Vanguard Chester Funds

12/02/2024 | Press release | Distributed by Public on 12/02/2024 06:29

Annual Report by Investment Company Form N CSR

8dd0a16dc048b1c

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT

OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-04098

Name of Registrant: Vanguard Chester Funds
Address of Registrant: P.O. Box 2600
Valley Forge, PA 19482
Name and address of agent for service: John E. Schadl, Esquire
P.O. Box 876
Valley Forge, PA 19482

Registrant's telephone number, including area code: (610) 669-1000

Date of fiscal year end: September 30

Date of reporting period: October 1, 2023-September 30, 2024

Item 1: Reports to Shareholders.

TABLE OF CONTENTS

Vanguard Target Retirement Income Fund
Investor Shares - VTINX

   

Vanguard Target Retirement 2020 Fund
Investor Shares - VTWNX

   

Vanguard Target Retirement 2025 Fund
Investor Shares - VTTVX

   

Vanguard Target Retirement 2030 Fund
Investor Shares - VTHRX

   

Vanguard Target Retirement 2035 Fund
Investor Shares - VTTHX

   

Vanguard Target Retirement 2040 Fund
Investor Shares - VFORX

   

Vanguard Target Retirement 2045 Fund
Investor Shares - VTIVX

   

Vanguard Target Retirement 2050 Fund
Investor Shares - VFIFX

   

Vanguard Target Retirement 2055 Fund
Investor Shares - VFFVX

   

Vanguard Target Retirement 2060 Fund
Investor Shares - VTTSX

   

Vanguard Target Retirement 2065 Fund
Investor Shares - VLXVX

   

Vanguard Target Retirement 2070 Fund
Investor Shares - VSVNX

   
Vanguard Target Retirement Income Fund
Investor Shares (VTINX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement Income Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement Income Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank, the Bank of England, and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund uses an asset allocation strategy designed for investors currently in retirement. It seeks to provide current income and some growth of capital.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 7.46% for Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 16.22% 4.45% 4.51%
Target Retirement Income Composite Index 16.34% 4.75% 4.74%
Bloomberg U.S. Aggregate Bond Index 11.57% 0.33% 1.84%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$36,539
Number of Portfolio Holdings 8
Portfolio Turnover Rate 4%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Bond Market II Index Fund Investor Shares 36.5%
Vanguard Total Stock Market Index Fund Institutional Plus Shares 17.9%
Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares 16.7%
Vanguard Total International Bond II Index Fund Institutional Shares 15.9%
Vanguard Total International Stock Index Fund Investor Shares 12.3%
Other Assets and Liabilities-Net 0.7%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR308
Vanguard Target Retirement 2020 Fund
Investor Shares (VTWNX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2020 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement 2020 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 7.46% for Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 18.25% 6.01% 5.99%
Target Retirement 2020 Composite Index 18.34% 6.37% 6.27%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$37,873
Number of Portfolio Holdings 8
Portfolio Turnover Rate 4%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Bond Market II Index Fund Investor Shares 33.6%
Vanguard Total Stock Market Index Fund Institutional Plus Shares 22.7%
Vanguard Total International Stock Index Fund Investor Shares 15.4%
Vanguard Total International Bond II Index Fund Institutional Shares 14.7%
Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares 12.9%
Other Assets and Liabilities-Net 0.7%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR682
Vanguard Target Retirement 2025 Fund
Investor Shares (VTTVX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2025 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement 2025 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 7.46% for Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 21.13% 7.09% 6.74%
Target Retirement 2025 Composite Index 21.26% 7.55% 7.06%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$78,755
Number of Portfolio Holdings 8
Portfolio Turnover Rate 7%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 31.0%
Vanguard Total Bond Market II Index Fund Investor Shares 28.7%
Vanguard Total International Stock Index Fund Investor Shares 20.8%
Vanguard Total International Bond II Index Fund Institutional Shares 12.4%
Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares 6.5%
Other Assets and Liabilities-Net 0.6%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR304
Vanguard Target Retirement 2030 Fund
Investor Shares (VTHRX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2030 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed roughly in line with its benchmark, the Target Retirement 2030 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 23.27% 8.04% 7.35%
Target Retirement 2030 Composite Index 23.41% 8.50% 7.68%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$99,058
Number of Portfolio Holdings 7
Portfolio Turnover Rate 7%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 36.7%
Vanguard Total Bond Market II Index Fund Investor Shares 26.6%
Vanguard Total International Stock Index Fund Investor Shares 24.8%
Vanguard Total International Bond II Index Fund Institutional Shares 11.3%
Other Assets and Liabilities-Net 0.6%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR695
Vanguard Target Retirement 2035 Fund
Investor Shares (VTTHX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2035 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement 2035 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 24.76% 8.95% 7.93%
Target Retirement 2035 Composite Index 24.96% 9.41% 8.26%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$104,179
Number of Portfolio Holdings 7
Portfolio Turnover Rate 4%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 41.4%
Vanguard Total International Stock Index Fund Investor Shares 27.6%
Vanguard Total Bond Market II Index Fund Investor Shares 21.3%
Vanguard Total International Bond II Index Fund Institutional Shares 9.1%
Other Assets and Liabilities-Net 0.6%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR305
Vanguard Target Retirement 2040 Fund
Investor Shares (VFORX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2040 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed roughly in line with its benchmark, the Target Retirement 2040 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 26.33% 9.85% 8.49%
Target Retirement 2040 Composite Index 26.51% 10.30% 8.83%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$93,115
Number of Portfolio Holdings 7
Portfolio Turnover Rate 2%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 46.3%
Vanguard Total International Stock Index Fund Investor Shares 30.2%
Vanguard Total Bond Market II Index Fund Investor Shares 16.0%
Vanguard Total International Bond II Index Fund Institutional Shares 6.9%
Other Assets and Liabilities-Net 0.6%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR696
Vanguard Target Retirement 2045 Fund
Investor Shares (VTIVX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2045 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed roughly in line with its benchmark, the Target Retirement 2045 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 27.82% 10.74% 8.97%
Target Retirement 2045 Composite Index 28.08% 11.18% 9.32%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$91,013
Number of Portfolio Holdings 7
Portfolio Turnover Rate 1%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 50.3%
Vanguard Total International Stock Index Fund Investor Shares 33.2%
Vanguard Total Bond Market II Index Fund Investor Shares 10.9%
Vanguard Total International Bond II Index Fund Institutional Shares 4.8%
Other Assets and Liabilities-Net 0.8%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR306
Vanguard Target Retirement 2050 Fund
Investor Shares (VFIFX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2050 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed roughly in line with its benchmark, the Target Retirement 2050 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 28.91% 11.05% 9.13%
Target Retirement 2050 Composite Index 29.26% 11.52% 9.49%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$77,441
Number of Portfolio Holdings 7
Portfolio Turnover Rate 1%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 53.5%
Vanguard Total International Stock Index Fund Investor Shares 36.2%
Vanguard Total Bond Market II Index Fund Investor Shares 6.6%
Vanguard Total International Bond II Index Fund Institutional Shares 3.0%
Other Assets and Liabilities-Net 0.7%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR699
Vanguard Target Retirement 2055 Fund
Investor Shares (VFFVX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2055 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement 2055 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 28.92% 11.05% 9.11%
Target Retirement 2055 Composite Index 29.26% 11.52% 9.49%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$52,016
Number of Portfolio Holdings 7
Portfolio Turnover Rate 1%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 53.5%
Vanguard Total International Stock Index Fund Investor Shares 36.1%
Vanguard Total Bond Market II Index Fund Investor Shares 6.7%
Vanguard Total International Bond II Index Fund Institutional Shares 3.0%
Other Assets and Liabilities-Net 0.7%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR1487
Vanguard Target Retirement 2060 Fund
Investor Shares (VTTSX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2060 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement 2060 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform over the past 10 years?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2014, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years 10 Years
Investor Shares 28.93% 11.05% 9.11%
Target Retirement 2060 Composite Index 29.26% 11.52% 9.49%
MSCI US Broad Market Index 35.26% 15.40% 12.91%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.87%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$29,576
Number of Portfolio Holdings 7
Portfolio Turnover Rate 1%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 53.4%
Vanguard Total International Stock Index Fund Investor Shares 36.2%
Vanguard Total Bond Market II Index Fund Investor Shares 6.6%
Vanguard Total International Bond II Index Fund Institutional Shares 3.0%
Other Assets and Liabilities-Net 0.8%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR1691
Vanguard Target Retirement 2065 Fund
Investor Shares (VLXVX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2065 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement 2065 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform since inception?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: July 12, 2017, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year 5 Years Since Inception
(7/12/2017)
Investor Shares 28.95% 11.04% 9.82%
Target Retirement 2065 Composite Index 29.26% 11.52% 10.22%
MSCI US Broad Market Index 35.26% 15.40% 13.96%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 0.36% 1.57%
This table reflects the Fund's investments, including short-term investments, derivatives and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$8,843
Number of Portfolio Holdings 7
Portfolio Turnover Rate 0%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 53.2%
Vanguard Total International Stock Index Fund Investor Shares 36.3%
Vanguard Total Bond Market II Index Fund Investor Shares 6.6%
Vanguard Total International Bond II Index Fund Institutional Shares 3.0%
Other Assets and Liabilities-Net 0.9%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
AR1791
Vanguard Target Retirement 2070 Fund
Investor Shares (VSVNX)
Annual Shareholder Report | September 30, 2024
This annual shareholder report contains important information about Vanguard Target Retirement 2070 Fund (the "Fund") for the period of October 1, 2023, to September 30, 2024. You can find additional information about the Fund at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature. You can also request this information by contacting us at 800-662-7447.
What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)
Share Class Name Costs of a $10,000 investment Costs paid as a percentage of a $10,000 investment
Investor Shares $9 0.08%
How did the Fund perform during the reporting period?
  • For the 12 months ended September 30, 2024, the Fund performed in line with its benchmark, the Target Retirement 2070 Composite Index.
  • Global economic growth appeared relatively stable at around 3% during the period. With inflation moderating across much of the world, major central banks including the European Central Bank and the U.S. Federal Reserve began lowering policy rates. Stock and bond prices rose worldwide.
  • The Fund automatically adjusts its asset mix over time, providing broad diversification while incrementally decreasing exposure to stocks and increasing exposure to bonds. The Fund continues to adjust for approximately seven years after its target date until its allocations match those of Vanguard Target Retirement Income Fund.
  • As a fund of funds, the Fund's performance reflects the weighted average of its holdings' total returns, which ranged from 10.35% for Vanguard Total International Bond II Index Fund Institutional Shares to 35.27% for Vanguard Total Stock Market Index Fund Institutional Plus Shares.
How did the Fund perform since inception?
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 on our website at vanguard.com/performance or by calling Vanguard toll-free at 800-662-7447. The graph and returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: June 28, 2022, Through September 30, 2024
Initial Investment of $10,000
Average Annual Total Returns
1 Year Since Inception
(6/28/2022)
Investor Shares 28.98% 16.56%
Target Retirement 2070 Composite Index 29.26% 16.78%
MSCI US Broad Market Index 35.26% 21.14%
Bloomberg U.S. Aggregate Float Adjusted Index 11.47% 3.52%
This table reflects the Fund's investments, including short-term investments and other assets and liabilities.
Fund Statistics
(as of September 30, 2024)
Fund Net Assets
(in millions) 		$1,036
Number of Portfolio Holdings 5
Portfolio Turnover Rate 1%
Total Investment Advisory Fees
(in thousands) 		$0
Portfolio Composition % of Net Assets
(as of September 30, 2024)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 54.1%
Vanguard Total International Stock Index Fund Investor Shares 35.8%
Vanguard Total Bond Market II Index Fund Investor Shares 7.0%
Vanguard Total International Bond II Index Fund Institutional Shares 3.0%
Other Assets and Liabilities-Net 0.1%
Where can I find additional information about the Fund?
Additional information about the Fund, including its prospectus, financial information, holdings, and proxy voting information is available at https://personal1.vanguard.com/ngf-next-gen-form-webapp/fund-literature.
Connect with Vanguard® • vanguard.com
Fund Information • 800-662-7447
Direct Investor Account Services • 800-662-2739
Text Telephone for People Who Are Deaf or Hard of Hearing • 800-749-7273
© 2024 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
ARV009

Item 2: Code of Ethics.

The Registrant has adopted a code of ethics that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics was amended during the reporting period covered by this report to make certain technical, non-material changes.

Item 3: Audit Committee Financial Expert.

All members of the Audit Committee have been determined by the Registrant's Board of Trustees to be Audit Committee Financial Experts and to be independent: F. Joseph Loughrey, Mark Loughridge, Sarah Bloom Raskin, and Peter F. Volanakis.

Item 4: Principal Accountant Fees and Services.

Includes fees billed in connection with services to the Registrant only.

Fiscal Year Ended
September 30, 2024 		Fiscal Year Ended
September 30, 2023
(a) Audit Fees. $ 32,000 $ 30,000
(b) Audit-Related Fees. 0 0
(c) Tax Fees. 0 0
(d) All Other Fees. 0 0
Total. $ 32,000 $ 30,000
(e) (1) Pre-Approval Policies. The audit committee is responsible for pre-approving all audit and non-audit services provided by PwC to: (i) the Vanguard funds; and (ii) Vanguard, or any entity controlled by Vanguard that provides ongoing services to the Vanguard funds. All services provided to Vanguard entities by the independent auditor, whether or not they are subject to preapproval, must be disclosed to the audit committee. The audit committee chair may preapprove any permissible audit and non-audit services as long as any preapproval is brought to the attention of the full audit committee at the next scheduled meeting.
(2) No percentage of the principal accountant's fees or services were approved pursuant to the waiver provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) For the most recent fiscal year, over 50% of the hours worked under the principal accountant's engagement were not performed by persons other than full-time, permanent employees of the principal accountant.
(g) Aggregate Non-Audit Fees.

Includes fees billed for non-audit services provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.

Fiscal Year Ended
September 30, 2024 		Fiscal Year Ended
September 30, 2023
Non-audit fees to the Registrant only, listed as (b) through (d) above. $ 0 $ 0
Non-audit Fees to other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
Audit-Related Fees. $ 3,508,505 $ 3,295,934
Tax Fees. $ 2,017,364 $ 1,678,928
All Other Fees. $ 268,000 $ 25,000
Total. $ 5,793,869 $ 4,999,862
(h) For the most recent fiscal year, the Audit Committee has determined that the provision of all non-audit services was consistent with maintaining the principal accountant's independence.

Item 5: Audit Committee of Listed Registrants.

The Registrant is a listed issuer as defined in rule 10A-3 under the Securities Exchange Act of 1934 ("Exchange Act"). The Registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant's audit committee members are: F. Joseph Loughrey, Mark Loughridge, Sarah Bloom Raskin, and Peter F. Volanakis.

Item 6: Investments.

Not applicable. The complete schedule of investments is included in the financial statements filed under Item 7 of this Form.

Item 7: Financial Statements and Financial Highlights for Open-End Management Investment Companies.

Financial Statements
For the year ended September 30, 2024
Vanguard Target Retirement Funds
Vanguard Target Retirement Income 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
Contents
Target Retirement Income Fund
1
Target Retirement 2020 Fund
9
Target Retirement 2025 Fund
17
Target Retirement 2030 Fund
25
Target Retirement 2035 Fund
33
Target Retirement 2040 Fund
41
Report of Independent Registered

Public Accounting Firm
49
Tax information
50
Target Retirement Income Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.3%)
U.S. Stock Fund (17.9%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 25,248,936 6,530,133
International Stock Fund (12.3%)
Vanguard Total International Stock Index Fund Investor Shares 216,396,591 4,503,213
U.S. Bond Funds (53.2%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 1,366,518,049 13,323,551
Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares 249,129,550 6,121,113
19,444,664
International Bond Fund (15.9%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 214,176,436 5,795,614
Total Investment Companies (Cost $30,615,690) 36,273,624
Temporary Cash Investments (0.7%)
Money Market Fund (0.7%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $264,066) 2,641,597 264,160
Total Investments (100.0%) (Cost $30,879,756) 36,537,784
Other Assets and Liabilities-Net (0.0%) 1,413
Net Assets (100%) 36,539,197
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 1,137 129,938 151
E-mini S&P 500 Index December 2024 462 134,309 2,855
3,006
See accompanying Notes, which are an integral part of the Financial Statements.
1
Target Retirement Income Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $30,879,756) 36,537,784
Cash Collateral Pledged-Futures Contracts 9,027
Receivables for Investment Securities Sold 12,211
Receivables for Accrued Income 89,913
Receivables for Capital Shares Issued 7,293
Variation Margin Receivable-Futures Contracts 16
Total Assets 36,656,244
Liabilities
Payables for Investment Securities Purchased 89,910
Payables for Capital Shares Redeemed 27,137
Total Liabilities 117,047
Net Assets 36,539,197

At September 30, 2024, net assets consisted of:
Paid-in Capital 30,128,752
Total Distributable Earnings (Loss) 6,410,445
Net Assets 36,539,197
Net Assets
Applicable to 2,641,973,936 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		36,539,197
Net Asset Value Per Share $13.83
See accompanying Notes, which are an integral part of the Financial Statements.
2
Target Retirement Income Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 1,151,579
Net Investment Income-Note B 1,151,579
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 2
Affiliated Funds Sold1 834,904
Futures Contracts 30,373
Realized Net Gain (Loss) 865,279
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 3,363,109
Futures Contracts 10,826
Change in Unrealized Appreciation (Depreciation) 3,373,935
Net Increase (Decrease) in Net Assets Resulting from Operations 5,390,793
1 Includes $33,689,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
3
Target Retirement Income Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 1,151,579 972,603
Realized Net Gain (Loss) 865,279 423,805
Change in Unrealized Appreciation (Depreciation) 3,373,935 1,147,158
Net Increase (Decrease) in Net Assets Resulting from Operations 5,390,793 2,543,566
Distributions
Total Distributions (1,578,331) (1,182,988)
Capital Share Transactions
Issued 2,422,826 2,868,217
Issued in Lieu of Cash Distributions 1,524,768 1,143,309
Redeemed (6,484,132) (6,630,784)
Net Increase (Decrease) from Capital Share Transactions (2,536,538) (2,619,258)
Total Increase (Decrease) 1,275,924 (1,258,680)
Net Assets
Beginning of Period 35,263,273 36,521,953
End of Period 36,539,197 35,263,273
See accompanying Notes, which are an integral part of the Financial Statements.
4
Target Retirement Income Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $12.43 $12.00 $15.24 $14.54 $13.85
Investment Operations
Net Investment Income1 .422 .333 .380 .278 .308
Capital Gain Distributions Received1 .0002 .0002 .017 .056 -
Net Realized and Unrealized Gain (Loss) on Investments 1.560 .503 (2.381) .887 .696
Total from Investment Operations 1.982 .836 (1.984) 1.221 1.004
Distributions
Dividends from Net Investment Income (.448) (.360) (.382) (.256) (.297)
Distributions from Realized Capital Gains (.134) (.046) (.874) (.265) (.017)
Total Distributions (.582) (.406) (1.256) (.521) (.314)
Net Asset Value, End of Period $13.83 $12.43 $12.00 $15.24 $14.54
Total Return3 16.22% 7.02% -14.19% 8.48% 7.35%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $36,539 $35,263 $36,522 $16,322 $17,576
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.12% 0.12%
Ratio of Net Investment Income to Average Net Assets 3.21% 2.64% 2.82% 1.84% 2.19%
Portfolio Turnover Rate 4%5 4%5 19%5 6% 17%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement Income Fund on February 11, 2022, the AFFE was 0.12% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis and remained 0.08% following the acquisition of Vanguard Target Retirement 2015 Fund on July 8, 2022.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
5
Target Retirement Income Fund
Notes to Financial Statements
Vanguard Target Retirement Income Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
6
Target Retirement Income Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 105,323
Total Distributable Earnings (Loss) (105,323)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 44,493
Undistributed Long-Term Gains 720,520
Net Unrealized Gains (Losses) 5,645,432
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 6,410,445
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 1,240,877 1,046,938
Long-Term Capital Gains 337,454 136,050
Total 1,578,331 1,182,988
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 30,892,352
Gross Unrealized Appreciation 6,937,053
Gross Unrealized Depreciation (1,291,621)
Net Unrealized Appreciation (Depreciation) 5,645,432
7
Target Retirement Income Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 184,602 227,373
Issued in Lieu of Cash Distributions 115,335 92,349
Redeemed (495,049) (527,079)
Net Increase (Decrease) in Shares Outstanding (195,112) (207,357)
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 283,342 NA2 NA2 20 7 13,825 2 264,160
Vanguard Short-Term Inflation-Protected Securities Index Fund 5,967,726 191,025 292,700 (12,319) 267,381 173,624 - 6,121,113
Vanguard Total Bond Market II Index Fund 13,009,696 480,402 1,126,802 (89,457) 1,049,712 472,522 - 13,323,551
Vanguard Total International Bond II Index Fund 5,685,794 274,612 457,092 (42,792) 335,092 269,737 - 5,795,614
Vanguard Total International Stock Index Fund 4,192,888 239,644 773,885 118,665 725,901 129,561 - 4,503,213
Vanguard Total Stock Market Index Fund 6,127,293 348,860 1,791,823 860,787 985,016 92,310 - 6,530,133
Total 35,266,739 1,534,543 4,442,302 834,904 3,363,109 1,151,579 2 36,537,784
1 Includes $164,200,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
8
Target Retirement 2020 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.3%)
U.S. Stock Fund (22.7%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 33,262,141 8,602,588
International Stock Fund (15.4%)
Vanguard Total International Stock Index Fund Investor Shares 280,007,822 5,826,963
U.S. Bond Funds (46.5%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 1,305,452,257 12,728,159
Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares 199,196,455 4,894,257
17,622,416
International Bond Fund (14.7%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 205,835,829 5,569,917
Total Investment Companies (Cost $30,354,034) 37,621,884
Temporary Cash Investments (0.7%)
Money Market Fund (0.7%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $250,201) 2,502,977 250,298
Total Investments (100.0%) (Cost $30,604,235) 37,872,182
Other Assets and Liabilities-Net (0.0%) 1,166
Net Assets (100%) 37,873,348
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 1,090 124,567 144
E-mini S&P 500 Index December 2024 469 136,344 2,899
3,043
See accompanying Notes, which are an integral part of the Financial Statements.
9
Target Retirement 2020 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $30,604,235) 37,872,182
Cash Collateral Pledged-Futures Contracts 9,030
Receivables for Investment Securities Sold 38,151
Receivables for Accrued Income 80,132
Receivables for Capital Shares Issued 10,890
Variation Margin Receivable-Futures Contracts 45
Total Assets 38,010,430
Liabilities
Payables for Investment Securities Purchased 80,103
Payables for Capital Shares Redeemed 56,979
Total Liabilities 137,082
Net Assets 37,873,348

At September 30, 2024, net assets consisted of:
Paid-in Capital 28,235,164
Total Distributable Earnings (Loss) 9,638,184
Net Assets 37,873,348
Net Assets
Applicable to 1,287,256,497 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		37,873,348
Net Asset Value Per Share $29.42
See accompanying Notes, which are an integral part of the Financial Statements.
10
Target Retirement 2020 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 1,168,548
Net Investment Income-Note B 1,168,548
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 2
Affiliated Funds Sold1 1,899,059
Futures Contracts 31,986
Realized Net Gain (Loss) 1,931,047
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 3,226,463
Futures Contracts 13,330
Change in Unrealized Appreciation (Depreciation) 3,239,793
Net Increase (Decrease) in Net Assets Resulting from Operations 6,339,388
1 Includes $46,975,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
11
Target Retirement 2020 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 1,168,548 1,014,170
Realized Net Gain (Loss) 1,931,047 1,497,398
Change in Unrealized Appreciation (Depreciation) 3,239,793 1,169,579
Net Increase (Decrease) in Net Assets Resulting from Operations 6,339,388 3,681,147
Distributions
Total Distributions (2,289,720) (1,915,234)
Capital Share Transactions
Issued 2,242,477 2,700,212
Issued in Lieu of Cash Distributions 2,242,720 1,876,931
Redeemed (8,412,025) (8,427,322)
Net Increase (Decrease) from Capital Share Transactions (3,926,828) (3,850,179)
Total Increase (Decrease) 122,840 (2,084,266)
Net Assets
Beginning of Period 37,750,508 39,834,774
End of Period 37,873,348 37,750,508
See accompanying Notes, which are an integral part of the Financial Statements.
12
Target Retirement 2020 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $26.42 $25.37 $36.04 $33.79 $32.24
Investment Operations
Net Investment Income1 .851 .671 .725 .613 .713
Capital Gain Distributions Received1 .0002 .0002 .033 .110 -
Net Realized and Unrealized Gain (Loss) on Investments 3.817 1.643 (5.358) 3.680 1.987
Total from Investment Operations 4.668 2.314 (4.600) 4.403 2.700
Distributions
Dividends from Net Investment Income (.790) (.654) (.789) (.554) (.789)
Distributions from Realized Capital Gains (.878) (.610) (5.281) (1.599) (.361)
Total Distributions (1.668) (1.264) (6.070) (2.153) (1.150)
Net Asset Value, End of Period $29.42 $26.42 $25.37 $36.04 $33.79
Total Return3 18.25% 9.36% -15.83% 13.37% 8.51%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $37,873 $37,751 $39,835 $25,373 $31,887
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.13% 0.13%
Ratio of Net Investment Income to Average Net Assets 3.09% 2.52% 2.48% 1.73% 2.21%
Portfolio Turnover Rate 4%5 3%5 14%5 5% 19%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2020 Fund on February 11, 2022, the AFFE was 0.13% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
13
Target Retirement 2020 Fund
Notes to Financial Statements
Vanguard Target Retirement 2020 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
14
Target Retirement 2020 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 254,077
Total Distributable Earnings (Loss) (254,077)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 658,944
Undistributed Long-Term Gains 1,729,511
Net Unrealized Gains (Losses) 7,249,729
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 9,638,184
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 1,084,058 990,842
Long-Term Capital Gains 1,205,662 924,392
Total 2,289,720 1,915,234
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 30,622,453
Gross Unrealized Appreciation 8,821,573
Gross Unrealized Depreciation (1,571,844)
Net Unrealized Appreciation (Depreciation) 7,249,729
15
Target Retirement 2020 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 81,454 101,678
Issued in Lieu of Cash Distributions 83,218 74,363
Redeemed (306,055) (317,822)
Net Increase (Decrease) in Shares Outstanding (141,383) (141,781)
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 348,258 NA2 NA2 22 4 15,598 2 250,298
Vanguard Short-Term Inflation-Protected Securities Index Fund 4,451,843 276,846 32,549 (169) 198,286 135,552 - 4,894,257
Vanguard Total Bond Market II Index Fund 12,311,654 450,316 944,987 (82,018) 993,194 450,916 - 12,728,159
Vanguard Total International Bond II Index Fund 5,547,306 259,239 516,549 (59,087) 339,008 259,240 - 5,569,917
Vanguard Total International Stock Index Fund 6,117,582 250,928 1,704,863 308,425 854,891 180,133 - 5,826,963
Vanguard Total Stock Market Index Fund 8,977,444 367,903 3,315,725 1,731,886 841,080 127,109 - 8,602,588
Total 37,754,087 1,605,232 6,514,673 1,899,059 3,226,463 1,168,548 2 37,872,182
1 Includes $177,710,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
16
Target Retirement 2025 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.4%)
U.S. Stock Fund (31.0%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 94,313,431 24,392,283
International Stock Fund (20.8%)
Vanguard Total International Stock Index Fund Investor Shares 787,647,127 16,390,937
U.S. Bond Funds (35.2%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 2,317,769,324 22,598,251
Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares 209,156,779 5,138,981
27,737,232
International Bond Fund (12.4%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 359,314,346 9,723,046
Total Investment Companies (Cost $58,199,550) 78,243,498
Temporary Cash Investments (0.6%)
Money Market Fund (0.6%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $486,300) 4,864,730 486,473
Total Investments (100.0%) (Cost $58,685,850) 78,729,971
Other Assets and Liabilities-Net (0.0%) 24,678
Net Assets (100%) 78,754,649
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 2,275 259,990 302
E-mini S&P 500 Index December 2024 870 252,920 5,377
5,679
See accompanying Notes, which are an integral part of the Financial Statements.
17
Target Retirement 2025 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $58,685,850) 78,729,971
Cash Collateral Pledged-Futures Contracts 17,255
Receivables for Investment Securities Sold 72,635
Receivables for Accrued Income 119,745
Receivables for Capital Shares Issued 27,152
Total Assets 78,966,758
Liabilities
Payables for Investment Securities Purchased 119,690
Payables for Capital Shares Redeemed 92,389
Variation Margin Payable-Futures Contracts 30
Total Liabilities 212,109
Net Assets 78,754,649

At September 30, 2024, net assets consisted of:
Paid-in Capital 54,688,373
Total Distributable Earnings (Loss) 24,066,276
Net Assets 78,754,649
Net Assets
Applicable to 3,851,324,958 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		78,754,649
Net Asset Value Per Share $20.45
See accompanying Notes, which are an integral part of the Financial Statements.
18
Target Retirement 2025 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 2,203,082
Net Investment Income-Note B 2,203,082
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 5
Affiliated Funds Sold1 3,218,878
Futures Contracts 56,097
Realized Net Gain (Loss) 3,274,980
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 8,985,964
Futures Contracts 28,547
Change in Unrealized Appreciation (Depreciation) 9,014,511
Net Increase (Decrease) in Net Assets Resulting from Operations 14,492,573
1 Includes $256,625,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
19
Target Retirement 2025 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 2,203,082 1,762,114
Realized Net Gain (Loss) 3,274,980 1,409,551
Change in Unrealized Appreciation (Depreciation) 9,014,511 4,750,817
Net Increase (Decrease) in Net Assets Resulting from Operations 14,492,573 7,922,482
Distributions
Total Distributions (2,925,671) (2,068,531)
Capital Share Transactions
Issued 6,055,516 6,709,930
Issued in Lieu of Cash Distributions 2,869,835 2,031,053
Redeemed (13,917,429) (11,801,508)
Net Increase (Decrease) from Capital Share Transactions (4,992,078) (3,060,525)
Total Increase (Decrease) 6,574,824 2,793,426
Net Assets
Beginning of Period 72,179,825 69,386,399
End of Period 78,754,649 72,179,825
See accompanying Notes, which are an integral part of the Financial Statements.
20
Target Retirement 2025 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $17.55 $16.20 $22.84 $20.56 $19.34
Investment Operations
Net Investment Income1 .548 .418 .413 .362 .438
Capital Gain Distributions Received1 .0002 .0002 .019 .063 -
Net Realized and Unrealized Gain (Loss) on Investments 3.080 1.426 (3.761) 2.792 1.292
Total from Investment Operations 3.628 1.844 (3.329) 3.217 1.730
Distributions
Dividends from Net Investment Income (.505) (.368) (.440) (.356) (.471)
Distributions from Realized Capital Gains (.223) (.126) (2.871) (.581) (.039)
Total Distributions (.728) (.494) (3.311) (.937) (.510)
Net Asset Value, End of Period $20.45 $17.55 $16.20 $22.84 $20.56
Total Return3 21.13% 11.56% -17.53% 15.93% 9.04%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $78,755 $72,180 $69,386 $41,268 $46,521
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.13% 0.13%
Ratio of Net Investment Income to Average Net Assets 2.91% 2.39% 2.19% 1.63% 2.25%
Portfolio Turnover Rate 7%5 6%5 14%5 7% 21%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2025 Fund on February 11, 2022, the AFFE was 0.13% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
21
Target Retirement 2025 Fund
Notes to Financial Statements
Vanguard Target Retirement 2025 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
22
Target Retirement 2025 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 534,418
Total Distributable Earnings (Loss) (534,418)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 1,294,022
Undistributed Long-Term Gains 2,804,452
Net Unrealized Gains (Losses) 19,967,802
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 24,066,276
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 2,028,705 1,541,167
Long-Term Capital Gains 896,966 527,364
Total 2,925,671 2,068,531
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 58,762,169
Gross Unrealized Appreciation 22,879,795
Gross Unrealized Depreciation (2,911,993)
Net Unrealized Appreciation (Depreciation) 19,967,802
23
Target Retirement 2025 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 321,666 383,880
Issued in Lieu of Cash Distributions 155,715 122,574
Redeemed (739,265) (677,360)
Net Increase (Decrease) in Shares Outstanding (261,884) (170,906)
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 850,233 NA2 NA2 57 11 37,083 5 486,473
Vanguard Short-Term Inflation-Protected Securities Index Fund 3,472,304 1,526,975 45,873 1,189 184,386 128,068 - 5,138,981
Vanguard Total Bond Market II Index Fund 20,404,221 1,620,014 987,605 (65,803) 1,627,424 771,603 - 22,598,251
Vanguard Total International Bond II Index Fund 9,039,251 521,546 318,150 (12,363) 492,762 437,984 - 9,723,046
Vanguard Total International Stock Index Fund 15,529,970 558,396 2,797,595 293,910 2,806,256 481,037 - 16,390,937
Vanguard Total Stock Market Index Fund 22,888,304 665,778 6,038,812 3,001,888 3,875,125 347,307 - 24,392,283
Total 72,184,283 4,892,709 10,188,035 3,218,878 8,985,964 2,203,082 5 78,729,971
1 Includes $750,680,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
24
Target Retirement 2030 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.4%)
U.S. Stock Fund (36.7%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 140,574,395 36,356,756
International Stock Fund (24.8%)
Vanguard Total International Stock Index Fund Investor Shares 1,177,153,813 24,496,571
U.S. Bond Fund (26.6%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 2,704,830,883 26,372,101
International Bond Fund (11.3%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 414,406,874 11,213,850
Total Investment Companies (Cost $70,816,329) 98,439,278
Temporary Cash Investments (0.6%)
Money Market Fund (0.6%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $593,995) 5,941,950 594,195
Total Investments (100.0%) (Cost $71,410,324) 99,033,473
Other Assets and Liabilities-Net (0.0%) 24,909
Net Assets (100%) 99,058,382
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 2,678 306,045 355
E-mini S&P 500 Index December 2024 1,071 311,353 6,619
6,974
See accompanying Notes, which are an integral part of the Financial Statements.
25
Target Retirement 2030 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $71,410,324) 99,033,473
Cash Collateral Pledged-Futures Contracts 20,995
Receivables for Investment Securities Sold 53,767
Receivables for Accrued Income 101,758
Receivables for Capital Shares Issued 49,226
Variation Margin Receivable-Futures Contracts 18
Total Assets 99,259,237
Liabilities
Payables for Investment Securities Purchased 101,674
Payables for Capital Shares Redeemed 99,181
Total Liabilities 200,855
Net Assets 99,058,382

At September 30, 2024, net assets consisted of:
Paid-in Capital 69,376,946
Total Distributable Earnings (Loss) 29,681,436
Net Assets 99,058,382
Net Assets
Applicable to 2,480,894,497 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		99,058,382
Net Asset Value Per Share $39.93
See accompanying Notes, which are an integral part of the Financial Statements.
26
Target Retirement 2030 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 2,510,656
Net Investment Income-Note B 2,510,656
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 6
Affiliated Funds Sold1 1,050,761
Futures Contracts 69,322
Realized Net Gain (Loss) 1,120,089
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 15,152,314
Futures Contracts 30,322
Change in Unrealized Appreciation (Depreciation) 15,182,636
Net Increase (Decrease) in Net Assets Resulting from Operations 18,813,381
1 Includes $403,118,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
27
Target Retirement 2030 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 2,510,656 1,859,970
Realized Net Gain (Loss) 1,120,089 610,299
Change in Unrealized Appreciation (Depreciation) 15,182,636 6,928,523
Net Increase (Decrease) in Net Assets Resulting from Operations 18,813,381 9,398,792
Distributions
Total Distributions (2,243,420) (1,883,769)
Capital Share Transactions
Issued 10,662,275 10,157,450
Issued in Lieu of Cash Distributions 2,206,276 1,854,906
Redeemed (11,933,760) (10,089,296)
Net Increase (Decrease) from Capital Share Transactions 934,791 1,923,060
Total Increase (Decrease) 17,504,752 9,438,083
Net Assets
Beginning of Period 81,553,630 72,115,547
End of Period 99,058,382 81,553,630
See accompanying Notes, which are an integral part of the Financial Statements.
28
Target Retirement 2030 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $33.23 $30.12 $43.40 $37.63 $35.22
Investment Operations
Net Investment Income1 1.011 .767 .730 .679 .782
Capital Gain Distributions Received1 .0002 .0002 .028 .098 -
Net Realized and Unrealized Gain (Loss) on Investments 6.609 3.137 (7.291) 6.031 2.495
Total from Investment Operations 7.620 3.904 (6.533) 6.808 3.277
Distributions
Dividends from Net Investment Income (.920) (.643) (.822) (.661) (.867)
Distributions from Realized Capital Gains - (.151) (5.925) (.377) -
Total Distributions (.920) (.794) (6.747) (1.038) (.867)
Net Asset Value, End of Period $39.93 $33.23 $30.12 $43.40 $37.63
Total Return3 23.27% 13.14% -18.42% 18.29% 9.38%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $99,058 $81,554 $72,116 $36,946 $42,285
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.13% 0.14%
Ratio of Net Investment Income to Average Net Assets 2.78% 2.32% 2.07% 1.62% 2.20%
Portfolio Turnover Rate 7%5 3%5 11%5 6% 21%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2030 Fund on February 11, 2022, the AFFE was 0.13% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
29
Target Retirement 2030 Fund
Notes to Financial Statements
Vanguard Target Retirement 2030 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
30
Target Retirement 2030 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 477,134
Total Distributable Earnings (Loss) (477,134)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 1,560,754
Undistributed Long-Term Gains 633,601
Net Unrealized Gains (Losses) 27,487,081
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 29,681,436
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 2,243,420 1,534,433
Long-Term Capital Gains - 349,336
Total 2,243,420 1,883,769
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 71,546,392
Gross Unrealized Appreciation 30,355,549
Gross Unrealized Depreciation (2,868,468)
Net Unrealized Appreciation (Depreciation) 27,487,081
31
Target Retirement 2030 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 293,166 307,590
Issued in Lieu of Cash Distributions 62,026 59,567
Redeemed (328,357) (307,233)
Net Increase (Decrease) in Shares Outstanding 26,835 59,924
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 814,547 NA2 NA2 47 36 42,243 6 594,195
Vanguard Total Bond Market II Index Fund 20,775,602 4,699,059 803,448 (44,679) 1,745,567 842,372 - 26,372,101
Vanguard Total International Bond II Index Fund 9,013,314 1,834,026 149,988 (679) 517,177 462,470 - 11,213,850
Vanguard Total International Stock Index Fund 20,169,055 1,096,703 1,086,626 73,048 4,244,391 666,480 - 24,496,571
Vanguard Total Stock Market Index Fund 30,787,513 777,259 4,876,183 1,023,024 8,645,143 497,091 - 36,356,756
Total 81,560,031 8,407,047 6,916,245 1,050,761 15,152,314 2,510,656 6 99,033,473
1 Includes $1,018,730,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
32
Target Retirement 2035 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.4%)
U.S. Stock Fund (41.4%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 166,597,775 43,087,182
International Stock Fund (27.6%)
Vanguard Total International Stock Index Fund Investor Shares 1,381,250,456 28,743,822
U.S. Bond Fund (21.3%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 2,281,255,223 22,242,238
International Bond Fund (9.1%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 349,765,876 9,464,665
Total Investment Companies (Cost $71,249,549) 103,537,907
Temporary Cash Investments (0.6%)
Money Market Fund (0.6%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $618,819) 6,190,185 619,019
Total Investments (100.0%) (Cost $71,868,368) 104,156,926
Other Assets and Liabilities-Net (0.0%) 22,535
Net Assets (100%) 104,179,461
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 2,746 313,816 364
E-mini S&P 500 Index December 2024 1,115 324,145 6,891
7,255
See accompanying Notes, which are an integral part of the Financial Statements.
33
Target Retirement 2035 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $71,868,368) 104,156,926
Cash Collateral Pledged-Futures Contracts 21,775
Receivables for Investment Securities Sold 49,636
Receivables for Accrued Income 86,070
Receivables for Capital Shares Issued 50,928
Variation Margin Receivable-Futures Contracts 38
Total Assets 104,365,373
Liabilities
Payables for Investment Securities Purchased 86,015
Payables for Capital Shares Redeemed 99,897
Total Liabilities 185,912
Net Assets 104,179,461

At September 30, 2024, net assets consisted of:
Paid-in Capital 70,050,314
Total Distributable Earnings (Loss) 34,129,147
Net Assets 104,179,461
Net Assets
Applicable to 4,145,024,400 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		104,179,461
Net Asset Value Per Share $25.13
See accompanying Notes, which are an integral part of the Financial Statements.
34
Target Retirement 2035 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 2,463,259
Net Investment Income-Note B 2,463,259
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 6
Affiliated Funds Sold1 918,521
Futures Contracts 87,117
Realized Net Gain (Loss) 1,005,644
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 17,061,449
Futures Contracts 35,118
Change in Unrealized Appreciation (Depreciation) 17,096,567
Net Increase (Decrease) in Net Assets Resulting from Operations 20,565,470
1 Includes $536,314,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
35
Target Retirement 2035 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 2,463,259 1,835,942
Realized Net Gain (Loss) 1,005,644 781,472
Change in Unrealized Appreciation (Depreciation) 17,096,567 7,590,148
Net Increase (Decrease) in Net Assets Resulting from Operations 20,565,470 10,207,562
Distributions
Total Distributions (2,189,745) (1,976,113)
Capital Share Transactions
Issued 11,467,634 10,669,339
Issued in Lieu of Cash Distributions 2,156,718 1,946,584
Redeemed (10,185,189) (8,732,751)
Net Increase (Decrease) from Capital Share Transactions 3,439,163 3,883,172
Total Increase (Decrease) 21,814,888 12,114,621
Net Assets
Beginning of Period 82,364,573 70,249,952
End of Period 104,179,461 82,364,573
See accompanying Notes, which are an integral part of the Financial Statements.
36
Target Retirement 2035 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $20.64 $18.50 $27.25 $23.16 $21.60
Investment Operations
Net Investment Income1 .601 .471 .455 .430 .470
Capital Gain Distributions Received1 .0002 .0002 .014 .046 -
Net Realized and Unrealized Gain (Loss) on Investments 4.437 2.192 (4.566) 4.244 1.614
Total from Investment Operations 5.038 2.663 (4.097) 4.720 2.084
Distributions
Dividends from Net Investment Income (.548) (.402) (.559) (.409) (.524)
Distributions from Realized Capital Gains - (.121) (4.094) (.221) -
Total Distributions (.548) (.523) (4.653) (.630) (.524)
Net Asset Value, End of Period $25.13 $20.64 $18.50 $27.25 $23.16
Total Return3 24.76% 14.61% -18.87% 20.60% 9.71%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $104,179 $82,365 $70,250 $37,822 $40,597
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.14% 0.14%
Ratio of Net Investment Income to Average Net Assets 2.64% 2.30% 2.08% 1.64% 2.15%
Portfolio Turnover Rate 4%5 1%5 9%5 6% 18%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2035 Fund on February 11, 2022, the AFFE was 0.14% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
37
Target Retirement 2035 Fund
Notes to Financial Statements
Vanguard Target Retirement 2035 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
38
Target Retirement 2035 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 584,735
Total Distributable Earnings (Loss) (584,735)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 1,516,507
Undistributed Long-Term Gains 429,903
Net Unrealized Gains (Losses) 32,182,737
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 34,129,147
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 2,189,745 1,518,471
Long-Term Capital Gains - 457,642
Total 2,189,745 1,976,113
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 71,974,189
Gross Unrealized Appreciation 34,447,534
Gross Unrealized Depreciation (2,264,797)
Net Unrealized Appreciation (Depreciation) 32,182,737
39
Target Retirement 2035 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 504,125 521,644
Issued in Lieu of Cash Distributions 97,237 101,437
Redeemed (447,783) (429,813)
Net Increase (Decrease) in Shares Outstanding 153,579 193,268
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 912,183 NA2 NA2 52 28 45,797 6 619,019
Vanguard Total Bond Market II Index Fund 16,717,264 4,651,616 526,641 (787) 1,400,786 693,870 - 22,242,238
Vanguard Total International Bond II Index Fund 7,302,310 1,857,240 123,085 2,737 425,463 379,510 - 9,464,665
Vanguard Total International Stock Index Fund 22,548,234 1,687,985 428,351 102,276 4,833,678 760,795 - 28,743,822
Vanguard Total Stock Market Index Fund 34,890,772 592,145 3,611,472 814,243 10,401,494 583,287 - 43,087,182
Total 82,370,763 8,788,986 4,689,549 918,521 17,061,449 2,463,259 6 104,156,926
1 Includes $1,217,400,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
40
Target Retirement 2040 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.4%)
U.S. Stock Fund (46.3%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 166,674,512 43,107,029
International Stock Fund (30.2%)
Vanguard Total International Stock Index Fund Investor Shares 1,348,545,483 28,063,231
U.S. Bond Fund (16.0%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 1,527,766,111 14,895,720
International Bond Fund (6.9%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 238,084,881 6,442,577
Total Investment Companies (Cost $62,295,640) 92,508,557
Temporary Cash Investments (0.6%)
Money Market Fund (0.6%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $589,869) 5,900,464 590,047
Total Investments (100.0%) (Cost $62,885,509) 93,098,604
Other Assets and Liabilities-Net (0.0%) 16,198
Net Assets (100%) 93,114,802
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 2,454 280,446 326
E-mini S&P 500 Index December 2024 1,126 327,342 6,959
7,285
See accompanying Notes, which are an integral part of the Financial Statements.
41
Target Retirement 2040 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $62,885,509) 93,098,604
Cash Collateral Pledged-Futures Contracts 21,355
Receivables for Investment Securities Sold 8,287
Receivables for Accrued Income 58,944
Receivables for Capital Shares Issued 50,932
Variation Margin Receivable-Futures Contracts 183
Total Assets 93,238,305
Liabilities
Payables for Investment Securities Purchased 58,920
Payables for Capital Shares Redeemed 64,583
Total Liabilities 123,503
Net Assets 93,114,802

At September 30, 2024, net assets consisted of:
Paid-in Capital 61,602,484
Total Distributable Earnings (Loss) 31,512,318
Net Assets 93,114,802
Net Assets
Applicable to 2,067,489,679 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		93,114,802
Net Asset Value Per Share $45.04
See accompanying Notes, which are an integral part of the Financial Statements.
42
Target Retirement 2040 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 2,067,134
Net Investment Income-Note B 2,067,134
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 4
Affiliated Funds Sold1 603,183
Futures Contracts 66,345
Realized Net Gain (Loss) 669,532
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 16,402,715
Futures Contracts 29,341
Change in Unrealized Appreciation (Depreciation) 16,432,056
Net Increase (Decrease) in Net Assets Resulting from Operations 19,168,722
1 Includes $485,408,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
43
Target Retirement 2040 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 2,067,134 1,580,870
Realized Net Gain (Loss) 669,532 812,659
Change in Unrealized Appreciation (Depreciation) 16,432,056 7,324,732
Net Increase (Decrease) in Net Assets Resulting from Operations 19,168,722 9,718,261
Distributions
Total Distributions (1,851,778) (1,648,245)
Capital Share Transactions
Issued 10,590,366 9,888,244
Issued in Lieu of Cash Distributions 1,824,415 1,625,528
Redeemed (8,782,179) (7,781,857)
Net Increase (Decrease) from Capital Share Transactions 3,632,602 3,731,915
Total Increase (Decrease) 20,949,546 11,801,931
Net Assets
Beginning of Period 72,165,256 60,363,325
End of Period 93,114,802 72,165,256
See accompanying Notes, which are an integral part of the Financial Statements.
44
Target Retirement 2040 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $36.50 $32.25 $48.29 $40.07 $37.27
Investment Operations
Net Investment Income1 1.017 .821 .797 .764 .799
Capital Gain Distributions Received1 .0002 .0002 .017 .057 -
Net Realized and Unrealized Gain (Loss) on Investments 8.459 4.315 (8.162) 8.312 2.892
Total from Investment Operations 9.476 5.136 (7.348) 9.133 3.691
Distributions
Dividends from Net Investment Income (.936) (.714) (1.003) (.719) (.891)
Distributions from Realized Capital Gains - (.172) (7.689) (.194) -
Total Distributions (.936) (.886) (8.692) (.913) (.891)
Net Asset Value, End of Period $45.04 $36.50 $32.25 $48.29 $40.07
Total Return3 26.33% 16.15% -19.42% 23.00% 9.96%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $93,115 $72,165 $60,363 $29,084 $32,404
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.14% 0.14%
Ratio of Net Investment Income to Average Net Assets 2.50% 2.27% 2.08% 1.66% 2.12%
Portfolio Turnover Rate 2%5 1%5 7%5 5% 13%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2040 Fund on February 11, 2022, the AFFE was 0.14% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
45
Target Retirement 2040 Fund
Notes to Financial Statements
Vanguard Target Retirement 2040 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
46
Target Retirement 2040 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 515,127
Total Distributable Earnings (Loss) (515,127)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 1,292,136
Undistributed Long-Term Gains 140,634
Net Unrealized Gains (Losses) 30,079,548
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 31,512,318
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 1,851,778 1,327,883
Long-Term Capital Gains - 320,362
Total 1,851,778 1,648,245
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 63,019,056
Gross Unrealized Appreciation 31,578,975
Gross Unrealized Depreciation (1,499,427)
Net Unrealized Appreciation (Depreciation) 30,079,548
47
Target Retirement 2040 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 261,232 274,531
Issued in Lieu of Cash Distributions 46,328 48,264
Redeemed (217,148) (217,354)
Net Increase (Decrease) in Shares Outstanding 90,412 105,441
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 742,525 NA2 NA2 31 37 36,670 4 590,047
Vanguard Total Bond Market II Index Fund 11,174,009 3,054,841 271,618 (9,088) 947,576 463,461 - 14,895,720
Vanguard Total International Bond II Index Fund 4,726,925 1,501,351 71,858 1,776 284,383 251,524 - 6,442,577
Vanguard Total International Stock Index Fund 21,635,460 1,939,514 317,633 88,026 4,717,864 741,508 - 28,063,231
Vanguard Total Stock Market Index Fund 33,874,355 584,982 2,327,601 522,438 10,452,855 573,971 - 43,107,029
Total 72,153,274 7,080,688 2,988,710 603,183 16,402,715 2,067,134 4 93,098,604
1 Includes $1,033,610,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
48
Report of Independent Registered
Public Accounting Firm
To the Board of Trustees of Vanguard Chester Funds and Shareholders of Vanguard Target Retirement Income Fund, Vanguard Target Retirement 2020 Fund, Vanguard Target Retirement 2025 Fund, Vanguard Target Retirement 2030 Fund, Vanguard Target Retirement 2035 Fund and Vanguard Target Retirement 2040 Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Vanguard Target Retirement Income Fund, Vanguard Target Retirement 2020 Fund, Vanguard Target Retirement 2025 Fund, Vanguard Target Retirement 2030 Fund, Vanguard Target Retirement 2035 Fund and Vanguard Target Retirement 2040 Fund (six of the funds constituting Vanguard Chester Funds, hereafter collectively referred to as the "Funds") as of September 30, 2024, the related statements of operations for the year ended September 30, 2024, the statements of changes in net assets for each of the two years in the period ended September 30, 2024, including the related notes, and the financial highlights for each of the five years in the period ended September 30, 2024 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of September 30, 2024, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended September 30, 2024 and each of the financial highlights for each of the five years in the period ended September 30, 2024 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds' financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of September 30, 2024 by correspondence with the transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
‎ /s/PricewaterhouseCoopers LLP‎
Philadelphia, Pennsylvania
November 20, 2024
We have served as the auditor of one or more investment companies in The Vanguard Group of Funds since 1975.
49
Tax information (unaudited)
The following percentages, or if subsequently determined to be different, the maximum percentages allowable by law, of ordinary income (dividend income plus short-term gains, if any) for the fiscal year qualified for the dividends-received deduction for corporate shareholders.
Fund Percentage
Target Retirement Income Fund 6.8%
Target Retirement 2020 Fund 9.2
Target Retirement 2025 Fund 13.3
Target Retirement 2030 Fund 16.9
Target Retirement 2035 Fund 20.5
Target Retirement 2040 Fund 23.8
The following amounts, or if subsequently determined to be different, the maximum amounts allowable by law, are hereby designated as qualified dividend income for purposes of the maximum rate under section 1(h)(11) for calendar year 2023. Shareholders will be notified in January 2025 via IRS Form 1099 of the amounts for use in preparing their 2024 income tax return.
Fund ($000)
Target Retirement Income Fund 184,168
Target Retirement 2020 Fund 274,175
Target Retirement 2025 Fund 688,051
Target Retirement 2030 Fund 899,997
Target Retirement 2035 Fund 1,010,704
Target Retirement 2040 Fund 975,530
The following amounts for the fiscal year, or if subsequently determined to be different, the maximum amounts allowable by law, are hereby designated as interest earned from obligations of the U.S. government which is generally exempt from state income tax.
Fund ($000)
Target Retirement Income Fund 368,789
Target Retirement 2020 Fund 323,028
Target Retirement 2025 Fund 453,896
Target Retirement 2030 Fund 357,105
Target Retirement 2035 Fund 300,146
Target Retirement 2040 Fund 204,156
For nonresident alien shareholders, 100% of short-term capital gain dividends distributed by the Target Retirement Income Fund, Target Retirement 2020 Fund, Target Retirement 2025 Fund, Target Retirement 2030 Fund and Target Retirement 2040 Fund for the fiscal year are qualified short-term capital gains.
The following amounts were distributed as capital gain dividends (20% rate gain distributions) to shareholders during the fiscal year.
Fund ($000)
Target Retirement Income Fund 405,218
Target Retirement 2020 Fund 1,330,748
Target Retirement 2025 Fund 1,055,027
Target Retirement 2030 Fund 14,998
Target Retirement 2035 Fund 7,299
Target Retirement 2040 Fund 1,907
50
The following percentages, or if subsequently determined to be different, the maximum percentages allowable by law, are hereby designated as ordinary income dividends eligible to be treated as interest income for purposes of section 163(j) and the regulations thereunder for the fiscal year.
Fund Percentage
Target Retirement Income Fund 68.7%
Target Retirement 2020 Fund 73.5
Target Retirement 2025 Fund 64.1
Target Retirement 2030 Fund 58.8
Target Retirement 2035 Fund 50.0
Target Retirement 2040 Fund 39.5
The following amounts, or if subsequently determined to be different, the maximum amounts allowable by law, are hereby designated to shareholders as foreign source income and foreign taxes paid. Form 1099-DIV reports calendar-year amounts that can be included on the income tax return of shareholders.
Fund Foreign Source Income
($000) 		Foreign Taxes Paid
($000)
Target Retirement Income Fund 237,369 9,382
Target Retirement 2020 Fund 282,094 12,796
Target Retirement 2025 Fund 647,405 33,623
Target Retirement 2030 Fund 836,171 46,271
Target Retirement 2035 Fund 891,775 52,401
Target Retirement 2040 Fund 820,603 50,836
Q3080 112024
51
Financial Statements
For the year ended September 30, 2024
Vanguard Target Retirement Funds
Vanguard Target Retirement 2045 Fund
Vanguard Target Retirement 2050 Fund
Vanguard Target Retirement 2055 Fund
Vanguard Target Retirement 2060 Fund
Vanguard Target Retirement 2065 Fund
Vanguard Target Retirement 2070 Fund
Contents
Target Retirement 2045 Fund
1
Target Retirement 2050 Fund
9
Target Retirement 2055 Fund
17
Target Retirement 2060 Fund
25
Target Retirement 2065 Fund
33
Target Retirement 2070 Fund
41
Report of Independent Registered

Public Accounting Firm
49
Tax information
50
Target Retirement 2045 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.2%)
U.S. Stock Fund (50.3%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 177,068,994 45,795,354
International Stock Fund (33.2%)
Vanguard Total International Stock Index Fund Investor Shares 1,452,052,346 30,217,209
U.S. Bond Fund (10.9%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 1,017,713,248 9,922,704
International Bond Fund (4.8%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 161,265,290 4,363,839
Total Investment Companies (Cost $58,649,857) 90,299,106
Temporary Cash Investments (0.8%)
Money Market Fund (0.8%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $689,156) 6,893,611 689,361
Total Investments (100.0%) (Cost $59,339,013) 90,988,467
Other Assets and Liabilities-Net (0.0%) 24,650
Net Assets (100%) 91,013,117
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 3,065 350,272 409
E-mini S&P 500 Index December 2024 1,236 359,321 7,639
8,048
See accompanying Notes, which are an integral part of the Financial Statements.
1
Target Retirement 2045 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $59,339,013) 90,988,467
Cash Collateral Pledged-Futures Contracts 24,180
Receivables for Investment Securities Sold 42,697
Receivables for Accrued Income 40,614
Receivables for Capital Shares Issued 59,072
Variation Margin Receivable-Futures Contracts 33
Total Assets 91,155,063
Liabilities
Payables for Investment Securities Purchased 40,598
Payables for Capital Shares Redeemed 101,348
Total Liabilities 141,946
Net Assets 91,013,117

At September 30, 2024, net assets consisted of:
Paid-in Capital 58,220,707
Total Distributable Earnings (Loss) 32,792,410
Net Assets 91,013,117
Net Assets
Applicable to 2,952,972,083 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		91,013,117
Net Asset Value Per Share $30.82
See accompanying Notes, which are an integral part of the Financial Statements.
2
Target Retirement 2045 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 1,898,858
Net Investment Income-Note B 1,898,858
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 5
Affiliated Funds Sold1 644,995
Futures Contracts 69,844
Realized Net Gain (Loss) 714,844
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 16,797,361
Futures Contracts 34,427
Change in Unrealized Appreciation (Depreciation) 16,831,788
Net Increase (Decrease) in Net Assets Resulting from Operations 19,445,490
1 Includes $606,774,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
3
Target Retirement 2045 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 1,898,858 1,474,423
Realized Net Gain (Loss) 714,844 898,295
Change in Unrealized Appreciation (Depreciation) 16,831,788 7,499,425
Net Increase (Decrease) in Net Assets Resulting from Operations 19,445,490 9,872,143
Distributions
Total Distributions (1,701,640) (1,622,229)
Capital Share Transactions
Issued 10,856,682 9,893,868
Issued in Lieu of Cash Distributions 1,674,884 1,597,470
Redeemed (8,043,403) (6,881,466)
Net Increase (Decrease) from Capital Share Transactions 4,488,163 4,609,872
Total Increase (Decrease) 22,232,013 12,859,786
Net Assets
Beginning of Period 68,781,104 55,921,318
End of Period 91,013,117 68,781,104
See accompanying Notes, which are an integral part of the Financial Statements.
4
Target Retirement 2045 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $24.66 $21.54 $31.04 $25.22 $23.38
Investment Operations
Net Investment Income1 .657 .548 .536 .495 .492
Capital Gain Distributions Received1 .0002 .0002 .007 .020 -
Net Realized and Unrealized Gain (Loss) on Investments 6.111 3.200 (5.672) 5.840 1.900
Total from Investment Operations 6.768 3.748 (5.129) 6.355 2.392
Distributions
Dividends from Net Investment Income (.608) (.486) (.629) (.452) (.552)
Distributions from Realized Capital Gains - (.142) (3.742) (.083) -
Total Distributions (.608) (.628) (4.371) (.535) (.552)
Net Asset Value, End of Period $30.82 $24.66 $21.54 $31.04 $25.22
Total Return3 27.82% 17.67% -19.93% 25.42% 10.27%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $91,013 $68,781 $55,921 $28,918 $30,205
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.15% 0.15%
Ratio of Net Investment Income to Average Net Assets 2.37% 2.25% 2.09% 1.68% 2.08%
Portfolio Turnover Rate 1%5 1%5 5%5 4% 9%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2045 Fund on February 11, 2022, the AFFE was 0.15% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
5
Target Retirement 2045 Fund
Notes to Financial Statements
Vanguard Target Retirement 2045 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. The fund invests a substantial amount of its assets in Vanguard Total Stock Market Index Fund.
Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
6
Target Retirement 2045 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 629,977
Total Distributable Earnings (Loss) (629,977)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 1,183,810
Undistributed Long-Term Gains 47,422
Net Unrealized Gains (Losses) 31,561,178
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 32,792,410
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 1,701,640 1,254,390
Long-Term Capital Gains - 367,839
Total 1,701,640 1,622,229
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 59,427,289
Gross Unrealized Appreciation 32,447,235
Gross Unrealized Depreciation (886,057)
Net Unrealized Appreciation (Depreciation) 31,561,178
7
Target Retirement 2045 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 393,465 407,526
Issued in Lieu of Cash Distributions 62,706 70,747
Redeemed (291,976) (285,799)
Net Increase (Decrease) in Shares Outstanding 164,195 192,474
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 837,984 NA2 NA2 32 50 41,097 5 689,361
Vanguard Total Bond Market II Index Fund 7,074,053 2,391,159 149,969 4,231 603,230 301,294 - 9,922,704
Vanguard Total International Bond II Index Fund 2,871,702 1,361,969 56,593 1,572 185,189 163,332 - 4,363,839
Vanguard Total International Stock Index Fund 22,753,830 2,772,568 405,663 102,359 4,994,115 785,274 - 30,217,209
Vanguard Total Stock Market Index Fund 35,242,139 629,174 1,627,537 536,801 11,014,777 607,861 - 45,795,354
Total 68,779,708 7,154,870 2,239,762 644,995 16,797,361 1,898,858 5 90,988,467
1 Includes $1,202,800,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
8
Target Retirement 2050 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.3%)
U.S. Stock Fund (53.5%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 160,173,433 41,425,655
International Stock Fund (36.2%)
Vanguard Total International Stock Index Fund Investor Shares 1,346,073,947 28,011,799
U.S. Bond Fund (6.6%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 524,775,121 5,116,557
International Bond Fund (3.0%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 85,341,389 2,309,338
Total Investment Companies (Cost $51,720,266) 76,863,349
Temporary Cash Investments (0.7%)
Money Market Fund (0.7%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $573,283) 5,734,628 573,462
Total Investments (100.0%) (Cost $52,293,549) 77,436,811
Other Assets and Liabilities-Net (0.0%) 4,174
Net Assets (100%) 77,440,985
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 2,523 288,332 335
E-mini S&P 500 Index December 2024 1,031 299,724 6,372
6,707
See accompanying Notes, which are an integral part of the Financial Statements.
9
Target Retirement 2050 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $52,293,549) 77,436,811
Cash Collateral Pledged-Futures Contracts 20,103
Receivables for Accrued Income 21,849
Receivables for Capital Shares Issued 60,652
Variation Margin Receivable-Futures Contracts 42
Total Assets 77,539,457
Liabilities
Payables for Investment Securities Purchased 47,561
Payables for Capital Shares Redeemed 50,911
Total Liabilities 98,472
Net Assets 77,440,985

At September 30, 2024, net assets consisted of:
Paid-in Capital 51,451,228
Total Distributable Earnings (Loss) 25,989,757
Net Assets 77,440,985
Net Assets
Applicable to 1,497,621,450 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		77,440,985
Net Asset Value Per Share $51.71
See accompanying Notes, which are an integral part of the Financial Statements.
10
Target Retirement 2050 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 1,528,517
Net Investment Income-Note B 1,528,517
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 3
Affiliated Funds Sold1 484,494
Futures Contracts 50,913
Realized Net Gain (Loss) 535,410
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 14,749,014
Futures Contracts 27,232
Change in Unrealized Appreciation (Depreciation) 14,776,246
Net Increase (Decrease) in Net Assets Resulting from Operations 16,840,173
1 Includes $494,587,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
11
Target Retirement 2050 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 1,528,517 1,192,157
Realized Net Gain (Loss) 535,410 847,632
Change in Unrealized Appreciation (Depreciation) 14,776,246 6,221,469
Net Increase (Decrease) in Net Assets Resulting from Operations 16,840,173 8,261,258
Distributions
Total Distributions (1,372,680) (1,134,127)
Capital Share Transactions
Issued 10,844,484 9,932,027
Issued in Lieu of Cash Distributions 1,350,227 1,115,771
Redeemed (6,858,135) (6,274,244)
Net Increase (Decrease) from Capital Share Transactions 5,336,576 4,773,554
Total Increase (Decrease) 20,804,069 11,900,685
Net Assets
Beginning of Period 56,636,916 44,736,231
End of Period 77,440,985 56,636,916
See accompanying Notes, which are an integral part of the Financial Statements.
12
Target Retirement 2050 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $41.00 $35.44 $50.09 $40.60 $37.63
Investment Operations
Net Investment Income1 1.056 .904 .884 .798 .793
Capital Gain Distributions Received1 .0002 .0002 .009 .031 -
Net Realized and Unrealized Gain (Loss) on Investments 10.638 5.557 (9.524) 9.498 3.053
Total from Investment Operations 11.694 6.461 (8.631) 10.327 3.846
Distributions
Dividends from Net Investment Income (.984) (.805) (1.026) (.741) (.876)
Distributions from Realized Capital Gains - (.096) (4.993) (.096) -
Total Distributions (.984) (.901) (6.019) (.837) (.876)
Net Asset Value, End of Period $51.71 $41.00 $35.44 $50.09 $40.60
Total Return3 28.91% 18.48% -20.18% 25.65% 10.26%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $77,441 $56,637 $44,736 $21,583 $22,979
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.15% 0.15%
Ratio of Net Investment Income to Average Net Assets 2.28% 2.24% 2.10% 1.68% 2.08%
Portfolio Turnover Rate 1%5 2%5 4%5 4% 9%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2050 Fund on February 11, 2022, the AFFE was 0.15% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
13
Target Retirement 2050 Fund
Notes to Financial Statements
Vanguard Target Retirement 2050 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. The fund invests a substantial amount of its assets in Vanguard Total Stock Market Index Fund.
Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
14
Target Retirement 2050 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 509,579
Total Distributable Earnings (Loss) (509,579)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 955,617
Undistributed Long-Term Gains 23,982
Net Unrealized Gains (Losses) 25,010,158
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 25,989,757
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 1,372,680 1,012,798
Long-Term Capital Gains - 121,329
Total 1,372,680 1,134,127
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 52,426,653
Gross Unrealized Appreciation 25,584,235
Gross Unrealized Depreciation (574,077)
Net Unrealized Appreciation (Depreciation) 25,010,158
15
Target Retirement 2050 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 235,290 246,763
Issued in Lieu of Cash Distributions 30,329 29,841
Redeemed (149,397) (157,371)
Net Increase (Decrease) in Shares Outstanding 116,222 119,233
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 595,128 NA2 NA2 20 49 29,111 3 573,462
Vanguard Total Bond Market II Index Fund 3,975,264 1,088,574 272,323 (8,122) 333,164 161,384 - 5,116,557
Vanguard Total International Bond II Index Fund 1,552,897 714,545 57,667 (3,239) 102,802 85,389 - 2,309,338
Vanguard Total International Stock Index Fund 20,316,546 3,537,733 465,466 88,252 4,534,734 714,912 - 28,011,799
Vanguard Total Stock Market Index Fund 30,192,144 1,712,246 664,583 407,583 9,778,265 537,721 - 41,425,655
Total 56,631,979 7,053,098 1,460,039 484,494 14,749,014 1,528,517 3 77,436,811
1 Includes $971,630,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
16
Target Retirement 2055 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.3%)
U.S. Stock Fund (53.5%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 107,648,394 27,841,105
International Stock Fund (36.1%)
Vanguard Total International Stock Index Fund Investor Shares 902,706,448 18,785,321
U.S. Bond Fund (6.7%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 356,569,947 3,476,557
International Bond Fund (3.0%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 57,560,798 1,557,595
Total Investment Companies (Cost $37,404,480) 51,660,578
Temporary Cash Investments (0.7%)
Money Market Fund (0.7%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $345,883) 3,459,960 345,996
Total Investments (100.0%) (Cost $37,750,363) 52,006,574
Other Assets and Liabilities-Net (0.0%) 9,178
Net Assets (100%) 52,015,752
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 1,385 158,280 184
E-mini S&P 500 Index December 2024 681 197,975 4,209
4,393
See accompanying Notes, which are an integral part of the Financial Statements.
17
Target Retirement 2055 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $37,750,363) 52,006,574
Cash Collateral Pledged-Futures Contracts 12,719
Receivables for Accrued Income 14,626
Receivables for Capital Shares Issued 52,585
Variation Margin Receivable-Futures Contracts 156
Total Assets 52,086,660
Liabilities
Payables for Investment Securities Purchased 25,329
Payables for Capital Shares Redeemed 45,579
Total Liabilities 70,908
Net Assets 52,015,752

At September 30, 2024, net assets consisted of:
Paid-in Capital 37,161,607
Total Distributable Earnings (Loss) 14,854,145
Net Assets 52,015,752
Net Assets
Applicable to 901,400,574 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		52,015,752
Net Asset Value Per Share $57.71
See accompanying Notes, which are an integral part of the Financial Statements.
18
Target Retirement 2055 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 1,012,092
Net Investment Income-Note B 1,012,092
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 2
Affiliated Funds Sold1 359,215
Futures Contracts 33,527
Realized Net Gain (Loss) 392,744
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 9,716,990
Futures Contracts 17,117
Change in Unrealized Appreciation (Depreciation) 9,734,107
Net Increase (Decrease) in Net Assets Resulting from Operations 11,138,943
1 Includes $362,452,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
19
Target Retirement 2055 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 1,012,092 757,392
Realized Net Gain (Loss) 392,744 502,355
Change in Unrealized Appreciation (Depreciation) 9,734,107 3,870,705
Net Increase (Decrease) in Net Assets Resulting from Operations 11,138,943 5,130,452
Distributions
Total Distributions (888,536) (648,927)
Capital Share Transactions
Issued 8,991,675 8,314,898
Issued in Lieu of Cash Distributions 873,723 638,183
Redeemed (4,864,879) (4,239,814)
Net Increase (Decrease) from Capital Share Transactions 5,000,519 4,713,267
Total Increase (Decrease) 15,250,926 9,194,792
Net Assets
Beginning of Period 36,764,826 27,570,034
End of Period 52,015,752 36,764,826
See accompanying Notes, which are an integral part of the Financial Statements.
20
Target Retirement 2055 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $45.74 $39.46 $54.38 $44.08 $40.84
Investment Operations
Net Investment Income1 1.179 1.011 .981 .868 .862
Capital Gain Distributions Received1 .0002 .0002 .010 .034 -
Net Realized and Unrealized Gain (Loss) on Investments 11.874 6.192 (10.672) 10.295 3.307
Total from Investment Operations 13.053 7.203 (9.681) 11.197 4.169
Distributions
Dividends from Net Investment Income (1.083) (.885) (1.099) (.791) (.929)
Distributions from Realized Capital Gains - (.038) (4.140) (.106) -
Total Distributions (1.083) (.923) (5.239) (.897) (.929)
Net Asset Value, End of Period $57.71 $45.74 $39.46 $54.38 $44.08
Total Return3 28.92% 18.48% -20.17% 25.61% 10.25%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $52,016 $36,765 $27,570 $12,516 $12,901
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.15% 0.15%
Ratio of Net Investment Income to Average Net Assets 2.28% 2.25% 2.10% 1.68% 2.09%
Portfolio Turnover Rate 1%5 1%5 4%5 6% 8%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2055 Fund on February 11, 2022, the AFFE was 0.15% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
21
Target Retirement 2055 Fund
Notes to Financial Statements
Vanguard Target Retirement 2055 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. The fund invests a substantial amount of its assets in Vanguard Total Stock Market Index Fund.
Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
22
Target Retirement 2055 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 375,045
Total Distributable Earnings (Loss) (375,045)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 636,367
Undistributed Long-Term Gains 34,939
Net Unrealized Gains (Losses) 14,182,839
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 14,854,145
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 888,536 622,443
Long-Term Capital Gains - 26,484
Total 888,536 648,927
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 37,823,735
Gross Unrealized Appreciation 14,547,895
Gross Unrealized Depreciation (365,056)
Net Unrealized Appreciation (Depreciation) 14,182,839
23
Target Retirement 2055 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 174,790 185,243
Issued in Lieu of Cash Distributions 17,587 15,300
Redeemed (94,819) (95,370)
Net Increase (Decrease) in Shares Outstanding 97,558 105,173
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 366,319 NA2 NA2 17 25 17,421 2 345,996
Vanguard Total Bond Market II Index Fund 2,582,067 851,270 174,087 1,253 216,054 108,114 - 3,476,557
Vanguard Total International Bond II Index Fund 1,002,290 532,195 43,229 (1,640) 67,979 56,551 - 1,557,595
Vanguard Total International Stock Index Fund 13,247,927 2,888,028 415,664 68,874 2,996,156 473,424 - 18,785,321
Vanguard Total Stock Market Index Fund 19,565,411 2,069,520 521,313 290,711 6,436,776 356,582 - 27,841,105
Total 36,764,014 6,341,013 1,154,293 359,215 9,716,990 1,012,092 2 52,006,574
1 Includes $837,070,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
24
Target Retirement 2060 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.2%)
U.S. Stock Fund (53.4%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 61,107,311 15,804,184
International Stock Fund (36.2%)
Vanguard Total International Stock Index Fund Investor Shares 514,036,532 10,697,100
U.S. Bond Fund (6.6%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 201,568,218 1,965,290
International Bond Fund (3.0%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 32,723,667 885,502
Total Investment Companies (Cost $22,204,934) 29,352,076
Temporary Cash Investments (0.8%)
Money Market Fund (0.8%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $226,330) 2,263,985 226,399
Total Investments (100.0%) (Cost $22,431,264) 29,578,475
Other Assets and Liabilities-Net (0.0%) (2,502)
Net Assets (100%) 29,575,973
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 885 101,139 117
E-mini S&P 500 Index December 2024 458 133,146 2,831
2,948
See accompanying Notes, which are an integral part of the Financial Statements.
25
Target Retirement 2060 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $22,431,264) 29,578,475
Cash Collateral Pledged-Futures Contracts 8,465
Receivables for Accrued Income 8,395
Receivables for Capital Shares Issued 34,860
Variation Margin Receivable-Futures Contracts 126
Total Assets 29,630,321
Liabilities
Payables for Investment Securities Purchased 28,605
Payables for Capital Shares Redeemed 25,743
Total Liabilities 54,348
Net Assets 29,575,973

At September 30, 2024, net assets consisted of:
Paid-in Capital 22,083,737
Total Distributable Earnings (Loss) 7,492,236
Net Assets 29,575,973
Net Assets
Applicable to 556,250,369 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		29,575,973
Net Asset Value Per Share $53.17
See accompanying Notes, which are an integral part of the Financial Statements.
26
Target Retirement 2060 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 562,108
Net Investment Income-Note B 562,108
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds 1
Affiliated Funds Sold1 157,516
Futures Contracts 22,761
Realized Net Gain (Loss) 180,278
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 5,416,518
Futures Contracts 9,864
Change in Unrealized Appreciation (Depreciation) 5,426,382
Net Increase (Decrease) in Net Assets Resulting from Operations 6,168,768
1 Includes $162,229,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
27
Target Retirement 2060 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 562,108 393,439
Realized Net Gain (Loss) 180,278 188,523
Change in Unrealized Appreciation (Depreciation) 5,426,382 1,995,500
Net Increase (Decrease) in Net Assets Resulting from Operations 6,168,768 2,577,462
Distributions
Total Distributions (474,148) (313,855)
Capital Share Transactions
Issued 6,613,234 5,725,418
Issued in Lieu of Cash Distributions 464,827 307,570
Redeemed (2,893,982) (2,278,877)
Net Increase (Decrease) from Capital Share Transactions 4,184,079 3,754,111
Total Increase (Decrease) 9,878,699 6,017,718
Net Assets
Beginning of Period 19,697,274 13,679,556
End of Period 29,575,973 19,697,274
See accompanying Notes, which are an integral part of the Financial Statements.
28
Target Retirement 2060 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $42.12 $36.30 $48.04 $38.95 $36.07
Investment Operations
Net Investment Income1 1.090 .936 .903 .773 .762
Capital Gain Distributions Received1 .0002 .0002 .009 .029 -
Net Realized and Unrealized Gain (Loss) on Investments 10.938 5.697 (9.930) 9.085 2.922
Total from Investment Operations 12.028 6.633 (9.018) 9.887 3.684
Distributions
Dividends from Net Investment Income (.978) (.813) (.936) (.684) (.804)
Distributions from Realized Capital Gains - - (1.786) (.113) -
Total Distributions (.978) (.813) (2.722) (.797) (.804)
Net Asset Value, End of Period $53.17 $42.12 $36.30 $48.04 $38.95
Total Return3 28.93% 18.49% -20.16% 25.60% 10.25%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $29,576 $19,697 $13,680 $6,658 $6,027
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.15% 0.15%
Ratio of Net Investment Income to Average Net Assets 2.29% 2.26% 2.10% 1.69% 2.09%
Portfolio Turnover Rate 1%5 1%5 3%5 8% 6%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2060 Fund on February 11, 2022, the AFFE was 0.15% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
29
Target Retirement 2060 Fund
Notes to Financial Statements
Vanguard Target Retirement 2060 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. The fund invests a substantial amount of its assets in Vanguard Total Stock Market Index Fund .
Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
30
Target Retirement 2060 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 170,397
Total Distributable Earnings (Loss) (170,397)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 358,943
Undistributed Long-Term Gains 14,621
Net Unrealized Gains (Losses) 7,118,672
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 7,492,236
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 474,148 313,855
Long-Term Capital Gains - -
Total 474,148 313,855
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 22,459,803
Gross Unrealized Appreciation 7,295,852
Gross Unrealized Depreciation (177,180)
Net Unrealized Appreciation (Depreciation) 7,118,672
31
Target Retirement 2060 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 139,473 138,419
Issued in Lieu of Cash Distributions 10,156 8,008
Redeemed (61,037) (55,574)
Net Increase (Decrease) in Shares Outstanding 88,592 90,853
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 201,765 NA2 NA2 6 23 11,144 1 226,399
Vanguard Total Bond Market II Index Fund 1,371,534 578,395 105,248 688 119,921 59,464 - 1,965,290
Vanguard Total International Bond II Index Fund 534,345 333,269 19,131 (318) 37,337 31,280 - 885,502
Vanguard Total International Stock Index Fund 7,092,119 2,101,058 200,345 28,102 1,676,166 262,292 - 10,697,100
Vanguard Total Stock Market Index Fund 10,498,675 1,844,966 251,566 129,038 3,583,071 197,928 - 15,804,184
Total 19,698,438 4,857,688 576,290 157,516 5,416,518 562,108 1 29,578,475
1 Includes $401,820,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
32
Target Retirement 2065 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.1%)
U.S. Stock Fund (53.2%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 18,207,156 4,708,917
International Stock Fund (36.3%)
Vanguard Total International Stock Index Fund Investor Shares 154,094,184 3,206,700
U.S. Bond Fund (6.6%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 60,143,015 586,395
International Bond Fund (3.0%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 9,774,951 264,510
Total Investment Companies (Cost $7,115,518) 8,766,522
Temporary Cash Investments (0.9%)
Money Market Fund (0.9%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $75,769) 757,885 75,789
Total Investments (100.0%) (Cost $7,191,287) 8,842,311
Other Assets and Liabilities-Net (0.0%) 646
Net Assets (100%) 8,842,957
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
($000)
Expiration Number of
Long (Short)
 Contracts 		Notional
Amount 		Value and
Unrealized
Appreciation
(Depreciation)
Long Futures Contracts
10-Year U.S. Treasury Note December 2024 270 30,856 36
E-mini S&P 500 Index December 2024 153 44,479 946
982
See accompanying Notes, which are an integral part of the Financial Statements.
33
Target Retirement 2065 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $7,191,287) 8,842,311
Cash Collateral Pledged-Futures Contracts 2,780
Receivables for Accrued Income 2,521
Receivables for Capital Shares Issued 16,917
Variation Margin Receivable-Futures Contracts 54
Total Assets 8,864,583
Liabilities
Payables for Investment Securities Purchased 12,742
Payables for Capital Shares Redeemed 8,884
Total Liabilities 21,626
Net Assets 8,842,957

At September 30, 2024, net assets consisted of:
Paid-in Capital 7,095,065
Total Distributable Earnings (Loss) 1,747,892
Net Assets 8,842,957
Net Assets
Applicable to 253,660,328 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		8,842,957
Net Asset Value Per Share $34.86
See accompanying Notes, which are an integral part of the Financial Statements.
34
Target Retirement 2065 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 159,046
Net Investment Income-Note B 159,046
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds -
Affiliated Funds Sold1 39,508
Futures Contracts 7,819
Realized Net Gain (Loss) 47,327
Change in Unrealized Appreciation (Depreciation)
Affiliated Funds 1,525,852
Futures Contracts 2,953
Change in Unrealized Appreciation (Depreciation) 1,528,805
Net Increase (Decrease) in Net Assets Resulting from Operations 1,735,178
1 Includes $38,893,000 of net gain (loss) resulting from in-kind redemptions.
See accompanying Notes, which are an integral part of the Financial Statements.
35
Target Retirement 2065 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 159,046 97,583
Realized Net Gain (Loss) 47,327 21,392
Change in Unrealized Appreciation (Depreciation) 1,528,805 483,869
Net Increase (Decrease) in Net Assets Resulting from Operations 1,735,178 602,844
Distributions
Total Distributions (123,878) (70,815)
Capital Share Transactions
Issued 2,941,658 2,130,702
Issued in Lieu of Cash Distributions 120,545 68,514
Redeemed (1,021,065) (673,806)
Net Increase (Decrease) from Capital Share Transactions 2,041,138 1,525,410
Total Increase (Decrease) 3,652,438 2,057,439
Net Assets
Beginning of Period 5,190,519 3,133,080
End of Period 8,842,957 5,190,519
See accompanying Notes, which are an integral part of the Financial Statements.
36
Target Retirement 2065 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $27.59 $23.76 $30.31 $24.52 $22.69
Investment Operations
Net Investment Income1 .718 .617 .594 .500 .485
Capital Gain Distributions Received1 .0002 .0002 .005 .017 -
Net Realized and Unrealized Gain (Loss) on Investments 7.169 3.723 (6.543) 5.712 1.802
Total from Investment Operations 7.887 4.340 (5.944) 6.229 2.287
Distributions
Dividends from Net Investment Income (.617) (.510) (.535) (.400) (.457)
Distributions from Realized Capital Gains - - (.071) (.039) -
Total Distributions (.617) (.510) (.606) (.439) (.457)
Net Asset Value, End of Period $34.86 $27.59 $23.76 $30.31 $24.52
Total Return3 28.95% 18.47% -20.10% 25.59% 10.11%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $8,843 $5,191 $3,133 $1,430 $864
Ratio of Total Expenses to Average Net Assets - - - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.09%4 0.15% 0.15%
Ratio of Net Investment Income to Average Net Assets 2.29% 2.27% 2.13% 1.72% 2.11%
Portfolio Turnover Rate 0%5 1%5 2%5 5% 6%
1 Calculated based on average shares outstanding.
2 Distribution was less than $.001 per share.
3 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
4 The Acquired Fund Fees and Expenses (AFFE) of 0.09% reflects the blended amount of expenses for the year ended September 30, 2022. Before the acquisition of Vanguard Institutional Target Retirement 2065 Fund on February 11, 2022, the AFFE was 0.15% on an annualized basis. Following the acquisition, the AFFE was 0.08% on an annualized basis.
5 Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund's capital shares.
See accompanying Notes, which are an integral part of the Financial Statements.
37
Target Retirement 2065 Fund
Notes to Financial Statements
Vanguard Target Retirement 2065 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. The fund invests a substantial amount of its assets in Vanguard Total Stock Market Index Fund.
Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented 1% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
38
Target Retirement 2065 Fund
C. The fund's SEC registrant (the Vanguard Chester Funds (the "Trust")), certain officers and trustees of the Trust, and The Vanguard Group Inc. (collectively, the "Defendants") were named in putative class action lawsuits filed in 2022 by certain investors (the "Plaintiffs") in the U.S. District Court for the Eastern District of Pennsylvania; these class action lawsuits were later consolidated into one action. The Plaintiffs assert claims related to their allegations that the Defendants improperly decided to lower minimum investment limits in 2020 for the Trust's Institutional Target Retirement funds for certain smaller retirement plan participants, which purportedly harmed certain investors in taxable accounts. Subject to court approval, the parties have reached an agreement in principle to settle the lawsuit. The settlement is not anticipated to have a financial impact on the Trust.
D. Various inputs may be used to determine the value of the fund's investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments and derivatives valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments and derivatives was determined based on Level 1 inputs.
E. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for in-kind redemptions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 41,501
Total Distributable Earnings (Loss) (41,501)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales; and the recognition of unrealized gains or losses from certain derivative contracts. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 104,073
Undistributed Long-Term Gains 2,038
Net Unrealized Gains (Losses) 1,641,781
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 1,747,892
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 123,878 70,815
Long-Term Capital Gains - -
Total 123,878 70,815
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 7,200,530
Gross Unrealized Appreciation 1,685,783
Gross Unrealized Depreciation (44,002)
Net Unrealized Appreciation (Depreciation) 1,641,781
39
Target Retirement 2065 Fund
F. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 94,300 78,495
Issued in Lieu of Cash Distributions 4,018 2,723
Redeemed (32,780) (24,968)
Net Increase (Decrease) in Shares Outstanding 65,538 56,250
G. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold1
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 61,345 NA2 NA2 2 8 3,721 - 75,789
Vanguard Total Bond Market II Index Fund 356,384 211,260 14,948 227 33,472 16,577 - 586,395
Vanguard Total International Bond II Index Fund 141,395 117,408 4,816 (47) 10,570 8,695 - 264,510
Vanguard Total International Stock Index Fund 1,864,657 911,008 52,225 8,787 474,473 73,966 - 3,206,700
Vanguard Total Stock Market Index Fund 2,763,712 979,540 72,203 30,539 1,007,329 56,087 - 4,708,917
Total 5,187,493 2,219,216 144,192 39,508 1,525,852 159,046 - 8,842,311
1 Includes $121,340,000 of portfolio securities delivered as a result of in-kind redemptions of the fund's capital shares.
2 Not applicable-purchases and sales are for temporary cash investment purposes.
H. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
I. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
40
Target Retirement 2070 Fund
Financial Statements
Schedule of Investments
As of September 30, 2024
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund's Form N-PORT reports are available on the SEC's website at www.sec.gov.
Shares Market
Value•
 ($000)
Investment Companies (99.9%)
U.S. Stock Fund (54.1%)
Vanguard Total Stock Market Index Fund Institutional Plus Shares 2,168,205 560,763
International Stock Fund (35.8%)
Vanguard Total International Stock Index Fund Investor Shares 17,854,504 371,552
U.S. Bond Fund (7.0%)
1 Vanguard Total Bond Market II Index Fund Investor Shares 7,406,082 72,209
International Bond Fund (3.0%)
1 Vanguard Total International Bond II Index Fund Institutional Shares 1,143,080 30,932
Total Investment Companies (Cost $890,247) 1,035,456
Temporary Cash Investments (0.2%)
Money Market Fund (0.2%)
1 Vanguard Market Liquidity Fund, 5.014% (Cost $1,679) 16,794 1,679
Total Investments (100.1%) (Cost $891,926) 1,037,135
Other Assets and Liabilities-Net (-0.1%) (1,037)
Net Assets (100%) 1,036,098
Cost is in $000.
• See Note A in Notes to Financial Statements.
1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.
See accompanying Notes, which are an integral part of the Financial Statements.
41
Target Retirement 2070 Fund
Statement of Assets and Liabilities
As of September 30, 2024
($000s, except shares, footnotes, and per-share amounts) Amount
Assets
Investments in Securities, at Value-Affiliated Funds (Cost $891,926) 1,037,135
Receivables for Accrued Income 268
Receivables for Capital Shares Issued 5,137
Total Assets 1,042,540
Liabilities
Payables for Investment Securities Purchased 2,905
Payables for Capital Shares Redeemed 3,537
Total Liabilities 6,442
Net Assets 1,036,098

At September 30, 2024, net assets consisted of:
Paid-in Capital 881,659
Total Distributable Earnings (Loss) 154,439
Net Assets 1,036,098
Net Assets
Applicable to 37,566,535 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		1,036,098
Net Asset Value Per Share $27.58
See accompanying Notes, which are an integral part of the Financial Statements.
42
Target Retirement 2070 Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Income Distributions Received from Affiliated Funds 14,595
Net Investment Income-Note B 14,595
Realized Net Gain (Loss)
Capital Gain Distributions Received from Affiliated Funds -
Affiliated Funds Sold (286)
Futures Contracts 38
Realized Net Gain (Loss) (248)
Change in Unrealized Appreciation (Depreciation) from Affiliated Funds 143,467
Net Increase (Decrease) in Net Assets Resulting from Operations 157,814
See accompanying Notes, which are an integral part of the Financial Statements.
43
Target Retirement 2070 Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 14,595 3,677
Realized Net Gain (Loss) (248) (30)
Change in Unrealized Appreciation (Depreciation) 143,467 4,653
Net Increase (Decrease) in Net Assets Resulting from Operations 157,814 8,300
Distributions
Total Distributions (7,044) (626)
Capital Share Transactions
Issued 730,478 317,437
Issued in Lieu of Cash Distributions 6,795 608
Redeemed (166,624) (42,943)
Net Increase (Decrease) from Capital Share Transactions 570,649 275,102
Total Increase (Decrease) 721,419 282,776
Net Assets
Beginning of Period 314,679 31,903
End of Period 1,036,098 314,679
See accompanying Notes, which are an integral part of the Financial Statements.
44
Target Retirement 2070 Fund
Financial Highlights
For a Share Outstanding
Throughout Each Period 		Year Ended September 30, June 28,
20221 to
September 30,
2022
2024 2023
Net Asset Value, Beginning of Period $21.72 $18.50 $20.00
Investment Operations
Net Investment Income2 .567 .523 .113
Capital Gain Distributions Received2 .0003 - -
Net Realized and Unrealized Gain (Loss) on Investments 5.666 2.879 (1.613)
Total from Investment Operations 6.233 3.402 (1.500)
Distributions
Dividends from Net Investment Income (.373) (.182) -
Distributions from Realized Capital Gains - - -
Total Distributions (.373) (.182) -
Net Asset Value, End of Period $27.58 $21.72 $18.50
Total Return4 28.98% 18.49% -7.50%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $1,036 $315 $32
Ratio of Total Expenses to Average Net Assets - - -
Acquired Fund Fees and Expenses 0.08% 0.08% 0.08%5
Ratio of Net Investment Income to Average Net Assets 2.27% 2.40% 2.15%5
Portfolio Turnover Rate 1% 2% 44%
1 Inception.
2 Calculated based on average shares outstanding.
3 Distribution was less than $.001 per share.
4 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.
5 Annualized.
See accompanying Notes, which are an integral part of the Financial Statements.
45
Target Retirement 2070 Fund
Notes to Financial Statements
Vanguard Target Retirement 2070 Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund.
The fund follows a balanced investment strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S. and international stocks, and U.S. and international bonds. The fund invests a substantial amount of its assets in Vanguard Total Stock Market Index Fund.
Financial statements and other information about each underlying fund are available at www.vanguard.com.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date.
2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with the objectives of maintaining full exposure to the market and maintaining its target asset allocation. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of investments held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund's performance and requires daily settlement of variation margin representing changes in the market value of each contract. Any securities pledged as initial margin for open contracts are noted in the Schedule of Investments.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Assets and Liabilities. Fluctuations in the value of the contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized gains (losses) on futures contracts.
During the year ended September 30, 2024, the fund's average investments in long and short futures contracts represented less than 1% of net assets, based on the average of the notional amounts at each quarter-end during the period. The fund had no open futures contracts at September 30, 2024.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute virtually all of its taxable income. The fund's tax returns are open to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return. Management has analyzed the fund's tax positions taken for all open federal and state income tax years, and has concluded that no provision for income tax is required in the fund's financial statements.
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined on a tax basis at the fiscal year-end and may differ from net investment income and realized capital gains for financial reporting purposes.
5. Credit Facilities and Interfund Lending Program: The fund and certain other funds managed by The Vanguard Group ("Vanguard") participate in a $4.3 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement and an uncommitted credit facility provided by Vanguard. Both facilities may be renewed annually. Each fund is individually liable for its borrowings, if any, under the credit facilities. Borrowings may be utilized for temporary or emergency purposes and are subject to the fund's regulatory and contractual borrowing restrictions. With respect to the committed credit facility, the participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn committed amount of the facility, which are allocated to the funds based on a method approved by the fund's board of trustees and borne by the funds in which the fund invests (see Note B). Any borrowings under either facility bear interest at an agreed-upon spread plus the higher of the federal funds effective rate, the overnight bank funding rate, or the Daily Simple Secured Overnight Financing Rate inclusive of an additional agreed-upon spread. However, borrowings under the uncommitted credit facility may bear interest based upon an alternate rate agreed to by the fund and Vanguard.
In accordance with an exemptive order (the "Order") from the SEC, the fund may participate in a joint lending and borrowing program that allows registered open-end Vanguard funds to borrow money from and lend money to each other for temporary or emergency purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the fund's investment objective and investment policies. Interfund loans and borrowings normally extend overnight but can have a maximum duration of seven days. Loans may be called on one business day's notice. The interest rate to be charged is governed by the conditions of the Order and internal procedures adopted by the board of trustees. The board of trustees is responsible for overseeing the Interfund Lending Program.
For the year ended September 30, 2024, the fund did not utilize the credit facilities or the Interfund Lending Program.
6. Other: Income and capital gain distributions received are recorded on the ex-dividend date. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
B. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative, marketing, and distribution services at Vanguard's cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard to the fund and all other expenses incurred by the fund during the year ended September 30, 2024, were borne by the underlying Vanguard funds in which the fund invests. The fund's trustees and officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as directors and employees, respectively, of Vanguard.
46
Target Retirement 2070 Fund
C. Various inputs may be used to determine the value of the fund's investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1-Quoted prices in active markets for identical securities.
Level 2-Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3-Significant unobservable inputs (including the fund's own assumptions used to determine the fair value of investments). Any investments valued with significant unobservable inputs are noted on the Schedule of Investments.
At September 30, 2024, 100% of the market value of the fund's investments was determined based on Level 1 inputs.
D. Permanent differences between book-basis and tax-basis components of net assets are reclassified among capital accounts in the financial statements to reflect their tax character. These reclassifications have no effect on net assets or net asset value per share. As of period end, permanent differences primarily attributable to the accounting for distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 457
Total Distributable Earnings (Loss) (457)
Temporary differences between book-basis and tax-basis components of total distributable earnings (loss) arise when certain items of income, gain, or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. The differences are primarily related to the deferral of losses from wash sales. As of period end, the tax-basis components of total distributable earnings (loss) are detailed in the table as follows:
Amount
($000)
Undistributed Ordinary Income 10,290
Undistributed Long-Term Gains 14
Net Unrealized Gains (Losses) 144,135
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 154,439
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 7,044 626
Long-Term Capital Gains - -
Total 7,044 626
* Includes short-term capital gains, if any.
As of September 30, 2024, gross unrealized appreciation and depreciation for investments based on cost for U.S. federal income tax purposes were as follows:
Amount
($000)
Tax Cost 893,000
Gross Unrealized Appreciation 145,231
Gross Unrealized Depreciation (1,096)
Net Unrealized Appreciation (Depreciation) 144,135
47
Target Retirement 2070 Fund
E. Capital shares issued and redeemed were:
Year Ended September 30,
2024
Shares
(000) 		2023
Shares
(000)
Issued 29,511 14,713
Issued in Lieu of Cash Distributions 286 31
Redeemed (6,716) (1,983)
Net Increase (Decrease) in Shares Outstanding 23,081 12,761
F. Transactions during the period in affiliated underlying Vanguard funds were as follows:
Current Period Transactions
Sep. 30, 2023
Market Value
($000) 		Purchases
at Cost
($000) 		Proceeds
from
Securities
Sold
($000) 		Realized
Net Gain
(Loss)
($000) 		Change in
Unrealized
App. (Dep.)
($000) 		Income
($000) 		Capital Gain
Distributions
Received
($000) 		Sep. 30, 2024
Market Value
($000)
Vanguard Market Liquidity Fund 1,253 NA1 NA1 1 - 52 - 1,679
Vanguard Total Bond Market II Index Fund 22,081 47,552 697 8 3,265 1,628 - 72,209
Vanguard Total International Bond II Index Fund 9,434 20,737 239 5 995 771 - 30,932
Vanguard Total International Stock Index Fund 113,108 216,338 3,214 (72) 45,392 6,685 - 371,552
Vanguard Total Stock Market Index Fund 169,577 300,492 2,893 (228) 93,815 5,459 - 560,763
Total 315,453 585,119 7,043 (286) 143,467 14,595 - 1,037,135
1 Not applicable-purchases and sales are for temporary cash investment purposes.
G. Significant market disruptions, such as those caused by pandemics, natural or environmental ‎disasters, war, acts of terrorism, or other events, can adversely affect local and global ‎markets and normal market operations. Any such disruptions could have an adverse impact on the value of the fund's investments and fund performance.
To the extent the fund's investment portfolio reflects concentration in a particular market, industry, sector, country or asset class, the fund may be adversely affected by the performance of these concentrations and may be subject to increased price volatility and other risks.
The use of derivatives may expose the fund to various risks. Derivatives can be highly volatile, and any initial investment is generally small relative to the notional amount so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard securities. Leveraged derivatives positions can, therefore, increase volatility. Additional information regarding the fund's use of derivative(s) and the specific risks associated is described under significant accounting policies.
H. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
48
Report of Independent Registered
Public Accounting Firm
To the Board of Trustees of Vanguard Chester Funds and Shareholders of Vanguard Target Retirement 2045 Fund, Vanguard Target Retirement 2050 Fund, Vanguard Target Retirement 2055 Fund, Vanguard Target Retirement 2060 Fund, Vanguard Target Retirement 2065 Fund and Vanguard Target Retirement 2070 Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of each of the funds indicated in the table below (six of the funds constituting Vanguard Chester Funds, hereafter collectively referred to as the "Funds") as of September 30, 2024, the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated in the table below (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of September 30, 2024, the results of each of their operations, the changes in each of their net assets, and each of the financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.
Vanguard Target Retirement 2045 Fund (1)
Vanguard Target Retirement 2050 Fund (1)
Vanguard Target Retirement 2055 Fund (1)
Vanguard Target Retirement 2060 Fund (1)
Vanguard Target Retirement 2065 Fund (1)
Vanguard Target Retirement 2070 Fund (2)
(1) The related statement of operations for the year ended September 30,2024, the statement of changes in net assets for each of the two years in the period ended September 30, 2024 and the financial highlights for each of the five years in the period ended September 30, 2024.
(2) The related statement of operations for the year ended September 30, 2024, the statement of changes in net assets for each of the two years in the period ended September 30, 2024 and the financial highlights for each of the two years in the period ended September 30, 2024 and for the period June 28, 2022 (inception) through September 30, 2022.
Basis for Opinions
These financial statements are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds' financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of September 30, 2024 by correspondence with the transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 20, 2024
We have served as the auditor of one or more investment companies in The Vanguard Group of Funds since 1975.
49
Tax information (unaudited)
The following percentages, or if subsequently determined to be different, the maximum percentages allowable by law, of ordinary income (dividend income plus short-term gains, if any) for the fiscal year qualified for the dividends-received deduction for corporate shareholders.
Fund Percentage
Target Retirement 2045 Fund 27.5%
Target Retirement 2050 Fund 30.1
Target Retirement 2055 Fund 30.1
Target Retirement 2060 Fund 29.9
Target Retirement 2065 Fund 29.9
Target Retirement 2070 Fund 32.0
The following amounts, or if subsequently determined to be different, the maximum amounts allowable by law, are hereby designated as qualified dividend income for purposes of the maximum rate under section 1(h)(11) for calendar year 2023. Shareholders will be notified in January 2025 via IRS Form 1099 of the amounts for use in preparing their 2024 income tax return.
Fund ($000)
Target Retirement 2045 Fund 1,014,792
Target Retirement 2050 Fund 883,952
Target Retirement 2055 Fund 571,913
Target Retirement 2060 Fund 304,696
Target Retirement 2065 Fund 79,434
Target Retirement 2070 Fund 4,530
The following amounts for the fiscal year, or if subsequently determined to be different, the maximum amounts allowable by law, are hereby designated as interest earned from obligations of the U.S. government which is generally exempt from state income tax.
Fund ($000)
Target Retirement 2045 Fund 141,310
Target Retirement 2050 Fund 80,083
Target Retirement 2055 Fund 52,772
Target Retirement 2060 Fund 29,672
Target Retirement 2065 Fund 8,526
Target Retirement 2070 Fund 707
For nonresident alien shareholders, 100% of short-term capital gain dividends distributed by the Target Retirement 2055, Target Retirement 2060, Target Retirement 2065 and Target Retirement 2070 Fund for the fiscal year are qualified short-term capital gains.
The following amounts were distributed as capital gain dividends (20% rate gain distributions) to shareholders during the fiscal year.
Fund ($000)
Target Retirement 2045 Fund 572
Target Retirement 2050 Fund 234
Target Retirement 2055 Fund 424
Target Retirement 2060 Fund 209
Target Retirement 2065 Fund 33
Target Retirement 2070 Fund -
The following percentages, or if subsequently determined to be different, the maximum percentages allowable by law, are hereby designated as ordinary income dividends eligible to be treated as interest income for purposes of section 163(j) and the regulations thereunder for the fiscal year.
Fund Percentage
Target Retirement 2045 Fund 28.8%
Target Retirement 2050 Fund 19.4
Target Retirement 2055 Fund 19.8
Target Retirement 2060 Fund 20.7
Target Retirement 2065 Fund 22.5
Target Retirement 2070 Fund 32.7
50
The following amounts, or if subsequently determined to be different, the maximum amounts allowable by law, are hereby designated to shareholders as foreign source income and foreign taxes paid. Form 1099-DIV reports calendar-year amounts that can be included on the income tax return of shareholders.
Fund Foreign Source Income
($000) 		Foreign Taxes Paid
($000)
Target Retirement 2045 Fund 826,516 53,614
Target Retirement 2050 Fund 726,865 48,691
Target Retirement 2055 Fund 481,336 32,247
Target Retirement 2060 Fund 266,575 17,862
Target Retirement 2065 Fund 75,087 5,036
Target Retirement 2070 Fund 6,782 456
Q3080B 112024
51

Item 8: Changes in and Disagreements with Accountants for Open-End Management Investment Companies.

Not applicable.

Item 9: Proxy Disclosures for Open-End Management Investment Companies.

Not applicable.

Item 10: Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.

Not applicable. The Trustees' Fees and Expenses are borne by the underlying Vanguard funds in which the funds of the Registrant invest.

Item 11: Statement Regarding Basis for Approval of Investment Advisory Contracts.

Not applicable.

Item 12: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 13: Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 14: Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 15: Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 16: Controls and Procedures.

(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant's disclosure controls and procedures are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report.

(b) Internal Control Over Financial Reporting. In February 2024, a third-party service provider began performing security pricing services for the Registrant. There were no other changes in the Registrant's internal control over financial reporting or in other factors that could significantly affect this control during the period covered by this report, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 17: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 18: Recovery of Erroneously Awarded Compensation.

Not applicable.

Item 19: Exhibits.

(a)(1) Code of Ethics filed herewith.
(a)(2) Certifications filed herewith.
(a)(2) Certifications filed herewith.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VANGUARD CHESTER FUNDS
BY: /s/ SALIM RAMJI*
SALIM RAMJI
CHIEF EXECUTIVE OFFICER

Date: November 22, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

VANGUARD CHESTER FUNDS
BY: /s/ SALIM RAMJI*
SALIM RAMJI
CHIEF EXECUTIVE OFFICER
Date: November 22, 2024
VANGUARD CHESTER FUNDS
BY: /s/ CHRISTINE BUCHANAN*
CHRISTINE BUCHANAN
CHIEF FINANCIAL OFFICER

Date: November 22, 2024

* By: /s/ John E. Schadl

John E. Schadl, pursuant to a Power of Attorney filed on July 25, 2024 (see File Number 33-48863), Incorporated by Reference.