Overview

Investment Objective

The Portfolio seeks to provide capital appreciation and current income consistent with its current asset allocation.

Investment Strategy

The portfolio invests in Vanguard mutual funds using an asset allocation strategy designed to become more conservative over time. The target allocations adjust as your beneficiary approaches the date they are expected to enroll in school or an eligible program. Portfolios are rebalanced on a quarterly basis to incrementally decrease exposure to stocks and increase exposure to bonds; the funds continue to adjust until their allocations match that of the Vanguard Commencement Portfolio. The underlying funds are: Vanguard Institutional Total Stock Market Index Fund, Vanguard Developed Markets Index Fund, Vanguard Emerging Markets ex-China ETF, and Vanguard Total Bond Market II Index Fund, and Vanguard Short-Term Reserves.

The fund’s indirect stock holdings are a diversified mix of U.S. and foreign large-, mid-, small-, and micro-capitalization stocks. The fund’s indirect bond holdings are a diversified mix of short- and intermediate-term investment-grade U.S. government bonds, U.S. corporate bonds, international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities.

Through its investment in Vanguard Institutional Total Stock Market Index Fund, the Portfolio indirectly invests in primarily large-capitalization U.S. stocks and, to a lesser extent, mid-, small-, and micro-capitalization U.S. stocks. The Fund holds a broadly diversified collection of securities that, in the aggregate, approximates the total market capitalization of all the U.S. common stocks regularly traded on the New York Stock Exchange and Nasdaq.

Through its investment in Vanguard Developed Markets Index Fund, the Portfolio indirectly invest in stocks issued by companies located in Canada and the major markets of Europe and the Pacific region. The fund employs an indexing investment approach designed to track the performance of the FTSE Developed All Cap ex US Index, a market-capitalization-weighted index that as of December 31, 2024, is made up of approximately 3,909 common stocks of large-, mid-, and small-cap companies.

Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio also indirectly invests in a broadly diversified collection of securities that, in the aggregate, approximates the Bloomberg U.S. Aggregate Float Adjusted Index in terms of key risk factors and other characteristics. The Index measures a wide spectrum of public, investment-grade, taxable, fixed income securities 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.

The Fund maintains a dollar-weighted average maturity consistent with that of the Index, which generally ranges between 5 and 10 years.

Through its investment in Vanguard Emerging Markets Ex-China ETF, the Portfolio indirectly invests in stocks issued by companies located in emerging market countries, excluding China. The Fund employs an indexing investment approach designed to track the performance of the FTSE Emerging ex-China Index, a market-capitalization-weighted index that as of August 29, 2025, is made up of approximately 1,012 common stocks of large- and mid-cap companies.

Through its investment in Vanguard Short-Term Reserves Account, the Portfolio indirectly invests in funding agreements issued by one or more insurance companies, synthetic investment contracts (SICs), and shares of Vanguard Federal Money Market Fund. Funding agreements and SICs are interest-bearing contracts that are structured to preserve principal and accumulate interest earnings over the life of the investment. Funding agreements generally pay interest at a fixed interest rate and have fixed maturity dates that normally range from 2 to 5 years. SICs pay a variable interest rate and have an average duration range between 2 and 5 years. The Federal Money Market Fund invests primarily in high-quality, short-term money market instruments issued by the U.S. government and its agencies and instrumentalities.

Note:
Vanguard Short-Term Reserves Account’s investments in Vanguard Federal Money Market Fund are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Federal Money Market Fund seeks to preserve the value of the investment at $1 per share, it cannot guarantee that it will do so. It is possible that Vanguard Short-Term Reserves Account may lose money by investing in the Fund. The Vanguard Group, Inc., has no legal obligation to provide financial support to the Fund, and there should be no expectation that the sponsor will provide financial support to the Fund at any time.

Investment Risks

The Portfolio is subject to the risks of the underlying stock funds, which include stock market risk, country/regionalrisk, currency risk, and emerging markets risk, and the risks of the underlying bond funds, which include interest rate risk, income risk, prepayment risk, extension risk, call risk, credit risk, country/regional risk, liquidity risk,currency and currency hedging risk, and derivatives risk. The Portfolio is also subject to investment style risk, Index sampling risk, and nondiversification risk.

Average Annual Returns

**Derived by applying the fund’s target asset allocation to the results of the following benchmarks: for U.S. stocks, the CRSP U.S. Total Market Index; for international stocks, the FTSE Global All Cap ex US Index; for U.S. bonds, the Bloomberg U.S. Aggregate Float Adjusted Index; for international bonds, the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index Hedged; and for short-term reserves, the FTSE three-month U.S. Treasury Bill Index and the Ryan Labs 3 year GIC Index. International stock benchmark returns are adjusted for withholding taxes.

Annual Investment Returns

Historical Prices

Brand: arkansas

Fund ID: 1007060

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