Vanguard ESG U.S. Corporate Bond ETF
Supplement Dated February 1, 2023, to the Prospectus and Summary Prospectus Dated December 21, 2022
Important Changes to Vanguard ESG U.S. Corporate Bond ETF (the Fund)
Effective immediately, the following changes are made to the Fund’s Prospectus and Summary Prospectus in connection with Bloomberg MSCI’s recent changes to the methodology for the Bloomberg MSCI US Corporate SRI Select Index tracked by the Fund.
Prospectus and Summary Prospectus Text Changes
The first paragraph under the “Principal Investment Strategies” section under the ETF Summary is replaced with the following:
Principal Investment Strategies
The Fund employs an indexing investment approach designed to track the performance of the Bloomberg MSCI US Corporate SRI Select Index (the “Index”). The Index is a subset of the Bloomberg U.S. Corporate Index (the “Parent Index”), which serves as the universe of eligible bonds for use in constructing the Index and represents U.S. dollar-denominated, taxable, investment-grade corporate bonds. The Index excludes bonds with maturities of less than 1 year and with less than $750 million outstanding, and is screened for certain environmental, social, and governance (ESG) criteria by the Index provider, which is independent of Vanguard. The Index excludes the bonds of companies that the Index provider determines engage in (which may include manufacturing, owning, and operating), have a specified level of involvement in, and/or derive threshold amounts of revenue from certain activities or business segments related to the following: adult entertainment, alcohol, gambling, tobacco, nuclear weapons, controversial weapons, conventional weapons, civilian firearms, nuclear power, and thermal coal, oil, or gas. The level or type of involvement in, or amount of revenue earned from, certain activities or business segments that lead to exclusion by the Index provider can vary from one activity or business segment to another. The Index also excludes the bonds of any company that, as determined by the Index provider, does not meet certain standards defined by the Index provider with respect to an ESG controversies assessment, which measures a company’s involvement in major ESG