Overview

Investment Objective

The Portfolio seeks to provide moderate levels of income and capital appreciation.

Investment Strategy

The Portfolio invests in two Vanguard stock index funds and two Vanguard bond index funds, resulting in an allocation of 50% of its assets to stocks and 50% of its assets to investment-grade bonds. The percentages of the Portfolio’s assets allocated to each Underlying Fund are:

Vanguard Morningstar Institutional Total Stock Market Index Fund 30%
Vanguard® Total International Stock Index Fund 20%
Vanguard® Total Bond Market II Index Fund 35%
Vanguard® Total International Bond Index Fund 15%

Through its investment in Vanguard Institutional Total Stock Market Index Fund, the Portfolio indirectly invests in large-, mid-, small-, and micro-capitalization U.S. stocks. The Fund employs an indexing investment approach designed to track the performance of the Morningstar US Total Market Index, which represents approximately 100% of the investable U.S. stock market, and includes large-, mid-, small-, and micro-cap stocks regularly traded on the NYSE and Nasdaq. The Fund invests by sampling the Index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full Index in terms of key characteristics. These key characteristics include industry weightings and market capitalization, as well as certain financial measures such as price/earnings ratio and dividend yield. The Fund may become nondiversified, as defined under the Investment Company Act of 1940, solely as a result of an index rebalance or market movement.

Through its investment in Vanguard Total International Stock Index Fund, the Portfolio also indirectly invests in international stocks. The Fund employs an indexing investment approach designed to track the performance of the FTSE Global All Cap ex US Index, a float-adjusted, market-capitalization weighted index designed to measure equity market performance of companies located in developed and emerging markets, excluding the United States. As of October 31, 2024, the Index includes approximately 8,408 stocks of companies located in 47 markets. The Fund invests all, or substantially all, of its assets in the common stocks included in its target Index.

Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio also indirectly invests in a broadly diversified collection of securities that, in the aggregate, approximates the Bloomberg U.S. Aggregate Float Adjusted Index in terms of key risk factors and other characteristics. The Fund employs an indexing investment approach designed to track the performance of the Index. The Index represents a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States—including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities—all with maturities of more than 1 year. The Fund invests by sampling the Index. The Fund seeks to maintain a dollar-weighted average maturity and an average duration consistent with that of the Index, which generally ranges between 5 and 10 years.

Through its investment in Vanguard Total International Bond Index Fund, the Portfolio also indirectly invests in government, government agency, corporate, and securitized non-U.S. investment-grade fixed income investments, all issued in currencies other than the U.S. dollar and with maturities of more than 1 year. The Fund employs an indexing investment approach designed to track the performance of the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged), which provides a broad-based measure of the global, investment-grade, fixed-rate debt markets. The Fund will attempt to hedge its foreign currency exposure, primarily through the use of foreign currency exchange forward contracts, in order to correlate to the returns of the Index, which is U.S. dollar hedged. Such hedging is intended to minimize the currency risk associated with investment in bonds denominated in currencies other than the U.S. dollar. The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between 5 and 10 years. The Fund may become nondiversified, as defined under the Investment Company Act of 1940, solely as a result of an index rebalance or market movement. The Fund invests by sampling the Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics.

Investment Risks

Through its stock fund holdings, the Portfolio is subject to stock market risk. Through its bond fund holdings, the Portfolio is subject to interest rate risk, credit risk, income risk, extension risk, liquidity risk, call risk, and prepayment risk. The Portfolio is also subject to country/regional risk, currency risk, emerging markets risk, special risks of investing in China, investment style risk, currency and currency hedging risk, index-related risks, index replicating risk, index sampling risk, derivatives risk, nondiversification risk, and sector risk

Average Annual Returns

**Consists of the Bloomberg Barclays U.S. Aggregate Float Adjusted Bond Index (35%), the Morningstar US Total Market Index (30%), the FTSE Global All Cap ex US Index (20%), and the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index Hedged (15%). The Bloomberg Barclays U.S. Aggregate Float Adjusted Bond Index replaced the Barclays U.S. Aggregate Bond Index on December 31, 2009. Effective September 29, 2016, Barclays indexes were rebranded to Bloomberg Barclays indexes. The Morningstar US Total Market Index replaced the MSCI US Broad Market Index (on January 15, 2013), which had replaced the Dow Jones Wilshire 5000 Index (on April 22, 2005). The FTSE Global All Cap ex US Index replaced the MSCI ACWI ex USA IMI Index (on June 3, 2013), which had replaced the MSCI EAFE + Emerging Markets Index (on December 16, 2010).

Annual Investment Returns

Historical Prices

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Fund ID: 1006016

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