Overview

Investment Objective

The Portfolio seeks to provide a high level of current income and low capital appreciation.

Investment Strategy

The Portfolio invests in two Vanguard stock index funds and two Vanguard bond index funds, resulting in an allocation of 20% of its assets to stocks and 80% of its assets to investment-grade bonds. The percentages of the Portfolio’s assets allocated to each Fund are:

Vanguard Total Stock Market Index Fund 12%
Vanguard Total International Stock Index Fund 8%
Vanguard Total Bond Market II Index Fund 56%
Vanguard Total International Bond Index Fund 24%

Vanguard Total Stock Market Index Fund employs an indexing investment approach designed to track the performance of the Morningstar US Total Market Index (the “Target Index”), which represents 100% of the investable U.S. stock market, as determined by the index provider. The Target Index includes large-, mid-, small-, and micro-cap stocks regularly traded on the New York Stock Exchange and Nasdaq. Under normal circumstances, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the stocks that make up the Target Index. The Fund invests by sampling the Target Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Target Index in terms of key risk factors and other characteristics. The Fund may become nondiversified, as defined under the Investment Company Act of 1940, solely as a result of tracking an index. This could occur due to events such as an index rebalance or market movement. A nondiversified fund may invest a greater percentage of its assets in the securities of particular issuers as compared with diversified funds. In addition, the Fund could become concentrated in an industry or group of industries if the Target Index becomes concentrated due to market conditions or the performance of a single or related group of issuers.

Vanguard Total International Stock Index Fund employs an indexing investment approach designed to track the performance of the FTSE Global All Cap ex US Index (the “Target 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. Under normal circumstances, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the stocks that make up the Target Index. The Fund uses the replication method of indexing, meaning that the Fund generally holds the same stocks as those in its Target Index and in approximately the same proportions.

Vanguard Total Bond Market II Index Fund employs an indexing investment approach designed to track the performance of the Bloomberg U.S. Aggregate Float Adjusted Index (the “Target Index”). The Target Index measures the performance of a wide spectrum of public, investment-grade, taxable bonds 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. Under normal circumstances, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the bonds that make up the Target Index and in securities that the advisor determines have substantially identical economic characteristics to the securities that make up the Target Index. The Fund invests by sampling the Target Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Target Index in terms of key risk factors and other characteristics. The Fund maintains a dollar-weighted average maturity consistent with that of the Target Index. As of December 31, 2025, the dollar-weighted average maturity of the Target Index was 8.2 years.

Vanguard Total International Bond Index 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) (the “Target Index”), a market-value-weighted index that provides a broad-based measure of the global, investment-grade, fixed-rate bond markets. The Target Index includes government, government agency, corporate, and securitized investment-grade bonds of issuers located in developed and emerging markets, all issued in currencies other than the U.S. dollar and with maturities of more than one year. The Target Index is capped to comply with investment company diversification standards of the Internal Revenue Code, but is not designed to satisfy the diversification requirements of the Investment Company Act of 1940. Under normal circumstances, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in the bonds that make up the Target Index.

The Fund invests by sampling the Target Index, meaning that it holds a range of securities that, in the aggregate, approximates the full Target Index in terms of key risk factors and other characteristics. The Fund maintains a dollar-weighted average maturity consistent with that of the Target Index. As of October 31, 2025, the dollar-weighted average maturity of the Target Index was 8.6 years. To correlate to the returns of the Target Index (which is U.S.-dollar hedged) and to minimize the currency risk associated with investing in bonds denominated in currencies other than the U.S. dollar, the Fund seeks to hedge its foreign currency exposure. The Fund hedges its foreign currency exposure primarily through the use of foreign currency exchange forward contracts, which are a type of derivative. The Fund may become nondiversified, as defined under the Investment Company Act of 1940, solely as a result of tracking an index. This could occur due to events such as an index rebalance or market movement. A nondiversified fund may invest a greater percentage of its assets in the securities of particular issuers as compared with diversified funds.

Investment Risks

The Portfolio is subject to general market risk, investing in equity markets risk, market capitalization risk, index investing risk, nondiversification risk, concentration risk, information technology sector risk, investing in foreign markets risk, investing in emerging markets risk, currency risk, investments economically tied to China risk, investing in bond markets risk, interest rate risk, income risk, credit risk, bond liquidity risk, call risk, prepayment risk, extension risk, currency hedging risk, and investing in derivatives risk. For a description of these risks, see Part II. Plan Investment Options – Risk Factor Glossary

Average Annual Returns

*Note - ID 529 Income Composite reflects monthly re-balancing through February, 28 2013 and daily rebalancing thereafter.
**Consists of the Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index (56%), the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged) (24%), the Morningstar US Total Market Index (12%), and the FTSE Global All Cap ex US Index (8%). The Morningstar US Total Market Index replaced the MSCI US Broad Market Index (on June 3, 2013), which had replaced the Dow Jones Wilshire 5000 Index (on April 22, 2005). 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. Effective September 29, 2016, Barclays indexes were rebranded to Bloomberg Barclays indexes. 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

Brand: idaho

Fund ID: 1013017

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