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Vanguard Ireland and UK-domiciled funds and ETFs move to T+2 settlement

01 September 2017 | Topical insights

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On 5 September 2017 the US financial industry plans to shorten the settlement cycle process from three business days after the trade date (T+3) to two business days after the trade date (T+2) for securities bought and sold on the secondary market.

Due to this change, we will be changing the settlement cycle of all Vanguard UK-domiciled and most Ireland-domiciled investments from T+3 to T+2 to align the settlement time of the funds and ETFs with the settlement time of the underlying investments on the key markets on which they trade.

The change is designed to reduce a number of risks, including credit risk, market risk, liquidity risk and, as a result, systemic risk. It will also introduce greater global settlement harmonisation, as many countries have also recently moved their settlement cycles to T+2.

The change means that investors in our Ireland- and UK-domiciled funds will need to provide payment for subscriptions within two days – one day earlier than now – and will receive payment following a redemption one day earlier.

At the same time, primary-market transactions in the Ireland-domiciled ETFs listed below will also move to T+2. (Primary-market transactions are where authorised participants create new shares in our ETFs to meet the needs of large investors.) From 5 September, authorised participants in the below-mentioned funds will need to provide payment within two days of instructing the trade. However, since most clients deal for ETFs on the secondary market (i.e. via an exchange) and the Ireland-domiciled ETFs are only listed on European exchanges, they are already following a T+2 cycle.

Primary market transactions in our Japan Stock Index Fund and FTSE Japan UCITS ETF will remain at T+3.

If you have questions about these changes, please get in touch with your normal Vanguard contact.

Funds affected by the change:

Vanguard Investment Series PLC

Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard Eurozone Stock Index Fund
Vanguard Global Small-Cap Index Fund
Vanguard Global Stock Index Fund
Vanguard Pacific Ex-Japan Stock Index Fund
Vanguard SRI European Stock Fund
Vanguard SRI Global Stock Fund
Vanguard U.S. 500 Stock Index Fund
Vanguard U.S. Fundamental Value Fund
Vanguard U.S. Opportunities Fund
Vanguard Euro Government Bond Index Fund
Vanguard Euro Investment Grade Bond Index Fund
Vanguard Eurozone Inflation-Linked Bond Index Fund
Vanguard Global Bond Index Fund
Vanguard Japan Government Bond Index Fund
Vanguard U.K. Government Bond Index Fund
Vanguard U.K. Investment Grade Bond Index Fund
Vanguard U.S. Government Bond Index Fund
Vanguard U.S. Investment Grade Credit Index Fund
Vanguard U.S. Ultra-Short-Term Bond Fund
Vanguard 20+ Year Euro Treasury Index Fund
Vanguard U.K. Short-Term Investment Grade Bond Index Fund
Vanguard Global Short-Term Bond Index Fund
Vanguard U.S. Treasury Inflation-Protected Securities Index Fund
Vanguard SRI Euro Investment Grade Bond Index Fund

Vanguard FTSE U.K. All-Share Index Unit Trust

Vanguard FTSE 100 Index Unit Trust

Vanguard LifeStrategy Funds ICVC

Vanguard LifeStrategy 100% Equity Fund
Vanguard LifeStrategy 20% Equity Fund
Vanguard LifeStrategy 40% Equity Fund
Vanguard LifeStrategy 60% Equity Fund
Vanguard LifeStrategy 80% Equity Fund
Vanguard Target Retirement 2015 Fund
Vanguard Target Retirement 2020 Fund
Vanguard Target Retirement 2025 Fund
Vanguard Target Retirement 2030 Fund
Vanguard Target Retirement 2035 Fund
Vanguard Target Retirement 2040 Fund
Vanguard Target Retirement 2045 Fund
Vanguard Target Retirement 2050 Fund
Vanguard Target Retirement 2055 Fund

Vanguard Investments Funds ICVC

Vanguard FTSE Developed World ex-U.K. Equity Index Fund
Vanguard FTSE Developed Europe ex-U.K. Equity Index Fund
Vanguard FTSE U.K. Equity Income Index Fund
Vanguard U.K. Inflation Linked Gilt Index Fund
Vanguard U.K. Long Duration Gilt Index Fund
Vanguard U.S. Equity Index Fund
Vanguard Global Equity Fund
Vanguard Global Equity Income Fund
Vanguard Global Emerging Markets Fund
Vanguard Global Balanced Fund
Vanguard Global All-Cap Index Fund

Vanguard Common Contractual Fund

Vanguard U.S. Equity Index Common Contractual Fund

Vanguard Investments Common Contractual Fund

Vanguard FTSE Developed World Common Contractual Fund
Vanguard FTSE Developed World ex UK Common Contractual Fund
Vanguard FTSE Developed Europe ex UK Common Contractual Fund

Vanguard Funds Plc

Vanguard FTSE All-World High Dividend Yield UCITS ETF
Vanguard FTSE All-World UCITS ETF
Vanguard FTSE Developed Asia Pacific ex Japan UCITS ETF
Vanguard S&P 500 UCITS ETF
Vanguard FTSE Developed World UCITS ETF
Vanguard FTSE North America UCITS ETF
Vanguard Global Momentum Factor UCITS ETF
Vanguard Global Liquidity Factor UCITS ETF
Vanguard Global Value Factor UCITS ETF
Vanguard Global Minimum Volatility UCITS ETF
Vanguard FTSE Emerging Markets UCITS ETF

Important information:

This document is directed at professional investors and should not be distributed to, or relied upon by, retail investors.

The material contained in this email is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so.

The information on this email does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this email when making any investment decisions.

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested. The value of this investment may fall or rise as a result of change in exchange rates.

Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.

ETF shares can be bought or sold only through a broker. Investing in ETFs entails stockbroker commission and a bid- offer spread which should be considered fully before investing.

Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.

Vanguard Funds plc has been authorised by the Central Bank of Ireland as a UCITS and has been registered for public distribution in certain EU countries. Prospective investors are referred to the Funds' prospectus for further information. Prospective investors are also urged to consult their own professional advisors on the implications of making an investment in, and holding or disposing shares of the Funds and the receipt of distributions with respect to such shares under the law of the countries in which they are liable to taxation.

The Manager of Vanguard Funds plc is Vanguard Group (Ireland) Limited. Vanguard Asset Management, Limited is a distributor for Vanguard Funds plc. The Manager of Vanguard Investment Series plc and Vanguard Funds plc is Vanguard Group (Ireland) Limited. Vanguard Asset Management, Limited is a distributor of Vanguard Investment Series plc and Vanguard Funds plc. The Authorised Corporate Director for Vanguard Lifestrategy Funds ICVC is Vanguard Investments UK, Limited. Vanguard Asset Management, Limited is a distributor of Vanguard Lifestrategy Funds ICVC. The Authorised Corporate Director for Vanguard Investment Funds ICVC is Vanguard Investments UK, Limited. Vanguard Asset Management, Limited is a distributor of Vanguard Investment Funds ICVC.

For further information on a fund's investment policy, please refer to its Key Investor Information Document ("KIID"). The KIID and the Prospectus for this fund is available in local languages from Vanguard via our website: https://global.vanguard.com/.

The Central Bank of Ireland has granted authorisation for the Vanguard UK Government Bond UCITS ETF to invest up to 100% of net assets in different Transferable Securities and Money Market Instruments issued or guaranteed by any EU Member State, its local authorities, non-EU Member States or public international bodies of which one or more EU Member States are members. As at 30 June 2017, the Vanguard UK Government Bond ETF invests more than 35% of its scheme property in transferable securities and money market instruments issued or guaranteed by the UK.

All rights in the FTSE All-World Index , FTSE 100 Index, FTSE Emerging Index, FTSE Developed Asia Pacific ex Japan Index, FTSE Developed Europe Index, FTSE Japan Index , FTSE North America Index, FTSE Developed Europe ex UK Index, FTSE 250 Index, FTSE Developed Index and the FTSE All-World High Dividend Yield Index (the "Indices") vest in FTSE International Limited ("FTSE"). "FTSE®" is a trademark of London Stock Exchange Group companies and is used by FTSE under license. The Vanguard FTSE 100 UCITS ETF, Vanguard FTSE All-World UCITS ETF, Vanguard FTSE Emerging Markets UCITS ETF, Vanguard FTSE Developed Asia Pacific ex Japan UCITS ETF, Vanguard FTSE Japan UCITS ETF, Vanguard FTSE Developed Europe UCITS ETF, Vanguard FTSE North America UCITS ETF, Vanguard FTSE Developed Europe ex UK UCITS ETF, Vanguard FTSE 250 UCITS ETF, Vanguard FTSE Developed World UCITS ETF and the Vanguard FTSE All-World High Dividend Yield UCITS ETF (the "Products") have been developed solely by Vanguard. The Indices are calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Products and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Indices or (b )investment in or operation of the Products. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Products or the suitability of any of the Indices for the purpose to which it is being put by Vanguard.

S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P") and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by Vanguard. The S&P Index is a product of S&P Dow Jones Indices LLC and has been licensed for use by Vanguard. The Vanguard S&P 500 UCITS ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and none of S&P Dow Jones Indices LLC, Dow Jones, S&P nor their respective affiliates makes any representation regarding the advisability of investing in such a product.

Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority.

VAM-2017-08-21-5088

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