Strategy and policy
The portfolio invests in two Vanguard stock index funds and two Vanguard bond index funds according to a formula that results in an allocation of 50% of assets to stocks and 50% to investment-grade bonds. The percentages of the portfolio’s assets allocated to each underlying fund are: 30% Vanguard Institutional Total Stock Market Index Fund, 20% Vanguard Total International Stock Index Fund, 35% Vanguard Total Bond Market II Index Fund, and 15% Vanguard Total International Bond 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-, small-, and micro-capitalization U.S. stocks and international stocks. Through its ownership of the two bond funds, the portfolio also indirectly holds a mix of bonds—including government, government agency, corporate, securitized non-U.S. investment-grade fixed income investments 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 and abroad, all with maturities of more than 1 year.
The portfolio invests in four Vanguard funds. Each underlying fund follows its own investment policies.