Fund Description: Vanguard Total International Bond ETF is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the Vanguard Charlotte Funds, an investment management company. INVESTMENT OBJECTIVE: The Vanguard Total International Bond ETF seeks to track the performance of the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index. INDEX DESCRIPTION: The Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index provides a broad-based measure of the global, investment-grade, fixed-rate debt markets. The Index includes government, government agency, corporate, and securitized non-U.S. investment-grade fixed income investments, all issued in currencies other than the U.S. dollar and with maturities of more than one year. The Index is capped, which means that its exposure to any particular bond issuer is limited to a maximum of 20%. Additionally, issuers that individually constitute 5% or more of the Index may not constitute, in the aggregate, more than 48% of the Index. If the Index, as constituted based on market weights, would exceed the 20% or 48% limits, the excess is reallocated to bonds of other issuers represented in the Index. To minimize the currency risk associated with investment in bonds denominated in currencies other than the U.S. dollar, the Fund will attempt to hedge its currency exposures. FUND STRATEGY: The Fund employs an indexing investment approach designed to track the performance of the Index. 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 generally ranges between 5 and 10 years and, as of March 31, 2013, was 8.2 years. FUND MANAGEMENT: The Vanguard Group, Inc. serves as Investment Advisor to the Fund.