Strategy and policy
The portfolio invests in two Vanguard stock index funds and one Vanguard bond index fund according to a formula that results in an allocation of 75% of assets to stocks and 25% to investment-grade U.S. bonds. The percentages of the portfolio’s assets allocated to each underlying fund are: 45% Vanguard Institutional Total Stock Market Index Fund, 30% Vanguard Total International Stock Index Fund, and 25% Vanguard Total Bond Market II Index Fund.
Through its ownership of the two stock funds, the portfolio indirectly owns primarily large-capitalization U.S. stocks and, to a lesser extent, mid- and small-capitalization U.S. stocks and international stocks. Through its ownership of the bond fund, the portfolio also indirectly holds a mix of bonds—including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities—that represents a wide spectrum of public, investment-grade, taxable fixed income securities in the United States with maturities of more than 1 year.
The portfolio invests in three Vanguard funds. Each underlying fund follows its own investment policy.