VCIT Vanguard Intermediate Term Corporate Bond

Investment Objective
The Fund seeks to track the performance of a market-weighted mortgage-backed
securities index.

Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and hold
Signal Shares of the Fund.

Shareholder Fees
(Fees paid directly from your investment)

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

Example

The following example is intended to help you compare the cost of investing in the
Fund’s Signal Shares with the cost of investing in other mutual funds. It illustrates the
hypothetical expenses that you would incur over various periods if you invest $10,000
in the Fund’s shares. This example assumes that the Shares provide a return of 5% a
year and that total annual fund operating expenses remain as stated in the preceding
table. The results apply 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:

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Portfolio Turnover

The Fund pays 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 529%.

Primary Investment Strategies
The Fund employs an indexing investment approach designed to track the
performance of the Barclays U.S. MBS Float Adjusted Index. This index covers U.S.
agency mortgage-backed pass-through securities issued by the Government National
Mortgage Association (GNMA), the Federal National Mortgage Association (FNMA),
and the Federal Home Loan Mortgage Corporation (FHLMC). To be included in the
Index, pool aggregates must have at least $250 million currently outstanding and a
weighted average maturity of at least 1 year.

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 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, which, as of August 31, 2012, was 4.5 years.

Primary Risks
An investment in the Fund could lose money over short or even long periods. You should
expect the Fund’s share price and total return to fluctuate within a wide range, like the
fluctuations of the overall bond market. The Fund is subject to the following risks, which
could affect the Fund’s performance:

• Prepayment risk, which is the chance that during periods of falling interest rates,
homeowners will refinance their mortgages before their maturity dates, resulting in
prepayment of mortgage-backed securities held by the Fund. The Fund would then
lose any price appreciation above the mortgage’s principal and would be forced to
reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in
the Fund’s income. Prepayment risk, which is a type of call risk, is high for the Fund.

• Interest rate risk , which is the chance that bond prices overall will decline because
of rising interest rates. In addition, when interest rates decline, mortgage-backed
securities’ prices typically do not rise as much as the prices of comparable bonds. This
is because the market tends to discount mortgage-backed securities’ prices for
prepayment risk when interest rates decline. Interest rate risk should be moderate for
the Fund.

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• Income risk , which is the chance that the Fund’s income will decline because of
falling interest rates. Income risk is generally moderate for intermediate-term bond
funds, so investors should expect the Fund’s monthly income to fluctuate accordingly.

• Credit risk, which is the chance that the issuer of a mortgage-backed security will
fail to pay interest and 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 very low for the Fund because it invests in securities issued by
U.S. government agencies and instrumentalities, including many securities backed by
the full faith and credit of the U.S. government.

• Index sampling risk, which is the chance that the securities selected for the Fund, in
the aggregate, will not provide investment performance matching that of the Fund’s
target index. Index sampling risk for the Fund should be low.

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 the performance of the Fund‘s Signal
Shares in their first full calendar year. The table shows how the average annual total
returns compare with those of the Fund's target index, which has investment
characteristics similar to those of the Fund. 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 online at vanguard.com/performance or by calling
Vanguard toll-free at 800-662-7447.

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Annual Total Returns — Vanguard Mortgage-Backed Securities Index Fund Signal Shares ¹

1 The year-to-date return as of the most recent calendar quarter, which ended on September 30, 2012, was 2.96%.

During the periods shown in the bar chart, the highest return for a calendar quarter
was 2.76% (quarter ended June 30, 2010), and the lowest return for a quarter was
0.42% (quarter ended September 30, 2010).

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Investment Advisor
The Vanguard Group, Inc.

Portfolio Managers

William D. Baird, Portfolio Manager. He has co-managed the Fund since its inception
in 2009.

Gregory Davis, CFA, Principal of Vanguard and head of Vanguard’s Bond Index Group.
He has co-managed the Fund since its inception in 2009.

Tax Information
The Fund’s distributions will be reinvested in additional Fund shares and accumulate on
a tax-deferred basis if you are investing through an employer-sponsored retirement or
savings plan. You will not owe taxes on these distributions until you begin withdrawals
from the plan. You should consult your plan administrator, your plan’s Summary Plan
Description, or your tax advisor about the tax consequences of plan withdrawals.

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

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Vanguard Mortgage-Backed Securities Index Fund Signal Shares—Fund Number 1948

CFA ^® is a trademark owned by CFA Institute.

© 2012 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.

SPI 1948 122012