemnification

The Registrant’s organizational documents contain provisions indemnifying Trustees and officers against liability incurred in their official capacities. Article VII, Section 2 of the Amended and Restated Agreement and Declaration of Trust provides that the Registrant may indemnify and hold harmless each and every Trustee and officer from and against any and all claims, demands, costs, losses, expenses, and damages whatsoever arising out of or related to the performance of his or her duties as a Trustee or officer. Article VI of the By-Laws generally provides that the Registrant shall indemnify its Trustees and officers from any liability arising out of their past or present service in that capacity. Among other things, this provision excludes any liability arising by reason of willful misfeasance, bad faith, gross negligence, or the reckless disregard of the duties involved in the conduct of the Trustee’s or officer’s office with the Registrant.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the Securities Act) may be permitted for directors, officers, or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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Item 31. Business and Other Connections of the Investment Adviser

The Vanguard Group, Inc. (Vanguard), is an investment adviser registered under the Investment Advisers Act of 1940 (the Advisers Act). The list required by this Item 31 of officers and directors of Vanguard, together with any information as to any business, profession, vocation, or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated herein by reference from Form ADV filed by Vanguard pursuant to the Advisers Act (SEC File No. 801-11953).

Item 32. Principal Underwriters

(a) Vanguard Marketing Corporation, a wholly owned subsidiary of The Vanguard Group, Inc., is the principal underwriter of each fund within the Vanguard group of investment companies, a family of investment companies with over 200 funds.

(b) The principal business address of each named director and officer of Vanguard Marketing Corporation is 100 Vanguard Boulevard, Malvern, PA 19355.


Name	Positions and Office with Underwriter	Positions and Office with Funds
Karin A. Risi	Director and Chairman and Principal and Chief Executive	None
	Officer and Designee
Scott A. Conking	Director and Principal	None
Kevin Jestice	Director and Principal	None
Christopher D. McIsaac	Director and Principal	None
Thomas M. Rampulla	Director and Principal	None
Michael Rollings	Director and Principal	Finance Director
John E. Schadl	Director and Principal and General Counsel	None
Mortimer J. Buckley	President	Chief Executive Officer, President, and
		Trustee
Brian Dvorak	Assistant Vice President	Chief Compliance Officer
Caroline Cosby	Secretary	None
Beth Morales Singh	Assistant Secretary	None
Aisling Murphy	Chief Compliance Officer	None
John T. Marcante	Chief Information Officer	None
Ellen Rinaldi	Chief Information Security Officer	None
Salvatore L. Pantalone	Financial and Operations Principal and Tresurer	None
Amy M. Laursen	Financial and Operations Principal	None
Danielle Corey	Annuity and Insurance Officer	None
Jeff Seglem	Annuity and Insurance Officer	None
Matthew Benchener	Principal	None
John Bendl	Principal	None
Saundra K. Cusumano	Principal	None
James M. Delaplane Jr.	Principal	None
Kathleen A. Graham-Kelly	Principal	None
Andrew Kadjeski	Principal	None
Martha G. King	Principal	None
Mike Lucci	Principal	None

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Name		Positions and Office with Underwriter	Positions and Office with Funds
Alba E. Martinez		Principal	None
Brian McCarthy		Principal	None
James M. Norris		Principal	None
David Petty		Principal	None
Frank Satterthwaite		Principal	None

(c)	Not applicable.

Item 33. Location of Accounts and Records

The books, accounts, and other documents required to be maintained by Section 31 (a) of the Investment Company Act of 1940, as amended, and the rules promulgated thereunder will be maintained at the offices of the Registrant; the Registrant’s Transfer Agent, The Vanguard Group, Inc., 100 Vanguard Boulevard, Malvern, PA 19355; the Registrant’s Custodians, JPMorgan Chase Bank, 383 Madison Avenue, New York, NY 10179, The Bank of New York Mellon, 240 Greenwich Street, New York, NY 10286, and State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111; and the Registrant’s investment advisor at the location identified in this Registration Statement.

Item 34. Management Services

Other than as set forth in the section titled “Management of the Funds” in Part B of this Registration Statement, the Registrant is not a party to any management-related service contract.

Item 35. Undertakings

Not applicable.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant hereby certifies that it meets all requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Valley Forge and the Commonwealth of Pennsylvania, on the 19th day of December, 2018.

VANGUARD CMT FUNDS

BY:_________/s/ Mortimer J. Buckley*____________
Mortimer J. Buckley
Chief Executive Officer, President, and Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated:


Signature	Title	Date
/S/ F. WILLIAM MCNABB III*	Chairman of the Board of	December 19, 2018
	Trustees
F. William McNabb III
/S/ MORTIMER J. BUCKLEY*	Trustee	December 19, 2018
Mortimer J. Buckley
/S/ EMERSON U. FULLWOOD*	Trustee	December 19, 2018
Emerson U. Fullwood
/S/ AMY GUTMANN*	Trustee	December 19, 2018
Amy Gutmann
/S/ JOANN HEFFERNAN HEISEN*	Trustee	December 19, 2018
JoAnn Heffernan Heisen
/S/ MARK LOUGHRIDGE*	Trustee	December 19, 2018
Mark Loughridge
/S/ F. JOSEPH LOUGHREY*	Trustee	December 19, 2018
F. Joseph Loughrey
/S/ SCOTT C. MALPASS*	Trustee	December 19, 2018
Scott C. Malpass
/S/ DEANNA MULLIGAN*	Trustee	December 19, 2018
Deanna Mulligan
/S/ ANDRÉ F. PEROLD*	Trustee	December 19, 2018
André F. Perold
/S/ SARAH BLOOM RASKIN*	Trustee	December 19, 2018
Sarah Bloom Raskin
/S/ PETER F. VOLANAKIS*	Trustee	December 19, 2018
Peter F. Volanakis
/S/ THOMAS J. HIGGINS*	Chief Financial Officer	December 19, 2018
Thomas J. Higgins

*By: /s/ Anne E. Robinson

Anne E. Robinson, pursuant to a Power of Attorney filed on January 18, 2018, see File Number 33-32216, Incorporated by Reference.

C-4


INDEX TO EXHIBITS
Custodian Agreements, State Street Bank and Trust Company and The Bank of New York Mellon.	Ex-99.G
Other Opinions, Consent of Independent Registered Public Accounting Firm	Ex-99.J

C-5

AMENDED AND RESTATED MASTER CUSTODIAN AGREEMENT

This Agreement is made as of September 15, 2017 by and among each management investment company identified on Appendix A hereto (each such management investment company made subject to this Agreement in accordance with Section 19.5 below, shall hereinafter be referred to as the “Fund”), and STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company (the “Custodian”). Each Fund and the Custodian agree that this Agreement merges, integrates and supersedes all prior agreements, side letters and understandings between the parties with respect to the matters contained herein; provided, however, that the continuation of any other agreements that may reference the Master Custodian Agreement between the Custodian and the Fund dated prior to the date hereof (“Prior Agreement”) is not intended to be affected by the fact of this amendment and restatement of the Master Custodian Agreement, and reference in such other agreements to a Prior Agreement shall be considered to be a reference to this Agreement effective as of the date of this Agreement (provided that matters relating to the time period prior to the date of this Agreement are governed by the terms of the Prior Agreement).

WITNESSETH:

WHEREAS, each Fund is authorized to issue shares of common stock or shares of beneficial interest in separate series (“Shares”), with each such series representing interests in a separate portfolio of securities and other assets;

WHEREAS, each Fund so authorized intends that this Agreement be applicable to each of its series set forth on Appendix A hereto (such series together with all other series subsequently established by the Fund and made subject to this Agreement in accordance with Section 19.6 below, shall hereinafter be referred to as the “Portfolio(s)”).

WHEREAS, each Fund not so authorized intends that this Agreement be applicable to it and all references hereinafter to one or more “Portfolio(s)” shall be deemed to refer to such Fund(s); and


NOW, THEREFORE, in consideration of the mutual covenants and agreements		hereinafter
contained, the parties hereto intending to be legally bound hereby agree as follows:

SECTION 1.	EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT

Each Fund hereby employs the Custodian as a custodian of assets of the Portfolios, including securities which the Fund, on behalf of the applicable Portfolio, desires to be held in places within the United States (“domestic securities”) and securities which the Fund, on behalf of the applicable Portfolio desires to be held outside the United States (“foreign securities”). Each Fund, on behalf of its Portfolio(s), agrees to deliver to the Custodian all securities, other financial assets and cash of the Portfolios, and all payments of income, payments of principal or capital distributions received by it with respect to all securities or other financial assets owned by the Portfolio(s) from time to time, and the cash consideration received by it for such Shares as may be issued or sold from time to time. The Custodian shall not be responsible for any property of a Portfolio which is not received by it or which is delivered out in accordance with Proper Instructions (as such term is defined in Section 8 hereof) including, without limitation, Portfolio property (i) held by brokers, private bankers or other entities on behalf of the Portfolio (each a “Local Agent”), (ii) held by Special Sub-Custodians (as such term is defined in Section 6 hereof), (iii) held by entities which have advanced monies to or on behalf of the Portfolio and which have received Portfolio property as security for such advance(s) (each a “Pledgee”), or (iv) delivered or otherwise removed from the custody of the Custodian (a) in connection with any Free Trade (as such term is defined in Sections 2.2(14) and 2.6(7) hereof) or (b) pursuant to Special Instructions (as such term is defined in Section 8 hereof). With

respect to uncertificated shares (the “Underlying Shares”) of (i) registered “investment companies” (as defined in Section 3(a)(1) of the Investment Company Act of 1940, as amended from time to time (the “1940 Act”)), whether in the same “group of investment companies” (as defined in Section 12(d)(1)(G)(ii) of the 1940 Act) or otherwise, including pursuant to Section 12(d)(1)(F) of the 1940 Act or (ii) investment companies or other pooled investment vehicles that are not registered pursuant to the 1940 Act (the entities listed in clauses (i) and (ii) being hereinafter sometimes referred to as the “Underlying Portfolios”) the holding of confirmation statements that identify the shares as being recorded in the Custodian’s name on behalf of the Portfolios will be deemed custody for purposes hereof.

Upon receipt of Proper Instructions, the Custodian shall from time to time employ one or more sub-custodians located in the United States for a Fund on behalf of the applicable Portfolio(s. The Custodian may place and maintain each Fund’s foreign securities with foreign banking institution sub-custodians employed by the Custodian and/or foreign securities depositories, all as designated in Schedules A and B hereto, but only in accordance with the applicable provisions of Sections 3 and 4 hereof.


SECTION 2.	DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS TO BE HELD IN THE UNITED STATES

SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate for the account of each Portfolio all non-cash property, to be held by it in the United States, including all domestic securities owned by such Portfolio other than (a) securities which are maintained pursuant to Section 2.8 in a clearing agency which acts as a securities depository or in a book-entry system authorized by the U.S. Department of the Treasury (each, a “U.S. Securities System”) and (b) Underlying Shares owned by each Fund which are maintained pursuant to Section 2.10 hereof in an account with State Street Bank and Trust Company or such other entity which may from time to time act as a transfer agent for the Underlying Portfolios and with respect to which the Custodian is provided with Proper Instructions (the “Underlying Transfer Agent”). Except as precluded by Section 8-501(d) of the Uniform Commercial Code (“UCC”), the Custodian shall hold all securities and other financial assets, other than cash, of a Portfolio that are delivered to it in a “securities account” with the Custodian for and in the name of such Portfolio and shall treat all such assets other than cash as “financial assets” as those terms are used in the UCC. The Custodian shall identify on its books and records as belonging to a Portfolio the securities and other financial assets, constituting Portfolio assets held by (a) the Custodian, its delegates and sub-custodians, (b) a U.S. Securities System, or (c) an Underlying Transfer Agent in accordance with Section 2.10. To the extent that the Custodian or any of its sub-custodians holds securities constituting the Portfolio’s assets in an omnibus account that is identified as belonging to the Custodian for the benefit of its customers, the records of the Custodian shall identify which of such securities constitute a Portfolio’s assets.

SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver domestic securities and other financial assets owned by a Portfolio held by the Custodian, in a U.S. Securities System account of the Custodian or in an account at the Underlying Transfer Agent, only upon receipt of Proper Instructions on behalf of the applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

1)	Upon sale of such securities for the account of the Portfolio in accordance with customary or established market practices and procedures, including, without limitation, delivery to the purchaser thereof or to a dealer therefor (or an agent of such purchaser or dealer) against expectation of receiving later payment;
2)	Upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by the Portfolio;

Information Classification: Limited Access

3)	In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.8 hereof;
4)	To the depository agent in connection with tender or other similar offers for securities of the Portfolio;
5)	To the issuer thereof or its agent when such securities are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian;
6)	To the issuer thereof, or its agent, for transfer into the name of the Portfolio or into the name of any nominee or nominees of the Custodian or into the name or nominee name of any agent appointed pursuant to Section 2.7 or into the name or nominee name of any sub-custodian appointed pursuant to Section 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new securities are to be delivered to the Custodian;
7)	Upon the sale of such securities for the account of the Portfolio, to the broker or its clearing agent, against a receipt, for examination in accordance with “street delivery” custom; provided that in any such case, the Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Custodian’s own negligence or willful misconduct;
8)	For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
9)	In the case of warrants, rights or similar securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
10)	For delivery in connection with any loans of securities made by the Portfolio (a) against
receipt	of collateral as agreed from time to time by the Fund on behalf of the Portfolio,
except	that in connection with any loans for which collateral is to be credited to the
Custodian’s	account in the book-entry system authorized by the U.S. Department of the
Treasury,	the Custodian will not be held liable or responsible for the delivery of securities
owned	by the Portfolio prior to the receipt of such collateral or (b) to the lending agent, or
the	lending agent’s custodian, in accordance with written Proper Instructions (which need
not	provide for the receipt by the Custodian of collateral therefor) agreed upon from time
to	time by the Custodian and the Fund;
11)	For delivery as security in connection with any borrowing by a Fund on behalf of a
Portfolio	requiring a pledge of assets by the Fund on behalf of such Portfolio;

Information Classification: Limited Access

12)	For delivery in accordance with the provisions of any agreement among the Fund on behalf
	of	the Portfolio, the Custodian and a broker-dealer registered under the Securities Exchange
	Act	of 1934 (the “*Exchange Act*”) and a member of the Financial Industry Regulatory
	Authority,	Inc. (“*FINRA*”), relating to compliance with the rules of The Options Clearing
	Corporation	and of any registered national securities exchange, or of any similar
	organization	or organizations, regarding escrow or other arrangements in connection with
	transactions	by the Fund on behalf of a Portfolio;
13)	For delivery in accordance with the provisions of any agreement among a Fund on behalf
	of	the Portfolio, the Custodian, and a futures commission merchant registered under the
	Commodity	Exchange Act, relating to compliance with the rules of the Commodity Futures
	Trading	Commission (the “*CFTC*”) and/or any contract market, or any similar organization
	or	organizations, regarding account deposits in connection with transactions by the Fund
	on	behalf of a Portfolio;
14)	Upon the sale or other delivery of such investments (including, without limitation, to one
	or	more (a) Special Sub-Custodians or (b) additional custodians appointed by the Fund,
	and	communicated to the Custodian from time to time via a writing duly executed by an
	authorized	officer of the Fund, for the purpose of engaging in repurchase agreement
	transactions(s),	each a “*Repo Custodian*”), and prior to receipt of payment therefor, as set
	forth	in written Proper Instructions (such delivery in advance of payment, along with
	payment	in advance of delivery made in accordance with Section 2.6(7), as applicable,
	shall	each be referred to herein as a “*Free Trade*”), provided that such Proper Instructions
	shall	set forth (a) the securities of the Portfolio to be delivered and (b) the person(s) to
	whom	delivery of such securities shall be made;
15)	Upon receipt of instructions from the Fund’s transfer agent (the “*Transfer Agent*”) for
	delivery	to such Transfer Agent or to the holders of Shares in connection with distributions
	in	kind, as may be described from time to time in the currently effective prospectus and
	statement	of additional information of the Fund related to the Portfolio (the “*Prospectus*”),
	in	satisfaction of requests by holders of Shares for repurchase or redemption;
16)	In the case of a sale processed through the Underlying Transfer Agent of Underlying
	Shares,	in accordance with Section 2.10 hereof;
17)	For delivery as initial or variation margin in connection with futures or options on futures
	contracts	entered into by the Fund on behalf of the Portfolio; and
18)	For any other purpose, but only upon receipt of Proper Instructions from the Fund on behalf
	of	the applicable Portfolio specifying (a) the securities of the Portfolio to be delivered and
	(b)	the person or persons to whom delivery of such securities shall be made.

SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities or other financial assets held by the Custodian (other than bearer securities) shall be registered in the name of the Portfolio or in the name of any nominee of a Fund on behalf of the Portfolio or of any nominee of the Custodian which nominee shall be assigned exclusively to the Portfolio, unless the Fund has authorized in writing the appointment of a nominee to be used in common with other registered management investment companies having the same investment adviser as the Portfolio, or in the name or nominee name of any agent appointed pursuant to Section 2.7 or in the name or nominee name of any sub-custodian appointed pursuant to Section 1. All securities accepted by the Custodian on behalf of the Portfolio under the terms of this Agreement shall be

Information Classification: Limited Access

in “street name” or other good delivery form. If, however, a Fund directs the Custodian to maintain securities in “street name”, the Custodian shall utilize its best efforts to timely collect income due the Fund on such securities and shall utilize its best efforts to timely notify the Fund of relevant corporate actions including, without limitation, pendency of calls, maturities, tender or exchange offers.

SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank account or accounts in the United States in the name of each Portfolio of each Fund, subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Portfolio, other than cash maintained by the Portfolio in a bank account established and used in accordance with Rule 17f-3 under the 1940 Act. Funds held by the Custodian for a Portfolio may be deposited by it to its credit as Custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable; provided, however, that every such bank or trust company shall be qualified to act as a custodian under the 1940 Act and that each such bank or trust company and the funds to be deposited with each such bank or trust company shall on behalf of each applicable Portfolio be approved by vote of a majority of the Board of Trustees or the Board of Directors of the Fund (as appropriate, and in each case, the “Board”). Such funds shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that capacity.

SECTION 2.5 COLLECTION OF INCOME. Except with respect to Portfolio property released and delivered pursuant to Section 2.2(14) or purchased pursuant to Section 2.6(7), and subject to the provisions of Section 2.3, the Custodian shall collect on a timely basis all income and other payments with respect to registered domestic securities and other financial assets held hereunder to which each Portfolio shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer domestic securities if, on the date of payment by the issuer, such securities are held by the Custodian or its agent. Without limiting the generality of the foregoing, the Custodian shall detach and present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when due on securities held hereunder. The Custodian shall credit income to the Portfolio as such income is received or in accordance with the Custodian’s then current payable date income schedule. The Custodian may reverse any income credited by the Custodian to a Portfolio after the Custodian reasonably determines that actual payment of income will not occur in due course, and the Custodian may charge the Portfolio a rate agreed upon by the parties for the amount of unpaid income credited to the Portfolio. Income due each Portfolio on securities loaned pursuant to the provisions of Section 2.2 (10) shall be the responsibility of the applicable Fund. The Custodian will have no duty or responsibility in connection therewith, other than to provide the Fund with such information or data as may be necessary to assist the Fund in arranging for the timely delivery to the Custodian of the income to which the Portfolio is properly entitled.

The Custodian shall notify a Fund, at the frequency agreed upon by the parties, in writing by facsimile transmission, electronic communication, or in such other manner as the Fund and the Custodian may agree in writing, if any amount payable with respect to portfolio securities or other assets of the Portfolios of a Fund is not received by the Custodian when due. In the event that extraordinary measures are required to collect such income, the Fund and the Custodian shall consult as to such measures and agree upon any compensation and expenses payable to the Custodian as a result of taking such measures. The Custodian shall not be responsible for the collection of amounts due and payable with respect to portfolio securities or other assets that are in default.

SECTION 2.6 PAYMENT OF FUND MONIES. The Custodian shall pay out monies of a Portfolio as

provided in Section 5 and otherwise upon receipt of Proper Instructions on behalf of the applicable

Information Classification: Limited Access

Portfolio, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out monies of a Portfolio in the following cases only:

1)	Upon the purchase of domestic securities, options, futures contracts or options on futures
	contracts	for the account of the Portfolio but only (a) in accordance with customary or
	established	market practices and procedures, including, without limitation, delivering
	money	to the seller thereof or to a dealer therefor (or an agent for such seller or dealer)
	against	expectation of receiving later delivery of such securities or evidence of title to such
	options,	futures contracts or options on futures contracts to the Custodian (or any bank,
	banking	firm or trust company doing business in the United States or abroad which is
	qualified	under the 1940 Act to act as a custodian and has been designated by the Custodian
	as	its agent for this purpose) registered in the name of the Portfolio or in the name of a
	nominee	of the Custodian referred to in Section 2.3 hereof or in proper form for transfer;
	(b)	in the case of a purchase effected through a U.S. Securities System, in accordance with
	the	conditions set forth in Section 2.8 hereof; (c) in the case of a purchase of Underlying
	Shares,	in accordance with the conditions set forth in Section 2.10 hereof; (d) in the case
	of	repurchase agreements entered into between the applicable Fund on behalf of a Portfolio
	and	the Custodian, or another bank, or a broker-dealer which is a member of FINRA, (i)
	against	delivery of the securities either in certificate form or through an entry crediting the
	Custodian’s	account at the Federal Reserve Bank with such securities or (ii) against
	delivery	of the receipt evidencing purchase by the Portfolio of securities owned by the
	Custodian	along with written evidence of the agreement by the Custodian to repurchase
	such	securities from the Portfolio; or (e) for transfer to a time deposit account of the Fund
	in	any bank, whether domestic or foreign; such transfer may be effected prior to receipt of
	a	confirmation from a broker and/or the applicable bank pursuant to Proper Instructions
	from	the Fund as defined herein;
2)	In connection with conversion, exchange or surrender of securities owned by the Portfolio
	as	set forth in Section 2.2 hereof;
3)	For the redemption or repurchase of Shares issued as set forth in Section 7 hereof;
4)	For the payment of any expense or liability incurred by the Portfolio, including but not
	limited	to the following payments for the account of the Portfolio: interest, taxes,
	management,	accounting, transfer agent and legal fees, and operating expenses of the Fund
	whether	or not such expenses are to be in whole or in part capitalized or treated as deferred
	expenses;
5)	For the payment of any dividends on Shares declared pursuant to the Fund’s articles of
	incorporation	or organization and by-laws or agreement or declaration of trust, as
	applicable,	and Prospectus and Statement of Additional Information (collectively,
	“*Governing*	*Documents*”);
6)	For payment of the amount of dividends received in respect of securities sold short;
7)	Upon the purchase of domestic investments including, without limitation, repurchase
	agreement	transactions involving delivery of Portfolio monies to Repo Custodian(s), and
	prior	to receipt of such investments, as set forth in written Proper Instructions (such
	payment	in advance of delivery, along with delivery in advance of payment made in
	accordance	with Section 2.2(14), as applicable, shall each be referred to herein as a “*Free*

Information Classification: Limited Access

	*Trade*”), provided that such Proper Instructions shall also set forth (a) the amount of such payment and (b) the person(s) to whom such payment is made;
8)	For payment as initial or variation margin in connection with futures or options on futures contracts entered into by the Fund on behalf of the Portfolio; and
9)	For any other purpose, but only upon receipt of Proper Instructions from the Fund on behalf of the Portfolio specifying (a) the amount of such payment and (b) the person or persons to whom such payment is to be made.

SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its discretion appoint (and may at any time remove) agents to carry out such of the provisions of this Agreement as the Custodian may from time to time direct; provided, however, that the appointment of any agent shall not relieve the Custodian of any of its duties or obligations hereunder and the Custodian shall be fully responsible and liable for the actions and omissions of any agent (which shall not be deemed to be U.S. Securities Systems, Special Sub-Custodians, U.S. sub-custodians designated pursuant to the last paragraph of Section 1, or Foreign Sub-Custodians and sub-custodians and other agents of the Fund or Portfolio) appointed hereunder. The Underlying Transfer Agent shall not be deemed an agent or sub-custodian of the Custodian for purposes of this Section 2.7 or any other provision of this Agreement.

SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The Custodian may deposit and/or maintain securities owned by a Portfolio in a U.S. Securities System in compliance with the conditions of Rule 17f-4 under the 1940 Act, as amended from time to time.

SECTION 2.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper Instructions on behalf of each applicable Portfolio, establish and maintain a segregated account or accounts for and on behalf of each such Portfolio, into which account or accounts may be transferred cash, in the case of a deposit account, or securities and other financial assets (other than cash), in the case of a securities account, of the Portfolio and collateral provided to the Portfolio by its counterparties, including securities maintained in an account by the Custodian pursuant to Section 2.8 hereof, (a) in accordance with the provisions of any agreement among the Fund on behalf of the Portfolio, the Custodian and a broker-dealer registered under the Exchange Act and a member of the FINRA, relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Portfolio, (b) in accordance with the provisions of any agreement among the Fund, on behalf of the Portfolio, the Custodian and any futures commission merchant (registered under the Commodity Exchange Act) relating to compliance with the rules of the CFTC or any registered contract market, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Portfolio, (c) for purposes of segregating cash or government securities in connection with options purchased, sold or written by the Portfolio or commodity futures contract options thereon purchased or sold by the Portfolio, (d) for the purposes of compliance by the Portfolio with the procedures required by Investment Company Act Release No. 10666, or any subsequent release of the U.S. Securities and Exchange Commission (the “SEC”), or no-action letter of the staff of the SEC, relating to the maintenance of segregated accounts by registered management investment companies, and (e) for any other purpose in accordance with Proper Instructions.

SECTION 2.10 DEPOSIT OF FUND ASSETS WITH THE UNDERLYING TRANSFER AGENT. Underlying Shares beneficially owned by the Fund, on behalf of a Portfolio, shall be deposited and/or maintained in an account or accounts maintained with an Underlying Transfer Agent and the Custodian’s only responsibilities with respect thereto shall be limited to the following:

Information Classification: Limited Access

1)	Upon receipt of a confirmation or statement from an Underlying Transfer Agent that such Underlying Transfer Agent is holding or maintaining Underlying Shares in the name of the Custodian (or a nominee of the Custodian) for the benefit of a Portfolio, the Custodian shall identify by book-entry that such Underlying Shares are being held by it as custodian for the benefit of such Portfolio.
2)	In respect of the purchase of Underlying Shares for the account of a Portfolio, upon receipt of Proper Instructions, the Custodian shall pay out monies of such Portfolio as so directed, and record such payment from the account of such Portfolio on the Custodian’s books and records.
3)	In respect of the sale or redemption of Underlying Shares for the account of a Portfolio, upon receipt of Proper Instructions, the Custodian shall transfer such Underlying Shares as so directed, record such transfer from the account of such Portfolio on the Custodian’s books and records and, upon the Custodian’s receipt of the proceeds therefor, record such payment for the account of such Portfolio on the Custodian’s books and records.

The Custodian shall not be liable to the Fund for any loss or damage to the Fund or any Portfolio resulting from the maintenance of Underlying Shares with an Underlying Transfer Agent except to the extent the loss or damage results directly from the fraud, negligence or willful misconduct of the Custodian or any of its agents or of any of its or their employees.

SECTION 2.11 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to domestic securities of each Portfolio held by it and in connection with transfers of securities.

SECTION 2.12 PROXIES. The Custodian shall deliver to a Fund all forms of proxies, all proxy solicitation materials, all notices of meetings, and any other notices or announcements affecting or relating to securities owned by one or more of a Fund’s Portfolios that are received by the Custodian, any sub-custodian, or any nominee of either of them (or with the exercise of reasonable care that the Custodian, any sub-custodian, or any nominee of either of them should have become aware), and, upon receipt of Proper Instructions, the Custodian shall execute and deliver, or cause such sub-custodian or nominee to execute and deliver, such proxies or other authorizations as may be required. Except as directed pursuant to Proper Instructions, neither the Custodian nor any sub-custodian or nominee shall vote upon any such securities, or execute any proxy to vote thereon, or give any consent or take any other action with respect thereto. In the event that the Custodian is unable to vote upon any such securities in accordance with Proper Instructions, the Custodian shall promptly notify (subject to market practices and rules) a Fund. Each Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Fund to exercise shareholder rights.

SECTION 2.13 COMMUNICATIONS. Subject to the domestic securities or other financial assets held in the United States being registered as provided in Section 2.3, the Custodian shall transmit promptly to a Fund for each Portfolio all written information received by the Custodian from issuers of the securities and other financial assets being held for the Portfolio, including among other things, maturities of domestic securities and notices of exercise of call and put options. The Custodian shall transmit promptly to the Fund all written information received by the Custodian from issuers of the securities and other financial assets whose tender or exchange is sought and from the party or its agent making the tender or exchange offer.

Information Classification: Limited Access

The Custodian shall also transmit promptly to the Fund for each Portfolio all written information received by the Custodian regarding any class action or other collective litigation relating to Portfolio securities or other financial assets issued in the United States and then held, or previously held, during the relevant class-action period during the term of this Agreement by the Custodian for the account of the Fund for the Portfolio, including, but not limited to, opt-out notices and proof-of-claim forms. Unless otherwise agreed to by the parties, the Custodian’s services with respect to class actions do not extend beyond the timely forwarding of written information so received by the Custodian.

SECTION 2.14 EXERCISE OF RIGHTS; TENDER OFFERS. Upon receipt of Proper Instructions, the Custodian shall: (a) deliver warrants, puts, calls, rights or similar securities to the issuer or trustee thereof, or to the agent of such issuer or trustee, for the purpose of exercise or sale, provided that the new securities, cash or other assets, if any, acquired as a result of such actions are to be delivered to the Custodian; and (b) deposit securities upon invitations for tenders thereof, provided that the consideration for such securities is to be paid or delivered to the Custodian, or the tendered securities are to be returned to the Custodian. Notwithstanding any provision of this Agreement to the contrary, the Custodian shall take all necessary action, unless otherwise directed to the contrary in Proper Instructions, to comply with the terms of all mandatory or compulsory exchanges, calls, tenders, redemptions, or similar rights of security ownership (“Mandatory Corporate Actions”), and shall promptly notify a Fund of such Mandatory Corporate Action in writing by facsimile transmission, electronic communication, or in such other manner as the Fund and the Custodian may agree in writing.

In the event that Custodian is provided notice (in industry standard form) of (a) a proposed merger, recapitalization, reorganization, conversion, consolidation, subdivision, tender offer, takeover offer or other electable or voluntary corporate action or (b) a proposed issuance of securities or rights to participate in the issuance of securities, in each case by or with respect to the issuer of securities held by it for the account of a Portfolio (each a “Voluntary Corporate Action”), the Custodian shall provide written notice to the Fund or its designee promptly upon being provided such notice of the Voluntary Corporate Action. The notice provided by the Custodian shall include (i) a copy, or if a copy is not available, a synopsis of the offering materials provided to the Custodian by the issuer or its agent in connection with the Voluntary Corporate Action and (ii) the date on which the Custodian is required to take action to exercise rights or powers with respect to the Voluntary Corporate Action. Provided that the Custodian shall have delivered timely notice of the Voluntary Corporate Action to the Fund, the Custodian shall not be liable for any untimely exercise of any Voluntary Corporate Action or other right or power in connection with domestic securities or other property of the Portfolios at any time held by it unless (i) the Custodian is in actual possession of such securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least two (2) business days prior to the date on which the Custodian is to take action to exercise such right or power. If the Fund provides the Custodian with such notification after such deadline, the Custodian shall use its reasonable best efforts to process such election.

SECTION 2.15 SECURITIES LENDING. To the extent that a Fund engages in a securities lending program other than with the Custodian, the Fund and the Custodian will agree to procedures that will apply to such securities lending program.


SECTION 3.	PROVISIONS RELATING TO RULES 17F-5 AND 17F-7
SECTION 3.1		DEFINITIONS. As used throughout this Agreement, the capitalized terms set forth

below shall have the indicated meanings:

“Country Risk” means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country including, but not limited to, such country’s political environment, economic and

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financial infrastructure (including any Eligible Securities Depository operating in the country), nationalization, expropriation, currency restrictions, prevailing or developing custody and settlement practices, and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country.

“Eligible Foreign Custodian” has the meaning set forth in section (a)(1) of Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate action of the SEC), or a foreign branch of a Bank (as defined in Section 2(a)(5) of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of the 1940 Act; the term does not include any Eligible Securities Depository.

“Eligible Securities Depository” has the meaning set forth in section (b)(1) of Rule 17f-7.

“Foreign Assets” means any of the Portfolios’ investments (including foreign currencies) for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect the Portfolios’ transactions in such investments.

“Foreign Custody Manager” has the meaning set forth in section (a)(3) of Rule 17f-5.

“Rule 17f-5” means Rule 17f-5 promulgated under the 1940 Act.

“Rule 17f-7” means Rule 17f-7 promulgated under the 1940 Act.

SECTION 3.2 THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.

3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. Each Fund, by resolution adopted by its Board, hereby delegates to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 3.2 with respect to Foreign Assets of the Portfolios held outside the United States, and the Custodian hereby accepts such delegation as Foreign Custody Manager with respect to the Portfolios.

3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be responsible for performing the delegated responsibilities defined below only with respect to the countries and custody arrangements for each such country listed on Schedule A to this Agreement, which list of countries may be amended from time to time by any Fund with the agreement of the Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign Custodians selected by the Foreign Custody Manager to maintain the assets of the Portfolios, which list of Eligible Foreign Custodians may be amended from time to time in the sole discretion of the Foreign Custody Manager. The Foreign Custody Manager will provide amended versions of Schedule A in accordance with Section 3.2.5 hereof.

Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account or to place or maintain Foreign Assets in a country listed on Schedule A, and the fulfillment by each Fund, on behalf of the applicable Portfolio(s), of the applicable account opening requirements for such country, the Foreign Custody Manager shall be deemed to have been delegated by such Fund’s Board on behalf of such Portfolio(s) responsibility as Foreign Custody Manager with respect to that country and to have accepted such delegation. Execution of this Agreement by each Fund shall be deemed to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in each country listed on Schedule A. The Custodian will assist a Fund in satisfying the account opening requirements for a country as may be reasonably requested by the Fund. Following the receipt of Proper Instructions directing the Foreign

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Custody Manager to close the account of a Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody Manager in a designated country, the delegation by the Board on behalf of such Portfolio to the Custodian as Foreign Custody Manager for that country shall be deemed to have been withdrawn, and such withdrawal shall be deemed to be effective, and the Custodian shall cease to be the Foreign Custody Manager with respect to such Portfolio with respect to that country as of the date that is ninety days (or such other period to which the parties may agree in writing) after receipt of any such Proper Instructions by the Foreign Custody Manager.

The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect to a designated country upon written notice to the Fund. Ninety days (or such longer period to which the parties agree in writing) after receipt of any such notice by the Fund, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund with respect to the country as to which the Custodian’s acceptance of delegation is withdrawn.

3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:

(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions of this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign Assets in the care of the Eligible Foreign Custodian selected by the Foreign Custody Manager in each country listed on Schedule A, as amended from time to time. In performing its delegated responsibilities as Foreign Custody Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by that Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1).

(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody Manager shall determine that the contract governing the foreign custody arrangements with each Eligible Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).

(c) MONITORING. In each case in which the Foreign Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian selected by the Foreign Custody Manager, the Foreign Custody Manager shall establish a system to monitor (i) the appropriateness of maintaining the Foreign Assets with such Eligible Foreign Custodian and (ii) the contract governing the custody arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian. In the event the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian it has selected are no longer appropriate, the Foreign Custody Manager shall notify the Board in accordance with Section 3.2.5 hereunder.

3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes of this Section 3.2, the Board shall be deemed to have considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for which the Custodian is serving as Foreign Custody Manager of the Portfolios.

3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the placement of such Foreign Assets with another Eligible Foreign Custodian by providing to the Board an amended Schedule A at the end of the calendar quarter in which an amendment to such Schedule has occurred. The Foreign Custody Manager shall make written reports notifying the Board of any other material change in the foreign custody arrangements of the Portfolios described in this Section 3.2 after the occurrence of the material change. The

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Foreign Custody Manager will also provide the Fund with global market information bulletins on a timely basis.

3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In performing the responsibilities delegated to it, the Foreign Custody Manager agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of assets of management investment companies registered under the 1940 Act would exercise (unless a higher standard of care is required by Rule 17f-5). Notwithstanding the foregoing, the Custodian acting as Foreign Custody Manager of the Portfolio is subject to the standard of care set forth in Section 16 of this Agreement.

3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody Manager represents to each Fund that it is a U.S. Bank as defined in section (a)(7) of Rule 17f-5. Each Fund represents to the Custodian that its Board has determined that it is reasonable for such Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Agreement to the Custodian as the Foreign Custody Manager of the Portfolios.

3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. Each Board’s delegation to the Custodian as Foreign Custody Manager of the Portfolios shall be effective as of the date hereof and shall remain in effect until terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective ninety (90) days after receipt by the non-terminating party of such notice. The provisions of Section 3.2.2 hereof shall govern the delegation to and termination of the Custodian as Foreign Custody Manager of the Portfolios with respect to designated countries.

3.2.9 CERTIFICATION REGARDING ELIGIBLE FOREIGN CUSTODIANS. Each report presented to a Fund’s Board by the Custodian pursuant to Section 3.2.5 above shall be accompanied by a certificate representing that (a) the Custodian has established a system to monitor the appropriateness of maintaining a Portfolio’s Foreign Assets with each Eligible Foreign Custodian pursuant to paragraph (c)(1) of Rule 17f-5 and to monitor the performance of each Eligible Foreign Custodian under the sub-custodian agreement between the Custodian and the Eligible Foreign Custodian, (b) the Custodian has monitored all Eligible Foreign Custodians and each Eligible Foreign Custodian continues to be an Eligible Foreign Custodian, (c) each Eligible Foreign Custodian continues to provide the standard of care set forth in Section 3.2.6 hereof, after considering all relevant factors, including without limitation, those factors set forth in paragraph (c)(1) of Rule 17f-5, (d) all foreign custody agreements between the Custodian and the Eligible Foreign Custodians continue to meet the requirements of paragraph (c)(2) of Rule 17f-5, (e) since the submission of the last report pursuant to Section 3.2.5 above, there have been no material adverse changes to the Custodian’s foreign custody network or arrangements other than those reported to the Board or other governing body or entity of the Fund, on behalf of itself or its applicable Portfolios, in the accompanying report or notified to the Fund through the Custodian’s Global Market Bulletins, distributed to designated officers of the Fund and available on the Custodian’s internet client portal, my.statestreet.com (which information shall be included in the accompanying report to the Board), and (f) the information included in the report is true, accurate and complete in all material respects.

SECTION 3.3

ELIGIBLE SECURITIES DEPOSITORIES.

3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide the Fund (or its duly-authorized investment manager or investment adviser) with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B hereto in accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a continuing basis, and

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promptly notify the Fund (or its duly-authorized investment manager or investment adviser) of any material change in such risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7.

3.3.2 STANDARD OF CARE. The Custodian agrees to exercise reasonable care, prudence and diligence in performing the duties set forth in Section 3.3.1 (unless a higher standard of care is required by Rule 17f-7). Notwithstanding the foregoing, the Custodian, in performing the duties set forth in Section 3.3.1, is subject to the standard of care set forth in Section 16 of this Agreement.

SECTION 3.4 LOCAL REGULATORY MATTERS. The Custodian shall assist a Fund in complying with regulations and market practices of jurisdictions other than the United States of America applicable to a Fund’s Foreign Assets as the Fund may reasonably request from time to time. Such assistance may include, but not be limited to, soliciting information and guidance from depositories, exchanges and regulators; obtaining legal opinions at the expense of the relevant Fund but only after a Fund has been notified and agrees in writing to the amount of such expenses; acting as a Fund’s representative (if required by local law) in making filings; and providing such other assistance with respect to its Foreign Assets as a Fund may reasonably request. Based on what the Custodian considers to be reasonably reliable sources of information, including its Eligible Foreign Custodians, Custodian shall inform a Fund as to the Custodian’s understanding of a Fund’s rights, duties and obligations under regulations and market practices of jurisdictions other than the United States of America in connection with actions taken by a Fund or the Custodian, including, but not limited to, corporate actions involving a Fund’s securities.


SECTION 4.	DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS TO BE HELD
	OUTSIDE THE UNITED STATES

SECTION 4.1		DEFINITIONS. As used throughout this Agreement, the capitalized terms set forth

below shall have the indicated meanings:

“Foreign Securities System” means an Eligible Securities Depository listed on Schedule B hereto.

“Foreign Sub-Custodian” means a foreign banking institution serving as an Eligible Foreign Custodian.

SECTION 4.2 HOLDING SECURITIES. The Custodian shall identify on its books as belonging to the Portfolios the foreign securities and other financial assets held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities and other financial assets for all of its customers, including the Portfolios, with any Foreign Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers, provided however, that (i) the records of the Custodian with respect to foreign securities and other financial assets of the Portfolios which are maintained in such account shall identify those securities as belonging to the Portfolios and (ii), to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

SECTION 4.3 FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained in a Foreign Securities System in a designated country through arrangements implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in such country.

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SECTION 4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.

4.4.1 DELIVERY OF FOREIGN ASSETS. The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of the Portfolios held by the Custodian or such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

(i)	Upon the sale of such foreign securities for the Portfolio in accordance with commercially reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System;
(ii)	In connection with any repurchase agreement related to foreign securities;
(iii)	To the depository agent in connection with tender or other similar offers for foreign securities of the Portfolios;
(iv)	To the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;
(v)	To the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;
(vi)	To brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case, the Foreign Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such foreign securities prior to receiving payment for such foreign securities except as may arise from the Foreign Sub-Custodian’s own negligence or willful misconduct;
(vii)	For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;
(viii)	In the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;
(ix)	For delivery as security in connection with any borrowing by a Fund on behalf of a Portfolio requiring a pledge of assets by the Fund on behalf of such Portfolio;
(x)	In connection with trading in options and futures contracts, including delivery as original margin and variation margin;
(xi)	Upon the sale or other delivery of such foreign securities (including, without limitation, to one or more Special Sub-Custodians or Repo Custodians) as a Free Trade, provided that

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	applicable Proper Instructions shall set forth (A) the foreign securities to be delivered and
	(B)	the person or persons to whom delivery shall be made;
(xii)	In connection with the lending of foreign securities; and
(xiii)	For any other purpose, but only upon receipt of Proper Instructions specifying (A) the foreign securities to be delivered and (B) the person or persons to whom delivery of such securities shall be made.
	4.4.2	PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper Instructions, which may

be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of a Portfolio in the following cases only:

(i)	Upon the purchase of foreign securities for the Portfolio, unless otherwise directed by
	Proper	Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or
	an	agent for such seller or dealer) against expectation of receiving later delivery of such
	foreign	securities; or (B) in the case of a purchase effected through a Foreign Securities
	System,	in accordance with the rules governing the operation of such Foreign Securities
	System;
(ii)	In connection with the conversion, exchange or surrender of foreign securities of the
	Portfolio;
(iii)	For the payment of any expense or liability of the Portfolio, including but not limited to
	the	following payments: interest, taxes, investment advisory fees, transfer agency fees, fees
	under	this Agreement, legal fees, accounting fees, and other operating expenses;
(iv)	For the purchase or sale of foreign exchange or foreign exchange contracts for the Portfolio,
	including	transactions executed with or through the Custodian or its Foreign Sub-
	Custodians;
(v)	In connection with trading in options and futures contracts, including delivery as original
	margin	and variation margin;
(vi)	Upon the purchase of foreign investments including, without limitation, repurchase
	agreement	transactions involving delivery of Portfolio monies to Repo Custodian(s), as a
	Free	Trade, provided that applicable Proper Instructions shall set forth (A) the amount of
	such	payment and (B) the person or persons to whom payment shall be made;
(vii)	For payment of part or all of the dividends received in respect of securities sold short;
(viii)	In connection with the borrowing or lending of foreign securities; and
(ix)	For any other purpose, but only upon receipt of Proper Instructions specifying (A) the
	amount	of such payment and (B) the person or persons to whom such payment is to be
	made.
	4.4.3	MARKET CONDITIONS. Notwithstanding any provision of this Agreement to the

contrary, settlement and payment for Foreign Assets received for the account of the Portfolios and delivery

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of Foreign Assets maintained for the account of the Portfolios may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer but in all events subject to the standard of care set forth in Section 16 of this Agreement.

The Custodian shall provide to each Board the information with respect to custody and settlement practices in countries in which the Custodian employs a Foreign Sub-Custodian described on Schedule C hereto at the time or times set forth on such Schedule. The Custodian may revise Schedule C from time to time, provided that no such revision shall result in a Board being provided with substantively less information than had been previously provided hereunder.

SECTION 4.5 REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer securities) shall be registered in the name of the applicable Portfolio or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing provided that the use of a nominee is customary market practice. The applicable Fund on behalf of such Portfolio agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities. To the extent that the use of nominee names is not customary market practice, foreign securities shall not be registered in a nominee name, and the Funds shall not have any obligation to hold harmless any such nominee where the use is not customary market practice. Notwithstanding the foregoing, if the prior written consent of the applicable Fund is given the applicable Fund on behalf of such Portfolio shall hold any such nominee harmless from any liability as a holder of record of such foreign securities. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a Portfolio under the terms of this Agreement unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice.

SECTION 4.6 BANK ACCOUNTS. The Custodian shall identify on its books as belonging to the applicable Portfolio cash (including cash denominated in foreign currencies) deposited with the Custodian. Where the Custodian is unable to maintain, or market practice does not facilitate the maintenance of, cash on the books of the Custodian, a bank account or bank accounts shall be opened and maintained outside the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All accounts referred to in this Section shall be subject only to draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian) acting pursuant to the terms of this Agreement to hold cash received by or from or for the account of the Portfolio. Cash maintained on the books of the Custodian (including its branches, subsidiaries and affiliates), regardless of currency denomination, is maintained in bank accounts established under, and subject to the laws of, The Commonwealth of Massachusetts. The foregoing constitutes the disclosure required by Massachusetts General Laws, Chapter 167D, Section 36.

SECTION 4.7 COLLECTION OF INCOME. The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which the Portfolios shall be entitled and shall credit such income, as collected, to the applicable Portfolio. The Custodian shall notify the Fund, at the frequency agreed to by the parties, in writing by facsimile transmission, electronic communication or in such other manner as the Fund and Custodian may agree in writing, if any amount payable with respect to portfolio securities or other assets of the Portfolio of a Fund are not received by the Custodian when due. The Custodian shall not be responsible for the collection of amounts due and payable with respect to portfolio securities or other assets that are in default. In the event that extraordinary measures are required to collect such income, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures.

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Income on securities loaned other than from the Custodian’s securities lending program shall be credited as received.

SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held pursuant to this Section 4, the Custodian shall use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued, including but not limited to proxy services not being available in certain markets. Each Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors, may have the effect of severely limiting the ability of a Fund to exercise shareholder rights. The Custodian shall, however, as soon as is reasonably practicable communicate information received as to the foregoing to the applicable Fund. In addition to the foregoing, the Custodian agrees to provide the Funds with annual and periodic market updates.

SECTION 4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall transmit promptly to the applicable Fund written information with respect to materials received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Portfolios (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith). With respect to tender or exchange offers, the Custodian shall transmit promptly to the applicable Fund written information with respect to materials so received by the Custodian from issuers of the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer. The Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with foreign securities or other property of the Portfolios at any time held by it unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual possession of such foreign securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least two (2) business days prior to the date on which the Custodian is to take action to exercise such right or power. For avoidance of doubt, upon and after the effective date of any termination of this Agreement, with respect to a Fund or its Portfolio(s), as may be applicable, the Custodian shall have no responsibility to so transmit any information under this Section 4.9.

The Custodian shall use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject to the laws, regulations and practical constraints that may exist in the country where such securities are issued. In the event that the Fund invests in non-U.S. securities in a market in which the Custodian does not offer proxy voting services, the Custodian shall promptly notify the Fund. The Custodian shall also transmit promptly to the Fund all written information received by the Custodian through Foreign Sub-Custodians from issuers of the foreign securities or other financial assets issued outside of the United States and being held for the account of the Portfolio regarding any class action or other collective litigation relating to the Portfolio’s foreign securities or other financial assets issued outside the United States and then held, or previously held, during the relevant class-action period during the term of this Agreement by the Custodian via a Foreign Sub-Custodian for the account of the Fund for the Portfolio, including, but not limited to, opt-out notices and proof-of-claim forms. Unless otherwise agreed to by the parties, the Custodian’s services with respect to class actions do not extend beyond the timely forwarding of written information so received by the Custodian.

SECTION 4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS. The Custodian shall not employ a Foreign Sub-Custodian unless such employment is memorialized in a written agreement. Each such written agreement pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the extent possible using best efforts, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties, and to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian’s performance of

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such obligations. At a Fund’s election, the Portfolios shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Portfolios have not been made whole for any such loss, damage, cost, expense, liability or claim.

SECTION 4.11 TAX LAW. The Fund or its Portfolio shall be liable for all taxes, assessments, duties and other government charges, including any interest or penalty with respect thereto, with respect to any cash or securities held on behalf of the Fund or its Portfolios or any transaction related thereto. The Custodian shall withhold or cause to withhold the amount of tax which is required to be withheld under applicable law upon collection of any dividend, interest or other distribution with respect to any domestic security or foreign security and proceeds or income from the sale or other transfer of any domestic security or foreign security in custody at the Custodian. The Custodian shall assist the Fund with respect to any claim for exemption or reclaim under the tax laws of the designated countries listed on Schedule A upon request by a Fund. In providing such services, the Custodian does not act as the Fund’s tax adviser or tax counsel.

SECTION 5. CONTRACTUAL SETTLEMENT SERVICES (PURCHASE / SALES)

SECTION 5.1 With respect to each cash account designated in writing by a Portfolio, the Custodian shall, in accordance with the terms set out in this Section 5, debit or credit the appropriate cash account of each Portfolio in connection with (i) the purchase of securities for such Portfolio, and (ii) proceeds of the sale of securities held on behalf of such Portfolio, on a contractual settlement basis (the “Contractual Settlement Services”).

SECTION 5.2 The Contractual Settlement Services shall be provided for such instruments and in such markets as the Custodian may advise from time to time. The Custodian may terminate or suspend any part of the provision of the Contractual Settlement Services under this Agreement at its sole discretion immediately upon notice to the applicable Fund on behalf of each Portfolio, including, without limitation, in the event of force majeure events affecting settlement, any disorder in markets, or other changed external business circumstances affecting the markets or the Fund.

SECTION 5.3 The consideration payable in connection with a purchase transaction shall be debited from the appropriate cash account of the Portfolio as of the time and date that monies would ordinarily be required to settle such transaction in the applicable market. The Custodian shall promptly recredit such amount at the time that the Portfolio or the Fund notifies the Custodian by Proper Instruction that such transaction has been canceled.

SECTION 5.4 With respect to the settlement of a sale of securities, a provisional credit of an amount equal to the net sale price for the transaction (the “Settlement Amount”) shall be made to the account of the Portfolio as if the Settlement Amount had been received as of the close of business on the date that monies would ordinarily be available in good funds in the applicable market. Such provisional credit will be made conditional upon the Custodian having received Proper Instructions with respect to, or reasonable notice of, the transaction, as applicable; and the Custodian or its agents having possession of the asset(s) (which shall exclude assets subject to any third party lending arrangement entered into by a Portfolio) associated with the transaction in good deliverable form and not being aware of any facts which would lead them to reasonably believe that the transaction will not settle in the time period ordinarily applicable to such transactions in the applicable market.

SECTION 5.5 Subject to the relevant requirements of Section 16, the Custodian shall have the

right to reverse any provisional credit or debit given in connection with the Contractual Settlement Services

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when the Custodian believes, in its reasonable judgment, that such transaction will not settle in accordance with its terms or amounts due pursuant thereto will not be collectable or where the Custodian has not been provided Proper Instructions with respect thereto, as applicable. Upon such reversal, a sum equal to the credited or debited amount shall become immediately payable by the Portfolio to the Custodian and may be debited from any cash account held for benefit of the Portfolio. Prior to any such reversal, the Custodian will provide notice to the Fund pursuant to the relevant requirements of Section 16. Following such reversal, the Custodian will promptly notify the Fund of any action taken pursuant to this Section 5.5, which notice shall include a description of the facts forming the basis for the Custodian’s decision to reverse the provisional credit.

SECTION 5A. ACTUAL SETTLEMENT SERVICES (PURCHASE / SALES)

SECTION 5A.1 With respect to each cash account designated in writing by a Portfolio, the Custodian shall, in accordance with the terms set out in this Section 5A, debit or credit the appropriate cash account of each Portfolio in connection with (i) the purchase of securities for such Portfolio, and (ii) proceeds of the sale of securities held on behalf of such Portfolio, on an actual settlement basis.

SECTION 5A.2 The consideration payable in connection with a purchase transaction shall be debited from the appropriate cash account of the Portfolio as of the time and date that monies are actually payable.

SECTION 5A.3 With respect to the settlement of a sale of securities, the Custodian shall credit the appropriate cash account of the Portfolio as of the time and date that the cash received as consideration for the transaction is actually received by Custodian.

SECTION 6.

SPECIAL SUB-CUSTODIANS

Upon receipt of Special Instructions (as such term is defined in Section 8 hereof), the Custodian shall, on behalf of one or more Portfolios, appoint one or more banks, trust companies or other entities designated in such Special Instructions to act as a sub-custodian for the purposes of effecting such transaction(s) as may be designated by a Fund in Special Instructions. Each such designated sub-custodian is referred to herein as a “Special Sub-Custodian.” Each such duly appointed Special Sub-Custodian shall be listed on Schedule D hereto, as it may be amended from time to time by a Fund, with the acknowledgment of the Custodian. In connection with the appointment of any Special Sub-Custodian, and in accordance with Special Instructions, the Custodian shall enter into a sub-custodian agreement with the Fund and the Special Sub-Custodian in form and substance approved by such Fund, provided that such agreement shall in all events comply with the provisions of the 1940 Act and the rules and regulations thereunder and the terms and provisions of this Agreement.

SECTION 6A.

FOREIGN EXCHANGE

SECTION 6A.1. GENERALLY. Upon receipt of Proper Instructions, which for purposes of this Section may also include security trade advices, the Custodian shall facilitate the processing and settlement of foreign exchange transactions. Such foreign exchange transactions do not constitute part of the services provided by the Custodian under this Agreement.

SECTION 6A.2. FUND ELECTIONS. Each Fund (or its investment manager or investment advisor (“Investment Advisor”) acting on its behalf) may elect to enter into and execute foreign exchange transactions with third parties that are not affiliated with the Custodian, with State Street Global Markets, which is the foreign exchange division of State Street Bank and Trust Company and its affiliated companies

Information Classification: Limited Access

(“SSGM”), or with a sub-custodian. Where the Fund or its Investment Advisor gives Proper Instructions for the execution of a foreign exchange transaction using an indirect foreign exchange service described in the Client Publications (as defined below), the Fund (or its Investment Advisor) instructs the Custodian, on behalf of the Fund, to direct the execution of such foreign exchange transaction to SSGM or, when the relevant currency is not traded by SSGM, to the applicable sub-custodian. The Custodian shall not have any agency (except as contemplated in preceding sentence), trust or fiduciary obligation to the Fund, its Investment Advisor or any other person in connection with the execution of any foreign exchange transaction. The Custodian shall have no responsibility under this Agreement for the selection of the counterparty to, or the method of execution of, any foreign exchange transaction entered into by the Fund (or its Investment Advisor acting on its behalf) or the reasonableness of the execution rate on any such transaction. “Client Publications” means the general client publications of State Street Bank and Trust Company available from time to time to clients.

SECTION 6A.3. FUND ACKNOWLEDGEMENT Each Fund acknowledges that in connection with all foreign exchange transactions entered into by the Fund (or its Investment Advisor acting on its behalf) with SSGM or any sub-custodian, SSGM and each such sub-custodian:

(i)	shall be acting in a principal capacity and not as broker, agent or fiduciary to the Fund or its Investment Advisor;
(ii)	shall seek to profit from such foreign exchange transactions, and are entitled to retain and not disclose any such profit to the Fund or its Investment Advisor; and
(iii)	shall enter into such foreign exchange transactions pursuant to the terms and conditions, including pricing or pricing methodology, (a) agreed with the Fund or its Investment Advisor from time to time or (b) in the case of an indirect foreign exchange service, (i) as established by SSGM and set forth in the Client Publications with respect to the particular foreign exchange execution services selected by the Fund or the Investment Advisor or (ii) as established by the sub-custodian from time to time.

SECTION 6A.4. TRANSACTIONS BY STATE STREET. The Custodian or its affiliates, including SSGM, may trade based upon information that is not available to the Fund (or its Investment Advisor acting on its behalf), and may enter into transactions for its own account or the account of clients in the same or opposite direction to the transactions entered into with the Fund (or its Investment Advisor), and shall have no obligation, under this Agreement, to share such information with or consider the interests of their respective counterparties, including, where applicable, the Fund or the Investment Advisor.

SECTION 7. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES

The Custodian shall receive from the distributor of the Shares or from the Transfer Agent and deposit into the account of the appropriate Portfolio such payments as are received for Shares thereof issued or sold from time to time by the applicable Fund. The Custodian will provide timely notification to such Fund on behalf of each such Portfolio and the Transfer Agent of any receipt by it of payments for Shares of such Portfolio.

From such funds as may be available for the purpose, the Custodian shall, upon receipt of instructions from the Transfer Agent, make funds available for payment to holders of Shares who have delivered to the Transfer Agent a request for redemption or repurchase of their Shares. In connection with the redemption or repurchase of Shares, the Custodian is authorized upon receipt of instructions from the Transfer Agent to wire funds to or through a commercial bank designated by the redeeming shareholders. In connection

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with the redemption or repurchase of Shares, the Custodian shall honor checks drawn on the Custodian by a holder of Shares, which checks have been furnished by a Fund to the holder of Shares, when presented to the Custodian in accordance with such procedures and controls as are mutually agreed upon from time to time between such Fund and the Custodian.

SECTION 8. PROPER INSTRUCTIONS AND SPECIAL INSTRUCTIONS

“Proper Instructions,” which may also be standing instructions, as such term is used throughout this Agreement shall mean instructions received by the Custodian from a Fund, a Fund’s duly authorized investment manager or investment adviser, or a person or entity duly authorized by either of them. Such instructions may be in writing signed by the authorized person or persons or may be in a tested communication or in a communication utilizing access codes effected between electro-mechanical or electronic devices or may be by such other means and utilizing such intermediary systems and utilities as may be agreed from time to time by the Custodian and the person(s) or entity giving such instruction, provided that the Fund has followed any security procedures agreed to from time to time by the applicable Fund and the Custodian. Oral instructions will be considered Proper Instructions if the Custodian reasonably believes them to have been given by a person authorized to provide such instructions with respect to the transaction involved; the Fund shall cause all oral instructions to be confirmed in writing. For purposes of this Section, Proper Instructions shall include instructions received by the Custodian pursuant to any multi-party agreement which requires a segregated asset account in accordance with Section 2.9 hereof.

“Special Instructions,” as such term is used throughout this Agreement, means Proper Instructions countersigned or confirmed in writing by the Treasurer or any Assistant Treasurer of the applicable Fund or any other person designated in writing by the Treasurer of such Fund, which countersignature or confirmation shall be (a) included on the same instrument containing the Proper Instructions or on a separate instrument clearly relating thereto and (b) delivered by hand, by facsimile transmission, or in such other manner as the Fund and the Custodian agree in writing.

Concurrently with the execution of this Agreement, and from time to time thereafter, as appropriate, each Fund shall deliver to the Custodian, duly certified by such Fund’s Treasurer or Assistant Treasurer, a certificate setting forth: (i) the names, titles, signatures and scope of authority of all persons authorized to give Proper Instructions or any other notice, request, direction, instruction, certificate or instrument on behalf of the Fund and (ii) the names, titles and signatures of those persons authorized to give Special Instructions. Such certificate may be accepted and relied upon by the Custodian as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until receipt by the Custodian of a similar certificate to the contrary.

SECTION 9.

EVIDENCE OF AUTHORITY

The Custodian shall be protected in acting upon any instructions, notice, request, consent, certificate or other instrument or paper reasonably believed by it to be genuine and to have been properly executed by or on behalf of the applicable Fund provided that the Custodian exercised reasonable care without negligence in following or acting upon such instruction, notice, request, consent, certificate or other instrument. The Custodian may receive and accept a copy of a resolution certified by the Secretary or an Assistant Secretary of any Fund as conclusive evidence (a) of the authority of any person to act in accordance with such resolution or (b) of any determination or of any action by the applicable Board as described in such resolution, and such resolution may be considered as in full force and effect until receipt by the Custodian of written notice to the contrary.

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SECTION 10. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY

The Custodian may in its discretion, without express authority from the applicable Fund on behalf of each applicable Portfolio:

1)	Surrender securities in temporary form for securities in definitive form;
2)	Endorse for collection, in the name of the Portfolio, checks, drafts and other negotiable instruments; and
3)	In general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and property of the Portfolio except as otherwise directed by the applicable Board.

SECTION 11. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT

The Custodian shall cooperate with and supply necessary information to the entity or entities appointed by the applicable Board to keep the books of account of each Portfolio and to compute its net asset value. Each Fund acknowledges and agrees that, with respect to investments maintained with the Underlying Transfer Agent, the Underlying Transfer Agent is the sole source of information on the number of shares of a fund held by it on behalf of a Portfolio and that the Custodian has the right to rely on holdings information furnished by the Underlying Transfer Agent to the Custodian in performing its duties under this Agreement, including without limitation, the duties set forth in this Section 11 and in Section 12 hereof; provided, however, that the Custodian shall be obligated to reconcile information as to purchases and sales of Underlying Shares contained in trade instructions and confirmations received by the Custodian and to report promptly any discrepancies to the Underlying Transfer Agent. Each Fund acknowledges that, in keeping the books of account of the Portfolio, the Custodian is authorized and instructed to rely upon information provided to it by the Fund, the Fund’s counterparty(ies), or the agents of either of them.

SECTION 12.

RECORDS

The Custodian shall with respect to each Portfolio create and maintain all records relating to its activities and obligations under this Agreement in such manner as will meet the obligations of each Fund under the 1940 Act, with particular attention to section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund and shall at all times during the regular business hours of the Custodian be open for inspection by duly authorized officers, employees or agents of such Fund, including such Fund’s independent public accountants, and employees and agents of the SEC. The Custodian shall, at a Fund’s request, supply the Fund with a tabulation of securities owned by each Portfolio and held by the Custodian and shall, when requested to do so by the Fund and for such compensation as shall be agreed upon between the Fund and the Custodian, include certificate numbers in such tabulations. Each Fund acknowledges that, in creating and maintaining the records as set forth herein with respect to Portfolio property released and delivered pursuant to Section 2.2(14), or purchased pursuant to Section 2.6(7) hereof, the Custodian is authorized and instructed to rely upon information provided to it by the Fund, the Fund’s counterparty(ies), or the agents of either of them.

SECTION 13.

RESERVED

Information Classification: Limited Access

SECTION 14. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS

The Custodian shall provide the applicable Fund, on behalf of each of the Portfolios at such times as such Fund may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding securities, futures contracts and options on futures contracts, including securities deposited and/or maintained in a U.S. Securities System or a Foreign Securities System (either, a “Securities System”), relating to the services provided by the Custodian under this Agreement; such reports, shall be of sufficient scope and in sufficient detail, as may reasonably be required by the Fund to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.

SECTION 15.

COMPENSATION OF CUSTODIAN

The Custodian shall be entitled to reasonable compensation for its services and expenses as Custodian, as agreed upon from time to time between each Fund on behalf of each applicable Portfolio and the Custodian.

SECTION 16.

RESPONSIBILITY OF CUSTODIAN

So long as and to the extent that it is in the exercise of reasonable care, the Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement and shall be held harmless in acting upon any notice, request, consent, certificate or other instrument reasonably believed by it to be genuine and to be signed by the proper party or parties. The Custodian shall perform the services provided for in this Agreement without negligence, fraud or willful misconduct and with reasonable care. The Custodian shall be liable to a Fund for any failure by the Custodian to satisfy the foregoing standard of care. The Custodian shall be kept indemnified by and shall be without liability to any Fund for any action taken or omitted by it in good faith without negligence, fraud or willful misconduct, including, without limitation, acting in accordance with any Proper Instruction without negligence, fraud or willful misconduct. The indemnification obligations of this Section shall survive termination of this Agreement.

Except as may arise from the Custodian’s own negligence, fraud or willful misconduct or the negligence, fraud or willful misconduct of a sub-custodian or agent, the Custodian shall be without liability to any Fund for any loss, liability, claim or expense resulting from or caused by: (i) events or circumstances beyond the reasonable control of the Custodian or any sub-custodian or Securities System or any agent or nominee of any of the foregoing (a “Force Majeure Event”), including, without limitation, the interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, acts of war, revolution, riots or terrorism, computer viruses or communications disruptions, work stoppages, natural disasters, or other similar events or acts, except to the extent that the Custodian fails to maintain and keep updated the business and continuity and disaster recovery plan as set forth in Section 19.7 and such failure causes such loss; (ii) errors by any Fund or its duly authorized investment manager or investment adviser in their instructions to the Custodian provided such instructions have been in accordance with this Agreement; (iii) the insolvency of or acts or omissions by a Securities System; (iv) any act or omission of a Special Sub-Custodian including, without limitation, reliance on reports prepared by a Special Sub-Custodian; (v) any delay or failure of any broker, agent or intermediary, central bank or other commercially prevalent payment or clearing system to deliver to the Custodian’s sub-custodian or agent securities purchased or in the remittance or payment made in connection with securities sold; (vi) any delay or failure of any company, corporation, or other body in charge of registering or transferring securities in the name of the Custodian, any Fund, the Custodian’s sub-custodians, nominees or agents or any consequential losses arising out of such delay or failure to transfer such securities including non-receipt of bonus, dividends and rights and other accretions or benefits; (vii)

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delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security or Securities System; and (viii) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction.

The Custodian shall be liable to a Fund for the acts or omissions of any sub-custodian selected by the Custodian, whether domestic or foreign (but excluding any Special Sub-Custodian or U.S. sub-custodian designated by a Fund pursuant to Special Instructions or Proper Instructions), to the same extent that the Custodian would be liable to the Fund as if such action or omission was performed by the Custodian itself, taking into account the facts and circumstances and the established local market practices and laws prevailing in the relevant jurisdiction at the time of the action or omission. Notwithstanding the foregoing, the Custodian shall in no event be liable for losses arising from Country Risk or from the insolvency or other financial default with respect to (a) any sub-custodian that is not an affiliate of the Custodian or (b) any depositary bank holding in a deposit account cash denominated in any currency other than an “on book” currency for that market.

If a Fund on behalf of a Portfolio requires the Custodian to take any action with respect to securities, which action involves the payment of money or which action may, in the reasonable opinion of the Custodian, result in the Custodian or its nominee assigned to the Fund or the Portfolio being liable for the payment of money, such Fund on behalf of the Portfolio, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form to be mutually agreed upon between such Fund and Custodian if and when necessary.

If the Custodian, its affiliates, subsidiaries or agents, advances cash or securities for any purpose (including, but not limited to, securities settlements, foreign exchange contracts and assumed settlement, but not including amounts payable to the Custodian pursuant to Section 15 of this Agreement) or in the event that the Custodian or its nominee shall incur or be assessed from a third party any taxes, charges, expenses, assessments, claims or liabilities in connection with the investment activities of a Fund and the Custodian’s related performance of this Agreement, except such as may arise from the Custodian’s or its nominee’s own negligent action, negligent failure to act, fraud, or willful misconduct, any property at any time held for the account of the applicable Portfolio shall be security therefor and should the Fund fail to repay the Custodian promptly, the Custodian shall be entitled to apply available cash and to dispose of such Portfolio’s assets to the extent necessary to obtain reimbursement. In addition, the Custodian may at any time decline to follow Proper Instructions to deliver out cash, securities or other financial assets if the Custodian reasonably determines that, after giving effect to the Proper Instructions, the cash, securities or other financial assets remaining will not have sufficient value fully to secure the Fund’s reimbursement of the relevant advances or other liabilities.

Except as may arise from the Custodian’s own negligence, fraud or willful misconduct, each Fund severally and not jointly shall indemnify and hold the Custodian harmless from and against any and all costs, expenses, losses, damages, charges, counsel fees, payments and liabilities which may be asserted against the Custodian (a) acting in accordance with any Proper Instruction or Special Instruction including, without limitation, any Proper Instruction with respect to Free Trades including, but not limited to, cost, expense, loss, damage, charge, counsel fee, payment or liability resulting from the Custodian’s reasonable reliance upon information provided by the applicable Fund, such Fund’s counterparty(ies) or the agents of either of them with respect to Fund property released, delivered or purchased pursuant to either of Section 2.2(14) or Section 2.6(7) hereof; (b) for the acts or omissions of any Special Sub-Custodian; or (c) for the acts or omissions of any Local Agent or Pledgee.

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None of the parties shall be liable for indirect, special, incidental, punitive or consequential damages. Upon the occurrence of any event that causes or may cause any loss, damage or expense to a Fund, the Custodian shall (i) promptly notify a Fund of the occurrence of such event and (ii) use its commercially reasonable efforts to cause any sub-custodian to use all commercially reasonable efforts and to take all reasonable steps under the circumstances to mitigate the effects of such event and to avoid continuing harm to a Fund.

SECTION 17. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT

This Agreement shall become effective as of its execution, shall continue in full force and effect until terminated as hereinafter provided, may be amended at any time by mutual agreement of the parties hereto and may be terminated by either party by an instrument in writing delivered or mailed, postage prepaid to the other party, such termination to take effect not sooner than sixty (60) days after the date of such delivery or mailing if termination is being sought by a Fund on behalf of a Portfolio and not sooner than one hundred twenty (120) days if termination is being sought by the Custodian; provided, however, that no Fund shall amend or terminate this Agreement in contravention of any applicable federal or state regulations, or any provision of such Fund’s Governing Documents, and further provided, that any Fund on behalf of one or more of the Portfolios may at any time by action of its Board (i) substitute another bank or trust company for the Custodian by giving notice as described above to the Custodian, or (ii) immediately terminate this Agreement in the event of the appointment of a bankruptcy trustee or a conservator or receiver for the Custodian by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction. Termination of this Agreement with respect to any one particular Fund or Portfolio shall in no way affect the rights and duties under this Agreement with respect to any other Fund or Portfolio.

Upon termination of the Agreement, the applicable Fund on behalf of each applicable Portfolio shall pay to the Custodian such compensation as may be due as of the date of such termination and shall likewise reimburse the Custodian for the transaction costs of delivering out the securities of such applicable Portfolio to the successor custodian appointed pursuant to Section 18 of this Agreement, if any.

In connection with any termination of the Agreement for any reason whatsoever, the parties shall also reasonably cooperate with respect to the development of a transition plan setting forth a reasonable timetable for the transition and describing the parties’ respective responsibilities for transitioning the services back to the Fund or any successor custodian in an orderly and uninterrupted fashion.

If the Custodian is prevented from carrying out its obligations under the Agreement as a result of a Force Majeure Event for a period of 30 days, a Fund may terminate the Agreement by giving the Custodian not less than 30 days' notice, without prejudice to any of the rights of any party accrued prior to the date of termination; provided, however, that if the Force Majeure Event is a regional wide or market wide event that has similarly affected substantially all other providers of services to funds substantially similar to the services provided hereunder in such region or market, the Fund’s termination right shall only arise at such time that two (2) or more of such providers are reasonably able and have begun to recommence the provision of such services. If the Custodian recommences the provision of the affected services in all material respects prior to the exercise by a Fund of its termination right, such termination right shall lapse if the Custodian gives notice to the Fund that it has done so (and it has in fact so recommenced the provision of services) and a Fund has not already provided notice of termination prior to such notice by the Custodian that it has recommenced the services in all material respects.

Information Classification: Limited Access

SECTION 18.

SUCCESSOR CUSTODIAN

If a successor custodian for one or more Portfolios shall be appointed by the applicable Board, the Custodian shall, upon termination and receipt of Proper Instructions, deliver to such successor custodian at the office of the Custodian (or such other location as shall mutually be agreed upon by the Custodian and the applicable Fund on behalf of such Portfolio), duly endorsed and in the form for transfer, all securities, cash, and other assets of each applicable Portfolio then held by it hereunder and shall transfer to an account of the successor custodian all of the securities of each such Portfolio held in a Securities System or at the Underlying Transfer Agent.

If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of Proper Instructions, deliver at the office of the Custodian (or such other location as shall mutually be agreed upon by the Custodian and the applicable Fund on behalf of such Portfolio) and transfer such securities, funds and other properties in accordance with such resolution.

In the event that no Proper Instructions designating a successor custodian or alternative arrangements shall have been delivered to the Custodian on or before the date when such termination shall become effective, then the Custodian shall have the right to deliver to a bank or trust company, which is a “bank” as defined in the 1940 Act, doing business in Boston, Massachusetts or New York, New York, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $25,000,000, all securities, funds and other properties held by the Custodian on behalf of each applicable Portfolio and all instruments held by the Custodian relative thereto and all other property held by it under this Agreement on behalf of each applicable Portfolio, and to transfer to an account of such successor custodian all of the securities of each such Portfolio held in any Securities System or at the Underlying Transfer Agent. Thereafter, such bank or trust company shall be the successor of the Custodian under this Agreement.

In the event that securities, funds and other properties remain in the possession of the Custodian after the date of termination hereof owing to failure of any Fund to provide Proper Instructions as aforesaid, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian retains possession of such securities, funds and other properties and the provisions of this Agreement relating to the duties and obligations of the Custodian shall remain in full force and effect.

SECTION 19.

GENERAL

SECTION 19.1 NEWYORK LAW TO APPLY. This Agreement shall be construed and the provisions

thereof interpreted under and in accordance with laws of The State of New York.

SECTION 19.2 CONFIDENTIALITY. All information provided under this Agreement by a party (the “Disclosing Party”) to the other party (the “Receiving Party”) regarding the Disclosing Party’s business and operations shall be treated as confidential. All confidential information provided under this Agreement by Disclosing Party shall be used, including disclosure to third parties, by the Receiving Party, or its agents or service providers, solely for the purpose of performing or receiving the services and discharging the Receiving Party’s other obligations under the Agreement or managing the internal business of the Receiving Party and its affiliates, including financial and operational management and reporting, risk management, legal and regulatory compliance and client service management. The foregoing shall not be applicable to any information (a) that is publicly available when provided or thereafter becomes publicly available, other than through a breach of this Agreement, (b) that is independently derived by the Receiving Party without the use of any information provided by the Disclosing Party in connection with this Agreement, (c) that is disclosed to comply with any proceeding, investigation, audit, examination, subpoena, civil investigative

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demand or other similar process that is initiated, authorized, or conducted by a court of law, regulatory agency, or other governmental or administrative body with appropriate jurisdiction over either party, (d) that is disclosed as required by operation of law or regulation or as required to comply with the requirements of any market infrastructure that the Disclosing Party or its agents direct the Custodian or its affiliates to employ (or which is required in connection with the holding or settlement of instruments included in the assets subject to this Agreement), or (e) where the party seeking to disclose has received the prior written consent of the party providing the information.

SECTION 19.3 ASSIGNMENT. This Agreement may not be assigned by (a) any Fund without the written consent of the Custodian or (b) by the Custodian without the written consent of each applicable Fund.

SECTION 19.4 INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with the operation of this Agreement, the Custodian and each Fund on behalf of each of the Portfolios, may from time to time agree on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement.

SECTION 19.5 ADDITIONAL FUNDS. In the event that any management investment company in addition to those listed on Appendix A hereto desires to have the Custodian render services as custodian under the terms hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to provide such services, such management investment company shall become a Fund hereunder and be bound by all terms and conditions and provisions hereof including, without limitation, the representations and warranties set forth in Section 19.7 below.

SECTION 19.6 ADDITIONAL PORTFOLIOS. In the event that any Fund establishes one or more series of Shares in addition to those set forth on Appendix A hereto with respect to which it desires to have the Custodian render services as custodian under the terms hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to provide such services, such series of Shares shall become a Portfolio hereunder.

SECTION 19.7 THE PARTIES. All references herein to the “Fund” are to each of the management investment companies listed on Appendix A hereto, and each management investment company made subject to this Agreement in accordance with Section 19.5 above, individually, as if this Agreement were between such individual Fund and the Custodian. In the case of a series corporation, trust or other entity, all references herein to the “Portfolio” are to the individual series or portfolio of such corporation, trust or other entity, or to such corporation, trust or other entity on behalf of the individual series or portfolio, as appropriate. Any reference in this Agreement to “the parties” shall mean the Custodian and such other individual Fund as to which the matter pertains. Each Fund hereby represents and warrants that (a) it is duly incorporated or organized and is validly existing in good standing in its jurisdiction of incorporation or organization; (b) it has the requisite power and authority under applicable law and its Governing Documents to enter into and perform this Agreement; (c) all requisite proceedings have been taken to authorize it to enter into and perform this Agreement; (d) this Agreement constitutes its legal, valid, binding and enforceable agreement; and (e) its entrance into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Fund or any law or regulation applicable to it. The Custodian hereby represents and warrants that (a) it is duly incorporated or organized and is validly existing in good standing in its jurisdiction of incorporation or organization; (b) it has the requisite power and authority under applicable law and its declaration of trust or other governing documents to enter into and perform this Agreement; (c) all requisite proceedings have been taken to authorize it to enter into and perform this Agreement; (d) this Agreement constitutes its legal, valid, binding and enforceable agreement;

Information Classification: Limited Access

and (e) its entrance into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Custodian or any law or regulation applicable to it.

The Custodian hereby represents to each of the Funds, on behalf of each of such Fund’s Portfolios, that it (a) has and shall maintain and update a disaster recovery and business continuation plan that is reasonably designed to enable the Custodian to perform its duties and obligations set forth under this Agreement in the event of a significant business disruption affecting the Custodian, including a Force Majeure Event; (b) shall test the operability of such plan at least once every twelve (12) months and revise such plan as Custodian reasonably believes is necessary to ensure that the plan, in general, continues to be reasonably designed to enable the Custodian to perform its duties and obligations as set forth under this Agreement; and (c) shall activate such plan if Custodian reasonably believes (i) an event has occurred which would materially affect the Custodian’s timely discharge of its duties and performance of its obligations under this Agreement and (ii) activation of such plan would allow Custodian to discharge its duties hereunder. The Custodian shall enter into and shall maintain in effect at all times during the term of this Agreement with appropriate parties one or more agreements making reasonable provision for (i) periodic back-up of the computer files and data with respect to the Fund and (ii) emergency use of electronic data processing equipment to provide services under this Agreement. Upon reasonable request, the Custodian shall discuss with the Fund the business continuity/disaster recovery plan of the Custodian. The Custodian represents that its business continuity plan is appropriate for its business as a provider of custodian services to investment companies registered under the 1940 Act.

SECTION 19.8 REMOTEACCESS SERVICES ADDENDUM. The Custodian and each Fund agree to be

bound by the terms of the Remote Access Services Addendum hereto.

SECTION 19.9 NOTICES. Any notice, instruction or other instrument required to be given hereunder may be delivered in person to the offices of the parties as set forth herein during normal business hours or delivered prepaid registered mail or by telex, cable or telecopy to the parties at the following addresses or such other addresses as may be notified by any party from time to time.


To any Fund:	c/o THE VANGUARD GROUP, INC. 400 Devon Park Drive, A29 Wayne, PA 19087 Attention: Chief Financial Officer Telecopy: (610) 669-6112

With a copy to:	THE VANGUARD GROUP, INC. 400 Devon Park Drive, V26 Wayne, PA 19087 Attention: General Counsel Telecopy: (610) 669-6600

To the Custodian:	STATE STREET BANK AND TRUST COMPANY 1 Iron Street Boston, MA 02210 Attention: Jay Fulchino Telephone: 617-662-0934

Information Classification: Limited Access


With a copy to:	STATE STREET BANK AND TRUST COMPANY Legal Division – Global Services Americas One Lincoln Street Boston, MA 02111 Attention: Senior Vice President

Such notice, instruction or other instrument shall be deemed to have been served in the case of a registered letter at the expiration of five business days after posting, in the case of cable twenty-four hours after dispatch and, in the case of facsimile, immediately on dispatch and if delivered outside normal business hours it shall be deemed to have been received at the next time after delivery when normal business hours commence and in the case of cable, facsimile or telecopy on the business day after the receipt thereof. Evidence that the notice was properly addressed, stamped and put into the post shall be conclusive evidence of posting.

SECTION 19.10 COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts taken together shall constitute one and the same Agreement.

SECTION 19.11 SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

SECTION 19.12 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules, addenda, exhibits, appendices, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto all/each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

SECTION 19.13 SHAREHOLDER COMMUNICATIONS ELECTION. Rule 14b-2 promulgated under the Securities Exchange Act of 1934, as amended, requires banks which hold securities for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, the Custodian needs each Fund to indicate whether it authorizes the Custodian to provide such Fund’s name, address, and share position to requesting companies whose securities the Fund owns. If a Fund tells the Custodian “no,” the Custodian will not provide this information to requesting companies. If a Fund tells the Custodian “yes” or does not check either “yes” or “no” below, the Custodian is required by the rule to treat the Fund as consenting to disclosure of this information for all securities owned by the Fund or any funds or accounts established by the Fund. For a Fund’s protection, the Rule prohibits the requesting company from using the Fund’s name and address for any purpose other than corporate communications. Please indicate below whether the Fund consents or objects by checking one of the alternatives below.

YES [ ] The Custodian is authorized to release the Fund’s name, address, and share positions.

NO [X] The Custodian is not authorized to release the Fund’s name, address, and share positions.

SECTION 19.14 REPORTS. Upon reasonable request of a Fund, the Custodian shall provide the Fund

with a copy of the Custodian’s System and Organization Controls for Service Organizations: Internal

Information Classification: Limited Access

Control over Financial Reporting (SOC) 1 reports prepared in accordance with the requirements of AT-C section 320, Reporting on an Examination of Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting (or any successor attestation standard). In addition, from time to time as requested, the Custodian will furnish the Fund a “gap” or “bridge” letter that will address any material changes that might have occurred in the Custodian’s controls covered in the SOC Report from the end of the SOC Report period through a specified requested date. The Custodian shall use commercially reasonable efforts to provide the Fund with such reports as the Fund may reasonably request or otherwise reasonably require to fulfill its duties under Rule 38a-l of the 1940 Act or similar legal and regulatory requirements. Upon reasonable request to the Fund, the Custodian shall also provide to the Fund sub-certifications in connection with Sarbanes-Oxley Act of 2002 certification requirements.

SECTION 19.15 OPINIONS. The Custodian shall take all reasonable action, as the Fund with respect to a Portfolio may from time to time request, to obtain from year to year favorable opinions from the Fund’s independent accountants with respect to its activities hereunder in connection with (i) the preparation of any registration statement of a Fund and any other reports required by a governmental agency or regulatory authority with jurisdiction over the Fund, and (ii) the fulfillment by a Fund of any other requirements of a governmental agency or regulatory authority with jurisdiction over the Fund.

SECTION 19.16 REGULATION GG. The Funds are hereby notified that “restricted transactions,” as such term is defined in Section 233.2(y) of Federal Reserve Regulation GG, are prohibited in any dealings with the Custodian pursuant to this Agreement or otherwise between or among any party hereto.

SECTION 19.17 PORTFOLIO BY PORTFOLIO BASIS. This Agreement is executed by a Fund with respect to each of its Portfolios and the obligations hereunder are not binding upon any of the directors, officers or shareholders of the Fund individually. Notwithstanding any other provision in this Agreement to the contrary, each and every obligation, liability or undertaking of a particular Portfolio under this Agreement shall constitute solely an obligation, liability or undertaking of, and be binding upon, such particular Portfolio and shall be payable solely from the available assets of such particular Portfolio and shall not be binding upon or affect any assets of any other Portfolio.

SECTION 19.18 SERVICE LEVEL AGREEMENTS. The Custodian and the Funds may from time to time agree to document the manner in which they expect to deliver and receive the services contemplated by this Agreement. In such event, each party will perform its obligations in accordance with any service levels that may be agreed upon by the parties in writing from time to time, subject to the terms of this Agreement

SECTION 19.19 LOAN SERVICES ADDENDUM. If a Fund directs the Custodian in writing to perform loan services, the Custodian and the Fund will be bound by the terms of the Loan Services Addendum attached hereto. The Fund shall reimburse Custodian for its fees and expenses related thereto as agreed upon from time to time in writing by the Fund and the Custodian.

[Signature page to follow.]

Information Classification: Limited Access

APPENDIX A

Vanguard California Tax-Free Funds

Vanguard California Intermediate-Term Tax-Exempt Fund Vanguard California Long-Term Tax-Exempt Fund Vanguard California Municipal Money Market Fund

Vanguard CMT Funds

Vanguard Municipal Cash Management Fund

Vanguard Convertible Securities Fund Vanguard Convertible Securities Fund

Vanguard Institutional Index Funds Vanguard Institutional Index Fund

Vanguard Malvern Funds

Vanguard Institutional Intermediate-Term Bond Fund Vanguard Institutional Short-Term Bond Fund

Vanguard Massachusetts Tax-Exempt Funds Vanguard Massachusetts Tax-Exempt Fund

Vanguard Municipal Bond Funds

Vanguard High-Yield Tax-Exempt Fund Vanguard Intermediate-Term Tax-Exempt Fund Vanguard Limited-Term Tax-Exempt Fund Vanguard Long-Term Tax-Exempt Fund Vanguard Municipal Money Market Fund Vanguard Short-Term Tax-Exempt Fund Vanguard Tax-Exempt Bond Index Fund

Vanguard New Jersey Tax-Free Funds

Vanguard New Jersey Long-Term Tax-Exempt Fund Vanguard New Jersey Municipal Money Market Fund

Vanguard New York Tax-Free Funds

Vanguard New York Long-Term Tax-Exempt Fund Vanguard New York Municipal Money Market Fund

Vanguard Ohio Tax-Free Funds

Vanguard Ohio Long-Term Tax-Exempt Fund

Vanguard Pennsylvania Tax-Free Funds

Vanguard Pennsylvania Long-Term Tax-Exempt Fund Vanguard Pennsylvania Municipal Money Market Fund

Vanguard Quantitative Funds

Vanguard Growth and Income Fund

Vanguard STAR Funds
Vanguard STAR Fund

A-1

Vanguard Variable Insurance Funds Balanced Portfolio Diversified Value Portfolio Equity Index Portfolio High Yield Bond Portfolio Mid-Cap Index Portfolio REIT Index Portfolio Small Company Growth Portfolio

Vanguard World Fund

Vanguard FTSE Social Index Fund

A-2


SCHEDULE A – GLOBAL CUSTODY NETWORK


MARKET	SUBCUSTODIAN	ADDRESS

Albania	Raiffeisen Bank sh.a.	Blv. "Bajram Curri" ETC – Kati 14 Tirana, Albania

Argentina	Citibank, N.A.	Bartolome Mitre 530
		1036 Buenos Aires, Argentina

Australia	The Hongkong and Shanghai Banking	HSBC Securities Services Level 3,
	Corporation Limited	10 Smith St.,
		Parramatta, NSW 2150, Australia

Austria	Deutsche Bank AG (operating through its	Fleischmarkt 1
	Frankfurt branch with support from its	A-1010 Vienna, Austria
	Vienna branch)

	UniCredit Bank Austria AG	Custody Department / Dept. 8398-TZ Julius Tandler Platz 3
		A-1090 Vienna, Austria

Bahrain	HSBC Bank Middle East Limited (as	1^STFloor, Bldg. #2505 Road # 2832, Al
	delegate of The Hongkong and Shanghai	Seef 428 Kingdom of Bahrain
	Banking Corporation Limited)

Bangladesh	Standard Chartered Bank	Silver Tower, Level 7
		52 South Gulshan Commercial Area Gulshan 1, Dhaka 1212,
		Bangladesh

Belgium	Deutsche Bank AG, Netherlands	De Entrees 99-197
	(operating through its Amsterdam	1101 HE Amsterdam, Netherlands
	branch with support from its Brussels
	branch)

Benin	via Standard Chartered Bank Côte d’Ivoire	23, Bld de la République
	S.A., Abidjan, Ivory Coast	17 BP 1141 Abidjan 17 Côte d’Ivoire

Bermuda	HSBC Bank Bermuda Limited	6 Front Street
		Hamilton, HM06, Bermuda

Federation of	UniCredit Bank d.d.	Zelenih beretki 24
Bosnia and		71 000 Sarajevo
Herzegovina		Federation of Bosnia and Herzegovina

Botswana	Standard Chartered Bank Botswana Limited	4th Floor, Standard Chartered House Queens Road
		The Mall
		Gaborone, Botswana

Brazil	Citibank, N.A.	AV Paulista 1111
		São Paulo, SP 01311-920 Brazil

Bulgaria	Citibank Europe plc, Bulgaria Branch	Serdika Offices, 10th floor 48 Sitnyakovo Blvd.
		1505 Sofia, Bulgaria

	UniCredit Bulbank AD	7 Sveta Nedelya Square
		1000 Sofia, Bulgaria

Burkina Faso	via Standard Chartered Bank Côte d’Ivoire	23, Bld de la République
	S.A., Abidjan, Ivory Coast	17 BP 1141 Abidjan 17 Côte d’Ivoire

Canada	State Street Trust Company Canada	30 Adelaide Street East, Suite 800 Toronto, ON Canada
		M5C 3G6

Chile	Itaú CorpBanca S.A.	Presidente Riesco Street # 5537 Floor 18
		Las Condes, Santiago de Chile

People’s	HSBC Bank (China) Company Limited	33^rdFloor, HSBC Building, Shanghai IFC 8 Century Avenue
Republic of	(as delegate of The Hongkong and	Pudong, Shanghai, China (200120)
China	Shanghai Banking Corporation Limited)

	China Construction Bank Corporation	No.1 Naoshikou Street Chang An Xing Rong
		Plaza Beijing 100032-33, China

SCH A-1


China Connect	Citibank N.A.	39/F., Champion Tower 3 Garden Road
		Central, Hong Kong

	The Hongkong and Shanghai Banking	Level 30,
	Corporation Limited	HSBC Main Building 1 Queen's
		Road Central, Hong Kong

	Standard Chartered Bank (Hong Kong)	15^thFloor Standard Chartered Tower 388 Kwun Tong Road
	Limited	Kwun Tong, Hong Kong

Colombia	Cititrust Colombia S.A. Sociedad Fiduciaria	Carrera 9A, No. 99-02 Bogotá DC,
		Colombia

Costa Rica	Banco BCT S.A.	160 Calle Central Edificio BCT
		San José, Costa Rica

Croatia	Privredna Banka Zagreb d.d.	Custody Department Radni ka cesta 50
		10000 Zagreb, Croatia

	Zagrebacka Banka d.d.	Savska 60
		10000 Zagreb, Croatia

Cyprus	BNP Paribas Securities Services, S.C.A.,	2 Lampsakou Str.
	Greece (operating through its Athens	115 28 Athens, Greece
	branch)

Czech Republic	eskoslovenská obchodní banka, a.s.	Radlická 333/150
		150 57 Prague 5, Czech Republic

	UniCredit Bank Czech Republic and	BB Centrum – FILADELFIE }eletavská 1525/1
	Slovakia, a.s.	140 92 Praha 4 - Michle, Czech Republic

Denmark	Nordea Bank AB (publ), Sweden	Strandgade 3
	(operating through its branch, Nordea	0900 Copenhagen C, Denmark
	Danmark, Filial af Nordea Bank AB
	(publ), Sverige)

	Skandinaviska Enskilda Banken AB	Bernstorffsgade 50
	(publ), Sweden (operating through its	1577 Copenhagen, Denmark
	Copenhagen branch)

Egypt	HSBC Bank Egypt S.A.E.	6^thFloor
	(as delegate of The Hongkong and	306 Corniche El Nil Maadi
	Shanghai Banking Corporation Limited)	Cairo, Egypt

Estonia	AS SEB Pank	Tornimäe 2
		15010 Tallinn, Estonia

Finland	Nordea Bank AB (publ), Sweden	Satamaradankatu 5
	(operating through its branch, Nordea	00500 Helsinki, Finland
	Bank AB (publ), Finnish branch)

	Skandinaviska Enskilda Banken AB (publ),	Securities Services Box 630
	Sweden (operating through its Helsinki	SF-00101 Helsinki, Finland
	branch)

France	Deutsche Bank AG, Netherlands	De Entrees 99-197
	(operating through its Amsterdam	1101 HE Amsterdam, Netherlands
	branch with support from its Paris
	branch)

Republic of	JSC Bank of Georgia	29a Gagarini Str. Tbilisi 0160,
Georgia		Georgia

Germany	State Street Bank International GmbH	Brienner Strasse 59
		80333 Munich, Germany

	Deutsche Bank AG	Alfred-Herrhausen-Allee 16-24
		D-65760 Eschborn, Germany

Ghana	Standard Chartered Bank Ghana Limited	P. O. Box 768
		1st Floor

SCH A-2


		High Street Building Accra, Ghana

Greece	BNP Paribas Securities Services, S.C.A.	2 Lampsakou Str.
		115 28 Athens, Greece

Guinea-Bissau	via Standard Chartered Bank Côte d’Ivoire	23, Bld de la République
	S.A., Abidjan, Ivory Coast	17 BP 1141 Abidjan 17 Côte d’Ivoire

Hong Kong	Standard Chartered Bank (Hong Kong)	15th Floor Standard Chartered Tower 388 Kwun Tong Road
	Limited	Kwun Tong, Hong Kong

Hungary	Citibank Europe plc Magyarországi	7 Szabadság tér, Bank Center Budapest, H-1051 Hungary
	Fióktelepe

	UniCredit Bank Hungary Zrt.	6th Floor Szabadság tér 5-6
		H-1054 Budapest, Hungary

Iceland	Landsbankinn hf.	Austurstræti 11
		155 Reykjavik, Iceland

India	Deutsche Bank AG	Block B1, 4th Floor, Nirlon Knowledge Park
		Off Western Express Highway Goregaon (E)
		Mumbai 400 063, India

	The Hongkong and Shanghai Banking	11F, Building 3, NESCO - IT Park, NESCO Complex,
	Corporation Limited	Western Express Highway Goregaon (East),
		Mumbai 400 063, India

Indonesia	Deutsche Bank AG	Deutsche Bank Building, 4^thfloor Jl. Imam Bonjol, No. 80
		Jakarta 10310, Indonesia

Ireland	State Street Bank and Trust Company,	525 Ferry Road
	United Kingdom branch	Edinburgh EH5 2AW, Scotland

Israel	Bank Hapoalim B.M.	50 Rothschild Boulevard Tel Aviv, Israel
		61000

Italy	Deutsche Bank S.p.A.	Investor Services
		Via Turati 27 – 3rd Floor
		20121 Milan, Italy

Ivory Coast	Standard Chartered Bank Côte d’Ivoire S.A.	23, Bld de la République
		17 BP 1141 Abidjan 17 Côte d’Ivoire

Japan	Mizuho Bank, Limited	Shinagawa Intercity Tower A 2-15-1, Konan, Minato-ku
		Tokyo 108-6009, Japan

	The Hongkong and Shanghai Banking	HSBC Building
	Corporation Limited	11-1 Nihonbashi 3-chome, Chuo-ku Tokyo 1030027, Japan

Jordan	Standard Chartered Bank	Shmeissani Branch
		Al-Thaqafa Street, Building # 2
		P.O. Box 926190
		Amman 11110, Jordan

Kazakhstan	JSC Citibank Kazakhstan	Park Palace, Building A, 41 Kazibek Bi street,
		Almaty A25T0A1, Kazakhstan

Kenya	Standard Chartered Bank Kenya Limited	Custody Services
		Standard Chartered @ Chiromo, Level 5 48 Westlands Road
		P.O. Box 40984 – 00100 GPO
		Nairobi, Kenya

Republic of Korea	Deutsche Bank AG	18th Fl., Young-Poong Building 41 Cheonggyecheon-ro
		Jongro-ku-, Seoul 03188, Korea

	The Hongkong and Shanghai Banking	5F
	Corporation Limited	HSBC Building #37 Chilpae-ro
		Jung-gu, Seoul 04511, Korea

Kuwait	HSBC Bank Middle East Limited	Kuwait City, Sharq Area Abdulaziz Al Sager Street Al Hamra
	(as delegate of The Hongkong and	Tower, 37F

SCH A-3


	Shanghai Banking Corporation Limited)	P. O. Box 1683, Safat 13017, Kuwait

Latvia	AS SEB banka	Unicentrs, Valdlau i
		LV-1076 Kekavas pag., Rigas raj., Latvia

Lithuania	AB SEB bankas	Gedimino av. 12
		LT 2600 Vilnius, Lithuania

Malawi	Standard Bank Limited	Kaomba Centre
		Cnr. Victoria Avenue & Sir Glyn Jones Road
		Blantyre, Malawi

Malaysia	Deutsche Bank (Malaysia) Berhad	Domestic Custody Services Level 20, Menara IMC
		8 Jalan Sultan Ismail
		50250 Kuala Lumpur, Malaysia

	Standard Chartered Bank Malaysia Berhad	Menara Standard Chartered 30 Jalan Sultan Ismail
		50250 Kuala Lumpur, Malaysia

Mali	via Standard Chartered Bank Côte d’Ivoire	23, Bld de la République
	S.A., Abidjan, Ivory Coast	17 BP 1141 Abidjan 17 Côte d’Ivoire

Mauritius	The Hongkong and Shanghai Banking	6F HSBC Centre 18 CyberCity
	Corporation Limited	Ebene, Mauritius

Mexico	Banco Nacional de México, S.A.	3er piso, Torre Norte
		Act. Roberto Medellín No. 800 Col. Santa Fe
		Mexico, DF 01219

Morocco	Citibank Maghreb	Zénith Millénium Immeuble1 Sidi Maârouf –
		B.P. 40 Casablanca 20190, Morocco

Namibia	Standard Bank Namibia Limited	Standard Bank Center
		Cnr. Werner List St. and Post St. Mall 2nd Floor
		Windhoek, Namibia

Netherlands	Deutsche Bank AG	De Entrees 99-197
		1101 HE Amsterdam, Netherlands

New Zealand	The Hongkong and Shanghai Banking	HSBC House
	Corporation Limited	Level 7, 1 Queen St. Auckland 1010, New
		Zealand

Niger	via Standard Chartered Bank Côte d’Ivoire	23, Bld de la République
	S.A., Abidjan, Ivory Coast	17 BP 1141 Abidjan 17 Côte d’Ivoire

Nigeria	Stanbic IBTC Bank Plc.	Plot 1712 Idejo St Victoria Island,
		Lagos 101007, Nigeria

Norway	Nordea Bank AB (publ), Sweden	Essendropsgate 7
	(operating through its branch, Nordea	0368 Oslo, Norway
	Bank AB (publ), filial i Norge)

	Skandinaviska Enskilda Banken AB (publ),	P.O. Box 1843 Vika Filipstad Brygge 1
	Sweden (operating through its Oslo branch)	N-0123 Oslo, Norway

Oman	HSBC Bank Oman S.A.O.G.	2^ndFloor Al Khuwair PO Box 1727 PC 111
	(as delegate of The Hongkong and	Seeb, Oman
	Shanghai Banking Corporation Limited)

Pakistan	Deutsche Bank AG	Unicentre – Unitowers

I.I.	Chundrigar Road
P.O.	Box 4925


		Karachi - 74000, Pakistan
Panama	Citibank, N.A.	Boulevard Punta Pacifica Torre de las Americas Apartado
		Panama City, Panama 0834-00555
Peru	Citibank del Perú, S.A.	Canaval y Moreyra 480 3^rdFloor, San
		Isidro Lima 27, Perú
Philippines	Deutsche Bank AG	Global Transaction Banking Tower One, Ayala

SCH A-4


		Triangle 1226 Makati City, Philippines

Poland	Bank Handlowy w Warszawie S.A.	ul. Senatorska 16
		00-293 Warsaw, Poland

	Bank Polska Kasa Opieki S.A.	31 Zwirki I Wigury Street
		02-091, Warsaw, Poland

Portugal	Deutsche Bank AG, Netherlands	De Entrees 99-197
	(operating through its Amsterdam	1101 HE Amsterdam, Netherlands
	branch with support from its Lisbon
	branch)

Puerto Rico	Citibank N.A.	235 Federico Costa Street, Suite 315 San Juan, Puerto Rico
		00918

Qatar	HSBC Bank Middle East Limited	2 Fl Ali Bin Ali Tower Building no.: 150 Airport Road
	(as delegate of The Hongkong and	Doha, Qatar
	Shanghai Banking Corporation Limited)

Romania	Citibank Europe plc, Dublin – Romania	8, Iancu de Hunedoara Boulevard
	Branch	712042, Bucharest Sector 1, Romania

Russia	AO Citibank	8-10 Gasheka Street, Building 1
		125047 Moscow, Russia

Saudi Arabia	HSBC Saudi Arabia	HSBC Head Office 7267 Olaya - Al Murooj Riyadh 12283-
	(as delegate of The Hongkong and	2255
	Shanghai Banking Corporation Limited)	Kingdom of Saudi Arabia

Senegal	via Standard Chartered Bank Côte d’Ivoire	23, Bld de la République
	S.A., Abidjan, Ivory Coast	17 BP 1141 Abidjan 17 Côte d’Ivoire

Serbia	UniCredit Bank Serbia JSC	Rajiceva 27-29
		11000 Belgrade, Serbia

Singapore	Citibank N.A.	3 Changi Business Park Crescent
		#07-00, Singapore 486026

	United Overseas Bank Limited	156 Cecil Street
		FEB Building #08-03
		Singapore 069544

Slovak Republic	UniCredit Bank Czech Republic and	\ancová 1/A
	Slovakia, a.s.	813 33 Bratislava, Slovak Republic

Slovenia	UniCredit Banka Slovenija d.d.	Šmartinska 140
		SI-1000 Ljubljana, Slovenia

South Africa	FirstRand Bank Limited	Mezzanine Floor
		3 First Place Bank City
		Corner Simmonds & Jeppe Sts. Johannesburg 2001
		Republic of South Africa

	Standard Bank of South Africa Limited	3^rdFloor, 25 Pixley Ka Isaka Seme St. Johannesburg 2001
		Republic of South Africa

Spain	Deutsche Bank S.A.E.	Calle de Rosario Pino 14-16, Planta 1
		28020 Madrid, Spain

Sri Lanka	The Hongkong and Shanghai Banking	24, Sir Baron Jayatilake Mawatha Colombo 01, Sri Lanka
	Corporation Limited

Republic of	UniCredit Bank d.d.	Zelenih beretki 24
Srpska		71 000 Sarajevo
		Federation of Bosnia and Herzegovina

Swaziland	Standard Bank Swaziland Limited	Standard House, Swazi Plaza Mbabane,
		Swaziland H101

Sweden	Nordea Bank AB (publ)	Smålandsgatan 17
		105 71 Stockholm, Sweden

SCH A-5


	Skandinaviska Enskilda Banken AB (publ)	Sergels Torg 2
		SE-106 40 Stockholm, Sweden

Switzerland	Credit Suisse (Switzerland) Limited	Uetlibergstrasse 231
		8070 Zurich, Switzerland

	UBS Switzerland AG	Max-Högger-Strasse 80-82
		CH-8048 Zurich-Alstetten, Switzerland

Taiwan - R.O.C.	Deutsche Bank AG	296 Ren-Ai Road
		Taipei 106 Taiwan, Republic of China

	Standard Chartered Bank (Taiwan) Limited	168 Tun Hwa North Road
		Taipei 105, Taiwan, Republic of China

Tanzania	Standard Chartered Bank (Tanzania)	1 Floor, International House
	Limited	Corner Shaaban Robert St and Garden Ave
		PO Box 9011
		Dar es Salaam, Tanzania

Thailand	Standard Chartered Bank (Thai) Public	Sathorn Nakorn Tower 14^thFloor, Zone B
	Company Limited	90 North Sathorn Road
		Silom, Bangkok 10500, Thailand

Togo	via Standard Chartered Bank Côte d’Ivoire	23, Bld de la République
	S.A., Abidjan, Ivory Coast	17 BP 1141 Abidjan 17 Côte d’Ivoire

Tunisia	Union Internationale de Banques	65 Avenue Bourguiba
		1000 Tunis, Tunisia

Turkey	Citibank, A.^.	Tekfen Tower
		Eski Buyukdere Caddesi 209 Kat 3
		Levent 34394 Istanbul, Turkey

	Deutsche Bank A.^.	Eski Buyukdere Caddesi Tekfen Tower No. 209 Kat: 17 4
		Levent 34394 Istanbul, Turkey

Uganda	Standard Chartered Bank Uganda Limited	5 Speke Road
		P.O. Box 7111
		Kampala, Uganda

Ukraine	PJSC Citibank	16-g Dilova St.
		Kyiv 03150, Ukraine

United Arab	HSBC Bank Middle East Limited	HSBC Securities Services Emaar Square
Emirates Dubai	(as delegate of The Hongkong and	Level 3, Building No. 5 P O Box 502601
Financial	Shanghai Banking Corporation Limited)	Dubai, United Arab Emirates
Market

United Arab	HSBC Bank Middle East Limited	HSBC Securities Services Emaar Square
Emirates Dubai	(as delegate of The Hongkong and	Level 3, Building No. 5 P O Box 502601
International	Shanghai Banking Corporation Limited)	Dubai, United Arab Emirates
Financial Center

United Arab	HSBC Bank Middle East Limited	HSBC Securities Services Emaar Square
Emirates Abu	(as delegate of The Hongkong and	Level 3, Building No. 5 P O Box 502601
Dhabi	Shanghai Banking Corporation Limited)	Dubai, United Arab Emirates

United Kingdom	State Street Bank and Trust Company,	525 Ferry Road
	United Kingdom branch	Edinburgh EH5 2AW, Scotland

Uruguay	Banco Itaú Uruguay S.A.	Zabala 1463
		11000 Montevideo, Uruguay

Venezuela	Citibank, N.A.	Centro Comercial El Recreo Torre Norte,
		Piso 19 Avenida Casanova Caracas,
		Venezuela 1050

Vietnam	HSBC Bank (Vietnam) Limited	Centre Point
	(as delegate of The Hongkong and	106 Nguyen Van Troi Street Phu Nhuan District
	Shanghai Banking Corporation Limited)	Ho Chi Minh City, Vietnam

SCH A-6


Zambia	Standard Chartered Bank Zambia Plc.	Standard Chartered House Cairo Road
		P.O. Box 32238
		10101, Lusaka, Zambia

Zimbabwe	Stanbic Bank Zimbabwe Limited	3rd Floor Stanbic Centre
	(as delegate of Standard Bank of South	59 Samora Machel Avenue Harare,
	Africa Limited)	Zimbabwe

SCH A-7

SCHEDULE B – DEPOSITORIES OPERATING IN NETWORK MARKETS


MARKET	DEPOSITORY	TYPES OF SECURITIES
Albania	Bank of Albania	Government debt
Argentina	Caja de Valores S.A.	Equities, government and corporate bonds, and corporate money
		market instruments

Australia	Austraclear Limited	Government securities, corporate bonds, and corporate money
		market instruments

Austria	OeKB Central Securities	All securities listed on Wiener Börse AG, the Vienna Stock
	Depository GmbH	Exchange (as well as virtually all other Austrian securities)

Bahrain	Clearing, Settlement, Depository	Equities
	and Registry System of the
	Bahrain Bourse

Bangladesh	Bangladesh Bank	Government securities

	Central Depository Bangladesh	Equities and corporate bonds
	Limited

Belgium	Euroclear Belgium	Equities and most corporate bonds

	National Bank of Belgium	Government securities, corporate bonds, and money market
		instruments

Benin	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.

	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.

Bermuda	Bermuda Securities Depository	Equities, corporate bonds
Federation of	Registar vrijednosnih papira u	Equities, corporate bonds, government securities, money market
Bosnia and	Federaciji Bosne i Hercegovine,	instruments
Herzegovina	d.d.

Botswana	Bank of Botswana	Government debt

	Central Securities Depository	Equities and corporate bonds
	Company of Botswana Ltd.

Brazil	Central de Custódia e de	Corporate debt and money market instruments
	Liquidação Financeira de Títulos
	Privados (CETIP)

	BM&F BOVESPA Depository	Equities and corporate bonds traded on-exchange
	Services, a department of BM&F
	BOVESPA S.A.

	Sistema Especial de Liquidação e	Government debt issued by the central bank and the National
	de Custódia (SELIC)	Treasury

Bulgaria	Bulgarian National Bank	Government securities

	Central Depository AD	Eligible equities and corporate bonds

Burkina Faso	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.

SCH B-1


	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.

Canada	The Canadian Depository for	All book-entry eligible securities, including government securities,
	Securities Limited	equities, corporate bonds, money market instruments, strip bonds,
		and asset- backed securities


Chile	Depósito Central de Valores S.A.	Government securities, equities, corporate bonds, mortgage-backed
		securities, and money market instruments

People’s	China Securities Depository and	A shares, B shares, Treasury bonds, local government bonds,
Republic of	Clearing Corporation Limited,	enterprise bonds, corporate bonds, open and closed-end funds,
China	Shanghai and Shenzhen Branches	convertible bonds, and warrants

	China Central Depository and	Bonds traded through the China Interbank Bond Market (CIBM),
	Clearing Co., Ltd.	including Treasury bonds, local government bonds, policy bank
		bonds, central bank bills, medium-term notes, commercial paper,
		enterprise bonds, and commercial bank bonds

	Shanghai Clearing House	Bonds traded through the China Interbank Bond Market (CIBM),
		including Treasury bonds, local government bonds, policy bank
		bonds, central bank bills, enterprise bonds, certain issues of
		medium-term notes, commercial paper, and commercial bank
bonds

Colombia	Depósito Central de Valores	Securities issued by the central bank and the Republic of Colombia


	Depósito Centralizado de Valores	Equities, corporate bonds, money market instruments
	de Colombia S.A. (DECEVAL)

Costa Rica	Interclear Central de Valores S.A.	Securities traded on Bolsa Nacional de Valores
Croatia	Središnje klirinško depozitarno	Eligible equities, corporate bonds, government securities, and
	društvo d.d.	corporate money market instruments

Cyprus	Central Depository and Central	Equities, corporate bonds, dematerialized government securities,
	Registry	corporate money market instruments

Czech Republic	Centrální depozitáY cenných	All dematerialized equities, corporate debt, and government debt,
	papíro, a.s.	excluding Treasury bills

	Czech National Bank	Treasury bills

Denmark	VP Securities A/S	Equities, government securities, corporate bonds, corporate money
		market instruments, warrants

Egypt	Central Bank of Egypt	Treasury bills

	Misr for Central Clearing,	Eligible equities, corporate bonds, and Treasury bonds
	Depository and Registry S.A.E.

Estonia	AS Eesti Väärtpaberikeskus	All registered equity and debt securities
Finland	Euroclear Finland	Equities, corporate bonds, government securities, money market
		instruments

France	Euroclear France	Government securities, equities, bonds, and money market
		instruments

Republic of	Georgian Central Securities	Equities, corporate bonds, and money market instruments
Georgia	Depository

	National Bank of Georgia	Government securities

Germany	Clearstream Banking AG,	Equities, government securities, corporate bonds, money market
	Frankfurt	instruments, warrants, investment funds, and index certificates

SCH B-2


Ghana	Central Securities Depository	Government securities and Bank of Ghana securities; equities and
	(Ghana) Limited	corporate bonds

Greece	Bank of Greece, System for	Government debt
	Monitoring Transactions in
	Securities in Book-Entry Form

	Hellenic Central Securities	Eligible listed equities, government debt, and corporate bonds
	Depository

Guinea-Bissau	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.

	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.

Hong Kong	Central Moneymarkets Unit	Government debt (i.e., exchange fund bills and notes issued by the
		HKMA), other private debt, and money market instruments

	Hong Kong Securities Clearing	Securities listed or traded on the Stock Exchange of Hong Kong
	Company Limited	Limited

Hungary	KELER Központi Értéktár Zrt.	Government securities, equities, corporate bonds, and investment
fund notes

Iceland	Nasdaq verðbréfamiðstöð hf.	Government securities, equities, corporate bonds, and money
		market instruments

India	Central Depository Services	Eligible equities, debt securities, and money market instruments
	(India) Limited

	National Securities Depository	Eligible equities, debt securities, and money market instruments
	Limited

	Reserve Bank of India	Government securities

Indonesia	Bank Indonesia	Sertifikat Bank Indonesia (central bank certificates), Surat Utang
		Negara (government debt instruments), and Surat Perbendaharaan
		Negara (Treasury bills)

	PT Kustodian Sentral Efek	Equities, corporate bonds, and money market instruments
	Indonesia

Ireland	Euroclear UK & Ireland Limited	GBP- and EUR-denominated money market instruments

	Euroclear Bank S.A./N.V.	Government securities

Israel	Tel Aviv Stock Exchange Clearing	Government securities, equities, corporate bonds and trust fund
	House Ltd. (TASE Clearing	units
	House)

Italy	Monte Titoli S.p.A.	Equities, corporate debt, government debt, money market
		instruments, and warrants

Ivory Coast	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.

	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.

Japan	Bank of Japan – Financial	Government securities
	Network System

	Japan Securities Depository	Equities, corporate bonds, and corporate money market instruments
	Center (JASDEC) Incorporated

SCH B-3


Jordan	Central Bank of Jordan	Treasury bills, government bonds, development bonds, and public
		entity bonds

	Securities Depository Center	Equities and corporate bonds

Kazakhstan	Central Securities Depository	Government securities, equities, corporate bonds, and money
		market instruments

Kenya	Central Bank of Kenya	Treasury bills and Treasury bonds

	Central Depository and Settlement	Equities and corporate debt
	Corporation Limited

Republic of	Korea Securities Depository	Equities, government securities, corporate bonds and money market
Korea		instruments

Kuwait	Kuwait Clearing Company KSC	Money market instruments, equities, and corporate bonds

Latvia	Latvian Central Depository	Equities, government securities, corporate bonds, and money
		market instruments

Lebanon	Banque du Liban	Government securities and certificates of deposit issued by the
		central bank

	Custodian and Clearing Center of	Equities, corporate bonds and money market instruments
	Financial Instruments for Lebanon
	and the Middle East (Midclear)
	S.A.L.

Lithuania	Central Securities Depository of	All securities available for public trading
	Lithuania

Malawi	Reserve Bank of Malawi	Reserve Bank of Malawi bills and Treasury bills
Malaysia	Bank Negara Malaysia	Treasury bills, Bank Negara Malaysia bills, Malaysian government
		securities, private debt securities, and money market instruments

	Bursa Malaysia Depository Sdn.	Securities listed on Bursa Malaysia Securities Berhad
	Bhd.

Mali	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.

	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.

Mauritius	Bank of Mauritius	Government debt (traded through primary dealers)

	Central Depository and Settlement	Listed and unlisted equity and debt securities (corporate debt and
	Co. Limited	T-bills traded on the exchange)

Mexico	S.D. Indeval, S.A. de C.V.	All securities
Morocco	Maroclear	Eligible listed equities, corporate and government debt, certificates
		of deposit, commercial paper

Namibia	Bank of Namibia	Treasury bills
Netherlands	Euroclear Nederland	Government securities, equities, corporate bonds, corporate money
		market instruments, and stripped government bonds

New Zealand	New Zealand Central Securities	Government securities, equities, corporate bonds, and money
	Depository Limited	market instruments

Niger	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.

SCH B-4


	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.

Nigeria	Central Bank of Nigeria	Treasury bills and government bonds

	Central Securities Clearing	Equities and corporate bonds traded on the Nigeria Stock Exchange
	System Limited

Norway	Verdipapirsentralen	All listed securities
Oman	Muscat Clearing & Depository	Equities, corporate bonds, government debt
	Company S.A.O.G.

Pakistan	Central Depository Company of	Equities and corporate bonds
	Pakistan Limited

	State Bank of Pakistan	Government securities

Panama	Central Latinoamericana de	Equities, government and corporate debt, commercial paper, short-
	Valores,	term securities

	S.A. (LatinClear)

Peru	CAVALI S.A. Institución de	All securities in book-entry form traded on the stock exchange
	Compensación y Liquidación de
	Valores

Philippines	Philippine Depository & Trust	Eligible equities and debt
	Corporation

	Registry of Scripless Securities	Government securities
	(ROSS) of the Bureau of the
	Treasury

Poland	Rejestr Papierów Warto[ciowych	Treasury bills

	Krajowy Depozyt Papierów	Equities, corporate bonds, corporate money market instruments,
	Warto[ciowych, S.A.	Treasury bonds, warrants, and futures contracts

Portugal	INTERBOLSA - Sociedad	All local Portuguese instruments
	Gestora de Sistemas de
	Liquidação e de Sistemas
	Centralizados de Valores
	Mobiliários, S.A.

Qatar	Qatar Central Securities	Equities, government bonds and Treasury bills listed on the Qatar
	Depository	Exchange

Romania	National Bank of Romania	Treasury bills and bonds

	S.C. Depozitarul Central S.A.	Bursa de Valori Bucuresti- (Bucharest Stock Exchange-) listed
		equities, corporate bonds, government bonds, and municipal bonds

Russia	National Settlement Depository	Eligible equities, Obligatsii Federal’nogo Zaima (OFZs), and
		corporate debt denominated in RUB

Saudi Arabia	Saudi Arabian Monetary	Government securities and Saudi government development bonds
	Authority	(SGDBs)

	Securities Depository Center	Equities
	Company

Senegal	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.

	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.

SCH B-5


Serbia	Central Securities Depository and	All instruments
	Clearinghouse
Singapore	Monetary Authority of Singapore	Government securities
	The Central Depository (Pte.)	Eligible listed equities and eligible private debt traded in Singapore
	Limited
Slovak Republic	Centrálny depozitár cenných	All dematerialized securities
	papierov SR, a.s.
Slovenia	KDD – Centralna klirinško	All publicly traded securities
	depotna dru~ba d.d.
South Africa	Strate (Pty) Ltd.	Eligible equities, government securities, corporate bonds, money
		market instruments, and warrants
Spain	IBERCLEAR	Government securities, equities, warrants, money market
		instruments, and corporate bonds
Sri Lanka	Central Bank of Sri Lanka	Government securities
	Central Depository System (Pvt)	Equities and corporate bonds
	Limited
Republic of	Central Registry of Securities in	Government securities, equities, and corporate and municipal bonds
Srpska	the Republic of Srpska JSC
Swaziland	Central Bank of Swaziland	Treasury bills and Treasury bonds
Sweden	Euroclear Sweden	Government securities, equities, bonds, money market instruments,
		derivatives, exchange traded funds, and warrants

Switzerland	SIX SIS AG	Government securities, equities, corporate bonds, money market
		instruments, derivatives, mutual funds, and warrants

Taiwan - R.O.C.	Central Bank of the Republic of	Government securities
	China (Taiwan)

	Taiwan Depository and Clearing	Listed equities, short-term bills, and corporate bonds
	Corporation
Tanzania	Central Depository System (CDS),	Equities and corporate bonds
	a department of the Dar es Salaam
	Stock Exchange
Thailand	Thailand Securities Depository	Government securities, equities and corporate bonds
	Company Limited
Togo	Dépositaire Central – Banque de	All securities traded on Bourse Régionale des Valeurs Mobilières,
	Règlement	the West African regional exchange, including securities from the
		following West African nations: Benin, Burkina Faso, Guinea-
		Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
	Banque Centrale des Etats	Treasury bills and Treasury bonds issued by the following West
	d’Afrique de l’Ouest	African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory
		Coast, Mali, Niger, Senegal and Togo.
Tunisia	Tunisie Clearing	All eligible listed securities
Turkey	Central Bank of Turkey	Government securities
	Central Registry Agency	Equities, corporate bonds, money market instruments, mutual fund
		certificates, exchange traded funds
Uganda	Bank of Uganda	Treasury bills and Treasury bonds
	Securities Central Depository	Equities, corporate bonds
Ukraine	National Depository of Ukraine	Equities, bonds, and money market instruments

SCH B-6


United Arab	Clearing, Settlement, Depository	Equities, government securities, and corporate debt
Emirates – Abu	and Registry department of the
Dhabi	Abu Dhabi Securities Exchange
United Arab	Clearing, Settlement and	Equities, government securities, and corporate debt listed on the
Emirates –	Depository Division, a department	DFM
Dubai Financial	of the Dubai Financial Market
Market
United Arab	Central Securities Depository,	Equities, corporate bonds, and corporate money market instruments
Emirates –	owned and operated by NASDAQ
Dubai	Dubai Limited
International
Financial
United Kingdom	Euroclear UK & Ireland Limited	GBP- and EUR-denominated money market instruments
Uruguay	Banco Central del Uruguay	Government securities
Venezuela	Banco Central de Venezuela	Government securities
Vietnam	Vietnam Securities Depository	Equities, government bonds, T-bills, corporate bonds, and public
		fund certificates
Zambia	Bank of Zambia	Treasury bills and Treasury bonds
	LuSE Central Shares Depository	Treasury bonds, corporate bonds, and equities
	Limited
Zimbabwe	Chengetedzai Depository	Equities and corporate bonds
	Company Limited
	Reserve Bank of Zimbabwe	Treasury bills and Treasury bonds

TRANSNATIONAL DEPOSITORIES
Euroclear Bank S.A./N.V.		Domestic securities from more than 40 markets
Clearstream Banking, S.A.		Domestic securities from more than 50 markets

SCH B-7

SCHEDULE C – GLOBAL CUSTODY NETWORK PUBLICATIONS

Publication / Type of Information

(scheduled update frequency)

The Guide to Custody in World Markets

(regular my.statestreet.com updates)

Global Custody Network Review

(updated annually on my.statestreet.com)

Securities Depository Review

(updated annually on my.statestreet.com)

Global Legal Survey

(updated annually on my.statestreet.com)

Subcustodian Agreements

(available on CD-ROM annually)

Global Market Bulletin

(daily or as necessary via email and on my.statestreet.com)

Foreign Custody Risk Advisories

(provided as necessary and on my.statestreet.com)

Foreign Custody Manager Material Change Notices

(quarterly or as necessary and on my.statestreet.com)

Brief Description

An overview of settlement and safekeeping procedures, custody practices, and foreign investor considerations for the markets in which State Street offers custodial services.

Information relating to Foreign Subcustodians in State Street’s Global Custody Network. The Review stands as an integral part of the materials that State Street provides to its U.S. mutual fund clients to assist them in complying with SEC Rule 17f-5. The Review also gives insight into State Street’s market expansion and Foreign Subcustodian selection processes, as well as the procedures and controls used to monitor the financial condition and performance of our Foreign Subcustodian banks.

Custody risk analyses of the Foreign Securities Depositories presently operating in Network markets. This publication is an integral part of the materials that State Street provides to its U.S. mutual fund clients to meet informational obligations created by SEC Rule 17f-7.

With respect to each market in which State Street offers custodial services, opinions relating to whether local law restricts: (i) access of a fund’s independent public accountants to books and records of a Foreign Subcustodian or Foreign Securities System, (ii) a fund’s ability to recover in the event of bankruptcy or insolvency of a Foreign Subcustodian or Foreign Securities System, (iii) a fund’s ability to recover in the event of a loss by a Foreign Subcustodian or Foreign Securities System, and (iv) the ability of a foreign investor to convert cash and cash equivalents to U.S. dollars.

Copies of the contracts that State Street has entered into with each Foreign Subcustodian that maintains U.S. mutual fund assets in the markets in which State Street offers custodial services.

Information on changing settlement and custody conditions in markets where State Street offers custodial services. Includes changes in market and tax regulations, depository developments, dematerialization information, as well as other market changes that may impact State Street’s clients.

For those markets where State Street offers custodial services that exhibit special risks or infrastructures impacting custody, State Street maintains market advisories to highlight those unique market factors which might impact our ability to offer recognized custody service levels.

Informational letters and accompanying materials, pursuant to our role as Foreign Custody Manager, confirming State Street’s foreign custody arrangements, including a summary of material changes with Foreign Subcustodians that have occurred during the previous quarter. The notices also identify any material changes in the custodial risks associated with maintaining assets with Foreign Securities Depositories.

Please contact [email protected] with questions about this document.

The information contained in this document has been carefully researched and is believed to be reliable as of the publication date. Due to the complexities of the markets and changing conditions, however, State Street cannot guarantee that it is complete or accurate in every respect. This document should not be construed or used as a substitute for appropriate legal or investment counsel. Specific advice should be sought on matters relevant to the investment activities of the reader. This application contains proprietary information and is fully protected by relevant copyright laws worldwide.

www.statestreet.com

SCH C-1

SCHEDULE D – SPECIAL SUB-CUSTODIANS

SPECIAL SUB-CUSTODIANS

*[None/Name of Special Sub-Custodian(s)]

SCH D-1

LOAN SERVICES ADDENDUM

As used in this Addendum, the term “Fund”, in relation to a Loan (as defined below), includes a Portfolio on whose behalf the Fund acts with respect to the Loan.

The following provisions will apply with respect to interests in commercial loans, including loan participations, whether the loans are bilateral or syndicated and whether any obligor is located in or outside of the United States (collectively, “Loans”), made or acquired by a Fund on behalf of one or more of its Portfolios.

SECTION 1. PAYMENT CUSTODY. If a Fund wishes the Custodian to receive payments directly with respect to a Loan for credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement,

(a) the Fund will cause the Custodian to be named as the Fund’s nominee for payment purposes under the relevant financing documents, e.g., in the case of a syndicated loan, the administrative contact for the agent bank, and otherwise provide for the payment to the Custodian of the payments with respect to the Loan; and

(b) the Custodian will credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement any payment on or in respect of the Loan actually received by the Custodian and identified as relating to the Loan, but with any amount credited being conditional upon clearance and actual receipt by the Custodian of final payment.

SECTION 2. MONITORING. If a Fund wishes the Custodian to monitor payments on and forward notices relating to a Loan,

(a) the Fund will deliver, or cause to be delivered, to the Custodian a schedule identifying the amount and due dates of the scheduled principal payments, the scheduled interest payment dates and related payment amount information, and such other information with respect to the Loan as the Custodian may reasonably require in order to perform its services hereunder (collectively, “Loan Information”) and in such form and format as the Custodian may reasonably request; and

(b) the Custodian will (i) if the amount of a principal, interest, fee or other payment with respect to the Loan is not received by the Custodian on the date on which the amount is scheduled to be paid as reflected in the Loan Information, provide a report to the Fund that the payment has not been received and (ii) if the Custodian receives any consent solicitation, notice of default or similar notice from any syndication agent, lead or obligor on the Loan, undertake reasonable efforts to forward the notice to the Fund.

SECTION 3. EXCULPATION OF THE CUSTODIAN.

(a) Payment Custody and Monitoring. The Custodian will have no liability for any delay or failure by the Fund or any third party in providing Loan Information to the Custodian or for any inaccuracy or incompleteness of any Loan Information. The Custodian will have no obligation to verify, investigate, recalculate, update or otherwise confirm the accuracy or completeness of any Loan Information or other information or notices received by the Custodian in respect of the Loan. The Custodian will be entitled to (i) rely upon the Loan Information provided to it by or on behalf of the Fund or any other information or notices that the Custodian may receive from time to time from any syndication agent, lead or obligor or any similar party with respect to the Loan and (ii) update its records on the basis of such information or notices as may from time to time be received by the Custodian.

LSA-1

(b) Any Service. The Custodian will have no obligation to (i) determine whether any necessary steps have been taken or requirements have been met for the Fund to have acquired good or record title to a Loan, (ii) ensure that the Fund’s acquisition of the Loan has been authorized by the Fund, (iii) collect past due payments on the Loan, preserve any rights against prior parties, exercise any right or perform any obligation in connection with the Loan (including taking any action in connection with any consent solicitation, notice of default or similar notice received from any syndication agent, lead or obligor on the Loan) or otherwise take any other action to enforce the payment obligations of any obligor on the Loan, (iv) become itself the record title holder of the Loan or (v) make any advance of its own funds with respect to the Loan.

(c) Miscellaneous. The Custodian will not be considered to have been or be charged with knowledge of the sale of a Loan by the Fund, unless and except to the extent that the Custodian shall have received written notice of the sale from the Fund and the proceeds of the sale have been received by the Custodian for credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement. If any question arises as to the Custodian’s duties under this Addendum, the Custodian may request instructions from the Fund and will be entitled at all times to refrain from taking any action unless it has received Proper Instructions from the Fund. The Custodian will in all events have no liability, risk or cost for any action taken or omitted with respect to the Loan pursuant to Proper Instructions. The Custodian will have no responsibilities or duties whatsoever with respect to the Loan except as are expressly set forth in this Addendum.

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Execution Version

FIRST AMENDMENT TO AMENDED AND RESTATED

MASTER CUSTODIAN AGREEMENT

This first amendment dated January 18, 2018 (the “Amendment”) to the Amended and Restated Master Custodian Agreement dated September 15, 2017 (the “Agreement”) between State Street Bank and Trust Company, a Massachusetts trust company (the “Custodian”), and each management investment company listed on Appendix A thereto (each, a “Fund”). Custodian and each Fund may be referred to individually as a “Party” or collectively as the “Parties”.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

The Parties hereby amend and restate Appendix A to the Agreement as set forth below:

APPENDIX A

VANGUARD CALIFORNIA TAX-FREE FUNDS Vanguard California Intermediate-Term Tax-Exempt Fund Vanguard California Long-Term Tax-Exempt Fund Vanguard California Municipal Money Market Fund

VANGUARD CHARLOTTE FUNDS

Vanguard Total International Bond Index Fund

VANGUARD CMT FUNDS

Vanguard Municipal Cash Management Fund

VANGUARD CONVERTIBLE SECURITIES FUND Vanguard Convertible Securities Fund

VANGUARD FENWAY FUNDS Vanguard PRIMECAP Core Fund

VANGUARD FIXED INCOME SECURITIES Vanguard Intermediate-Term Investment-Grade Fund Vanguard Short-Term Investment-Grade Fund Vanguard High-Yield Corporate Fund Vanguard Long-Term Investment-Grade Fund Vanguard Ultra-Short-Term Bond Fund

VANGUARD EXPLORER FUND Vanguard Explorer Fund

VANGUARD HORIZON FUNDS Vanguard Global Equity Fund Vanguard Strategic Equity Fund Vanguard Strategic Small-Cap Equity Fund

VANGUARD INDEX FUNDS

Vanguard 500 Index Fund

Information Classification: Limited Access

Execution Version

VANGUARD INSTITUTIONAL INDEX FUNDS
Vanguard Institutional Index Fund

VANGUARD INTERNATIONAL EQUITY INDEX FUNDS Vanguard Global ex-U.S. Real Estate Index Fund Vanguard Total World Stock Index Fund

VANGUARD MALVERN FUNDS

Vanguard Institutional Intermediate-Term Bond Fund Vanguard Institutional Short-Term Bond Fund Vanguard Capital Value Fund Vanguard U.S. Value Fund Vanguard Emerging Markets Bond Fund

Vanguard Short-Term Inflation-Protected Securities Index Fund

VANGUARD MASSACHUSETTS TAX-EXEMPT FUNDS

Vanguard Massachusetts Tax-Exempt Fund

VANGUARD MONTGOMERY FUNDS
Vanguard Market Neutral Fund

VANGUARD MORGAN GROWTH FUND
Vanguard Morgan Growth Fund

VANGUARD MUNICIPAL BOND FUNDS Vanguard High-Yield Tax-Exempt Fund Vanguard Intermediate-Term Tax-Exempt Fund Vanguard Limited-Term Tax-Exempt Fund Vanguard Long-Term Tax-Exempt Fund Vanguard Municipal Money Market Fund Vanguard Short-Term Tax-Exempt Fund Vanguard Tax-Exempt Bond Index Fund

VANGUARD NEW JERSEY TAX-FREE FUNDS Vanguard New Jersey Long-Term Tax-Exempt Fund Vanguard New Jersey Municipal Money Market Fund

VANGUARD NEW YORK TAX-FREE FUNDS Vanguard New York Long-Term Tax-Exempt Fund Vanguard New York Municipal Money Market Fund

VANGUARD OHIO TAX-FREE FUNDS
Vanguard Ohio Long-Term Tax-Exempt Fund

VANGUARD PENNSYLVANIA TAX-FREE FUNDS Vanguard Pennsylvania Long-Term Tax-Exempt Fund Vanguard Pennsylvania Municipal Money Market Fund

VANGUARD QUANTITATIVE FUNDS
Vanguard Growth and Income Fund

Information Classification: Limited Access

Execution Version

VANGUARD SCOTTSDALE FUND
Vanguard Explorer Value Fund
Vanguard Russell 3000 Index Fund

VANGUARD SPECIALIZED FUNDS
Dividend Appreciation Index Fund
Vanguard Energy Fund
Vanguard Health Care Fund

VANGUARD STAR FUNDS
Vanguard STAR Fund

VANGUARD TAX-MANAGED FUNDS
Vanguard Developed Markets Index Fund

VANGUARD TRUSTEES’ EQUITY FUND
Vanguard Alternative Strategies Fund
Vanguard Emerging Markets Select Stock Fund

VANGUARD VARIABLE INSURANCE FUNDS
Balanced Portfolio
Capital Growth Portfolio
Diversified Value Portfolio
Equity Income Portfolio
Equity Index Portfolio
Growth Portfolio
High Yield Bond Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
International Portfolio
Small Company Growth Portfolio

VANGUARD WELLESLEY INCOME FUND
Vanguard Wellesley Income Fund

VANGUARD WHITEHALL FUNDS

Vanguard Emerging Markets Government Bond Index Fund Vanguard Mid-Cap Growth Fund Vanguard Selected Value Fund

VANGUARD WINDSOR FUNDS
Vanguard Windsor Fund
Vanguard Windsor II Fund

VANGUARD WORLD FUND
Vanguard Consumer Discretionary Index Fund
Vanguard Consumer Staples Index Fund
Vanguard Energy Index Fund
Vanguard Financials Index Fund
Vanguard FTSE Social Index Fund
Vanguard Health Care Index Fund

Information Classification: Limited Access

AMENDED AND RESTATED CUSTODY AGREEMENT

AMENDED AND RESTATED CUSTODY AGREEMENT, dated as of August 29, 2017 between each open-end management investment company listed on Schedule II hereto as amended from time to time (each such investment company, a “Fund”), each a statutory trust organized and existing under the laws of the State of Delaware and registered with the U.S. Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), on behalf of certain of their series (each a “Series”) having their principal office and place of business at P.O. Box 2600, Valley Forge, Pennsylvania 19482, and The Bank of New York Mellon, a bank organized under the laws of the State of New York and authorized to do a banking business having its principal office and place of business at 225 Liberty Street, New York, New York 10286 (“Custodian”).

WITNESSETH:

that for and in consideration of the mutual promises hereinafter set forth each Fund and Custodian, intending to be legally bound hereby, agree as follows:

ARTICLE I
DEFINITIONS

Whenever used in this Agreement, the following words shall have the meanings set forth below:

1. “Authorized Person” shall be any person, whether or not an officer or employee of a Fund, duly authorized to execute any Certificate or to give any Instructions or Oral Instruction with respect to one or more Accounts, such persons to be designated in a Certificate as may be received by Custodian from time to time.

2. “Autofax” shall mean an unsigned hard copy facsimile generated by a Fund’s computer system and transmitted to Custodian.

3. “BNY Affiliate” shall mean any office, branch or subsidiary of The Bank of New York Mellon Corporation.

4. “Book-Entry System” shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering securities, its successors and nominees.

5. “Business Day” shall mean any day on which Custodian, Book-Entry System and relevant Depositories are open for business:

6. “Certificate” shall mean any notice, instruction, or other instrument in writing, authorized or required by this Agreement to be given to Custodian, which is actually received by Custodian by letter or facsimile transmission and signed on behalf of a Fund by an Authorized Person of the Fund or a person reasonably believed by Custodian to be an Authorized Person.

7. “Composite Currency Unit” shall mean the Euro or any other composite currency unit consisting of the aggregate of specified amounts of specified currencies, as such unit may be constituted from time to time.

8. “Confidential Information” means, with respect to a party, any and all oral or written information, in whatever kind and in whatever form, of such party and/or of third parties in the possession of such party that is furnished, disclosed or otherwise made available to the other party in connection with

this Agreement and: (i) which a reasonably prudent business person would regard as being treated as secret by such party (that is, it is the subject of efforts by the disclosing party that are reasonable under the circumstances to maintain its secrecy), or (ii) that is designated by such party as confidential, restricted, or proprietary, or with a similar designation; including, without limitation, any past, present or future business and business activities, financial or technical information (including portfolio holdings information and transaction information); products, services, research and development; processes, techniques; designs; financial planning practices; client information (including clients’ identities and any client related data or information); and marketing plans. With respect to a Fund or its affiliates, Confidential Information shall also include the Personal Information of any shareholders, customers, partners, employees, trustees, and officers of the Fund or its affiliates. The term “Personal Information” shall mean (i) an individual’s name (first initial and last name or first name and last name) plus (a) social security number, (b) driver’s license number, (c) state identification card number, (d) debit or credit card number, (e) financial account number, (f) passport identification number, or (g) personal identification number or password that would permit access to a person’s account or (ii) any combination of the foregoing that would allow a person to log onto or access an individual’s account. Confidential Information shall not include any information that (i) is publicly available when disclosed by a party or thereafter becomes publicly available other than through a breach of this Agreement, (ii) was in the possession of the receiving party prior to its disclosure by the disclosing party and was not the subject of a pre-existing confidentiality obligation, (iii) is lawfully disclosed to the receiving party on a non-confidential basis by a third party who is not under a duty of confidentiality to the disclosing party, or (iv) is required to be disclosed by or to any regulatory authority, any external or internal accountant, auditor or counsels of the parties hereto, or by judicial or administration process or otherwise by applicable law.

9. “Depository” shall include (a) the Book-Entry System, (b) the Depository Trust Company, (c) any other clearing agency or securities depository registered with the SEC identified to a Fund from time to time, and (d) the respective successors and nominees of the foregoing.

10. “Foreign Depository” shall mean (a) Euroclear, (b) Clearstream Banking, societe anonyme, (c) each Eligible Securities Depository as defined in Rule 17f-7 under the 1940 Act, identified to a Fund from time to time, and (d) the respective successors and nominees of the foregoing.

11. “Instructions” shall mean communications transmitted by electronic or telecommunications media, including S.W.I.F.T., computer-to-computer interface, dedicated transmission lines, telex, Autofax or such other methods that may be agreed to by the Funds and Custodian from time to time.

12. “Oral Instructions” shall mean verbal instructions received by Custodian from an Authorized Person or from a person reasonably believed by Custodian to be an Authorized Person.

13. “Securities” shall include, without limitation, any common stock and other equity securities, bonds, debentures and other debt securities, notes, mortgages or other obligations, and any instruments representing rights to receive, purchase, or subscribe for the same, or representing any other rights or interests therein (whether represented by a certificate or held in a Depository or Foreign Depository or by a Subcustodian).

14. “Series” shall mean the various portfolios, if any, of a Fund listed on Schedule II hereto, and if none are listed references to Series shall be references to the Fund.

15. “Subcustodian” shall mean a bank (including any branch thereof) or other financial institution (other than a Foreign Depository) located within or outside the U.S. that is eligible to serve as a custodian pursuant to the 1940 Act and the rules thereunder (with respect to foreign Subcustodians, the

Schedule II-2

reference to eligibility to serve pursuant to the 1940 Act and the rules thereunder shall apply if Custodian acts as foreign custody manager for the applicable Series as contemplated in Rule 17f-5 under the 1940 Act (“Rule 17f-5”)), which is utilized by Custodian in connection with the purchase, sale or custody of Securities hereunder and identified to a Fund from time to time, and their respective successors and nominees.

ARTICLE II

APPOINTMENT OF CUSTODIAN; ACCOUNTS; REPRESENTATIONS, WARRANTIES, AND COVENANTS

1. This Agreement amends and restates the Amended and Restated Custody Agreement dated as of June 19, 2001 between each open-end management investment company listed on Schedule II thereto (as amended from time to time) and The Bank of New York (the “Prior Agreement”), and the terms of this Agreement replace the terms of the Prior Agreement effective as of the date of this Agreement. For clarity, matters relating to the time period prior to the date of this Agreement are governed by the terms of the Prior Agreement. For further clarity, the continuation of amendments to and other agreements that reference the Prior Agreement is not intended to be affected by the fact of the amendment and restatement of the Prior Agreement by this Agreement, and reference in such amendments and agreements to the Prior Agreement shall be considered to be a reference to this Agreement effective as of the date of this Agreement (provided that matters relating to the time period prior to the date of this Agreement are governed by the terms of the Prior Agreement).

2. (a) Each Fund hereby appoints Custodian as custodian of all Securities and cash at any time delivered to Custodian during the term of this Agreement, and authorizes Custodian to hold Securities in registered form in its name or the name of its nominees. Custodian hereby accepts such appointment and agrees to establish and maintain one or more securities accounts and cash accounts for each Series in which Custodian will hold Securities and cash as provided herein. Custodian shall maintain books and records segregating the assets of each Series from the assets of any other Series. Such accounts (each, an “Account”; collectively, the “Accounts”) shall be in the name of the Fund on behalf of the relevant Series. Except as precluded by Section 8-501(d) of the Uniform Commercial Code (“UCC”), Custodian shall hold all Securities and other financial assets, other than cash, of a Series that are delivered to it in a “securities account” with Custodian for and in the name of such Series and shall treat all such assets other than cash as “financial assets” as those terms are used in the UCC.

(b) Custodian may from time to time establish on its books and records such sub-accounts within each Account as a Fund and Custodian may reasonably agree upon (each a “Special Account”), and Custodian shall reflect therein such assets as the Fund may specify in a Certificate or Instructions.

(c) Custodian may from time to time establish pursuant to a written agreement with and for the benefit of a broker, dealer, futures commission merchant or other third party identified in a Certificate or Instructions such accounts on such terms and conditions as a Fund and Custodian shall reasonably agree, and Custodian shall transfer to such account such Securities and money as the Fund may specify in a Certificate or Instructions. Custodian shall upon receipt of a Certificate or Instructions on behalf of each applicable Series, establish and maintain a segregated account or accounts for and on behalf of each such Series, into which account or accounts may be transferred cash, securities, or other assets of the Series and collateral provided to the Series by its counterparties, including securities maintained in an account by Custodian (1) in accordance with the provisions of any agreement among a Fund on behalf of a Series, Custodian and a broker dealer registered under the Securities Exchange Act of 1934, as amended and a member of the Financial Industry Regulatory Authority relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or

Schedule II-3

organizations, regarding escrow or other arrangements in connection with transactions by the Series, (2) in accordance with the provisions of any agreement among a Fund, on behalf of a Series, Custodian and any futures commission merchant (registered under the Commodity Exchange Act) relating to compliance with the rules of the Commodity Futures Trading Commission or any registered contract market, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Series, (3) for purposes of segregating cash or government securities in connection with options purchased, sold or written by a Series or commodity futures contract options thereon purchased or sold by a Series, (4) for the purposes of compliance by a Series with the procedures required by Investment Company Act Release No. 10666, or any subsequent release of the SEC, or no-action letter of the staff of the SEC, relating to the maintenance of segregated accounts by registered management investment companies, and (5) for any other purpose in accordance with a Certificate or Instructions and as agreed by the parties.

3. Each Fund hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each delivery of a Certificate or each giving of Oral Instructions or Instructions by such Fund, that: (a) It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder; (b) This Agreement has been duly authorized, executed and delivered by the Fund, approved by a resolution of its board of trustees, constitutes a valid and legally binding obligation of the Fund, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or other laws affecting generally the enforceability of creditors’ rights or by equitable principles generally applied, and there is no statute, regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or performance of this Agreement; (c) It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted;

(d) It will not use the services provided by Custodian hereunder in any manner that is,

or will result in, a violation of any law, rule or regulation applicable to the Fund;

(e) Its board of trustees or its foreign custody manager, as defined in Rule 17f-5 under the 1940 Act, has determined that use of each Subcustodian (including any Replacement Custodian) and each Depository which Custodian or any Subcustodian is authorized to utilize in accordance with Section 1(a) of Article III hereof, satisfies the applicable requirements of the 1940 Act and Rules 17f-4 or 17f-5 thereunder, as the case may be; (f) Upon receiving from Custodian an initial analysis of and information concerning changes in the custody risks associated with maintaining assets at a Foreign Depository, the Fund or its investment adviser has determined that the custody arrangements of each Foreign Depository provide reasonable safeguards against the custody risks associated with maintaining assets with such Foreign Depository within the meaning of Rule 17f-7 under the 1940 Act; (g) It is fully informed of the protections and risks associated with various methods of transmitting Instructions and Oral Instructions and delivering Certificates to Custodian, understands that there may be more secure methods of transmitting or delivering the same than the methods selected by the

Schedule II-4

Fund, agrees that the security procedures (if any) to be utilized provide a commercially reasonable degree of protection in light of its particular needs and circumstances, acknowledges and agrees that Instructions need not be reviewed by Custodian if such Instructions require authentication codes and have such codes, acknowledges and agrees the same may conclusively be presumed by Custodian to have been given by person(s) duly authorized, and may be acted upon as given; (h) It shall manage its borrowings, including, without limitation, any advance or overdraft (including any day-light overdraft) in the Accounts, so that the aggregate of its total borrowings for each Series does not exceed the amount such Series is permitted to borrow under the 1940 Act; (i) Its transmission or giving of, and Custodian acting upon and in reliance on, Certificates, Instructions, or Oral Instructions pursuant to this Agreement shall at all times comply with the 1940 Act; (j) It shall impose and maintain restrictions on the destinations to which cash may be disbursed by Instructions to ensure that each disbursement is for a proper purpose; and (k) It has the right to make the pledge and grant the security interest and security entitlement to Custodian contained in Section 1 of Article V hereof, free of any right or prior claim of any other person or entity (except as otherwise provided by law), such pledge and such grants shall have a first priority subject to no setoffs, counterclaims, or other liens or grants prior to or on a parity therewith (except as otherwise provided by law).

4. The Fund hereby covenants that it shall from time to time complete and execute and deliver to Custodian upon Custodian’s request a Form FR U-l (or successor form) whenever the Fund borrows from Custodian any money to be used for the purchase or carrying of margin stock as defined in Federal Reserve Regulation U.

5. Custodian hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each receipt of a Certificate or each receipt of Oral Instructions or Instructions by Custodian, that: (a) It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder; (b) This Agreement has been duly authorized, executed and delivered by Custodian, constitutes a valid and legally binding obligation of Custodian, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or other laws affecting generally the enforceability of creditors’ rights or by equitable principles generally applied, and there is no statute, regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or performance of this Agreement; (c) It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted; and (d) It will not provide services hereunder in any manner that is, or will result in, a violation of any law, rule or regulation applicable to Custodian.

Schedule II-5

ARTICLE III

CUSTODY AND RELATED SERVICES

1. (a) Subject to the terms hereof, each Fund hereby authorizes Custodian to hold any Securities and cash received by it from time to time for such Fund’s account. Custodian shall be entitled to utilize Depositories, Subcustodians, and, subject to subsection (e) of this Section 1, Foreign Depositories, to the extent possible in connection with its performance hereunder. Securities and cash held in a Depository or Foreign Depository will be held subject to the rules, terms and conditions of such entity. Securities and cash held through Subcustodians shall be held subject to the terms and conditions of Custodian’s or a BNY Affiliate’s agreements with such Subcustodians. Subcustodians may be authorized to hold Securities in Foreign Depositories in which such Subcustodians participate. Unless otherwise required by local law or practice or a particular Subcustodian agreement, Securities deposited with a Subcustodian, a Depository or a Foreign Depository will be held in a commingled account, in the name of Custodian, holding only Securities held by Custodian as custodian for its customers. Custodian shall identify on its books and records the Securities and cash belonging to each Fund and their Series, whether held directly or indirectly through Depositories, Foreign Depositories, or Subcustodians. Custodian shall, directly or indirectly through Subcustodians, Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold Securities in the country or other jurisdiction in which the principal trading market for such Securities is located, where such Securities are to be presented for cancellation and/or payment and/or registration, or where such Securities are acquired. Custodian at any time may cease utilizing any Subcustodian and/or may replace a Subcustodian with a different Subcustodian (the “Replacement Subcustodian”). In the event Custodian selects a Replacement Subcustodian, Custodian shall not utilize such Replacement Subcustodian until after the Fund’s board or foreign custody manager has determined that utilization of such Replacement Subcustodian satisfies the requirements of the 1940 Act and Rule 17f-5 thereunder.

(b) Custodian may employ one or more Subcustodians located in the United States for a Fund, but only in accordance with applicable law and upon receipt of written approval from the Fund. The approval of a particular Subcustodian by the Fund shall not limit Custodian’s liability with respect to the use of the Subcustodian under this Agreement.

(c) With respect to Losses (as defined below) incurred by a Fund as a result of any action or omission of a Subcustodian relating to the Subcustodian’s provision of sub-custody services in a market listed in Schedule III hereto, Custodian will be liable for such Losses to the same extent as if such action or omission was performed by Custodian itself, unless a higher standard of care is required by law, rule, or regulation, in which case the higher standard of care will apply. Custodian shall take full responsibility for, and shall indemnify the Fund from and against, any Losses incurred by a Fund as a result of any action or omission of a Subcustodian relating to the Subcustodian’s provision of sub-custody services in a market listed in Schedule III hereto to the same extent as if such action or omission was performed by Custodian itself, or the insolvency of any Subcustodian that is a BNY Affiliate, and Custodian shall promptly reimburse the Fund in the amount of any such Losses. Where Custodian no longer maintains any client assets with a Subcustodian in a market listed in Schedule III or where Custodian intends to remove all client assets from all Subcustodians in a market listed in Schedule III, Custodian may remove that market from the list in Schedule III upon prior notice to the applicable Fund. In all other circumstances, Custodian may not remove a market listed in Schedule III without prior agreement of the applicable Fund.

(d) Assuming that Custodian acts as foreign custody manager for the applicable Series as contemplated in Rule 17f-5, unless Custodian has received a Certificate or Instructions to the contrary, Custodian shall hold such Series’ Foreign Assets (as defined in Rule 17f-5) indirectly through a Subcustodian only if Custodian determines that (1) the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by that Subcustodian, after considering all factors relevant to the safekeeping of such assets, including, without

Schedule II-6

limitation the factors specified in Rule 17f-5(c)(1); and (2) the contract governing the foreign custody arrangements with such Subcustodian selected by Custodian will satisfy the requirements of Rule 17f-5(c)(2), including but not limited to: (i) the Securities are not subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors or operators, including a receiver or trustee in bankruptcy or similar authority, except for a claim of payment for the safe custody or administration of Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial ownership of the Securities is freely transferable without the payment of cash or value other than for safe custody or administration.

(e) With respect to each Foreign Depository, Custodian shall exercise reasonable care, prudence, and diligence (i) to provide the Fund with an analysis of the custody risks associated with maintaining assets with the Foreign Depository, and (ii) to monitor such custody risks on a continuing basis and promptly notify the Fund or the Fund’s investment adviser of any material change in such risks. Each Fund acknowledges and agrees that such analysis and monitoring shall be made on the basis of, and limited by, information gathered from Subcustodians or through publicly available information otherwise obtained by Custodian, and shall include information concerning, but no evaluation of, Country Risks. As used herein the term “Country Risks” shall mean with respect to any Foreign Depository: (a) the financial infrastructure of the country in which it is organized, (b) such country’s prevailing custody and settlement practices, (c) nationalization, expropriation or other governmental actions, (d) such country’s regulation of the banking or securities industry, (e) currency controls, restrictions, devaluations or fluctuations, and (f) market conditions which affect the orderly execution of securities transactions or affect the value of securities.

2. Promptly after the close of business on each Business Day or the next Business Day in the

case of a Subcustodian or Foreign Depositary, or in accordance with practices in the related local market, Custodian shall furnish each Fund with confirmations and a summary, on a per Series basis, of all transfers to or from the Accounts, either hereunder or with any Subcustodian appointed in accordance with this Agreement during said day. Where Securities are transferred to an Account for a Series, Custodian shall also by book-entry or otherwise identify as belonging to such Series a quantity of Securities in a fungible bulk of Securities registered in the name of Custodian (or its nominee) or shown on Custodian’s account on the books of the Book-Entry System or a Depository. At least monthly and from time to time, Custodian shall furnish each Fund with a detailed statement, on a per Series basis, of the Securities and cash held by Custodian for such Fund.

3. With respect to all Securities held hereunder, Custodian shall, unless otherwise instructed to the contrary: (a) Collect and receive all income and other payments and in this regard Custodian shall promptly notify a Fund in writing by facsimile transmission, electronic communication, or in such other manner as the Fund and the Custodian may agree in writing, if any amount payable with respect to portfolio Securities or other assets of a Series is not received by Custodian when due. In the event that extraordinary measures are required to collect such income, a Fund and Custodian shall consult as to such measures and as to the compensation and expenses of Custodian relating to such measures; (b) Give notice to each Fund and present payment and collect the amount payable upon such Securities that are called, but only if either (i) Custodian receives a written notice of such call, or (ii) notice of such call appears in or is received from a nationally recognized bond or corporate action service to which Custodian subscribes; (c) Unless otherwise instructed by a Fund, Custodian shall retain in the appropriate account any stock dividends, subscription rights and other non-cash distributions on the Securities, or the

Schedule II-7

proceeds from the sale of any distributions. Custodian shall notify a Fund upon the receipt of any non-cash item.

(d) Present for payment and collect the amount payable upon all Securities which may mature, promptly deposit or withdraw such proceeds as designated therein and advise each Fund as promptly as practicable of any such amounts due but not paid;

(e)	Surrender Securities in temporary form for definitive Securities;
(f)	Forward to each Fund copies of all information or documents that it may actually

receive from an issuer of Securities which, in the opinion of Custodian, are intended for the beneficial owner of Securities; (g) Execute, as custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons; (h) Hold directly or through a Depository, a Foreign Depository, or a Subcustodian all rights and similar Securities issued with respect to any Securities credited to an Account hereunder; and


	(i)	Endorse for collection checks, drafts or other negotiable instruments.
4.	(a)	Custodian shall notify each Fund of rights or discretionary actions with respect to

Securities held hereunder, and of the date or dates by when such rights must be exercised or such action must be taken (each a “Notice” and collectively “Notices”), provided that Custodian has actually received, from the issuer or the relevant Depository (with respect to Securities issued in the United States) or from the relevant Subcustodian, Foreign Depository, or a nationally or internationally recognized bond or corporate action service to which Custodian subscribes (each a “Notice Provider” and collectively “Notice Providers”), timely notice of such rights or discretionary corporate action or of the date or dates such rights must be exercised or such action must be taken. Absent actual receipt of Notices, Custodian shall have no liability for failing to so notify a Fund except as provided in the last sentence of this paragraph or as otherwise specifically agreed by Custodian in writing in an amendment to or other document separate from this Agreement. Custodian shall use reasonable care in forwarding such Notice to the relevant Fund. Custodian shall use reasonable care in the selection of a Notice Provider other than a Foreign Depository. To the extent an officer of the Custodian, with working knowledge of the Accounts, has actual knowledge that a Notice Provider has failed to provide Notices to the Custodian, the Custodian shall use reasonable care to obtain a mailing of such Notice from such Notice Provider or except in the case of a Foreign Depository use an alternative Notice Provider.

(b) Whenever Securities (including, but not limited to, warrants, options, tenders, options to tender or non-mandatory puts or calls) confer discretionary rights on a Fund or provide for discretionary action or alternative courses of action by a Fund, the Fund shall be responsible for making any decisions relating thereto and for directing Custodian to act. In order for Custodian to act, it must receive the Fund’s Certificate or Instructions at Custodian’s offices, addressed as Custodian may from time to time request, at such date or time as Custodian may specify to the Fund. Absent Custodian’s timely receipt of such Certificate or Instructions Custodian shall not be liable for failure to take any action relating to or to exercise any rights conferred by such Securities.

5. Custodian shall perform the custody services provided for under this Agreement in a manner that meets or exceeds any service levels that may be agreed upon by the parties in writing from

Schedule II-8

time to time. If Custodian fails to satisfy any service level that has been designated as “critical,” Custodian will be required to pay the Fund agreed upon credit amounts, if any.

6. All voting rights with respect to Securities, however registered, shall be exercised by the Fund or its designee. For Securities issued in the United States, Custodian’s only duty shall be to mail to the Funds any documents (including proxy statements, annual reports and signed proxies) actually received by Custodian relating to the exercise of such voting rights. With respect to Securities issued outside of the United States, Custodian’s only duty shall be to provide the Funds with access to a provider of global proxy services at a Fund’s request. The Fund using the services shall be responsible for all associated costs.

7. Custodian shall promptly advise a Fund upon Custodian’s actual receipt of notification of the partial redemption, partial payment or other action affecting less than all Securities of the relevant class. If Custodian, any Subcustodian, any Depository, or any Foreign Depository holds any Securities in which the Fund has an interest as part of a fungible mass, Custodian, such Subcustodian, Depository, or Foreign Depository may select the Securities to participate in such partial redemption, partial payment or other action in any non-discriminatory manner that it customarily uses to make such selection.

8. Custodian shall not under any circumstances accept bearer interest coupons which have been stripped from United States federal, state or local government or agency securities unless explicitly agreed to by Custodian in writing.

9. Each Fund shall be liable for all taxes, assessments, duties and other governmental charges, including any interest or penalty with respect thereto (“Taxes”), with respect to any cash or Securities held on behalf of such Fund or any transaction related thereto. Each Fund shall indemnify Custodian and each Subcustodian for the amount of any Tax that Custodian, any such Subcustodian or any other withholding agent is required under applicable laws (whether by assessment or otherwise) to pay on behalf of, or in respect of income earned by or payments or distributions made to or for the account of the Fund (including any payment of Tax required by reason of an earlier failure to withhold). Custodian shall, or shall instruct the applicable Subcustodian or other withholding agent to, withhold the amount of any Tax which is required to be withheld under applicable law upon collection of any dividend, interest or other distribution made with respect to any Security and any proceeds or income from the sale, loan or other transfer of any Security. In the event that Custodian or any Subcustodian is required under applicable law to pay any Tax on behalf of a Fund, Custodian is hereby authorized to withdraw cash from any cash account in the amount required to pay such Tax and to use such cash, or to remit such cash to the appropriate Subcustodian or other withholding agent, for the timely payment of such Tax in the manner required by applicable law. If the aggregate amount of cash in all cash accounts is not sufficient to pay such Tax, Custodian shall promptly notify the Fund of the additional amount of cash (in the appropriate currency) required, and the Fund shall directly deposit such additional amount in the appropriate cash account promptly after receipt of such notice, for use by Custodian as specified herein. In the event that Custodian reasonably believes that Fund is eligible, pursuant to applicable law or to the provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax which is otherwise required to be withheld or paid on behalf of the Fund under any applicable law, Custodian shall, or shall instruct the applicable Subcustodian or withholding agent to, either withhold or pay such Tax at such reduced rate or refrain from withholding or paying such Tax, as appropriate; provided that Custodian shall have received from the Fund all documentary evidence of residence or other qualification for such reduced rate or exemption required to be received under such applicable law or treaty. In the event that Custodian reasonably believes that a reduced rate of, or exemption from, any Tax is obtainable only by means of an application for refund, Custodian and the applicable Subcustodian shall have no responsibility for the accuracy or validity of information provided by a Fund on any forms or documentation provided by the Fund to Custodian hereunder. Each Fund hereby agrees to indemnify and hold harmless Custodian and each Subcustodian in respect of any liability arising from any underwithholding or underpayment of any Tax which results from the inaccuracy or invalidity of

Schedule II-9

information provided by a Fund on any such forms or other documentation, and such obligation to indemnify shall be a continuing obligation of such Fund, its successors and assigns notwithstanding the termination of this Agreement.

10. (a) Upon receipt of a proper Certificate or proper Instructions in a format agreeable to the applicable Fund and Custodian, Custodian shall facilitate the processing and settlement of foreign exchange transactions for such Fund. For the purpose of settling Securities and foreign exchange transactions, each Fund shall provide Custodian with sufficient immediately available funds for all transactions by such time and date as conditions in the relevant market dictate. As used herein, “sufficient immediately available funds” shall mean either (i) sufficient cash denominated in U.S. dollars to purchase the necessary foreign currency, or (ii) sufficient applicable foreign currency to settle the transaction. Custodian shall provide each Fund with immediately available funds each day which result from the actual settlement of all sale transactions, based upon advices received by Custodian from Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in U.S. dollars or such other currency as a Fund may specify to Custodian.

(b) Any foreign exchange transaction effected by Custodian in connection with this Agreement may be entered with Custodian or a BNY Affiliate acting as principal or otherwise through customary banking channels. Each Fund may issue a standing Certificate or Instructions with respect to foreign exchange transactions, but Custodian may establish rules or limitations concerning any foreign exchange facility made available to the Funds. Each Fund shall bear all risks of investing in Securities or holding cash denominated in a foreign currency.

(c) To the extent that Custodian has agreed to provide pricing or other information services in connection with this Agreement, Custodian is authorized to utilize any vendor (including brokers and dealers of Securities) reasonably believed by Custodian to be reliable to provide such information. Each Fund understands that certain pricing information with respect to complex financial instruments (e.g., derivatives) may be based on calculated amounts rather than actual market transactions and may not reflect actual market values, and that the variance between such calculated amounts and actual market values may or may not be material. Where vendors do not provide pricing information for particular Securities or other property, an Authorized Person may advise Custodian in a Certificate regarding the fair market value of, or provide other information with respect to, such Securities or property as determined by it in good faith. Subject to the immediately following sentence, Custodian is entitled to rely without investigation on the accuracy and completeness of pricing and other information provided to Custodian by a Fund or third party. Nevertheless, Custodian shall be liable for the performance of any vendor selected by Custodian that is a BNY Affiliate to the same extent as Custodian would have been liable if it performed such services itself.

11. Custodian shall promptly send to a Fund (a) any reports it receives from a Depository on such Depository’s system of internal accounting control, and (b) such reports on its own system of internal accounting control as the Fund may reasonably request from time to time.

12. Subject to Article III, Section 4(a), Custodian shall transmit promptly to a Fund for each Series all written information received by Custodian from issuers of the Securities and other financial assets being held for the Series, including among other things, maturities of domestic securities and notices of exercise of call and put options. Also subject to Article III, Section 4(a), Custodian shall transmit promptly to the Fund all written information received by Custodian from issuers of the securities and other financial assets whose tender or exchange is sought and from the party or its agent making the tender or exchange offer. Custodian shall transmit promptly to the Fund for each Series all written information received by Custodian regarding any class action or other collective litigation relating to Securities or other financial assets issued in the United States and then held, or previously held, during the relevant class action period

Schedule II-10

during the term of this Agreement by Custodian for the account of a Fund for a Series, including, but not limited to, opt-out notices and proof-of-claim forms.

13. Custodian will implement and maintain a written information security program, in compliance with all federal, state and local laws and regulations (including any similar international laws) applicable to Custodian, that contains reasonable and appropriate security measures designed to safeguard the Confidential Information of a Fund that Custodian receives, stores, maintains, processes, transmits or otherwise accesses in connection with the provision of services hereunder. In this regard, Custodian will establish and maintain policies, procedures, and technical, physical, and administrative safeguards, designed to: (i) ensure the security and confidentiality of all Confidential Information of a Fund that Custodian receives, stores, maintains, processes or otherwise accesses in connection with the provision of services hereunder; (ii) protect against any reasonably foreseeable threats or hazards to the security or integrity of such Confidential Information; (iii) protect against unauthorized access to or use of such Confidential Information; (iv) maintain reasonable procedures to detect and respond to any internal or external security breaches; and (v) ensure appropriate disposal of such Confidential Information.

Custodian will monitor and review its information security program and revise it, as necessary and in its sole discretion, to address as it deems necessary any reasonably foreseeable and applicable legal and regulatory requirements. Custodian shall periodically test and audit its information security program.

Custodian shall respond to the Funds’ reasonable requests for information concerning Custodian’s information security program and once each calendar year, upon request, Custodian will permit authorized representatives of the Funds to review, at Custodian’s site, its applicable policies and procedures to the extent it is able to do so without divulging sensitive, proprietary, or Custodian Confidential Information. Upon reasonable request, Custodian shall discuss with the Funds the information security program of Custodian. Custodian also agrees, when requested but not more frequently than once per year, to complete any reasonable security questionnaire regarding Custodian’s information security program provided by the Funds and return it in a commercially reasonable period of time. The parties may also agree upon other matters relating to access management and information security which the parties consider to be appropriate from time to time.

Custodian shall: (i) promptly notify a Fund of any unauthorized access to Confidential Information of the Fund in the possession or control of Custodian (“Breach of Security”); (ii) promptly furnish to the relevant Fund full details of such Breach of Security to the extent it is available and not privileged information or part of an investigation; (iii) provide reasonable cooperation to a Fund in any litigation and investigation of third parties deemed necessary by the Fund to protect its proprietary and other rights; (iv) take all reasonable and appropriate action to end the Breach of Security and to mitigate any continuing or future harm to a Fund resulting from the Breach of Security, and (v) use reasonable precautions to prevent a recurrence of a Breach of Security. This provision will survive termination or expiration of this Agreement for so long as Custodian or any Subcustodian continues to possess or have access to Confidential Information of a Fund. Information and materials provided by Custodian in accordance with this Section are hereby designated by Custodian as confidential.

14. Custodian has and shall maintain business continuation and disaster recovery plans with respect to its global custody business, which, in the event of a significant business disruption affecting Custodian (which could include a Force Majeure Event as defined below), will be designed to ensure the continued processing capability and availability of the services provided by Custodian under this Agreement without undue delay or disruption. Custodian shall update and test the operability of such plans at least annually. On an annual basis, Custodian shall, upon reasonable request, meet with the Funds to review any business continuation and disaster recovery plans of Custodian relevant to the services provided by Custodian under this Agreement. Custodian represents that its business continuation and disaster

Schedule II-11

recovery plans are appropriate for its business as a provider of custodian services to investment companies registered under the 1940 Act. Information and materials provided by Custodian in accordance with this Section are hereby designated by Custodian as confidential.

15. Each Fund represents that it maintains compliance policies and procedures reasonably designed to prevent the Fund from violating any applicable laws, rules, regulations, executive orders or requirements administered by any governmental authority of the United States (including the U.S. Office of Foreign Assets Control) concerning economic sanctions. Unless otherwise prohibited, a Fund will promptly provide to Custodian such information as Custodian reasonably requests in connection with the matters referenced in this Section 15, including information regarding its Accounts, the assets held or to be held in the Accounts, the source thereof, and the identity of any individual or entity having or claiming an interest therein. Custodian may decline to act or provide services in respect of any Account, and take such other actions as it, in its reasonable discretion, deems necessary or advisable, in connection with the matters referenced in this Section 15. If Custodian declines to act or provide services as provided in the preceding sentence, except as otherwise prohibited by applicable law or official request, Custodian will inform the Fund as soon as reasonably practicable.

16. Each Fund hereby acknowledges that Custodian is subject to federal laws, including the Customer Identification Program (“CIP”) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which Custodian must obtain, verify and record information that allows Custodian to identify the Fund. Accordingly, prior to opening an Account hereunder, Custodian will ask the Fund to provide certain information including, but not limited to, the Fund’s name, physical address, tax identification number and other information that will help Custodian to identify and verify the Fund’s identity, such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information. Each Fund agrees that Custodian cannot open an Account hereunder unless and until Custodian verifies the Fund’s identity in accordance with Custodian’s CIP.

ARTICLE IV

PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT

1. Promptly after each purchase or sale of Securities by a Fund, the Fund shall deliver to Custodian a Certificate or Instructions, or if agreed between the Fund and Custodian Oral Instructions, specifying all information Custodian may reasonably request to settle such purchase or sale. Custodian shall account for all purchases and sales of Securities on the actual settlement date unless otherwise agreed by Custodian.

2. Each Fund understands that when Custodian is instructed to deliver Securities against payment, delivery of such Securities and receipt of payment therefor may not be completed simultaneously. Notwithstanding any provision in this Agreement to the contrary, settlements, payments and deliveries of Securities may be effected by Custodian or any Subcustodian in accordance with the customary or established securities trading or securities processing practices and procedures in the jurisdiction in which the transaction occurs, including, without limitation, delivery to a purchaser or dealer therefor (or agent) against receipt with the expectation of receiving later payment for such Securities. Each Fund assumes full responsibility for all risks, including, without limitation, credit risks, involved in connection with such deliveries of Securities, except the foregoing shall not excuse Custodian’s acting in accordance with such practices and procedures in a manner that constitutes negligence, bad faith or willful misconduct.

3. Custodian may, as a matter of bookkeeping convenience or by separate agreement with a Fund, credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest, dividends or other distributions payable on Securities prior to its actual receipt of final payment

Schedule II-12

therefor. All such credits shall be conditional until Custodian’s actual receipt of final payment and may be reversed by Custodian to the extent that final payment is not received. Custodian shall notify the appropriate Fund at least 48 hours prior to any such reversal, but such reversal shall be made as of the date Custodian determines it has not received final payment. Payment with respect to a transaction will not be “final” until Custodian shall have received immediately available funds which under applicable local law, rule and/or practice are irreversible and not subject to any security interest, levy or other encumbrance, and which are specifically applicable to such transaction.

ARTICLE V

OVERDRAFTS OR INDEBTEDNESS

1. If Custodian should in its sole discretion advance funds on behalf of any Series which results in an overdraft (including, without limitation, any day-light overdraft) because the cash held by Custodian in an Account for such Series shall be insufficient to pay the total amount payable upon a purchase of Securities specifically allocated to such Series, as set forth in a Certificate, Instructions or Oral Instructions, or if an overdraft arises in the separate Account of a Series for some other reason, including, without limitation, because of a reversal of a conditional credit or the purchase of any currency, or if the Fund is for any other reason indebted to Custodian with respect to a Series (except a borrowing for investment or for temporary or emergency purposes using Securities as collateral pursuant to a separate agreement and subject to the provisions of Section 2 of this Article), Custodian shall promptly notify the appropriate Fund of any such advance and the time at which such advance or overdraft must be paid. Such overdraft or indebtedness shall be deemed to be a loan made by Custodian to the Fund for such Series payable on demand and shall bear interest from the date incurred at a rate per annum agreed by such Fund and Custodian from time to time, or, in the absence of an agreement, at the rate ordinarily charged by Custodian to its institutional customers, as such rate may be adjusted from time to time. In addition, the Fund hereby agrees that Custodian shall to the maximum extent permitted by law have a continuing lien, security interest, and security entitlement in and to such Securities of such Series as shall have a fair market value equal to the aggregate amount of all overdrafts of, or advances to, such Series, together with accrued interest, such lien, security interest and security entitlement to be effective only so long as such advance, overdraft, or accrued interest thereon remains outstanding. The Fund authorizes Custodian to charge any such overdraft or indebtedness together with interest due thereon against any balance of account standing to such Series’ credit on Custodian’s books; provided, however, that Custodian shall provide the Fund with two (2) business days’ advance notice before effecting any such charge, during which time the Fund shall be entitled to determine the priority order in which Securities, cash, and other assets are to be used to set off the outstanding balance. For avoidance of doubt, the provisions of this Section do not apply to any amounts owed to Custodian pursuant to any other Section of this Agreement, including, in particular, any amounts owed to Custodian pursuant to Section 6 of Article VIII of this Agreement.

2. If a Fund borrows money from any bank (including Custodian if the borrowing is pursuant to a separate agreement) for investment or for temporary or emergency purposes using Securities held by Custodian hereunder as collateral for such borrowings, the Fund shall deliver to Custodian a Certificate specifying with respect to each such borrowing: (a) the Series to which such borrowing relates; (b) the name of the bank, (c) the amount of the borrowing, (d) the time and date, if known, on which the loan is to be entered into, (e) the total amount payable to the Fund on the borrowing date, (f) the Securities to be delivered as collateral for such loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities, and (g) a statement specifying whether such loan is for investment purposes or for temporary or emergency purposes and that such loan is in conformance with the 1940 Act and the Fund’s prospectus. Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral against payment by the lending bank of the total amount of the loan payable, provided that the same conforms to the total amount payable as set forth in the Certificate. Custodian may, at the option of the lending bank, keep such collateral in its possession, but such collateral shall be subject to all

Schedule II-13

rights therein given the lending bank by virtue of any promissory note or loan agreement. Custodian shall deliver such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in this Section. The Fund shall cause all Securities released from collateral status to be returned directly to Custodian, and Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that the Fund fails to specify in a Certificate the Series, the name of the issuer, the title and number of shares or the principal amount of any particular Securities to be delivered as collateral by Custodian, Custodian shall not be under any obligation to deliver any Securities. In this event, Custodian shall notify the Fund that the Securities were not delivered, and the information that the Fund failed to specify in the Certificate.

ARTICLE VI

SALE AND REDEMPTION OF SHARES

1. Whenever a Fund shall sell any shares issued by the Fund (“Shares”) it shall deliver to Custodian a Certificate or Instructions, or if agreed between the Fund and Custodian Oral Instructions, specifying the amount of cash and/or Securities to be received by Custodian for the sale of such Shares and specifically allocated to an Account for such Series.

2. Upon receipt of such cash from a Fund’s transfer agent, Custodian shall credit such cash to an Account in the name of the Series for which such cash was received.

3. Except as provided hereinafter, whenever a Fund desires Custodian to make payment out of the cash held by Custodian hereunder in connection with a redemption of any Shares, it shall furnish to Custodian a Certificate or Instructions, or if agreed between the Fund and Custodian Oral Instructions, specifying the total amount to be paid for such Shares. Custodian shall make payment of such total amount to the transfer agent specified in such Certificate, Instructions or Oral Instructions out of the cash held in an Account of the appropriate Series.

4. Notwithstanding the above provisions regarding the redemption of any Shares, whenever any Shares are redeemed pursuant to any check redemption privilege which may from time to time be offered by a Fund, Custodian, unless otherwise instructed by a Certificate or Instructions (or if agreed between the Fund and Custodian Oral Instructions) shall, upon presentment of such check, charge the amount thereof against the cash held in the Account of the Series of the Shares being redeemed, provided, that if the Fund or its agent timely advises Custodian that such check is not to be honored, Custodian shall return such check unpaid.

ARTICLE VII

PAYMENT OF DIVIDENDS OR DISTRIBUTIONS

1. Whenever a Fund shall determine to pay a dividend or distribution on Shares it shall furnish to Custodian Instructions, Oral Instructions (if agreed between the Fund and Custodian) or a Certificate setting forth with respect to the Series specified therein the date of the declaration of such dividend or distribution, the total amount payable, and the payment date.

2. Upon the payment date specified in such Instructions, Oral Instructions or Certificate, Custodian shall pay out of the cash held for the Account of such Series the total amount payable to the dividend agent of the Fund with respect to the Series specified therein.

Schedule II-14

ARTICLE VIII
CONCERNING CUSTODIAN

1. (a) Custodian shall exercise such good faith, reasonable care, diligence and prudence as a professional custodian would exercise under the facts and circumstances and to act without negligence, fraud, bad faith, or willful misconduct in carrying out the duties and obligations set forth in this Agreement, unless a higher standard of care is required by law, rule, or regulation, in which case such higher standard of care will apply. Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees (collectively, “Losses”), incurred by or asserted against a Fund, except those Losses arising out of Custodian’s own negligence, bad faith or willful misconduct. Custodian shall have no liability whatsoever for the action or inaction of any Depositories, or, except to the extent such action or inaction is a direct result of Custodian’s failure to fulfill its duties hereunder, of any Foreign Depositories. With respect to any Losses incurred by the Fund as a result of the acts or any failures to act by any Subcustodian, Depository, or Foreign Depository, Custodian shall take appropriate action to recover such Losses from such Subcustodian, Depository, or Foreign Depository; and with regard to a Depository or Foreign Depository or with regard to a Loss relating to the Subcustodian’s provision of sub-custody services in a market other than one listed in Schedule III hereto, Custodian’s sole responsibility and liability to the Fund shall be limited to amounts so received from such Subcustodian, Depository or Foreign Depository (exclusive of costs and expenses incurred by Custodian), except to the extent that (A) Custodian’s negligence, bad faith or willful misconduct is the direct cause of such Subcustodian, Depository or Foreign Depository’s act or omission (it being agreed that Custodian’s decision to use any such Subcustodian, Depository or Foreign Depository shall not constitute negligence, bad faith or willful misconduct), or (B) a transaction or other matter between Custodian and such Subcustodian, Depository or Foreign Depository in which Custodian acts with negligence, fraud, bad faith, or willful misconduct and which is unrelated to the Fund was the cause of the loss or damage, in each of which events, Custodian shall be liable for such Losses. At a Fund’s election and to the extent practicable under the circumstances and allowable under the applicable agreement and/or the law pursuant to which such agreement is construed, a Fund shall be subrogated on behalf of its Series to the rights of Custodian with respect to any claims against a Depository or Foreign Depository or against a Subcustodian with respect to the provision of sub-custody services in a market other than one listed in Schedule III hereto as a consequence of any Losses if and to the extent that such Series has not been made whole for any Losses within a reasonable period of time by such Subcustodian, Depository or Foreign Depository. Upon the occurrence of any event that causes or may cause any Losses to a Fund, Custodian shall (i) promptly notify the Fund of the occurrence of such event and (ii) take all reasonable steps under the circumstances to mitigate the effects of such event and to avoid continuing harm to the Fund.

(b) Provided Custodian’s actions or omissions are without gross negligence, fraudulent conduct, bad faith, or willful misconduct, Custodian shall not be liable to a Fund or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Agreement. In addition, neither Custodian nor any Subcustodian shall be liable: (i) for acting in accordance with any Certificate or Oral Instructions actually received by Custodian and reasonably believed by Custodian to be given by an Authorized Person; (ii) for acting in accordance with Instructions requiring authentication codes if such Instructions have authentication codes without reviewing the same; (iii) for conclusively presuming that all disbursements of cash directed by the Fund, whether by a Certificate, an Oral Instruction, or an Instruction, are in accordance with Section 3(i) of Article II hereof; (iv) for holding property in any particular country, including, but not limited to, Losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; exchange or currency controls or restrictions, devaluations or fluctuations; availability of cash or Securities or market conditions which prevent the transfer of property or execution of Securities transactions or affect the value of property; (v) for the insolvency of any Subcustodian (other than a BNY Affiliate), any Depository, or, except to the extent such action or inaction is a direct result of Custodian’s failure to fulfill its duties

Schedule II-15

hereunder, any Foreign Depository; or (vi) for any Losses arising from the applicability of any law or regulation now or hereafter in effect, or from the occurrence of any event, including, without limitation, implementation or adoption of any rules or procedures of a Foreign Depository, which may affect, limit, prevent or impose costs or burdens on, the transferability, convertibility, or availability of any currency or Composite Currency Unit in any country or on the transfer of any Securities, and in no event shall Custodian be obligated to substitute another currency for a currency (including a currency that is a component of a Composite Currency Unit) whose transferability, convertibility or availability has been affected, limited, or prevented by such law, regulation or event, and to the extent that any such law, regulation or event imposes a cost or charge upon Custodian in relation to the transferability, convertibility, or availability of any cash currency or Composite Currency Unit, such cost or charge shall be for the Account of the Fund, and Custodian may treat any Account denominated in an affected currency as a group of separate accounts denominated in the relevant component currencies. Provided that Custodian shall maintain an information security program as set forth in Article III, Section 13, and business continuation and disaster recovery procedures as set forth in Article III, Section 14, Custodian shall not be liable for any Losses due to forces beyond the control of Custodian, including without limitation strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes, or acts of God, or interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services (“Force Majeure Event”). Custodian shall endeavor to promptly notify the Funds when it becomes aware of any situation outlined above, but shall not be liable for a failure to do so. The Funds shall not be responsible for temporary delays in the performance of their duties and obligations hereunder and correspondingly shall not be liable for any Losses attributable to such delay in consequence of an event as described above affecting the Funds’ principal place of business operations or administration.

(c) Custodian may enter into subcontracts, agreements and understandings with any BNY Affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Custodian from its obligations hereunder. With respect to Losses incurred by a Fund as a result of an action or omission of a BNY Affiliate, Custodian will be liable for such Losses to the same extent that Custodian would be liable under the Agreement if the applicable action or omission was that of Custodian.

(d) The Funds agree to indemnify Custodian and hold Custodian harmless from and against any and all Losses sustained or incurred by or asserted against Custodian by reason of or as a result of any action or inaction, or arising out of Custodian’s performance hereunder, including reasonable fees and expenses of counsel incurred by Custodian in a successful defense of claims by the Fund; provided however, that the Funds shall not indemnify Custodian for those Losses arising out of Custodian’s own negligence, bad faith or willful misconduct. This indemnity shall be a continuing obligation of each Fund, their successors and assigns, notwithstanding the termination of this Agreement.

(e) Without limiting any provisions of Article III, Section 1, Custodian agrees to indemnify each Fund against and hold each Fund harmless from and against any and all direct damages sustained or incurred because of or in connection with this Agreement; provided however, that Custodian shall only indemnify the Funds for those direct damages arising out of the negligence, bad faith or willful misconduct of Custodian, or any affiliate of Custodian or any BNY Affiliate. This indemnity shall be a continuing obligation of Custodian, its successors and assigns, notwithstanding the termination of this Agreement.

2. Without limiting the generality of the foregoing, Custodian shall be under no obligation to inquire into, and shall not be liable for (except to the extent that either (a) or (b) involves Custodian’s negligence, bad faith or willful misconduct):

Schedule II-16

(a) Any Losses incurred by a Fund or any other person as a result of the receipt or acceptance of fraudulent, forged or invalid Securities, or Securities which are otherwise not freely transferable or deliverable without encumbrance in any relevant market; (b) The validity of the issue of any Securities purchased, sold, or written by or for the Fund, the legality of the purchase, sale or writing thereof, or the propriety of the amount paid or received therefor; (c) The legality of the sale or redemption of any Shares, or the propriety of the amount to be received or paid therefor; (d) The legality of the declaration or payment of any dividend or distribution by a Fund; (e) The legality of any borrowing by a Fund; (f) The legality of any loan of portfolio Securities, nor shall Custodian be under any duty or obligation to see to it that any cash or collateral delivered to it by a broker, dealer or financial institution or held by it at any time as a result of such loan of portfolio Securities is adequate collateral for the Fund against any loss it might sustain as a result of such loan, which duty or obligation shall be the sole responsibility of the Fund. In addition, Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however that Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due; (g) The sufficiency or value of any amounts of cash and/or Securities held in any Special Account in connection with transactions by a Fund; whether any broker, dealer, futures commission merchant or clearing member makes payment to the Fund of any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or clearing member, or whether any payment received by Custodian from any broker, dealer, futures commission merchant or clearing member is the amount the Fund is entitled to receive, or to notify the Fund of Custodian’s receipt or non-receipt of any such payment except that Custodian shall as promptly as practical under the circumstances notify a Fund of any difference between the amount the Fund has specified in a Certificate or Instructions as the amount to be received and the amount Custodian actually receives or does not receive; or (h) Whether any Securities at any time delivered to, or held by it or by any Subcustodian, for the account of a Fund and specifically allocated to a Series are such as properly may be held by the Fund or such Series under the provisions of its then current prospectus and statement of additional information, or to ascertain whether any transactions by a Fund, whether or not involving Custodian, are such transactions as may properly be engaged in by the Fund.

3. Custodian may, with respect to questions of law specifically regarding an Account, obtain the advice of counsel at its own expense (without limiting Article VIII, Section 1(d)) and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice provided that Custodian has selected and retained such counsel using reasonable care and any action taken pursuant to the advice must be consistent with Custodian’s responsibilities under this Agreement.

4. Custodian shall be under no obligation to take action to collect any amount payable on Securities in default, or if payment is refused after due demand and presentment, unless and until (i) it shall

Schedule II-17

be directed to take such action by a Certificate or Instructions and (ii) it shall be assured to its satisfaction of reimbursement of its reasonable costs and expenses in connection with any such action except that Custodian shall as promptly as practical under the circumstances notify the affected Fund in writing of such default or refusal to pay.

5. Custodian shall have no duty or responsibility to inquire into, make recommendations, supervise, or determine the suitability of any transactions affecting any Account.

6. Each Fund shall pay to Custodian the fees and charges as may be specifically agreed upon from time to time and such other fees and charges at agreed rates for such services as may be applicable.

7. In addition to, and not as a limitation of, Custodian’s rights under Section 1 of Article V, Custodian has the right to debit a cash account in advance for any amount payable by a Fund in connection with any and all obligations of the Fund to Custodian, provided Custodian has given the Fund at least two (2) business days’ prior notice of such debit during which time the Fund shall be entitled to determine the priority order in which any cash accounts are to be debited.

8. Each Fund agrees to forward to Custodian a Certificate or Instructions confirming Oral Instructions by the close of business of the same day that such Oral Instructions are given to Custodian. Each Fund agrees that the fact that such confirming Certificate or Instructions are not received or that a contrary Certificate or contrary Instructions are received by Custodian shall in no way affect the validity or enforceability of transactions authorized by such Oral Instructions and effected by Custodian. Under either of the two foregoing circumstances, Custodian shall promptly notify the Fund. If a Fund elects to transmit Instructions through an on-line communications system offered by Custodian, the Fund’s use thereof shall be subject to the terms and conditions contained in a separate written agreement.

9. The books and records pertaining to a Fund which are in possession of Custodian shall be the property of such Fund. Such books and records shall be prepared and maintained as required by the 1940 Act and the rules thereunder and other applicable securities laws, rules and regulations. The Fund, or its authorized representatives (including the Fund’s independent public accountants), shall have access to such books and records during Custodian’s normal business hours. Upon the reasonable request of a Fund, copies of any such books and records shall be provided by Custodian to the Fund or its authorized representative (including the Fund’s independent public accountants). Upon the reasonable request of a Fund, Custodian shall provide in hard copy or on computer disc any records included in any such delivery which are maintained by Custodian on a computer disc, or are similarly maintained.

10. Upon reasonable request of a Fund, Custodian shall provide the Fund with a copy of Custodian’s Service Organizational Control (SOC) 1 reports (or any successor reports) prepared in accordance with the requirements of AT-C Section 320, Reporting on an Examination of Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting (or successor governing standard). In addition, from time to time as reasonably requested, Custodian will furnish the Fund a “gap” or “bridge” letter that will address any material changes that might have occurred in Custodian’s controls covered in the SOC Report from the end of the SOC Report period through a specified requested date. Custodian shall use commercially reasonable efforts to provide the Fund with such reports as the Fund may reasonably request or otherwise reasonably require to fulfill its duties under Rule 38a-l of the 1940 Act or similar legal and regulatory requirements. Upon reasonable request of the Fund, Custodian shall also provide to the Fund sub-certifications in connection with Sarbanes-Oxley Act of 2002 certification requirements. Information and materials provided by Custodian in accordance with this Section are hereby designated by Custodian as confidential.

Schedule II-18

11. In addition, Custodian shall cooperate with and promptly supply necessary information reasonably requested to any entity or entities appointed by a Fund to keep its books of account and/or compute its net asset value. Custodian shall take all such reasonable actions as a Fund may from time to time request to enable a Fund to obtain, from year to year, favorable opinions from a Fund’s independent accountants with respect to Custodian’s activities hereunder in connection with (i) the preparation of any registration statement of a Fund and any other reports required by a governmental agency or regulatory authority with jurisdiction over the Fund, and (ii) the fulfillment by a Fund of any other requirements of a governmental agency or regulatory authority with jurisdiction over the Fund.

12. It is understood that Custodian is authorized to supply any information regarding the Accounts which is required by any law, regulation or rule now or hereafter in effect. Custodian shall provide each Fund with any report obtained by Custodian on the system of internal accounting control of a Depository, and with such reports on its own system of internal accounting control as a Fund may reasonably request from time to time.

13. Neither Custodian nor any Fund shall have any duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement.

ARTICLE IX
TERMINATION

1. Either of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall not take effect sooner than sixty (60) days after the date of such delivery or mailing if termination is being sought by a Fund on behalf of a Series and not sooner than one hundred twenty (120) days after the date of such delivery or mailing if termination is being sought by the Custodian. A Fund may immediately terminate this Agreement in the event of the appointment of a bankruptcy trustee or a conservator or receiver for the Custodian by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction. Termination of the Agreement with respect to any one particular Fund or Series shall in no way affect the rights and duties under the Agreement with respect to any other Fund or Series. In the event such notice is given by either party, the Fund shall designate a successor custodian or custodians on or before the termination date. In the absence of such designation by the Fund, Custodian may designate a successor custodian which shall be a bank or trust company having not less than $25,000,000 aggregate capital, surplus and undivided profits, as shown by its last published report, and which shall be satisfactory to the Funds. Upon the date set forth in such notice, this Agreement shall terminate with respect to the affected Fund(s), and Custodian shall upon receipt of a notice of acceptance by the successor custodian on that date deliver directly to the successor custodian all Securities and cash then owned by the Fund(s) and held by it as Custodian, after deducting all fees, expenses and other amounts for the payment or reimbursement of which it shall then be entitled, provided that the Fund shall be entitled to determine the reasonable priority order in which the cash or other assets of any Series are to be deducted by the Custodian to obtain reimbursement.

2. If a successor custodian is not designated by the Fund or Custodian in accordance with the preceding section, the Fund shall upon the date specified in the notice of termination of this Agreement and upon the delivery by Custodian of all Securities (other than Securities which cannot be delivered to the Fund) and cash then owned by the Fund be deemed to be its own custodian and Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities which cannot be delivered to the Fund to hold such Securities hereunder in accordance with this Agreement.

Schedule II-19

3. In the event of any termination of this Agreement for any reason whatsoever, Custodian shall, for a period of up to one hundred twenty (120) days after termination of the Agreement, (i) continue to provide all or part of the services under this Agreement if requested by the Fund, which services shall be subject to the terms and conditions of this Agreement during the transition period unless otherwise agreed to by the parties; (ii) provide to the Fund or any successor custodian all assistance reasonably requested to enable the Fund or the successor custodian to commence providing services similar to those under this Agreement; and (iii) subject to the same limitations in place during the term of this Agreement, provide the Fund with access to all records in the possession of Custodian relating to the Fund which belong to the Fund and which are required to be maintained pursuant to the 1940 Act.

4. In connection with any termination of this Agreement for any reason whatsoever, the parties shall promptly develop a transition plan setting forth a reasonable timetable for the transition and describing the parties’ respective responsibilities for transitioning the services back to the Fund or any successor custodian in an orderly and uninterrupted fashion.

5. If Custodian is prevented from carrying out its obligations under this Agreement as a result of any Force Majeure Event for a period of thirty (30) days, a Fund may terminate this Agreement by giving Custodian not less than thirty (30) days’ notice, without prejudice to any of the rights of any party accrued prior to the date of termination.

ARTICLE X
MISCELLANEOUS

1. Each Fund agrees to furnish to Custodian a new Certificate of Authorized Persons in the event of any change in the then present Authorized Persons. Until such new Certificate is received, Custodian shall be fully protected in acting upon Certificates, Instructions or Oral Instructions of such present Authorized Persons.

2. Any notice or other instrument in writing, authorized or required by this Agreement to be given to Custodian, shall be sufficiently given if addressed to Custodian and received by it at its offices at 225 Liberty Street, New York, New York 10286, or at such other place as Custodian may from time to time designate in writing.

3. Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Fund shall be sufficiently given if addressed to the Fund and received by it at its offices at Attn.; Chief Financial Officer, The Vanguard Group, Inc., 400 Devon Park Drive, A29, Wayne, Pennsylvania 19087, or at such other place as the Fund may from time to time designate in writing.

4. Each and every right granted to a party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of either party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by either party of any right preclude any other or future exercise thereof or the exercise of any other right.

5. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any exclusive jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties, except that any amendment to the Schedule I hereto need be signed only by the Fund and any amendment to Schedule III hereto may be made as provided in Article III, Section 1(c). This Agreement shall extend to and shall be binding upon the parties

Schedule II-20

hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other.

6. This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. The Fund and Custodian hereby consent to the jurisdiction of a federal court situated in New York City, New York in connection with any dispute arising hereunder. Each Fund hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. Each Fund and Custodian each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

7. This Agreement is executed on behalf of the Board of Trustees of each Fund as Trustees and not individually and the obligations of this Agreement are not binding upon any of the Trustees or shareholders individually but are binding only upon the assets and property of such Funds; further, the assets of a particular Series of such Fund shall under no circumstances be charged with liabilities attributable to any other Series of such Fund and that all persons extending credit to, or contracting with or having any claim against a particular Series of such Fund shall look only to the assets of that particular Series for payment of such credit, contract or claim.

8. Each party hereto agrees that it shall treat confidentially the terms and conditions of this Agreement and all Confidential Information of any other party. Subject to the terms of this Agreement, all Confidential Information of a party hereto shall not be used by any other party hereto except solely for the purpose of rendering or obtaining services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party without the prior written consent of such providing party. Custodian may disclose a Fund’s Confidential Information to Custodian’s affiliates, legal counsel, consultants, accountants, agents, or service providers (i) who have a business need to know such Confidential Information solely for purposes of carrying out services with respect to the Funds in connection with this Agreement, and (ii) who are subject to fiduciary, professional, or contractual obligations of confidentiality substantially similar to, and no less restrictive than, the obligations set forth herein, and as otherwise required by law or legal process (each such recipient being a “Custodian Agent”). Custodian shall remain ultimately responsible for any impermissible or unlawful use, disclosure, or distribution of a Fund’s Confidential Information by Custodian Agents.

9. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

Schedule II-21

SCHEDULE II – AMENDMENT #1

The following is an amended and restated Schedule II (“Amendment”) to the Amended and Restated Custody Agreement, dated as of August 29, 2017 (the “Agreement”), by and between The Bank of New York Mellon (“Custodian”) and each open-end management investment company listed on this Schedule II (each, a “Fund”). This Amendment serves to update Schedule II. Custodian and the Funds agree that all of the terms and conditions as set forth in the Agreement are hereby incorporated by reference with respect to the Funds listed below.

Schedule II is amended as follows: Vanguard Admiral Funds

Vanguard Treasury Money Market Fund/23-2696041

Vanguard Chester Funds

Vanguard PRIMECAP Fund/23-2311358

Vanguard CMT Funds

Vanguard Market Liquidity Fund/20-0961056

Vanguard Fenway Funds

Vanguard PRIMECAP Core Fund/20-1689237

Vanguard Fixed Income Securities Funds

Vanguard Intermediate-Term Investment-Grade Fund/23-2735379 Vanguard Intermediate-Term Treasury Fund/23-2659568 Vanguard Long-Term Treasury Fund/23-2439151 Vanguard Short-Term Investment-Grade Fund/23-2439153 Vanguard Short-Term Federal Fund/23-2483049 Vanguard Short-Term Treasury Fund/23-2659567

Vanguard Horizon Funds

Vanguard Capital Opportunity Fund/23-2801528 Vanguard Strategic Equity Fund/23-2787277 Vanguard Strategic Small-Cap Equity Fund/20-4234046

Vanguard Malvern Funds
Vanguard Core Bond Fund
Vanguard Emerging Markets Bond Fund

Vanguard Money Market Reserves

Vanguard Prime Money Market Fund/23-6607979 Vanguard Federal Money Market Fund/23-2439136

Vanguard Scottsdale Funds

Vanguard Explorer Value Fund/27-1663550 Vanguard Russell 1000 Index Fund/27-2939873

Vanguard Russell 1000 Value Index Fund/27-2939962 Vanguard Russell 1000 Growth Index Fund/27-2940030 Vanguard Russell 2000 Index Fund/27-2940100 Vanguard Russell 2000 Value Index Fund/27-2940202 Vanguard Russell 2000 Growth Index Fund/27-2940282 Vanguard Russell 3000 Index Fund/27-2940415

Vanguard Trustees’ Equity Fund

Vanguard Emerging Markets Select Stock Fund/45-1137578

Vanguard Variable Insurance Funds Capital Growth Portfolio/55-0795775 Growth Portfolio/23-2719785 Money Market Portfolio/23-2585135

Short-Term Investment-Grade Portfolio/23-2980466

Vanguard Wellington Funds

Vanguard U.S. Multifactor Fund/82-3636503 Vanguard U.S. Liquidity Factor ETF/82-3549793 Vanguard U.S. Minimum Volatility ETF/82-3575034 Vanguard U.S. Momentum Factor ETF/82-3594286 Vanguard U.S. Multifactor ETF/82-3607687 Vanguard U.S. Quality Factor ETF/82-3660611 Vanguard U.S. Value Factor ETF/82-3666894

Vanguard Whitehall Funds

Vanguard Global Minimum Volatility Fund/46-9759331 Vanguard Selected Value Fund/23-2827110 Vanguard High Dividend Yield Index Fund/20-5596733

Vanguard International Dividend Appreciation Index Fund/47-5192304 Vanguard International High Dividend Yield Index Fund/47-5195802

(Rest of page left intentionally blank)


AGREED TO as of January11, 2018 BY:

The Bank of New York Mellon	Each of the Open-End Management	Investment
	Companies Listed on Schedule II Hereto
By:	By:
Name:	Name: Thomas J. Higgins
Title:	Title: Chief Financial Officer


		SCHEDULE III

Argentina	Ireland	Slovenia
Australia	Israel	South Africa
Austria	Italy	South Korea
Bahrain	Japan	Spain
Bangladesh	Jordan	Sri Lanka
Belgium	Kazakhstan	Swaziland
Bermuda	Kenya	Sweden
Botswana	Kuwait	Switzerland
Brazil	Latvia	Taiwan
Bulgaria	Lebanon	Thailand
Canada	Lithuania	Tunisia
Cayman Islands	Luxembourg	Turkey
Channel Islands	Malaysia	Uganda
Chile	Malta	Ukraine
China Shanghai	Mauritius	United Arab Emirates
China Shenzhen	Mexico	United Kingdom
Colombia	Morocco	United States
Costa Rica	Namibia	Uruguay
Croatia	Netherlands	Venezuela
Cyprus	New Zealand	Vietnam
Czech Republic	Nigeria	Zambia
Denmark	Norway	Zimbabwe
Egypt	Oman
Estonia	Pakistan
Euromarket	Peru
Finland	Philippines
France	Poland
Germany	Portugal
Ghana	Qatar
Greece	Romania
Hong Kong	Russia
Hungary	Saudi Arabia
Iceland	Serbia
India	Singapore
Indonesia	Slovak Republic

Schedule III-1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of Vanguard CMT Funds of our report dated October 16, 2018, relating to the financial statements and financial highlights, which appears in Vanguard Market Liquidity Fund and Vanguard Municipal Cash Management Fund’s Annual Report on Form N-CSR for the year ended August 31, 2018. We also consent to the references to us under the headings “Financial Statements”, “Service Providers—Independent Registered Public Accounting Firm” and “Financial Highlights” in such Registration Statement.

/s/PricewaterhouseCoopers LLP

Philadelphia, PA

December 18, 2018

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Average Annual Total Returns for Periods Ended December 31, 2017
	1 Year	5 Years	10 Years
Vanguard Municipal Cash Management Fund Investor
Shares	0.82%	0.28%	0.44%
Tax-Exempt Money Market Funds Average	0.40%	0.11%	0.24%

Form 485BPOS VANGUARD CMT FUNDS

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