Personal Investors

Strategy and policy

Investment strategy

The portfolio invests in the Vanguard Inflation-Protected Securities Fund, which invests at least 80% of its net assets in inflation-indexed bonds issued by the U.S. Treasury and government agencies, as well as corporations. The fund may invest in bonds of any maturity; however, its dollar-weighted average maturity is expected to be in a range of 7 to 20 years. All bonds purchased by the fund will be rated “investment grade.” However, unlike conventional bonds, which make regular fixed interest payments and repay the face value of the bonds at maturity, the principal and interest payments of an inflation-indexed security are adjusted over time to reflect inflation—a rise in the general price level for goods and services. In the event of sustained deflation, or a drop in prices, the U.S. Treasury has guaranteed that it would repay at least the original face value of an inflation-indexed security.

Investment policy

The portfolio invests in a Vanguard fund, which follows its own investment policies.

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