Vanguard Total Corporate Bond ETF
Summary Prospectus
March 4, 2025
Exchange-traded fund shares that are not individually redeemable and are listed on Nasdaq
Vanguard Total Corporate Bond ETF Shares (VTC)
The Fund’s statutory Prospectus and Statement of Additional Information dated March 4, 2025, as may be amended or supplemented, are incorporated into and made part of this Summary Prospectus by reference.
Before you invest, you may want to review the Fund’s Prospectus, which contains more information about the Fund and its risks. You can find the Fund’s Prospectus and other information about the Fund online at www.vanguard.com/prospectus and http://personal.vanguard.com/us/literature/reports/ETFs. You can also obtain this information at no cost by calling 866-499-8473 or by sending an email request to online@vanguard.com.
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.
Investment Objective
The Fund seeks to track the performance of a broad, market-weighted corporate bond index.
Fees and Expenses
The following tables describe the fees and expenses you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and example below.
Shareholder Fees
(Fees paid directly from your investment)
(Fees paid directly from your investment)
|
|
|
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Transaction Fee on Purchases and Sales
|
None*
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Transaction Fee on Reinvested Dividends
|
None*
|
*
None through Vanguard (Broker fees vary)
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
(Expenses that you pay each year as a percentage of the value of your investment)
|
|
|
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Management Fees
|
0.02
%
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12b-1 Distribution Fee
|
None
|
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Other Expenses
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0.01
%
|
|
Total Annual Fund Operating Expenses1,2
|
0.03
%
|
1
The expense information shown in the table reflects estimated amounts for the current
fiscal year.
2
The expense information in this table has been restated resulting from a restatement
of Management Fees and Other Expenses due to the removal of Acquired Fund Fees and Expenses resulting from a change in investment strategy.
Example
The following example is intended to help you compare the cost of investing in the Fund’s ETF Shares with the cost of investing in other 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
1
expenses whether or not you were to sell your shares 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
|
|
$3
|
$10
|
$17
|
$39
|
This example does not include the brokerage commissions that you may pay to buy and sell shares of the Fund.
Portfolio Turnover
The Fund may pay transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in more taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the previous expense example, reduce the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 8% of the average value of its portfolio.
Principal Investment Strategies
The Fund employs an indexing investment approach designed to track the performance of the Bloomberg U.S. Corporate Bond Index (the Index), which measures the investment-grade, fixed-rate, taxable corporate bond market. The Index includes U.S. dollar-denominated securities that are publicly issued by U.S. and non-U.S. industrial, utility, and financial companies.
The Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk
factors and other characteristics. All of the Fund’s investments will be selected
through the sampling process, and under normal circumstances, at least 80% of the Fund’s assets will be invested in bonds included in the Index. The Fund maintains a dollar-weighted average maturity consistent with that of the Index. As
of August 31, 2024, the dollar-weighted average maturity of the Index was 11 years.
Principal Risks
An investment in the Fund could lose money over short or long periods of time. You should expect the Fund’s share price and total return to fluctuate within a wide range. The Fund is subject to the following risks, which could affect the Fund’s performance, and the level of risk may vary based on market conditions:
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• Interest rate risk, which is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be moderate for the Fund.
• Credit risk, which is the chance that a bond issuer 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 bond to decline. Credit risk should be moderate for the Fund.
• Income risk, which is the chance that a fund’s income will decline because of falling interest rates. Income risk should be moderate for the Fund.
• Liquidity risk, which is the chance that a fund may not be able to sell a security in a timely manner at a desired price.
• Index-related risks. The Fund is subject to risks associated with index investing, which include passive management risk, tracking error risk, and index provider risk. Passive management risk is the chance that the Fund’s use of an indexing strategy will negatively impact the Fund’s performance. Because the Fund seeks to track the performance of its target index regardless of how that index is performing, the Fund’s performance may be lower than it would be if the Fund were actively managed. Tracking error risk is the chance that the Fund’s performance will deviate from the performance of its target index. Tracking error
risk may be heightened during times of increased market volatility or under other
unusual market conditions. Index provider risk is the chance that the Fund will be
negatively impacted by changes or errors made by the index provider. Any gains, losses, or costs associated with or resulting from an error made by the index provider will generally be borne by the Fund and, as a result, the Fund’s shareholders.
• Index sampling risk, which is the chance that the securities selected for a fund, in the aggregate, will not provide investment performance matching that of a fund’s target index.
Because the Fund is an exchange-traded fund (ETF) and the Fund’s shares are traded on an exchange, the Fund is subject to additional risks:
• The Fund’s ETF Shares are listed for trading on Nasdaq and are bought and sold on the secondary market at market prices. Although it is expected that the market price of an ETF Share typically will approximate its net asset value (NAV),
there may be times when the market price and the NAV differ significantly. Thus, you may pay more or less than NAV when you buy ETF Shares on the secondary market, and you may receive more or less than NAV when you sell those shares.
3
• Although the Fund’s ETF Shares are listed for trading on Nasdaq, it is possible that an active trading market may not be maintained, which could increase the Fund’s risks as disclosed in this prospectus.
• Trading of the Fund’s ETF Shares may be halted by the activation of individual or marketwide trading halts (which halt trading for a specific period of time when
the price of a particular security or overall market prices decline by a specified
percentage). Trading of the Fund’s ETF Shares may also be halted if (1) the shares are delisted from Nasdaq without first being listed on another exchange or (2) Nasdaq officials determine that such action is appropriate in the interest
of a fair and orderly market or for the protection of investors.
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
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’s ETF Shares (based on NAV) 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 its target index and another comparative index, which have investment characteristics similar to those of the Fund. In March, 2025, Vanguard Total Corporate Bond ETF changed its investment strategy from seeking to track the Bloomberg U.S. Corporate Bond Index (Index) by investing all, or substantially all, of its assets in three underlying ETFs (Vanguard Short-Term Corporate Bond ETF, Vanguard Intermediate-Term Corporate Bond ETF, and Vanguard Long-Term Corporate Bond ETF) to investing all, or substantially all, of its assets directly in the bonds that comprise the Index. Keep in mind that the Fund’s past performance (before and after taxes) does not indicate how the Fund will perform in the future. Updated performance information is available on our website at vanguard.com/performance.
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Annual Total Returns — Vanguard Total Corporate Bond ETF Shares1
1 The year-to-date return as of the most recent calendar quarter, which ended September
30, 2024, was 5.39%.
During the periods shown in the bar chart, the highest and lowest returns for a calendar quarter were:
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Total Return
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Quarter
|
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Highest
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8.57
%
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June 30, 2020
|
|
Lowest
|
-7.48
%
|
March 31, 2022
|
Average Annual Total Returns for Periods Ended December 31, 2023
|
|
1 Year
|
5 Years
|
Since
Fund
Inception
|
Fund
Inception
Date
|
|
Vanguard Total Corporate Bond
ETF Shares
|
|
|
|
11/07/2017
|
|
Based on NAV
|
|
|
|
|
|
Returns Before Taxes
|
8.64
%
|
2.48
%
|
1.68
%
|
|
|
Returns After Taxes on Distributions
|
6.91
|
1.19
|
0.37
|
|
|
Returns After Taxes on Distributions and Sale
of Fund Shares
|
5.06
|
1.37
|
0.73
|
|
|
Based on Market Price
|
|
|
|
|
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Return Before Taxes
|
8.60
|
2.48
|
1.68
|
|
|
Bloomberg U.S. Corporate Bond Index
(reflects no deduction for fees, expenses,
or taxes)
|
8.52
%
|
2.63
%
|
1.80
%
|
|
|
Bloomberg U.S. Aggregate Float Adjusted
Index
(reflects no deduction for fees, expenses,
or taxes)
|
5.60
|
1.17
|
0.94
|
|
Actual after-tax returns depend on your tax situation and may differ from those shown in the preceding table. When after-tax returns are calculated, it is assumed that the shareholder was in the highest individual federal marginal
5
income tax bracket at the time of each distribution of income or capital gains or
upon redemption. State and local income taxes are not reflected in the calculations. Please note that after-tax returns are not relevant for a shareholder who holds fund shares in a tax-deferred account, such as an individual retirement account or a 401(k) plan. Also, figures captioned Return After Taxes on Distributions and Sale of Fund Shares may be higher than other figures for the same period if a capital loss occurs upon redemption and results in an assumed tax deduction for the shareholder.
Investment Advisor
The Vanguard Group, Inc. (Vanguard)
Portfolio Manager
Joshua C. Barrickman, CFA, Principal of Vanguard and co-head of Vanguard’s Fixed Income Indexing Americas. He has managed the Fund since its inception in 2017.
Purchase and Sale of Fund Shares
ETF Shares may only be bought and sold in the secondary market through a brokerage firm. The price you pay or receive for ETF Shares will be the prevailing market price, which may be more (premium) or less (discount) than the NAV of the shares. The brokerage firm may charge you a commission to execute the transaction. Unless imposed by your brokerage firm, there is no minimum dollar amount you must invest and no minimum number of shares you must buy. ETF Shares cannot be directly purchased from or redeemed with the Fund, except by certain authorized broker-dealers. These broker-dealers may purchase and redeem ETF Shares only in large blocks (Creation Units), typically in exchange for baskets of securities.
An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase ETF Shares (bid) and the lowest price
a seller is willing to accept for ETF Shares (ask) when buying or selling shares in
the secondary market (bid-ask spread). Recent information, including information on the Fund’s NAV, market price, premiums and discounts, and bid-ask spreads, is available online at vanguard.com.
Tax Information
The Fund’s distributions may be taxable as ordinary income or capital gains. If you are investing through a tax-advantaged account, such as an IRA or an employer-sponsored retirement or savings plan, special tax rules apply. You should consult your own tax advisor with respect to any particular U.S. or non-U.S. tax consequences of your investment in the Fund.
Payments to Financial Intermediaries
The Fund and its investment advisor do not pay financial intermediaries for sales
of Fund shares.
CFA® is a registered trademark owned by CFA Institute.
“Bloomberg®” and the Bloomberg U.S. Corporate Bond Index and Bloomberg U.S. Aggregate Float Adjusted Index (the “Indices”) are service marks of Bloomberg Finance L.P. and
its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator
of the index (collectively, “Bloomberg”), and have been licensed for use for certain purposes by
Vanguard.
Vanguard Total Corporate Bond ETF Shares—Fund Number 985
To request additional information about the Fund, please visit vanguard.com or contact us at 866-499-8473.
© 2025 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.
SP 985 032025