Fund Description

The fund was incepted in September 1994 and is managed by the Vanguard Group. The fund's main objective is to seek a reasonable level of income and long-term growth of capital and income. The fund invests in other Vanguard mutual funds according to a fixed formula that typically results in an allocation of about 60% of assets to common stocks and 40% to bonds. The percentages of the Fund's assets allocated to each of the underlying funds are 35% in Vanguard Total Stock Market Index Fund, 30% in Vanguard Total Bond Market Index Fund, 25% in Vanguard Asset Allocation Fund, and 10% in Vanguard Total International Stock Index Fund 10%. The Fund's indirect stock holdings consist substantially of large-capitalization U.S. stocks and, to a lesser extent, mid and small cap U.S. stocks and foreign stocks. Its indirect bond holdings are a diversified mix of short, intermediate, and long-term U.S. government, U.S. agency, mortgage-backed, and investment-grade corporate bonds, with an emphasis on long-term U.S. Treasury bonds and, to a lesser extent, mid and small cap U.S. stocks and foreign stocks. Dividends are distributed semiannually in June and December. Capital gains, if any, are distributed annually in December.