Vanguard Chester Funds

12/02/2024 | Press release | Distributed by Public on 12/02/2024 06:31

Annual Report by Investment Company Form N CSR

Consolidated ssr-output-EDGAR XBRL File

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

PRIMECAP Fund
Admiral™ Shares - VPMAX

   

PRIMECAP Fund
Investor Shares - VPMCX

   

Vanguard PRIMECAP Fund

Admiral™ Shares (VPMAX)

Annual Shareholder Report | September 30, 2024

This annual shareholder report contains important information about Vanguard PRIMECAP 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
Admiral Shares
$35
0.31%

How did the Fund perform during the reporting period?

  • For the 12 months ended September 30, 2024, the Fund underperformed its benchmark, the S&P 500 Index.

  • U.S. economic growth hovered around 3% on a year-over-year basis during the period, quelling recession fears. The Federal Reserve began cutting interest rates for the first time since early 2020, and the year-over-year rate of consumer price inflation eased to around 2.5%. Even with some negative monthly returns, U.S. stocks finished the period up sharply.

  • Small-, mid-, and large-capitalization stocks all posted positive returns for the 12-month period. Large-capitalization stocks held up better than mid- and small-caps, while growth stocks outperformed value.

  • Though the Fund recorded a strong gain in absolute terms, its shortfall relative to its benchmark reflected challenges with both security selection and sector allocation. Health care was the only sector in which the Fund outperformed the benchmark. Selection in information technology and industrials was one of the largest sources of underperformance.

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 $50,000

Admiral Shares
S&P 500 Index
Dow Jones U.S. Total Stock Market Float Adjusted Index
2014
$50,000
$50,000
$50,000
2014
$52,627
$52,466
$52,614
2015
$53,822
$52,965
$53,561
2015
$53,012
$53,112
$53,625
2015
$49,654
$49,693
$49,727
2015
$54,018
$53,192
$52,846
2016
$52,967
$53,909
$53,329
2016
$53,118
$55,233
$54,723
2016
$58,333
$57,361
$57,150
2016
$59,806
$59,554
$59,514
2017
$64,752
$63,167
$62,962
2017
$68,511
$65,117
$64,856
2017
$72,237
$68,035
$67,818
2017
$77,507
$72,556
$72,109
2018
$78,766
$72,005
$71,673
2018
$81,029
$74,478
$74,449
2018
$88,814
$80,220
$79,740
2018
$76,005
$69,375
$68,290
2019
$84,199
$78,843
$77,878
2019
$86,040
$82,236
$81,062
2019
$86,732
$83,633
$81,983
2019
$97,193
$91,218
$89,391
2020
$77,602
$73,341
$70,654
2020
$90,998
$88,408
$86,261
2020
$99,856
$96,302
$94,089
2020
$114,031
$108,001
$107,976
2021
$125,512
$114,670
$114,939
2021
$134,273
$124,473
$124,465
2021
$129,648
$125,198
$124,318
2021
$139,006
$139,004
$135,680
2022
$132,550
$132,611
$128,354
2022
$114,626
$111,260
$106,744
2022
$107,358
$105,827
$101,873
2022
$118,031
$113,829
$109,183
2023
$126,257
$122,363
$117,093
2023
$137,956
$133,060
$126,920
2023
$137,569
$128,704
$122,744
2023
$151,296
$143,752
$137,635
2024
$165,163
$158,926
$151,462
2024
$174,085
$165,734
$156,368
2024
$175,614
$175,490
$166,000

Average Annual Total Returns

1 Year
5 Years
10 Years
Admiral Shares
27.66%
15.15%
13.39%
S&P 500 Index
36.35%
15.98%
13.38%
Dow Jones U.S. Total Stock Market Float Adjusted Index
35.24%
15.15%
12.75%

This table reflects the Fund's investments, including short-term investments and other assets and liabilities.

Portfolio Composition % of Net Assets

(as of September 30, 2024)

Communication Services
5.7%
Consumer Discretionary
10.5%
Consumer Staples
0.5%
Energy
2.1%
Financials
6.7%
Health Care
30.4%
Industrials
12.6%
Information Technology
28.4%
Materials
1.2%
Other Assets and Liabilities-Net
1.9%

Fund Statistics

(as of September 30, 2024)

Fund Net Assets (in millions)
$78,334
Number of Portfolio Holdings
169
Portfolio Turnover Rate
4%
Total Investment Advisory Fees (in thousands)
$130,465

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.

AR559

Vanguard PRIMECAP Fund

Investor Shares (VPMCX)

Annual Shareholder Report | September 30, 2024

This annual shareholder report contains important information about Vanguard PRIMECAP 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
$43
0.38%

How did the Fund perform during the reporting period?

  • For the 12 months ended September 30, 2024, the Fund underperformed its benchmark, the S&P 500 Index.

  • U.S. economic growth hovered around 3% on a year-over-year basis during the period, quelling recession fears. The Federal Reserve began cutting interest rates for the first time since early 2020, and the year-over-year rate of consumer price inflation eased to around 2.5%. Even with some negative monthly returns, U.S. stocks finished the period up sharply.

  • Small-, mid-, and large-capitalization stocks all posted positive returns for the 12-month period. Large-capitalization stocks held up better than mid- and small-caps, while growth stocks outperformed value.

  • Though the Fund recorded a strong gain in absolute terms, its shortfall relative to its benchmark reflected challenges with both security selection and sector allocation. Health care was the only sector in which the Fund outperformed the benchmark. Selection in information technology and industrials was one of the largest sources of underperformance.

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

Investor Shares
S&P 500 Index
Dow Jones U.S. Total Stock Market Float Adjusted Index
2014
$10,000
$10,000
$10,000
2014
$10,524
$10,493
$10,523
2015
$10,760
$10,593
$10,712
2015
$10,598
$10,622
$10,725
2015
$9,924
$9,939
$9,945
2015
$10,796
$10,638
$10,569
2016
$10,584
$10,782
$10,666
2016
$10,612
$11,047
$10,945
2016
$11,651
$11,472
$11,430
2016
$11,944
$11,911
$11,903
2017
$12,929
$12,633
$12,592
2017
$13,677
$13,023
$12,971
2017
$14,419
$13,607
$13,564
2017
$15,468
$14,511
$14,422
2018
$15,717
$14,401
$14,335
2018
$16,166
$14,896
$14,890
2018
$17,715
$16,044
$15,948
2018
$15,158
$13,875
$13,658
2019
$16,789
$15,769
$15,576
2019
$17,154
$16,447
$16,212
2019
$17,288
$16,727
$16,397
2019
$19,369
$18,244
$17,878
2020
$15,462
$14,668
$14,131
2020
$18,130
$17,682
$17,252
2020
$19,890
$19,260
$18,818
2020
$22,710
$21,600
$21,595
2021
$24,992
$22,934
$22,988
2021
$26,731
$24,895
$24,893
2021
$25,805
$25,040
$24,864
2021
$27,664
$27,801
$27,136
2022
$26,373
$26,522
$25,671
2022
$22,805
$22,252
$21,349
2022
$21,354
$21,165
$20,375
2022
$23,473
$22,766
$21,837
2023
$25,104
$24,473
$23,419
2023
$27,425
$26,612
$25,384
2023
$27,345
$25,741
$24,549
2023
$30,067
$28,750
$27,527
2024
$32,816
$31,785
$30,292
2024
$34,585
$33,147
$31,274
2024
$34,884
$35,098
$33,200

Average Annual Total Returns

1 Year
5 Years
10 Years
Investor Shares
27.57%
15.07%
13.31%
S&P 500 Index
36.35%
15.98%
13.38%
Dow Jones U.S. Total Stock Market Float Adjusted Index
35.24%
15.15%
12.75%

This table reflects the Fund's investments, including short-term investments and other assets and liabilities.

Portfolio Composition % of Net Assets

(as of September 30, 2024)

Communication Services
5.7%
Consumer Discretionary
10.5%
Consumer Staples
0.5%
Energy
2.1%
Financials
6.7%
Health Care
30.4%
Industrials
12.6%
Information Technology
28.4%
Materials
1.2%
Other Assets and Liabilities-Net
1.9%

Fund Statistics

(as of September 30, 2024)

Fund Net Assets (in millions)
$78,334
Number of Portfolio Holdings
169
Portfolio Turnover Rate
4%
Total Investment Advisory Fees (in thousands)
$130,465

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.

AR59

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 PRIMECAP Fund
Contents
Financial Statements
1
Report of Independent Registered Public Accounting Firm
14
Tax information
15
PRIMECAP 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)
Common Stocks (98.1%)
Communication Services (5.7%)
Alphabet Inc. Class A 11,031,240  1,829,531
Alphabet Inc. Class C  6,336,720  1,059,436
* Baidu Inc. ADR  6,943,141    731,043
Walt Disney Co.  4,597,005    442,186
Meta Platforms Inc. Class A    259,750    148,691
T-Mobile US Inc.    337,800     69,709
* Charter Communications Inc. Class A    193,600     62,742
* Live Nation Entertainment Inc.    499,000     54,636
* Netflix Inc.     75,100     53,266
Universal Music Group NV    807,908     21,136
* Altice USA Inc. Class A  4,710,800     11,589
Comcast Corp. Class A     51,000      2,130
Nintendo Co. Ltd.     17,500        935
               4,487,030
Consumer Discretionary (10.5%)
* Tesla Inc.  5,679,300  1,485,875
Alibaba Group Holding Ltd. ADR 12,169,717  1,291,450
1 Sony Group Corp. ADR 12,915,400  1,247,240
Ross Stores Inc.  7,590,900  1,142,506
TJX Cos. Inc.  7,553,500    887,838
* Amazon.com Inc.  3,063,500    570,822
*,2 Mattel Inc. 25,160,838    479,314
2 Whirlpool Corp.  3,137,832    335,748
Royal Caribbean Cruises Ltd.  1,858,947    329,703
Bath & Body Works Inc.  3,480,714    111,104
eBay Inc.  1,189,000     77,416
* Burlington Stores Inc.    217,700     57,360
* Flutter Entertainment plc    210,942     49,603
Newell Brands Inc.  4,991,000     38,331
* Carnival Corp.  2,054,065     37,959
* Victoria's Secret & Co.  1,164,071     29,917
Marriott International Inc. Class A     97,000     24,114
* MGM Resorts International    540,000     21,109
* Ulta Beauty Inc.     21,000      8,172
               8,225,581
Consumer Staples (0.5%)
Sysco Corp.  3,383,501    264,116
* Dollar Tree Inc.  1,430,614    100,601
Altria Group Inc.    572,600     29,225
Dollar General Corp.     77,000      6,512
Tyson Foods Inc. Class A    100,000      5,956
1 Haleon plc ADR    548,000      5,798
                 412,208
Energy (2.1%)
Hess Corp.  4,771,700    647,997
Exxon Mobil Corp.  3,714,527    435,417
ConocoPhillips  2,265,600    238,522
EOG Resources Inc.  1,605,300    197,340
* Transocean Ltd. (XNYS) 17,429,773     74,077
Schlumberger NV    706,400     29,633
               1,622,986
Financials (6.7%)
Wells Fargo & Co. 21,831,417  1,233,257
JPMorgan Chase & Co.  3,653,400    770,356
Visa Inc. Class A  2,331,400    641,019
Marsh & McLennan Cos. Inc.  2,610,516    582,380
Raymond James Financial Inc.  4,306,903    527,423
Bank of America Corp.  6,907,832    274,103
1
PRIMECAP Fund
Shares Market
Value•

 ($000)
* PayPal Holdings Inc.  3,003,956    234,399
Progressive Corp.    833,000    211,382
Northern Trust Corp.  2,094,900    188,604
Mastercard Inc. Class A    308,300    152,239
CME Group Inc.    629,768    138,958
Citigroup Inc.  1,795,000    112,367
Fidelity National Information Services Inc.  1,066,500     89,319
Charles Schwab Corp.    687,414     44,551
Goldman Sachs Group Inc.     51,700     25,597
Morgan Stanley    205,000     21,369
               5,247,323
Health Care (30.4%)
Eli Lilly & Co. 10,656,328  9,440,867
Amgen Inc.  8,987,985  2,896,019
* Boston Scientific Corp. 25,696,344  2,153,354
AstraZeneca plc ADR 25,729,688  2,004,600
*,2 Biogen Inc.  9,179,801  1,779,413
Thermo Fisher Scientific Inc.  1,554,547    961,596
Novartis AG ADR  7,783,525    895,261
Bristol-Myers Squibb Co. 12,726,086    658,448
* BioMarin Pharmaceutical Inc.  7,270,808    511,065
* BeiGene Ltd. ADR  2,200,190    493,965
GSK plc ADR 10,357,490    423,414
Roche Holding AG    985,345    315,327
* Elanco Animal Health Inc. (XNYS) 19,016,439    279,351
Zimmer Biomet Holdings Inc.  2,204,500    237,976
CVS Health Corp.  2,145,500    134,909
Stryker Corp.    343,400    124,057
Agilent Technologies Inc.    732,516    108,764
Abbott Laboratories    660,000     75,247
UnitedHealth Group Inc.     94,615     55,319
Sanofi SA ADR    893,000     51,463
Medtronic plc    570,000     51,317
* IQVIA Holdings Inc.    213,584     50,613
3 Siemens Healthineers AG    721,300     43,322
Alcon Inc.    431,300     43,160
* Edwards Lifesciences Corp.    492,100     32,474
Sandoz Group AG    364,572     15,193
* Waters Corp.     33,680     12,121
Danaher Corp.     12,402      3,448
Humana Inc.     10,076      3,191
* Zimvie Inc.     27,100        430
              23,855,684
Industrials (12.6%)
FedEx Corp.  8,522,158  2,332,344
Siemens AG (Registered)  7,802,676  1,578,543
Southwest Airlines Co. 25,401,478    752,646
* United Airlines Holdings Inc. 12,148,403    693,188
Delta Air Lines Inc. 11,321,900    575,039
Airbus SE  3,517,566    514,818
Caterpillar Inc.  1,224,400    478,887
TransDigm Group Inc.    309,316    441,434
Union Pacific Corp.  1,327,800    327,276
Textron Inc.  3,601,000    318,977
*,1 American Airlines Group Inc. 26,384,413    296,561
United Parcel Service Inc. Class B (XNYS)  1,928,970    262,996
Otis Worldwide Corp.  1,517,260    157,704
General Dynamics Corp.    511,300    154,515
* Alaska Air Group Inc.  3,280,700    148,320
Carrier Global Corp.  1,670,200    134,434
JB Hunt Transport Services Inc.    515,900     88,905
Norfolk Southern Corp.    310,800     77,234
CSX Corp.  1,988,800     68,673
nVent Electric plc    859,000     60,353
Honeywell International Inc.    221,000     45,683
RTX Corp.    376,870     45,662
L3Harris Technologies Inc.    189,000     44,957
Rockwell Automation Inc.    165,500     44,430
* Boeing Co.    271,300     41,248
2
PRIMECAP Fund
Shares Market
Value•

 ($000)
* Lyft Inc. Class A  3,209,900     40,926
Deere & Co.     73,700     30,757
AMETEK Inc.    170,200     29,225
Ryanair Holdings plc ADR    625,000     28,238
* WillScot Holdings Corp.    722,300     27,159
* Uber Technologies Inc.    121,150      9,106
               9,850,238
Information Technology (28.4%)
Microsoft Corp.  6,072,600  2,613,040
KLA Corp.  3,277,680  2,538,268
Micron Technology Inc. 23,745,774  2,462,674
Texas Instruments Inc. 10,527,272  2,174,619
* Adobe Inc.  4,198,957  2,174,136
NVIDIA Corp. 14,418,000  1,750,922
Oracle Corp.  8,807,770  1,500,844
Intel Corp. 47,355,148  1,110,952
NetApp Inc.  8,028,602    991,613
Intuit Inc.  1,135,000    704,835
Analog Devices Inc.  2,490,000    573,123
HP Inc. 13,725,716    492,341
QUALCOMM Inc.  2,728,806    464,033
Apple Inc.  1,810,000    421,730
Hewlett Packard Enterprise Co. 17,166,842    351,234
Telefonaktiebolaget LM Ericsson ADR 33,116,269    251,021
Cisco Systems Inc.  4,371,279    232,639
Entegris Inc.  1,835,622    206,562
Applied Materials Inc.    947,300    191,402
Corning Inc.  3,913,600    176,699
* Autodesk Inc.    489,200    134,765
Teradyne Inc.    857,900    114,898
* Palo Alto Networks Inc.    315,600    107,872
Broadcom Inc.    435,930     75,198
Marvell Technology Inc.    927,500     66,891
Salesforce Inc.    198,300     54,277
* Western Digital Corp.    700,000     47,803
* Gartner Inc.     70,100     35,524
* Okta Inc.    464,500     34,531
Infineon Technologies AG    943,116     33,111
Dell Technologies Inc. Class C    273,900     32,468
* Keysight Technologies Inc.    179,500     28,528
*,1 BlackBerry Ltd.  9,975,500     26,136
Jabil Inc.    213,000     25,524
* Unity Software Inc.    290,000      6,560
* Fortinet Inc.     69,450      5,386
* Arista Networks Inc.      4,000      1,535
* Nice Ltd. ADR      2,250        391
* RingCentral Inc. Class A      8,000        253
              22,214,338
Materials (1.2%)
Glencore plc 40,673,825    232,925
Albemarle Corp.  2,174,794    205,975
DuPont de Nemours Inc.  1,969,556    175,507
Linde plc    245,300    116,974
Freeport-McMoRan Inc.  2,261,900    112,914
Dow Inc.  1,233,817     67,403
Corteva Inc.  1,099,216     64,623
                 976,321
Total Common Stocks (Cost $24,749,764) 76,891,709
3
PRIMECAP Fund
Shares Market
Value•

 ($000)
Temporary Cash Investments (2.0%)
Money Market Fund (2.0%)
4,5 Vanguard Market Liquidity Fund, 5.014%(Cost $1,541,649) 15,420,203           1,542,020
Total Investments (100.1%) (Cost $26,291,413) 78,433,729
Other Assets and Liabilities-Net (-0.1%) (100,021)
Net Assets (100%) 78,333,708
Cost is in $000.
• See Note A in Notes to Financial Statements.
* Non-income-producing security.
1 Includes partial security positions on loan to broker-dealers. The total value of securities on loan is $121,678,000.
2 Considered an affiliated company of the fund as the fund owns more than 5% of the outstanding voting securities of such company.
3 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2024, the aggregate value was $43,322,000, representing 0.1% of net assets.
4 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.
5 Collateral of $125,176,000 was received for securities on loan.
ADR-American Depositary Receipt.
See accompanying Notes, which are an integral part of the Financial Statements.
4
PRIMECAP 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 Value1
Unaffiliated Issuers (Cost $23,532,414) 74,297,234
Affiliated Issuers (Cost $2,758,999) 4,136,495
Total Investments in Securities 78,433,729
Investment in Vanguard 2,183
Cash 106,489
Foreign Currency, at Value (Cost $5) 5
Receivables for Investment Securities Sold 843
Receivables for Accrued Income 82,640
Receivables for Capital Shares Issued 9,483
Total Assets 78,635,372
Liabilities
Payables for Investment Securities Purchased 114,044
Collateral for Securities on Loan 125,176
Payables to Investment Advisor 34,225
Payables for Capital Shares Redeemed 23,334
Payables to Vanguard 4,885
Total Liabilities 301,664
Net Assets 78,333,708
1 Includes $121,678,000 of securities on loan.
At September 30, 2024, net assets consisted of:
Paid-in Capital 21,675,125
Total Distributable Earnings (Loss) 56,658,583
Net Assets 78,333,708
Investor Shares-Net Assets
Applicable to 28,983,812 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		5,075,891
Net Asset Value Per Share-Investor Shares $175.13
Admiral™ Shares-Net Assets
Applicable to 403,673,027 outstanding $.001 par value shares of
beneficial interest (unlimited authorization) 		73,257,817
Net Asset Value Per Share-Admiral Shares $181.48
See accompanying Notes, which are an integral part of the Financial Statements.
5
PRIMECAP Fund
Statement of Operations
Year Ended
September 30, 2024
($000)
Investment Income
Income
Dividends-Unaffiliated Issuers1 914,904
Dividends-Affiliated Issuers 21,634
Interest-Unaffiliated Issuers 8
Interest-Affiliated Issuers 61,469
Securities Lending-Net 127
Total Income 998,142
Expenses
Investment Advisory Fees-Note B 130,465
The Vanguard Group-Note C
Management and Administrative-Investor Shares 9,653
Management and Administrative-Admiral Shares 84,678
Marketing and Distribution-Investor Shares 202
Marketing and Distribution-Admiral Shares 1,975
Custodian Fees 1,697
Auditing Fees 32
Shareholders' Reports and Proxy Fees-Investor Shares 70
Shareholders' Reports and Proxy Fees-Admiral Shares 205
Trustees' Fees and Expenses 48
Other Expenses 221
Total Expenses 229,246
Expenses Paid Indirectly (68)
Net Expenses 229,178
Net Investment Income 768,964
Realized Net Gain (Loss)
Capital Gains Distributions Received - Affiliated Issuers 6
Investment Securities Sold-Unaffiliated Issuers 4,403,535
Investment Securities Sold-Affiliated Issuers (6,965)
Foreign Currencies 134
Realized Net Gain (Loss) 4,396,710
Change in Unrealized Appreciation (Depreciation)
Investment Securities-Unaffiliated Issuers 13,137,346
Investment Securities-Affiliated Issuers (729,009)
Foreign Currencies 1,126
Change in Unrealized Appreciation (Depreciation) 12,409,463
Net Increase (Decrease) in Net Assets Resulting from Operations 17,575,137
1 Dividends are net of foreign withholding taxes of $14,402,000.
See accompanying Notes, which are an integral part of the Financial Statements.
6
PRIMECAP Fund
Statement of Changes in Net Assets
Year Ended September 30,
2024
($000) 		2023
($000)
Increase (Decrease) in Net Assets
Operations
Net Investment Income 768,964 784,990
Realized Net Gain (Loss) 4,396,710 4,158,837
Change in Unrealized Appreciation (Depreciation) 12,409,463 10,273,895
Net Increase (Decrease) in Net Assets Resulting from Operations 17,575,137 15,217,722
Distributions
Investor Shares (342,044) (408,794)
Admiral Shares (4,449,800) (5,062,138)
Total Distributions (4,791,844) (5,470,932)
Capital Share Transactions
Investor Shares (571,119) (215,027)
Admiral Shares 862,243 (113,439)
Net Increase (Decrease) from Capital Share Transactions 291,124 (328,466)
Total Increase (Decrease) 13,074,417 9,418,324
Net Assets
Beginning of Period 65,259,291 55,840,967
End of Period 78,333,708 65,259,291
See accompanying Notes, which are an integral part of the Financial Statements.
7
PRIMECAP Fund
Financial Highlights
Investor Shares
For a Share Outstanding
Throughout Each Period  		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $147.17 $126.26 $168.72 $142.86 $133.12
Investment Operations
Net Investment Income1 1.591 1.632 1.456 1.183 1.745
Net Realized and Unrealized Gain (Loss) on Investments 37.177 31.717 (27.430) 39.134 17.947
Total from Investment Operations 38.768 33.349 (25.974) 40.317 19.692
Distributions
Dividends from Net Investment Income (1.659) (1.549) (1.150) (1.542) (1.690)
Distributions from Realized Capital Gains (9.149) (10.890) (15.336) (12.915) (8.262)
Total Distributions (10.808) (12.439) (16.486) (14.457) (9.952)
Net Asset Value, End of Period $175.13 $147.17 $126.26 $168.72 $142.86
Total Return2 27.57% 28.06% -17.25% 29.74% 15.05%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $5,076 $4,762 $4,243 $5,878 $5,697
Ratio of Total Expenses to Average Net Assets 0.38%3 0.38%3 0.38%3 0.38% 0.38%
Ratio of Net Investment Income to Average Net Assets 0.99% 1.17% 0.95% 0.73% 1.31%
Portfolio Turnover Rate 4% 4% 3% 5% 6%
1 Calculated based on average shares outstanding.
2 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.
3 The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.38%.
See accompanying Notes, which are an integral part of the Financial Statements.
8
PRIMECAP Fund
Financial Highlights
Admiral Shares
For a Share Outstanding
Throughout Each Period  		Year Ended September 30,
2024 2023 2022 2021 2020
Net Asset Value, Beginning of Period $152.51 $130.87 $174.92 $148.12 $138.02
Investment Operations
Net Investment Income1 1.762 1.793 1.621 1.345 1.920
Net Realized and Unrealized Gain (Loss) on Investments 38.521 32.854 (28.426) 40.564 18.600
Total from Investment Operations 40.283 34.647 (26.805) 41.909 20.520
Distributions
Dividends from Net Investment Income (1.830) (1.718) (1.343) (1.716) (1.853)
Distributions from Realized Capital Gains (9.483) (11.289) (15.902) (13.393) (8.567)
Total Distributions (11.313) (13.007) (17.245) (15.109) (10.420)
Net Asset Value, End of Period $181.48 $152.51 $130.87 $174.92 $148.12
Total Return2 27.66% 28.14% -17.19% 29.83% 15.13%
Ratios/Supplemental Data
Net Assets, End of Period (Millions) $73,258 $60,497 $51,598 $68,059 $58,626
Ratio of Total Expenses to Average Net Assets 0.31%3 0.31%3 0.31%3 0.31% 0.31%
Ratio of Net Investment Income to Average Net Assets 1.06% 1.24% 1.02% 0.80% 1.39%
Portfolio Turnover Rate 4% 4% 3% 5% 6%
1 Calculated based on average shares outstanding.
2 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.
3 The ratio of expenses to average net assets for the period net of reduction from custody fee offset arrangements was 0.31%.
See accompanying Notes, which are an integral part of the Financial Statements.
9
PRIMECAP Fund
Notes to Financial Statements
Vanguard PRIMECAP Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers two classes of shares: Investor Shares and Admiral Shares. Each of the share classes has different eligibility and minimum purchase requirements, and is designed for different types of investors.
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: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been affected by events occurring before the fund's pricing time but after the close of the securities' primary markets, are valued by methods deemed by the valuation designee to represent fair value and subject to oversight by the board of trustees. These procedures include obtaining quotations from an independent pricing service, monitoring news to identify significant market- or security-specific events, and evaluating changes in the values of foreign market proxies (for example, ADRs, futures contracts, or exchange-traded funds), between the time the foreign markets close and the fund's pricing time. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value.
2. Foreign Currency: Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates obtained from an independent third party as of the fund's pricing time on the valuation date. Realized gains (losses) and unrealized appreciation (depreciation) on investment securities include the effects of changes in exchange rates since the securities were purchased, combined with the effects of changes in security prices. Fluctuations in the value of other assets and liabilities resulting from changes in exchange rates are recorded as unrealized foreign currency gains (losses) until the assets or liabilities are settled in cash, at which time they are recorded as realized foreign currency gains (losses).
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. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are subject to termination by the fund at any time, and are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled before the opening of the market on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty's default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the event of a default, the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the Statement of Assets and Liabilities for the return of the collateral, during the period the securities are on loan. Collateral investments in Vanguard Market Liquidity Fund are subject to market appreciation or depreciation. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan. During the term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
6. 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 included in Management and Administrative expenses on the fund's Statement of Operations. 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.
10
PRIMECAP Fund
7. Other: Dividend income is recorded on the ex-dividend date. Non-cash dividends included in income, if any, are recorded at the fair value of the securities received. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. 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.
Taxes on foreign dividends and capital gains have been provided for in accordance with the applicable countries' tax rules and rates. Deferred foreign capital gains tax, if any, is accrued daily based upon net unrealized gains. The fund has filed tax reclaims for previously withheld taxes on dividends earned in certain European Union countries. These filings are subject to various administrative and judicial proceedings within these countries. Amounts related to these reclaims are recorded when there are no significant uncertainties as to the ultimate resolution of proceedings, the likelihood of receipt of these reclaims, and the potential timing of payment. Such tax reclaims and related professional fees, if any, are included in dividend income and other expenses, respectively.
Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses), shareholder reporting, and proxy fees. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.
B. PRIMECAP Management Company provides investment advisory services to the fund for a fee calculated at an annual percentage rate of average net assets. For the year ended September 30, 2024, the investment advisory fee represented an effective annual basic rate of 0.18% of the fund's average net assets.
C. In accordance with the terms of a Funds' Service Agreement (the "FSA") between Vanguard and the fund, Vanguard furnishes to the fund 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 and are generally settled twice a month.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At September 30, 2024, the fund had contributed to Vanguard capital in the amount of $2,183,000, representing less than 0.01% of the fund's net assets and 0.87% of Vanguard's capital received pursuant to the FSA. The fund's trustees and officers are also directors and employees, respectively, of Vanguard.
D. The fund's custodian bank has agreed to reduce its fees when the fund maintains cash on deposit in the non-interest-bearing custody account. For the year ended September 30, 2024, custodian fee offset arrangements reduced the fund's expenses by $68,000 (an annual rate of less than 0.01% of average net assets).
E. 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.
The following table summarizes the market value of the fund's investments as of September 30, 2024, based on the inputs used to value them:
Level 1
($000) 		Level 2
($000) 		Level 3
($000) 		Total
($000)
Investments 
Assets
Common Stocks 74,086,796 2,804,913 - 76,891,709
Temporary Cash Investments 1,542,020 - - 1,542,020
Total 75,628,816 2,804,913 - 78,433,729
F. 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 foreign currency transactions and distributions in connection with fund share redemptions were reclassified between the following accounts:
Amount
($000)
Paid-in Capital 156,634
Total Distributable Earnings (Loss) (156,634)
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
11
PRIMECAP Fund
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 603,701
Undistributed Long-Term Gains 3,949,253
Net Unrealized Gains (Losses) 52,105,629
Capital Loss Carryforwards -
Qualified Late-Year Losses -
Other Temporary Differences -
Total 56,658,583
The tax character of distributions paid was as follows:
Year Ended September 30,
2024
Amount
($000) 		2023
Amount
($000)
Ordinary Income* 796,382 721,198
Long-Term Capital Gains 3,995,462 4,749,734
Total 4,791,844 5,470,932
* 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 26,329,217
Gross Unrealized Appreciation 55,015,229
Gross Unrealized Depreciation (2,910,717)
Net Unrealized Appreciation (Depreciation) 52,104,512
G. During the year ended September 30, 2024, the fund purchased $2,720,745,000 of investment securities and sold $6,810,450,000 of investment securities, other than temporary cash investments.
H. Capital share transactions for each class of shares were:
Year Ended September 30,
2024 2023
Amount
($000) 		Shares
(000) 		Amount
($000) 		Shares
(000)
Investor Shares
Issued 374,366 2,347 205,544 1,472
Issued in Lieu of Cash Distributions 324,042 2,159 388,807 3,083
Redeemed (1,269,527) (7,883) (809,378) (5,800)
Net Increase (Decrease)-Investor Shares (571,119) (3,377) (215,027) (1,245)
Admiral Shares
Issued 2,201,007 13,110 1,725,734 12,228
Issued in Lieu of Cash Distributions 4,151,273 26,707 4,730,931 36,219
Redeemed (5,490,037) (32,813) (6,570,104) (46,041)
Net Increase (Decrease)-Admiral Shares 862,243 7,004 (113,439) 2,406
12
PRIMECAP Fund
I. Certain of the fund's investments are in companies that are considered to be affiliated companies of the fund because the fund owns more than 5% of the outstanding voting securities of the company or the issuer is another member of The Vanguard Group. Transactions during the period in securities of these companies 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)
Biogen Inc. 2,317,349 48,269 9,911 (2,792) (573,502) - - 1,779,413
Mattel Inc. 582,822 - 23,669 (4,273) (75,566) - - 479,314
Vanguard Market Liquidity Fund 1,211,327 NA1 NA1 100 103 61,469 6 1,542,020
Whirlpool Corp. 402,147 13,645 - - (80,044) 21,634 - 335,748
Total 4,513,645 61,914 33,580 (6,965) (729,009) 83,103 6 4,136,495
1 Not applicable-purchases and sales are for temporary cash investment purposes.
J. 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.
K. Management has determined that no events or transactions occurred subsequent to September 30, 2024, that would require recognition or disclosure in these financial statements.
13
Report of Independent Registered
Public Accounting Firm
To the Board of Trustees of Vanguard Chester Funds and Shareholders of Vanguard PRIMECAP Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Vanguard PRIMECAP Fund (one of the funds constituting Vanguard Chester Funds, referred to hereafter as the "Fund") as of September 30, 2024, 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, 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 the Fund as of September 30, 2024, the results of its operations for the year then ended, the changes in its 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 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's 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 Fund 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 custodian, 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 opinion.
/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.
14
Tax information (unaudited)
For corporate shareholders, 92.1%, or if subsequently determined to be different, the maximum percentage allowable by law, of ordinary income (dividend income plus short-term gains, if any) for the fiscal year qualified for the dividends-received deduction.
The fund hereby designates $931,630,000, or if subsequently determined to be different, the maximum amount allowable by law, 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.
The fund hereby designates for the fiscal year $19,008,000, or if subsequently determined to be different, the maximum amount allowable by law, of interest earned from obligations of the U.S. government which is generally exempt from state income tax.
For nonresident alien shareholders, 100% of short-term capital gain dividends distributed by the fund for the fiscal year are qualified short-term capital gains.
The fund distributed $4,127,606,000 as capital gain dividends (20% rate gain distributions) to shareholders during the fiscal year.
Q590 112024
15

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 included in the financial statements filed under Item 7 of this Form.

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

Trustees Approve Advisory Arrangement - PRIMECAP Fund

The board of trustees of Vanguard PRIMECAP Fund has renewed the fund's investment advisory arrangement with PRIMECAP Management Company (PRIMECAP). The board determined that renewing the fund's advisory arrangement was in the best interests of the fund and its shareholders.

The board based its decision upon an evaluation of the advisor's investment staff, portfolio management process, and performance. This evaluation included information provided to the board by Vanguard's Portfolio Review Department, which is responsible for fund and advisor oversight and product management. The Portfolio Review Department met regularly with the advisor and made presentations to the board during the fiscal year that directed the board's focus to relevant information and topics.

The board, or an investment committee made up of board members, also received information throughout the year during advisor presentations conducted by the Portfolio Review Department. For each advisor presentation, the board was provided with letters and reports that included information about, among other things, the advisory firm and the advisor's assessment of the investment environment, portfolio performance, and portfolio characteristics.

In addition, the board received periodic reports throughout the year, which included information about the fund's performance relative to its peers and benchmark, as applicable, and updates, as needed, on the Portfolio Review Department's ongoing assessment of the advisor.

Prior to their meeting, the trustees were provided with a memo and material that summarized the information they received over the course of the year. They also considered the factors discussed below, among others. However, no single factor determined whether the board approved the arrangement. Rather, it was the totality of the circumstances that drove the board's decision.

Nature, extent, and quality of services

The board reviewed the quality of the fund's investment management services over both the short and long term, and took into account the organizational depth and stability of the advisor. The board considered that PRIMECAP, founded in 1983, is recognized for its long-term approach to growth equity investing. Five experienced portfolio managers are responsible for separate sub-portfolios, and each portfolio manager employs a fundamental, research-driven approach in seeking to identify companies with long-term growth potential that the market has yet to appreciate. The multi-counselor approach employed by PRIMECAP is designed to emphasize individual decision-making and enable the portfolio managers to invest in their highest-conviction ideas. The advisor's fundamental research focuses on developing opinions independent from Wall Street's consensus and maintaining a long-term horizon. PRIMECAP has managed the fund since its inception in 1984.

The board concluded that the advisor's experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangement.

Investment performance

The board considered the short- and long-term performance of the fund, including any periods of outperformance or underperformance compared with a relevant benchmark index and peer group. The board concluded that the performance was such that the advisory arrangement should continue.

Cost

The board concluded that the fund's expense ratio was below the average expense ratio charged by funds in its peer group and that the fund's advisory fee rate was also below the peer-group average.

The board did not consider the profitability of PRIMECAP in determining whether to approve the advisory fee, because PRIMECAP is independent of Vanguard and the advisory fee is the result of arm's-length negotiations.

The benefit of economies of scale

The board concluded that the fund's shareholders benefit from economies of scale because of breakpoints in the fund's advisory fee schedule. The breakpoints reduce the effective rate of the fee as the fund's assets increase.

The board will consider whether to renew the advisory arrangement again after a one-year period.

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.