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 high level of income and moderate 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 bonds and 40% to common stocks. The percentages of the Fund's assets allocated to each of the underlying funds are 30% in Vanguard Total Bond Market Index Fund, 25% in Vanguard Asset Allocation Fund, 20% in Vanguard Short-Term Corporate Fund, 20% in Vanguard Total Stock Market Index Fund, and 5% in Vanguard Total International Stock Index Fund. The fund's 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. The funds 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. Dividends are distributed quarterly in March, June, September, and December. Capital gains, if any, are distributed annually in December.