Vanguard Variable Insurance Funds: Special tax information

This information attributable to the income and capital gains distributed in March 2025 for the fiscal year ended December 31, 2024, is included pursuant to provisions of the Internal Revenue Code for corporate shareholders only. The Vanguard Variable Insurance Fund Portfolios had income and distributions with tax attributes as outlined below.  Taxpayers should consult their advisor regarding more complex tax situations. Although Vanguard aims to ensure the accuracy of the information contained in this supplement, we cannot guarantee that the information herein will not be subject to change or that a tax authority might disagree with the information herein or any tax position taken by a taxpayer in reliance upon the information in this supplement.

Dividends-received deduction (DRD)

Below are the percentages of ordinary dividends (i.e., dividend income plus short-term capital gains, if any) that qualified for the intercorporate dividends-received deduction. The percentages are applicable to the March 2025 distribution:

Name	Qualifying Percentage
Balanced Portfolio	27.8%
Capital Growth Portfolio	84.1%
Conservative Allocation Portfolio	10.4%
Diversified Value Portfolio	46.0%
Equity Income Portfolio	60.0%
Equity Index Portfolio	94.4%
Growth Portfolio	100.0%
Mid-Cap Index Portfolio	85.4%
Moderate Allocation Portfolio	16.9%
Small Company Growth Portfolio	73.5%
Total Stock Market Index Portfolio	91.5%

 

Please note that the dividends-received deduction is subject to other requirements and limitations. The Global Bond Index, High Yield Bond, International, Money Market, Real Estate Index, Short-Term Investment-Grade, Total Bond Market Index, and Total International Stock Market Index Portfolios have no income qualifying for the DRD.

Section 163(j) interest dividends information

Below are the percentages of ordinary dividends (i.e., dividend income plus short-term capital gains, if any) that qualified as 163(j) interest dividends. Please note that the rules regarding 163(j) interest dividends are subject to other requirements and limitations. The percentages are applicable to the March 2025 distribution:

Name	Qualifying Percentage
Balanced Portfolio	54.7%
Conservative Allocation Portfolio	54.5%
Global Bond Index Portfolio	89.3%
High Yield Bond Portfolio	100.0%
Moderate Allocation Portfolio	41.5%
Money Market Portfolio	100.0%
Short-Term Investment Grade Portfolio	100.0%
Total Bond Market Index Portfolio	100.0%

 

The Capital Growth, Diversified Value, Equity Income, Equity Index, Growth, International, Mid-Cap Index, Real Estate Index, Small Company Growth, Total International Stock Market Index, and Total Stock Market Index Portfolios have no income qualifying for 163(j).

Foreign tax credit

The following funds have designated, as available for pass-through treatment to shareholders, foreign-source income and foreign taxes paid for the Portfolio’s fiscal year ended December 31, 2024:

1.     Conservative Allocation Portfolio

2.     International Portfolio

3.     Moderate Allocation Portfolio

4.     Total International Stock Market Index Portfolio

Shareholders are asked to contact Fund Tax Services at FTS@Vanguard.com for more information. This pass-through information will only be relevant for investors who were shareholders in the Portfolio on the dividend record date of March 27, 2025.

Long-term capital gains

Below are the amounts distributed as capital gain dividends (from net long-term capital gains) to shareholders:

Name	Long-term capital gains
Balanced Portfolio	$303,321,000
Capital Growth Portfolio	$90,054,000
Conservative Allocation Portfolio	$14,738,000
Diversified Value Portfolio	$92,628,000
Equity Income Portfolio	$125,824,000
Equity Index Portfolio	$245,481,000
Global Bond Index Portfolio	$39,000
Growth Portfolio	$79,842,000
International Portfolio	$158,082,000
Mid-Cap Index Portfolio	$127,732,000
Moderate Allocation Portfolio	$28,082,000
Real Estate Index Portfolio	$18,426,000
Small Company Growth	$68,269,000
Total International Stock Market Index Portfolio	$26,345,000
Total Stock Market Index Portfolio	$305,901,000

 

The High Yield Bond, Money Market, Short-Term Investment Grade, and Total Bond Market Index Portfolios distributed no capital gains dividends (from net long-term capital gains).

U.S. government obligations

Below are the percentages of total income derived from U.S. government obligations. Direct U.S. government obligations and certain U.S. government agency obligations are generally exempt from taxation in most states.¹ Advisors should check with state or local tax offices or with a tax advisor to determine whether their clients' states allow them to exclude some or all the income their clients earn from mutual funds that invest in U.S. government obligations.

Name	Income from U.S. government obligations2
Balanced Portfolio	11.38%
Capital Growth Portfolio	9.13%
Conservative Allocation Portfolio	17.44%
Diversified Value Portfolio	8.05%
Equity Income Portfolio	2.15%
Equity Index Portfolio	0.39%
Global Bond Index Portfolio	23.15%
High Yield Bond Portfolio	4.40%
International Portfolio	5.39%
Mid-Cap Index Portfolio	0.29%
Moderate Allocation Portfolio	12.66%
Money Market Portfolio	60.16%
Real Estate Index Portfolio	0.55%
Short-Term Investment Grade Portfolio	10.73%
Small Company Growth Portfolio	16.45%
Total Bond Market Index Portfolio	40.84%
Total International Stock Market Index Portfolio	0.50%
Total Stock Market Index Portfolio	0.41%

 

1 Investments in U.S. government obligations may include the following: Federal Farm Credit Banks, Federal Home Loan Banks, the Student Loan Marketing Association, the Tennessee Valley Authority, the U.S. Treasury Department (bonds, notes, bills, certificates, and savings bonds), and certain other U.S. government obligations. GNMA, FNMA, Freddie Mac, repurchase agreements (including those that involve U.S. government obligations), and certain other securities are generally subject to state and local taxes.

2 The percentages provided apply only to income distributions (dividends); they do not apply to capital gains distributions (whether long-term or short-term).

Note:

• All investments are subject to risk, including the possible loss of the money you invest.

long t