Overview |
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Investment Objective
The Portfolio seeks to provide current income and low to moderate capital appreciation.
Investment Strategy
The Income Portfolio invests in two Vanguard® bond index funds and two Vanguard stock index funds in approximately the following proportions:
Vanguard Total Bond Market II Index Fund 56%
Vanguard Total International Bond Index Fund 24%
Vanguard Total Stock Market Index Fund 12%
Vanguard Total International Stock Index Fund 8%
Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio indirectly invests in a broadly diversified collection of securities that, in the aggregate, approximates the Bloomberg Barclays U.S. Aggregate Float Adjusted Index in terms of key risk factors and other characteristics. This Index measures 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 one year. The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between five and ten years.
Through its investment in Vanguard Total International Bond Index Fund, the Portfolio 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 one year. To minimize the currency risk associated with investments in bonds denominated in currencies other than the U.S. dollar, the Fund attempts to hedge its currency exposures.
Through its investment in Vanguard Total Stock Market Index Fund, the Portfolio indirectly invests in primarily large-capitalization U.S. stocks and, to a lesser extent, mid-, small-, and micro-capitalization U.S. stocks. The Fund's target index represents approximately 100% of the investable U.S. stock market.
Through its investment in Vanguard Total International Stock Index Fund, the Portfolio indirectly invests in international stocks. The Fund is designed to track the performance of the FTSE Global All Cap ex US Index, a free-float-adjusted, market-capitalization-weighted index designed to measure equity market performance in of companies located in developed and emerging markets, excluding the United States. The Index includes more than 5,500 stocks of companies located in 46 countries.
Investment Risks
The Portfolio is subject to the risks of the underlying bond Funds, including interest rate risk, income risk, prepayment risk, extension risk, call risk, credit risk, country/regional risk, liquidity risk, currency and currency hedging risk, derivatives risk, stock market risk, currency risk, emerging markets risk, investment style risk, index sampling risk, index replicating risk, and nondiversification risk.
Average Annual Returns - Updated Monthly as of
| Name | 1 year | 3 year | 5 year | 10 year | Since Inception |
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**Consists of Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index (42%), the CRSP U.S. Total Stock Market Index (24%), Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index Hedged (18%), and FTSE Global All Cap ex US Index (16%). The Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index consists of the Barclays U.S. Aggregate Bond Index through December 31, 2009; and the Bloomberg Barclays U.S. Aggregate Float Adjusted Index thereafter.
Annual Investment Returns
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Index performance is provided as a benchmark but is not illustrative of any particular investment. An investment cannot be made in an index.
The performance data shown represents past performance. Past performance - especially short-term past performance - is not a guarantee of future results. Investment returns and principal value will fluctuate, so that investors' units, when sold, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data cited.
