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VANGUARD
INSTITUTIONAL INDEX
FUND
Semiannual Report - June 30, 1998
[PHOTO]
[THE VANGUARD GROUP LOGO]
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OUR CREW MAKES THE DIFFERENCE
Throughout our history, The Vanguard Group has received considerable attention
as the low-cost provider of mutual funds. While such accolades are gratifying,
we are most proud, not of our low operating expenses or the billions of dollars
we manage, but of our sterling reputation created by the Vanguard crew.
We recognize that it is our crew members--more than 7,000 highly
motivated men and women--who form the cornerstone of our operations. We could
not survive long--let alone prosper--without them. That's why we chose this
fiscal year's fund reports to celebrate the spirit, enthusiasm, and achievements
of our crew. (We call those who work at Vanguard crew members, not employees,
because they operate as a team to accomplish our mission of serving you, our
clients.)
But while we prize the collective contributions of our crew, we also
take time to recognize the importance of the individual. Each calendar quarter,
we present our Award For Excellence to a handful of crew members who have
demonstrated particular excellence in the performance of their jobs and who
embody "The Vanguard Spirit." Our report cover shows only a few of the more than
300 crew members who have received this distinction since 1984.
They, along with the rest of our valiant crew, look forward to
serving you in the years ahead.
[PHOTO] [PHOTO]
JOHN C. BOGLE JOHN J. BRENNAN
SENIOR CHAIRMAN CHAIRMAN & CEO
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CONTENTS
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A MESSAGE TO OUR SHAREHOLDERS .......... 1
THE MARKETS IN PERSPECTIVE ............. 3
PERFORMANCE SUMMARIES .................. 5
PORTFOLIO PROFILES ..................... 7
FINANCIAL STATEMENTS ................... 9
</TABLE>
All comparative mutual fund data are from Lipper Analytical Services, Inc., or
Morningstar unless otherwise noted.
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DEAR SHAREHOLDER,
The U.S. stock market rocketed to new highs during the first six months
of 1998, and Vanguard Institutional Index Fund was again among the leaders
on the remarkable climb.
During the half-year ended June 30, our fund earned a total return of
+17.7%, exactly matching the return of its target benchmark, the Standard &
Poor's 500 Composite Stock Price Index, and topping the performance of more than
80% of all general equity mutual funds.
The following table compares Vanguard Institutional Index Fund's
six-month total return (capital change plus reinvested dividends) with those of
the average general equity fund and the S&P 500 Index. Our fund's return is
based on an increase in net asset value from $89.56 per share on December 31,
1997, to $104.62 per share on June 30, 1998, with the latter figure adjusted for
dividends totaling $0.60 per share paid from net investment income and
distributions totaling $0.205 per share paid from net realized capital gains.
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<CAPTION>
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TOTAL RETURNS
SIX MONTHS ENDED
JUNE 30, 1998
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<S> <C>
Vanguard Institutional Index Fund +17.7%
Average General Equity Fund +11.8
S&P 500 Index +17.7
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Institutional Plus Shares +17.8%
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</TABLE>
Our Institutional Plus Shares, which are available for a minimum
investment of $200 million, eked out a small advantage over the S&P 500 Index,
earning +17.8%. The total return of these shares is based on an increase in net
asset value from $89.56 per share on December 31, 1997, to $104.62 per share on
June 30, 1998, with the latter figure adjusted for dividends totaling $0.615 per
share paid from net investment income and distributions totaling $0.205 per
share paid from net realized capital gains.
THE PERIOD IN REVIEW
The U.S. economy grew vigorously, inflation was subdued, and interest rates
declined during the first half of 1998. Consumers, heartened by high employment
and rising wages, spent freely, providing the economy's propellant. Strength in
consumer spending was more than enough to offset the negative effects of Asia's
severe economic slump.
Asia's troubles, which have lowered the prices of imported goods in
the United States, were partly responsible for the benign behavior of
inflation--consumer prices rose only 1.1% for the six months and 1.7% for the
twelve months ended June 30. Low inflation was especially soothing to the bond
market, where prices rose and interest rates declined; the yield on the
benchmark 30-year U.S. Treasury bond was 5.63% on June 30, down 29 basis points
(0.29 percentage point) from its yield at the start of the year, reflected in a
price increase of about 3%.
The stock market's rise during the six months, however impressive,
was not straight up. Jitters over Asia prompted an across-the-board decline
during April and May and resulted in a 10% "correction" in some small-stock
indexes. The S&P 500 Index's decline of -1.7% in May broke a string of six
straight monthly gains. However, the Index bounced back strongly in June,
posting a +4.1% advance.
As has been the case for a good portion of the current bull run in
stocks, bigger was better during the half-year and "big growth" was better
still. The S&P 500 Index's advance was once again led by a relatively narrow
segment of blue-chip growth companies. More
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than half of the Index's remarkable +17.7% return during the period was
accounted for by fewer than 20 giant stocks. Notably, the Index's second-largest
holding, Microsoft, was up 68% in the first half, Wal-Mart (seventh-largest in
the Index) climbed 54%, and Lucent (twelfth-largest) was up 108%. Those three
issues alone accounted for nearly one-fourth of the S&P 500 Index's gain during
the half-year. Stocks of large-cap growth companies set a blistering pace of
+23.1% during the six months, nearly 6 percentage points higher than the S&P 500
Index's return and almost double the +12.1% return of their value counterparts.
Returns on these two groups have been similar over long periods but often
diverge--sometimes sharply--over short periods.
As a group, technology stocks led the S&P 500 pack during the six
months with a +32.7% gain, while stocks in the health-care, consumer
discretionary, and auto & transportation sectors earned returns of more than
+24% for the half-year.
Beyond the S&P 500, the rest of the U.S. stock market (as represented
by the Wilshire 4500 Equity Index) returned +9.4%.
While Vanguard Institutional Index Fund's absolute performance was
outstanding--its +17.7% return was more than 11/2 times the historical annual
average for stocks--its relative performance was even more impressive. The
fund's margin of superiority over the average equity fund, which typically has a
higher stake in smaller stocks, was nearly 6 percentage points.
Of course, our extremely low expenses provide a big head start. Our
annual operating expenses were equal to 0.06% of average net assets for Vanguard
Institutional Index Fund and 0.025% for the Institutional Plus Shares, while the
average general equity mutual fund has an annual expense ratio of 1.45%.
IN SUMMARY
The rewards of investing in the stock market have been amply demonstrated during
the bull market that began nearly 16 years ago. The risks, meanwhile, seem to
have come in brief bursts.
For those who believe that such outsized gains will continue
indefinitely, we assure you they will not. Stocks will not continue to pack the
historical equivalent of more than 18 months' worth of returns into six months.
And not all future market declines will be short-lived. Prolonged declines have
occurred in the past and almost surely will recur in the future. That is the
nature of the stock market.
Because such turnabouts are difficult--if not impossible--to predict,
we recommend a sensible course that allows investors to participate in the stock
market's rewards without shouldering all of its considerable risk: holding a
balanced portfolio of stock funds, bond funds, and money market funds. Such a
portfolio is a time-tested vehicle for reaping the rewards of financial markets
as well as for "staying the course" toward your long-term objectives.
We look forward to reporting to you on the full 1998 fiscal year in
our annual report six months hence.
/s/ JOHN C. BOGLE /s/JOHN J. BRENNAN
John C. Bogle John J. Brennan
Senior Chairman Chairman and
Chief Executive Officer
July 17, 1998
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THE MARKETS IN PERSPECTIVE
Six Months Ended June 30, 1998
Blue skies predominated for U.S. financial markets during the first six months
of 1998, and even the occasional clouds had silver linings. The bond market
provided solid returns during the half-year, while the stock market's
performance was extraordinarily strong.
After expanding at a 5.4% annual pace during the first quarter, the
U.S. economy kept steaming along through June, fueled by powerful increases in
household spending. Consumers had reason to be upbeat: plentiful jobs
(unemployment fell to 4.3% of the workforce in May); rising wages (personal
income in May was 5.9% higher than in May 1997); and tame inflation (consumer
prices in June were up only 1.7% from a year before).
The economic push provided by consumers more than compensated for the
drag caused by Asia's severe economic problems. Weakening currencies and
business slowdowns in Asia cut into U.S. exports and lowered the cost of Asian
imports, causing the U.S. trade deficit to hit record levels. Ominously, Asia's
problems appear to be more serious and enduring than many economists expected.
Yet for Americans this "Asian contagion" has a bright side: It serves as an
escape valve for the inflationary pressures that ordinarily would be expected to
build up with the U.S. economy humming along at high speed.
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TOTAL RETURNS
PERIODS ENDED JUNE 30, 1998
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6 MONTHS 1 YEAR 5 YEARS*
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<S> <C> <C> <C>
EQUITY
S&P 500 Index 17.7% 30.2% 23.1%
Russell 2000 Index 4.9 16.5 16.0
MSCI EAFE Index 16.1 6.4 10.3
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FIXED-INCOME
Lehman Aggregate Bond Index 3.9% 10.5% 6.9%
Lehman 10-Year Municipal Bond Index 2.6 8.5 6.6
Salomon Brothers Three-Month
U.S. Treasury Bill Index 2.6 5.3 4.9
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OTHER
Consumer Price Index 1.1% 1.7% 2.5%
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</TABLE>
*Annualized.
U.S. EQUITY MARKETS
The mixture of robust economic growth and anemic inflation was a tonic for the
U.S. stock market. Although prices generally rose, there were striking
disparities in returns between large-capitalization and small-cap stocks and
between growth and value stocks. The large-cap-dominated S&P 500 earned 17.7%
during the six months, nearly double the 9.4% return on the rest of the market
(as measured by the Wilshire 4500 Index) and more than triple the 4.9% return on
the small-cap Russell 2000 Index. Within the S&P 500 Index, growth stocks were
up 23.1%, while value stocks rose 12.1%.
A decline in interest rates contributed to the stock market's rise,
as falling rates on bonds tend to make equities more attractive and to boost the
price investors will pay for each dollar of a stock's earnings or dividends. Yet
growth in earnings and dividends--the long-term underpinning of stock
prices--was unimpressive during the first half of 1998.
Corporate earnings estimates were reduced in June, the tenth
consecutive month in which securities analysts have cut their earnings
estimates, according to I/B/E/S International, a financial research group.
Earnings by the S&P 500 companies were expected to
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rise by only about 2% for the first half of 1998, I/B/E/S reported. With gains
in prices outstripping increases in earnings and dividends, stock valuations are
at or near all-time highs, an indication that investors expect ideal conditions
to continue.
Technology stocks were the best-performing sector during the first
half of 1998, generating a 32.7% return. Three other sectors of the stock
market--health care, consumer discretionary stocks such as retailers, and auto &
transportation--each provided returns of about 25% for the six months. Companies
involved in energy, chemicals, or other commodity-based businesses were
generally laggards. Prices of many commodities have declined as Asia's economic
funk cuts demand for energy and other industrial materials in the face of
plentiful supplies.
U.S. FIXED-INCOME MARKETS
Investors in fixed-income securities enjoyed a moderate rise in the market value
of their holdings because of declining interest rates. This price appreciation,
added to coupon interest income, resulted in solid total returns. The 3.9% total
return of the Lehman Aggregate Bond Index during the half-year brought its
return for the 12 months ended June 30 to 10.5%, or a very generous 8.8% after
adjustment for inflation.
Yields on 10-year and 30-year U.S. Treasury bonds declined by 29
basis points (0.29 percentage point) to 5.45% and 5.63%, respectively, during
the first half of 1998, with most of the drop occurring during the second
quarter. The yield on 3-month Treasury bills declined 36 basis points to 4.99%.
Mild inflation--consumer prices were up 1.1% for the half-year--enabled rates to
decline despite the economy's strong growth.
Yields on corporate and municipal bonds did not decline as far as
those on Treasury securities because of a large increase in the supply of new
bonds issued by companies and municipalities taking advantage of lower rates to
refinance old debt. Similarly, mortgage-backed securities did not match
Treasuries' performance because of expectations that large numbers of homeowners
would pay off old, higher-coupon mortgage loans and refinance with new,
lower-rate loans.
INTERNATIONAL EQUITY MARKETS
Stock markets in Europe soared while those in Asia and most emerging economies
suffered steep declines in U.S.-dollar terms. The 16.1% overall return from
international markets, as measured by the Morgan Stanley Capital International
Europe, Australasia, Far East Index, masked the divergence between Europe and
other regions.
Europe's markets were up 27.1% when measured in local currencies and
26.5% in U.S. dollars, after adjusting for a slight overall rise in the dollar's
value. Stocks benefited from an upswing in most European economies, from signs
that corporate managers are increasingly focused on shareholder value, and from
optimism concerning next year's planned adoption of the euro as a single
European currency.
In the Pacific, which is dominated by Japan's stock market, stocks
were buffeted by several problems: slowing growth in economic activity;
continued instability in currencies; political upheavals; and widespread worries
about corporate and banking insolvencies. On balance, the region's stocks fell
6.0% in U.S.-dollar terms. Japanese stocks were down 2.5%, but losses were more
severe in the region's smaller markets.
Emerging markets were, on balance, down sharply. Asian stock markets
were hurt by continued weakness in the currency values of several countries, by
Japan's recession, and by a growing conviction that the region's economic
troubles are far from transitory. Venezuela and Mexico, both key oil-producing
nations, were hard hit by falling oil prices.
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PERFORMANCE SUMMARY
Institutional Index Fund
All of the data on this page represent past performance, which cannot be used to
predict future returns that may be achieved by the fund. Note, too, that both
share price and return can fluctuate widely, so an investment in the fund could
lose money.
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TOTAL INVESTMENT RETURNS: JULY 31, 1990-JUNE 30, 1998
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INSTITUTIONAL INDEX FUND S&P 500
FISCAL CAPITAL INCOME TOTAL TOTAL
YEAR RETURN RETURN RETURN RETURN
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<S> <C> <C> <C> <C>
1990 -7.3% 1.6% -5.7% -5.7%
1991 26.4 3.9 30.3 30.5
1992 4.5 3.0 7.5 7.6
1993 7.1 2.9 10.0 10.1
1994 -1.5 2.8 1.3 1.3
1995 34.4 3.2 37.6 37.6
1996 20.6 2.5 23.1 23.0
1997 31.2 2.2 33.4 33.4
1998* 17.1 0.6 17.7 17.7
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</TABLE>
*Six months ended June 30, 1998.
See Financial Highlights table on page 17 for dividend and capital gains
information for the past five years.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS: PERIODS ENDED JUNE 30, 1998
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SINCE INCEPTION
INCEPTION -------------------------------------
DATE 1 YEAR 5 YEARS CAPITAL INCOME TOTAL
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<S> <C> <C> <C> <C> <C> <C>
Institutional Index Fund 7/31/1990 30.20% 23.10% 15.90% 2.92% 18.82%
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5
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PERFORMANCE SUMMARY
Institutional Index Fund-Institutional Plus Shares
All of the data on this page represent past performance, which cannot be used to
predict future returns that may be achieved by the fund. Note, too, that both
share price and return can fluctuate widely, so an investment in the fund could
lose money.
<TABLE>
<CAPTION>
TOTAL INVESTMENT RETURNS: JULY 7, 1997-JUNE 30, 1998
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INSTITUTIONAL INDEX FUND-
INSTITUTIONAL PLUS SHARES S&P 500
FISCAL CAPITAL INCOME TOTAL TOTAL
PERIOD RETURN RETURN RETURN RETURN
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<S> <C> <C> <C> <C>
1997 6.2% 1.1% 7.3% 7.3%
1998* 17.1 0.7 17.8 17.7
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</TABLE>
*Six months ended June 30, 1998.
See Financial Highlights table on page 18 for dividend and capital gains
information since the fund's inception.
<TABLE>
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TOTAL RETURN: PERIOD ENDED JUNE 30, 1998
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SINCE INCEPTION
INCEPTION ---------------------------------------
DATE CAPITAL INCOME TOTAL
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<S> <C> <C> <C> <C>
Institutional Index Fund-Institutional Plus Shares 7/7/1997 24.35% 1.98% 26.33%
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</TABLE>
6
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PORTFOLIO PROFILE
Institutional Index Fund
This Profile provides a snapshot of the fund's characteristics as of June 30,
1998, compared where appropriate to an unmanaged index. Key elements of this
Profile are defined on page 8.
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PORTFOLIO CHARACTERISTICS
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INSTITUTIONAL
INDEX S&P 500
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Number of Stocks 515 500
Median Market Cap $50.0B $50.0B
Price/Earnings Ratio 24.8x 24.8x
Price/Book Ratio 4.5x 4.5x
Yield 1.4% 1.4%
Yield--Institutional
Plus Shares 1.5% 1.4%
Return on Equity 21.6% 21.6%
Earnings Growth Rate 16.4% 16.4%
Foreign Holdings 1.7% 1.7%
Turnover Rate 14%* --
Expense Ratio 0.06%* --
Expense Ratio--
Institutional Plus Shares 0.025%* --
Cash Reserves 0.0% --
</TABLE>
*Annualized.
INVESTMENT FOCUS
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[GRAPH]
<TABLE>
<CAPTION>
VOLATILITY MEASURES
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INSTITUTIONAL
INDEX S&P 500
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<S> <C> <C>
R-Squared 1.00 1.00
Beta 1.00 1.00
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TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS)
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General Electric Co. 3.3%
Microsoft Corp. 3.0
The Coca-Cola Co. 2.3
Exxon Corp. 1.9
Merck & Co., Inc. 1.8
Pfizer, Inc. 1.6
Wal-Mart Stores, Inc. 1.5
Intel Corp. 1.4
Procter & Gamble Co. 1.4
Royal Dutch Petroleum Co. ADR 1.3
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Top Ten 19.5%
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<TABLE>
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SECTOR DIVERSIFICATION (% OF COMMON STOCKS)
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JUNE 30, 1997 JUNE 30, 1998
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INSTITUTIONAL INSTITUTIONAL
INDEX INDEX S&P 500
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<S> <C> <C> <C>
Auto & Transportation 3.5% 3.3% 3.3%
Consumer Discretionary 9.3 10.2 10.2
Consumer Staples 12.0 10.7 10.7
Financial Services 16.2 18.5 18.5
Health Care 11.4 12.1 12.1
Integrated Oils 7.8 6.5 6.5
Other Energy 1.2 1.0 1.0
Materials & Processing 6.9 5.3 5.2
Producer Durables 4.7 3.5 3.5
Technology 12.1 13.0 13.0
Utilities 9.2 10.3 10.3
Other 5.7 5.6 5.7
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BETA. A measure of the magnitude of a portfolio's past share-price fluctuations
in relation to the ups and downs of the overall market (or appropriate market
index). The market (or index) is assigned a beta of 1.00, so a portfolio with a
beta of 1.20 would have seen its share price rise or fall by 12% when the
overall market rose or fell by 10%.
CASH RESERVES. The percentage of a portfolio's net assets invested in "cash
equivalents"--highly liquid, short-term, interest-bearing securities. This
figure does not include cash invested in futures contracts to simulate stock
investment.
EARNINGS GROWTH RATE. The average annual rate of growth in earnings over the
past five years for the stocks now in a portfolio.
EXPENSE RATIO. The percentage of a portfolio's average net assets used to pay
its annual administrative and advisory expenses. These expenses directly reduce
returns to investors.
FOREIGN HOLDINGS. The percentage of a portfolio's net assets represented by
stocks or American Depositary Receipts of companies based outside the United
States.
INVESTMENT FOCUS. This grid indicates the focus of a portfolio in terms of two
attributes: market capitalization (large, medium, or small) and relative
valuation (growth, value, or a blend).
MEDIAN MARKET CAP. An indicator of the size of companies in which a portfolio
invests; the midpoint of market capitalization (market price x shares
outstanding) of a portfolio's stocks, weighted by the proportion of the
portfolio's assets invested in each stock. Stocks representing half of the
portfolio's assets have market capitalizations above the median, and the rest
are below it.
NUMBER OF STOCKS. An indicator of diversification. The more stocks a portfolio
holds, the more diversified it is and the more likely to perform in line with
the overall stock market.
PRICE/BOOK RATIO. The share price of a stock divided by its net worth, or book
value, per share. For a portfolio, the weighted average price/book ratio of the
stocks it holds.
PRICE/EARNINGS RATIO. The ratio of a stock's current price to its per-share
earnings over the past year. For a portfolio, the weighted average P/E of the
stocks it holds. P/E is an indicator of market expectations about corporate
prospects; the higher the P/E, the greater the expectations for a company's
future growth.
R-SQUARED. A measure of how much of a portfolio's past returns can be explained
by the returns from the overall market (or its benchmark index). If a
portfolio's total return were precisely synchronized with the overall market's
return, its R-squared would be 1.00. If a portfolio's returns bore no
relationship to the market's returns, its R-squared would be 0.
RETURN ON EQUITY. The annual average rate of return generated by a company
during the past five years for each dollar of shareholder's equity (net income
divided by shareholder's equity). For a portfolio, the weighted average return
on equity for the companies whose stocks it holds.
SECTOR DIVERSIFICATION. The percentages of a portfolio's common stocks that come
from each of the major industry groups that compose the stock market.
TEN LARGEST HOLDINGS. The percentage of net assets invested in a portfolio's ten
largest holdings. (The average for stock mutual funds is about 30%.) As this
percentage rises, a portfolio's returns are likely to be more volatile because
they depend more on the fortunes of a few companies.
TURNOVER RATE. An indication of trading activity during the period. Portfolios
with high turnover rates incur higher transaction costs and are more likely to
distribute capital gains (which are taxable to investors).
YIELD. A snapshot of a portfolio's income from interest and dividends. The
yield, expressed as a percentage of the portfolio's net asset value, is based on
income earned over the past 30 days and is annualized, or projected forward for
the coming year. The index yield is based on the current annualized rate of
dividends paid on stocks in the index.
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FINANCIAL STATEMENTS
June 30, 1998 (unaudited)
STATEMENT OF NET ASSETS
This Statement provides a detailed list of the fund's holdings, including each
security's market value on the last day of the reporting period. Securities are
grouped and subtotaled by asset type (common stocks, bonds, etc.), with the
fund's S&P 500 Index common stocks listed in descending market value order.
Other assets are added to, and liabilities are subtracted from, the value of
Total Investments to calculate the fund's Net Assets. Finally, Net Assets are
divided by the outstanding shares of the fund to arrive at its share price, or
Net Asset Value (NAV) Per Share.
At the end of the Statement of Net Assets, you will find a table
displaying the composition of the fund's net assets. Because all income and any
realized gains must be distributed to shareholders each year, the bulk of net
assets consists of Paid in Capital (money invested by shareholders). The amounts
shown for Undistributed Net Investment Income and Accumulated Net Realized Gains
usually approximate the sums the fund had available to distribute to
shareholders as income dividends or capital gains as of the statement date, but
may differ because certain investments or transactions may be treated
differently for financial statement and tax purposes. Any Accumulated Net
Realized Losses, and any cumulative excess of distributions over net income or
net realized gains, will appear as negative balances. Unrealized Appreciation
(Depreciation) is the difference between the market value of the fund's
investments and their cost, and reflects the gains (losses) that would be
realized if the fund were to sell all of its investments at their statement-date
values.
<TABLE>
<CAPTION>
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MARKET
VALUE*
INSTITUTIONAL INDEX FUND SHARES (000)
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COMMON STOCKS (99.2%)(1)
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<S> <C> <C>
General Electric Co. 8,332,588 $ 758,265
- - Microsoft Corp. 6,295,850 682,313
The Coca-Cola Co. 6,315,539 539,979
Exxon Corp. 6,257,812 446,260
Merck & Co., Inc. 3,056,921 408,863
Pfizer, Inc. 3,339,193 362,929
Wal-Mart Stores, Inc. 5,743,996 348,948
Intel Corp. 4,337,646 321,528
Procter & Gamble Co. 3,429,718 312,319
Royal Dutch Petroleum Co. ADR 5,484,250 300,605
Bristol-Myers Squibb Co. 2,545,571 292,582
Lucent Technologies, Inc. 3,355,540 279,139
International Business
Machines Corp. 2,411,514 276,872
American International
Group, Inc. 1,789,308 261,239
Johnson & Johnson 3,439,023 253,628
Philip Morris Cos., Inc. 6,213,325 244,650
- - Cisco Systems, Inc. 2,616,399 240,872
AT&T Corp. 4,153,892 237,291
E.I. du Pont de Nemours & Co. 2,886,275 215,388
SBC Communications Inc. 4,694,520 187,781
NationsBank Corp. 2,445,418 187,074
Eli Lilly & Co. 2,827,212 186,773
The Walt Disney Co. 1,740,394 182,850
Ford Motor Co. 3,096,736 182,707
Bell Atlantic Corp. 3,963,148 180,819
Travelers Group Inc. 2,936,006 177,995
American Home Products Corp. 3,351,064 173,418
Citicorp 1,152,707 172,042
Schering-Plough Corp. 1,873,007 171,614
BellSouth Corp. 2,527,663 169,669
The Chase Manhattan Corp. 2,178,799 164,499
Gillette Co. 2,868,022 162,581
Abbott Laboratories 3,940,713 161,077
Fannie Mae 2,647,148 160,814
Hewlett-Packard Co. 2,644,424 158,335
PepsiCo, Inc. 3,806,513 156,781
Home Depot, Inc. 1,875,852 155,813
Mobil Corp. 1,994,833 152,854
- - Dell Computer Corp. 1,644,108 152,594
BankAmerica Corp. 1,742,954 150,657
First Union Corp. 2,508,928 146,145
Warner-Lambert Co. 2,092,136 145,142
Morgan Stanley Dean
Witter & Co. 1,531,810 139,969
Chevron Corp. 1,669,718 138,691
GTE Corp. 2,457,467 136,697
American Express Co. 1,177,292 134,211
Unilever NV 1,634,277 129,006
Time Warner, Inc. 1,508,343 128,869
- - WorldCom, Inc. 2,634,867 127,626
Ameritech Corp. 2,809,493 126,076
McDonald's Corp. 1,755,013 121,096
Compaq Computer Corp. 4,219,350 119,724
The Boeing Co. 2,579,414 114,945
General Motors Corp. 1,706,346 114,005
MCI Communications Corp. 1,849,314 107,491
Amoco Corp. 2,453,456 102,125
Banc One Corp. 1,791,747 100,002
Allstate Corp. 1,073,322 98,276
Tyco International Ltd. 1,490,860 93,924
Chrysler Corp. 1,650,387 93,040
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
MARKET
VALUE*
INSTITUTIONAL INDEX FUND SHARES (000)
- ------------------------------------------------------------------------
<S> <C> <C>
Schlumberger Ltd. 1,275,309 $ 87,120
Monsanto Co. 1,529,058 85,436
- - AirTouch Communications, Inc. 1,459,853 85,310
Xerox Corp. 838,014 85,163
Minnesota Mining &
Manufacturing Co. 1,034,272 85,004
Texaco Inc. 1,383,480 82,576
Freddie Mac 1,735,077 81,657
U.S. Bancorp 1,898,495 81,635
Merrill Lynch & Co., Inc. 884,694 81,613
Wells Fargo & Co. 218,189 80,512
Motorola, Inc. 1,528,122 80,322
Sprint Corp. 1,100,724 77,601
Computer Associates
International, Inc. 1,396,104 77,571
Medtronic, Inc. 1,200,398 76,525
Northern Telecom Ltd. 1,330,833 75,525
Norwest Corp. 1,934,955 72,319
MediaOne Group, Inc. 1,556,833 68,403
Emerson Electric Co. 1,131,870 68,337
Associates First Capital Corp. 885,999 68,111
Sara Lee Corp. 1,194,279 66,805
Colgate-Palmolive Co. 757,099 66,625
Kimberly-Clark Corp. 1,424,446 65,346
First Chicago NBD Corp. 734,292 65,077
AlliedSignal Inc. 1,445,344 64,137
Atlantic Richfield Co. 820,398 64,094
The Gap, Inc. 1,005,167 61,943
Campbell Soup Co. 1,161,078 61,682
- - Oracle Corp. 2,488,800 61,131
Sears, Roebuck & Co. 999,797 61,050
Fleet Financial Group, Inc. 726,539 60,666
Eastman Kodak Co. 824,975 60,275
U S West, Inc. 1,280,486 60,183
Pharmacia & Upjohn, Inc. 1,298,789 59,907
National City Corp. 839,047 59,572
Anheuser-Busch Cos., Inc. 1,242,375 58,625
The Bank of New York Co., Inc. 961,090 58,326
CBS Corp. 1,833,881 58,226
Texas Instruments, Inc. 998,443 58,222
- - EMC Corp. 1,272,339 57,017
Automatic Data Processing, Inc. 770,493 56,150
Dow Chemical Co. 575,606 55,654
Duke Energy Corp. 921,451 54,596
United Technologies Corp. 586,851 54,284
Dayton Hudson Corp. 1,117,583 54,203
J.P. Morgan & Co., Inc. 455,550 53,356
Lockheed Martin Corp. 499,182 52,851
H.J. Heinz Co. 935,002 52,477
Walgreen Co. 1,269,846 52,461
Gannett Co., Inc. 726,105 51,599
- - Viacom Inc. Class B 871,151 50,745
- - Tele-Communications, Inc.
Class A 1,296,735 49,843
General Re Corp. 195,677 49,604
Caterpillar, Inc. 937,346 49,562
Southern Co. 1,779,406 49,267
Columbia/HCA Healthcare Corp. 1,645,334 47,920
J.C. Penney Co., Inc. 640,759 46,335
Mellon Bank Corp. 665,282 46,320
American General Corp. 648,631 46,174
- - Cendant Corp. 2,179,667 45,501
Enron Corp. 839,767 45,400
Wachovia Corp. 526,254 44,468
SunTrust Banks, Inc. 539,724 43,886
Washington Mutual, Inc. 988,234 42,926
Bestfoods 737,291 42,809
Waste Management Inc. 1,218,141 42,635
Illinois Tool Works, Inc. 638,938 42,609
- - Amgen, Inc. 649,542 42,464
MBNA Corp. 1,281,310 42,283
- - Sun Microsystems, Inc. 967,061 42,007
BankBoston Corp. 749,079 41,668
PNC Bank Corp. 769,072 41,386
Raytheon Co. Class B 695,428 41,117
Household International, Inc. 822,072 40,898
KeyCorp 1,123,438 40,022
Marsh & McLennan Cos., Inc. 656,797 39,695
Burlington Northern
Santa Fe Corp. 402,608 39,531
Kellogg Co. 1,046,183 39,297
Fifth Third Bancorp 618,439 38,962
ConAgra, Inc. 1,226,305 38,859
- - AMR Corp. 466,226 38,813
May Department Stores Co. 590,256 38,662
Baxter International, Inc. 717,500 38,610
HBO & Co. 1,093,440 38,544
CVS Corp. 981,327 38,210
CIGNA Corp. 550,636 37,994
First Data Corp. 1,139,803 37,970
Williams Cos., Inc. 1,082,408 36,531
Lowe's Cos., Inc. 894,287 36,275
The Seagram Co. Ltd. 885,347 36,244
NIKE, Inc. Class B 735,596 35,814
- - Boston Scientific Corp. 497,009 35,598
Franklin Resources Corp. 648,507 35,019
- - Costco Cos., Inc. 552,187 34,822
The Hartford Financial Services
Group Inc. 302,158 34,559
The Chubb Corp. 429,747 34,541
- - Clear Channel
Communications, Inc. 316,427 34,530
Pitney Bowes, Inc. 699,463 33,662
International Paper Co. 780,118 33,545
Deere & Co. 633,317 33,487
- - Tellabs, Inc. 465,177 33,318
Albertson's, Inc. 627,565 32,516
Phillips Petroleum Co. 667,486 32,164
Mattel, Inc. 748,468 31,670
Ralston-Ralston Purina Group 269,960 31,535
PPG Industries, Inc. 452,848 31,501
United Healthcare Corp. 493,596 31,343
PG&E Corp. 975,360 30,785
Aon Corp. 431,709 30,328
Textron, Inc. 417,703 29,944
Halliburton Co. 671,419 29,920
Texas Utilities Co. 713,593 29,703
Comcast Corp. Class A Special 726,139 29,477
FPL Group, Inc. 465,571 29,331
Wrigley, (Wm.) Jr. Co. 296,675 29,074
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
MARKET
VALUE*
SHARES (000)
- ------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust Corp. 250,142 $ 29,032
Norfolk Southern Corp. 971,572 28,965
- - Federated Department
Stores, Inc. 537,660 28,933
State Street Corp. 413,767 28,757
SunAmerica Inc. 498,830 28,652
Aluminum Co. of America 430,621 28,394
Aetna Inc. 371,975 28,317
Archer-Daniels-Midland Co. 1,460,444 28,296
- - The Kroger Co. 656,829 28,162
Service Corp. International 650,033 27,870
- - 3Com Corp. 907,916 27,862
Union Pacific Corp. 631,301 27,856
Consolidated Edison Inc. 601,191 27,692
General Mills, Inc. 403,975 27,622
- - Applied Materials, Inc. 935,068 27,585
Guidant Corp. 385,480 27,490
Edison International 926,077 27,377
- - HEALTHSOUTH Corp. 1,014,465 27,074
Honeywell, Inc. 322,001 26,907
Cardinal Health, Inc. 282,775 26,510
Comerica, Inc. 399,800 26,487
Masco Corp. 435,380 26,340
Cognizant Corp. 417,861 26,325
Avon Products, Inc. 338,095 26,202
Progressive Corp. of Ohio 185,069 26,095
The Goodyear Tire & Rubber Co. 403,345 25,991
Loews Corp. 293,551 25,576
CSX Corp. 561,587 25,552
Computer Sciences Corp. 399,009 25,536
The Clorox Co. 266,475 25,415
USX-Marathon Group 738,322 25,334
Hershey Foods Corp. 365,414 25,214
Fort James Corp. 564,558 25,123
Occidental Petroleum Corp. 930,062 25,112
Pioneer Hi-Bred
International, Inc. 606,029 25,074
St. Paul Cos., Inc. 594,829 25,020
Delta Air Lines, Inc. 192,799 24,919
Rite Aid Corp. 658,853 24,748
- - Tenet Healthcare Corp. 789,736 24,679
Becton, Dickinson & Co. 315,500 24,491
BB&T Corp. 360,489 24,378
ALLTEL Corp. 523,723 24,353
- - Ascend Communications, Inc. 487,901 24,181
Rockwell International Corp. 502,405 24,147
Air Products & Chemicals, Inc. 601,118 24,045
- - Kmart Corp. 1,247,026 24,005
Weyerhaeuser Co. 510,257 23,568
- - FDX Corporation 375,562 23,567
Lincoln National Corp. 256,857 23,470
Lehman Brothers Holdings, Inc. 299,774 23,251
Houston Industries, Inc. 743,887 22,967
Conseco Inc. 477,218 22,310
Charles Schwab Corp. 684,397 22,243
American Electric Power
Co., Inc. 488,636 22,172
Sysco Corp. 861,802 22,084
Unocal Corp. 617,140 22,063
Northern Trust Corp. 284,751 21,712
Omnicom Group Inc. 434,558 21,674
Summit Bancorp. 453,201 21,527
Beneficial Corp. 140,176 21,473
Tribune Co. 311,733 21,451
Interpublic Group of Cos., Inc. 349,348 21,201
Marriott International, Inc.
Class A 653,285 21,150
The McGraw-Hill Cos., Inc. 254,683 20,773
Corning, Inc. 594,886 20,672
- - US Airways Group, Inc. 258,434 20,481
Public Service Enterprise
Group, Inc. 593,576 20,441
Dominion Resources, Inc. 498,888 20,330
Newell Co. 406,757 20,262
- - Gateway 2000, Inc. 396,515 20,073
H.F. Ahmanson & Co. 280,161 19,891
Dresser Industries, Inc. 448,363 19,756
UNUM Corp. 355,152 19,711
TJX Cos., Inc. 815,339 19,670
Dover Corp. 569,093 19,491
The Quaker Oats Co. 354,358 19,468
Winn-Dixie Stores, Inc. 379,999 19,451
New York Times Co. Class A 245,222 19,434
Burlington Resources, Inc. 450,752 19,411
Unicom Corp. 553,325 19,401
AMP, Inc. 560,147 19,255
Providian Financial Corp. 243,630 19,140
The Limited, Inc. 576,035 19,081
Coastal Corp. 271,423 18,949
Praxair, Inc. 403,520 18,890
- - Parametric Technology Corp. 692,949 18,796
MBIA, Inc. 250,116 18,727
Ingersoll-Rand Co. 423,725 18,670
Transamerica Corp. 160,388 18,465
Barrick Gold Corp. 952,597 18,278
- - Bay Networks, Inc. 565,833 18,248
- - Unisys Corp. 642,437 18,149
FirstEnergy Corp. 589,316 18,121
Entergy Corp. 628,093 18,058
Hilton Hotels Corp. 630,082 17,957
Union Carbide Corp. 336,088 17,939
Northrop Grumman Corp. 172,283 17,767
- - Owens-Illinois, Inc. 394,140 17,638
Mercantile Bancorp, Inc. 349,910 17,627
Republic New York Corp. 275,776 17,357
- - NEXTEL Communications, Inc. 692,974 17,238
TRW, Inc. 314,631 17,187
PacifiCorp 757,872 17,147
Cooper Industries, Inc. 309,619 17,010
- - Sempra Energy 610,088 16,930
American Stores Co. 697,971 16,882
Fortune Brands, Inc. 439,128 16,879
Southwest Airlines Co. 568,547 16,843
- - Toys R Us, Inc. 713,461 16,811
Carolina Power & Light Co. 383,869 16,650
MGIC Investment Corp. 291,518 16,635
PECO Energy Corp. 568,680 16,598
R.R. Donnelley & Sons Co. 362,727 16,595
Tenneco, Inc. 435,196 16,565
SAFECO Corp. 363,346 16,510
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
MARKET
VALUE*
INSTITUTIONAL INDEX FUND SHARES (000)
- ------------------------------------------------------------------------
<S> <C> <C>
Huntington Bancshares Inc. 492,788 $ 16,508
Torchmark Corp. 357,905 16,374
Browning-Ferris Industries, Inc. 470,841 16,362
Cincinnati Financial Corp. 424,118 16,276
Rohm & Haas Co. 156,318 16,247
VF Corp. 312,036 16,070
Alcan Aluminium Ltd. 580,185 16,028
Avery Dennison Corp. 296,573 15,941
Synovus Financial Corp. 670,369 15,921
Genuine Parts Co. 456,723 15,785
The Dun & Bradstreet Corp. 435,677 15,739
Jefferson-Pilot Corp. 271,645 15,738
Golden West Financial Corp. 145,116 15,428
Crown Cork & Seal Co., Inc. 318,159 15,112
Bear Stearns Co., Inc. 265,000 15,072
Nordstrom, Inc. 194,697 15,040
DTE Energy Co. 370,889 14,975
General Dynamics Corp. 321,806 14,964
Baker Hughes, Inc. 432,740 14,957
Black & Decker Corp. 243,773 14,870
- - Seagate Technology 620,012 14,764
Sherwin-Williams Co. 442,317 14,652
Green Tree Financial Corp. 342,224 14,651
Central & South West Corp. 542,372 14,576
Consolidated Natural Gas Co. 243,943 14,362
Dana Corp. 268,347 14,357
The Times Mirror Co. Class A 226,152 14,219
Eaton Corp. 182,573 14,195
Cinergy Corp. 403,566 14,125
Countrywide Credit
Industries, Inc. 277,807 14,099
Ameren Corp. 351,132 13,958
Georgia Pacific Group 236,544 13,941
- - Thermo Electron Corp. 406,495 13,897
Frontier Corp. 438,569 13,815
SLM Holding Corp. 280,100 13,725
Tandy Corp. 258,570 13,720
Equifax, Inc. 377,600 13,712
- - Micron Technology, Inc. 541,495 13,436
Hasbro, Inc. 340,773 13,397
Dow Jones & Co., Inc. 238,153 13,277
Whirlpool Corp. 192,030 13,202
- - Humana, Inc. 422,670 13,182
Amerada Hess Corp. 234,385 12,730
Rubbermaid, Inc. 383,432 12,725
UST, Inc. 470,910 12,715
Eastman Chemical Co. 200,652 12,490
W.W. Grainger, Inc. 249,558 12,431
- - AutoZone Inc. 388,637 12,412
Johnson Controls, Inc. 215,315 12,313
- - Tricon Global Restaurants, Inc. 388,369 12,306
GPU, Inc. 324,533 12,271
Champion International Corp. 245,901 12,095
Maytag Corp. 242,738 11,985
International Flavors &
Fragrances, Inc. 275,099 11,950
Circuit City Stores, Inc. 252,804 11,850
- - Western Atlas, Inc. 139,497 11,840
Columbia Energy Group 212,457 11,818
Baltimore Gas & Electric Co. 377,876 11,738
- - Novell, Inc. 903,336 11,518
Allegheny Teledyne Inc. 499,369 11,423
Dillard's Inc. 275,165 11,402
ITT Industries, Inc. 303,153 11,330
H & R Block, Inc. 268,595 11,315
Brown-Forman Corp. Class B 175,908 11,302
Union Pacific Resources
Group, Inc. 640,999 11,258
Knight Ridder 200,663 11,049
Northern States Power Co. 381,112 10,909
- - Ceridian Corp. 185,664 10,908
Sonat, Inc. 280,411 10,831
Parker Hannifin Corp. 283,468 10,807
Harcourt General, Inc. 180,332 10,730
Fluor Corp. 209,552 10,687
PACCAR, Inc. 200,278 10,465
Nucor Corp. 224,136 10,310
Reynolds Metals Co. 183,800 10,281
Anadarko Petroleum Corp. 152,607 10,253
General Instrument Corp. 376,998 10,250
Laidlaw, Inc. 838,002 10,213
Ecolab, Inc. 329,022 10,200
- - Consolidated Stores, Inc. 275,656 9,993
Hercules, Inc. 242,295 9,964
Ashland, Inc. 191,947 9,909
Raytheon Co. Class A 170,789 9,842
- - Apple Computer, Inc. 341,796 9,805
- - Mirage Resorts, Inc. 457,416 9,749
PP&L Resources Inc. 422,915 9,595
Biomet, Inc. 287,693 9,512
American Greetings Corp.
Class A 186,294 9,489
The Stanley Works 227,727 9,465
Newmont Mining Corp. 400,445 9,460
- - ALZA Corp. 218,471 9,449
Sun Co., Inc. 240,736 9,344
Case Corp. 191,489 9,239
- - DSC Communications Corp. 304,235 9,127
Harris Corp. 203,688 9,102
Willamette Industries, Inc. 283,969 9,087
The BFGoodrich Co. 182,992 9,081
Sigma-Aldrich Corp. 258,184 9,069
Liz Claiborne, Inc. 170,790 8,924
Union Camp Corp. 177,701 8,818
U.S. Surgical Corp. 193,033 8,807
Comcast Corp. Class A 218,396 8,681
Phelps Dodge Corp. 149,851 8,570
The Mead Corp. 267,760 8,501
- - LSI Logic Corp. 361,640 8,340
Morton International, Inc. 332,241 8,306
Wendy's International, Inc. 337,858 7,940
Echlin, Inc. 161,463 7,922
- - St. Jude Medical, Inc. 214,121 7,882
Temple-Inland Inc. 144,499 7,785
Apache Corp. 245,861 7,745
- - Sealed Air Corp. 210,290 7,728
- - Allergan, Inc. 166,359 7,715
Perkin-Elmer Corp. 123,573 7,685
Engelhard Corp. 369,283 7,478
Deluxe Corp. 207,468 7,430
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
MARKET
VALUE*
SHARES (000)
- ------------------------------------------------------------------------
<S> <C> <C>
Placer Dome, Inc. 630,915 $ 7,413
Westvaco Corp. 260,539 7,360
Mercantile Stores Co., Inc. 93,228 7,359
USX-U.S. Steel Group 220,182 7,266
Adobe Systems, Inc. 170,134 7,220
- - Niagara Mohawk Power Corp. 481,065 7,186
Bausch & Lomb, Inc. 140,904 7,063
Kerr-McGee Corp. 121,867 7,053
Armstrong World Industries Inc. 103,538 6,976
Thomas & Betts Corp. 140,533 6,921
SuperValu Inc. 153,012 6,790
Giant Food, Inc. Class A 153,756 6,621
- - Venator Group, Inc. 343,666 6,573
Pall Corp. 317,847 6,516
Raychem Corp. 216,700 6,406
Meredith Corp. 134,928 6,333
Brunswick Corp. 254,944 6,310
Manor Care Inc. 162,666 6,252
- - Fruit of the Loom, Inc. 186,686 6,196
- - Advanced Micro Devices, Inc. 362,190 6,180
Pennzoil Co. 121,389 6,145
- - FMC Corp. 88,657 6,045
Great Lakes Chemical Corp. 153,125 6,039
- - KLA-Tencor Corp. 216,439 5,993
Ryder System, Inc. 189,757 5,989
- - Harrah's Entertainment, Inc. 257,142 5,979
- - Oryx Energy Co. 270,109 5,976
Nalco Chemical Co. 169,864 5,967
Freeport-McMoRan Copper &
Gold Inc. Class B 390,127 5,925
Inco Ltd. 427,459 5,824
- - Silicon Graphics, Inc. 478,569 5,803
Darden Restaurants Inc. 364,433 5,785
Centex Corp. 151,811 5,731
Crane Co. 116,855 5,675
Capital One Financial Corp. 45,600 5,663
Homestake Mining Co. 543,196 5,636
Snap-On Inc. 155,142 5,624
- - 360 Communications Co. 175,500 5,616
National Service Industries, Inc. 109,864 5,589
Owens Corning 136,405 5,567
C.R. Bard, Inc. 145,522 5,539
Bemis Co., Inc. 135,327 5,531
Mallinckrodt, Inc. 186,109 5,525
- - National Semiconductor Corp. 418,775 5,522
- - Cabletron Systems, Inc. 404,424 5,434
McDermott International, Inc. 154,716 5,328
Louisiana-Pacific Corp. 279,749 5,105
Scientific-Atlanta, Inc. 200,644 5,091
- - Navistar International Corp. 176,160 5,087
Cummins Engine Co., Inc. 97,661 5,005
IKON Office Solutions, Inc. 343,142 4,997
NICOR, Inc. 123,597 4,959
The Timken Co. 160,331 4,940
Shared Medical Systems Corp. 66,810 4,906
- - King World Productions, Inc. 188,104 4,797
Boise Cascade Corp. 143,763 4,708
Autodesk, Inc. 120,082 4,638
Tektronix, Inc. 128,945 4,561
Tupperware Corp. 155,986 4,387
- - Rowan Cos., Inc. 220,048 4,277
Alberto-Culver Co. Class B 145,199 4,211
Aeroquip-Vickers Inc. 71,940 4,200
Cooper Tire & Rubber Co. 201,264 4,151
- - Andrew Corp. 227,932 4,117
Polaroid Corp. 114,380 4,068
- - Bethlehem Steel Corp. 326,562 4,062
General Signal Corp. 111,627 4,018
- - Reebok International Ltd. 144,188 3,992
- - Stone Container Corp. 252,135 3,940
Worthington Industries, Inc. 247,779 3,732
Fleetwood Enterprises, Inc. 92,362 3,694
Peoples Energy Corp. 89,780 3,468
Battle Mountain Gold Co. Class A 581,891 3,455
EG&G, Inc. 114,944 3,448
Harnischfeger Industries Inc. 121,329 3,435
Pulte Corp. 107,683 3,217
Great Atlantic & Pacific Tea
Co., Inc. 97,078 3,210
W.R. Grace & Co. 188,018 3,208
Adolph Coors Co. Class B 94,092 3,199
Kaufman & Broad Home Corp. 98,862 3,139
ONEOK, Inc. 78,694 3,138
Cyprus Amax Minerals Co. 236,750 3,137
Potlatch Corp. 73,506 3,087
Ball Corp. 76,675 3,081
The Pep Boys
(Manny, Moe & Jack) 161,875 3,066
Millipore Corp. 110,380 3,008
Moore Corp. Ltd. 226,331 2,999
Helmerich & Payne, Inc. 127,587 2,839
Longs Drug Stores, Inc. 98,037 2,831
Russell Corp. 92,979 2,807
NACCO Industries, Inc. Class A 20,861 2,696
Cincinnati Milacron, Inc. 101,364 2,464
Jostens Inc. 98,869 2,385
Springs Industries Inc. Class A 51,192 2,361
Briggs & Stratton Corp. 62,850 2,353
ASARCO, Inc. 102,903 2,290
Eastern Enterprises 51,752 2,219
Foster Wheeler Corp. 103,495 2,219
- - Data General Corp. 123,660 1,847
- - Armco, Inc. 271,571 1,731
- - Vlasic Foods International, Inc. 56,284 1,133
- - Viacom Inc. Class A 18,015 1,054
Freeport-McMoRan Copper &
Gold, Inc. Class A 72,417 1,032
Sealed Air Corp. Pfd. 10,000 420
- - Charming Shoppes, Inc. 42,155 200
Octel Corp. 10,005 199
- - Fresenius National Medical
Care Pfd. 114,209 7
- ------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $13,544,674) 22,920,661
- ------------------------------------------------------------------------
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
FACE MARKET
AMOUNT VALUE*
INSTITUTIONAL INDEX FUND (000) (000)
- ----------------------------------------------------------------------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS (0.9%)
- ----------------------------------------------------------------------
U.S. TREASURY BILL
(2) 4.97%, 7/23/1998 $ 11,964 $ 11,965
REPURCHASE AGREEMENTS
Collateralized by U.S. Government
Obligations in a Pooled
Cash Account
5.76%, 7/1/1998--Note E 3,372 3,372
5.67%, 7/1/1998 183,652 183,652
- ----------------------------------------------------------------------
TOTAL TEMPORARY CASH INVESTMENTS
(COST $198,989) 198,989
- ----------------------------------------------------------------------
TOTAL INVESTMENTS (100.1%)
(COST $13,743,663) 23,119,650
- ----------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.1%)
- ----------------------------------------------------------------------
Other Assets 729,918
Liabilities--Note E (761,233)
---------
(31,315)
- ----------------------------------------------------------------------
NET ASSETS (100%) $23,088,335
======================================================================
</TABLE>
* See Note A in Notes to Financial Statements.
- Non-Income-Producing Security.
(1)The combined market value of common stocks and
index futures contracts represents 100.0% of net assets.
See Note D in Notes to Financial Statements.
(2)Security segregated as initial margin for open futures
contracts.
ADR--American Depositary Receipt.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
AMOUNT
(000)
- ----------------------------------------------------------------------
<S> <C>
AT JUNE 30, 1998, NET ASSETS CONSISTED OF:
- ----------------------------------------------------------------------
Paid in Capital--Note C $13,536,706
Undistributed Net Investment Income 25,952
Accumulated Net Realized Gains--Note C 146,953
Unrealized Appreciation--Note D
Investment Securities 9,375,987
Futures Contracts 2,737
- ----------------------------------------------------------------------
NET ASSETS $23,088,335
======================================================================
Institutional Shares--
Net Assets applicable to 181,273,588
outstanding shares of beneficial interest
(unlimited authorization) $18,964,090
- ----------------------------------------------------------------------
NET ASSET VALUE PER SHARE--
INSTITUTIONAL SHARES $104.62
======================================================================
Institutional Plus Shares--
Net Assets applicable to 39,421,356
outstanding shares of beneficial interest
(unlimited authorization) $4,124,245
- ----------------------------------------------------------------------
NET ASSET VALUE PER SHARE--
INSTITUTIONAL SHARES $104.62
======================================================================
</TABLE>
14
<PAGE> 17
STATEMENT OF OPERATIONS
This Statement shows dividend and interest income earned by the fund during the
reporting period, and details the operating expenses charged to each class of
its shares. These expenses directly reduce the amount of investment income
available to pay to shareholders as dividends. This Statement also shows any Net
Gain (Loss) realized on the sale of investments, and the increase or decrease in
the Unrealized Appreciation (Depreciation) on investments during the period. If
the fund invested in futures contracts during the period, the results of these
investments are shown separately.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
INSTITUTIONAL INDEX FUND
MONTHS ENDED JUNE 30, 1998
(000)
- ------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
INCOME
Dividends $ 157,751
Interest 6,826
--------------
Total Income 164,577
--------------
EXPENSES
The Vanguard Group--Note B
Management and Administrative 2,133
Shareholder Services--Institutional Shares 3,462
Shareholder Services--Institutional Plus Shares 100
--------------
Total Expenses 5,695
- ------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 158,882
- ------------------------------------------------------------------------------------------
REALIZED NET GAIN
Investment Securities Sold 733,260
Futures Contracts 21,002
- ------------------------------------------------------------------------------------------
REALIZED NET GAIN 754,262
- ------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
Investment Securities 2,535,554
Futures Contracts 2,558
- ------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) 2,538,112
- ------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,451,256
==========================================================================================
</TABLE>
15
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
This Statement shows how the fund's total net assets changed during the two most
recent reporting periods. The Operations section summarizes information detailed
in the Statement of Operations. The amounts shown as Distributions to
shareholders from the fund's net income and capital gains may not match the
amounts shown in the Operations section, because distributions are determined on
a tax basis and may be made in a period different from the one in which the
income was earned or the gains were realized on the financial statements. The
Capital Share Transactions section shows the amount shareholders invested in the
fund, either by purchasing shares or by reinvesting distributions, as well as
the amounts redeemed. The corresponding numbers of Shares Issued and Redeemed
are shown at the end of the Statement. Distributions, Capital Share
Transactions, and Shares Issued and Redeemed are shown separately for each class
of shares.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
INSTITUTIONAL INDEX FUND
--------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUN. 30, 1998 DEC. 31, 1997
(000) (000)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net Investment Income $ 158,882 $ 272,622
Realized Net Gain 754,262 270,779
Change in Unrealized Appreciation (Depreciation) 2,538,112 3,767,863
----------------------------------------
Net Increase in Net Assets Resulting from Operations 3,451,256 4,311,264
DISTRIBUTIONS ----------------------------------------
Net Investment Income
Institutional Shares (108,054) (244,664)
Institutional Plus Shares (24,969) (27,865)
Realized Capital Gain
Institutional Shares (36,559) (122,571)
Institutional Plus Shares (7,946) (20,702)
----------------------------------------
Total Distributions (177,528) (415,802)
----------------------------------------
CAPITAL SHARE TRANSACTIONS--INSTITUTIONAL SHARES(1)
Issued 3,267,678 5,668,456
Issued in Lieu of Cash Distributions 129,128 331,598
Redeemed (2,437,020) (5,841,427)
----------------------------------------
Net Increase--Institutional Shares 959,786 158,627
----------------------------------------
CAPITAL SHARE TRANSACTIONS--INSTITUTIONAL PLUS SHARES(2)
Issued 1,020,486 3,404,088
Issued in Lieu of Cash Distributions 32,915 48,567
Redeemed (1,034,387) (97,352)
----------------------------------------
Net Increase--Institutional Plus Shares 19,014 3,355,303
- ---------------------------------------------------------------------------------------------------------
Total Increase 4,252,528 7,409,392
- ---------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of Period 18,835,807 11,426,415
----------------------------------------
End of Period $23,088,335 $18,835,807
=========================================================================================================
(1)Shares Issued (Redeemed)--Institutional Shares
Issued 33,079 71,347
Issued in Lieu of Cash Distributions 1,263 3,973
Redeemed (24,436) (69,894)
---------------------------------------
Net Increase in Shares Outstanding 9,906 5,426
=========================================================================================================
(2)Shares Issued (Redeemed)--Institutional Plus Shares
Issued 10,213 39,499
Issued in Lieu of Cash Distributions 321 559
Redeemed (10,058) (1,113)
---------------------------------------
Net Increase in Shares Outstanding 476 38,945
=========================================================================================================
</TABLE>
16
<PAGE> 19
FINANCIAL HIGHLIGHTS
This table summarizes the fund's investment results and distributions to
shareholders on a per-share basis for each class of shares. It also presents the
Total Return and shows net investment income and expenses as percentages of
average net assets. These data will help you assess: the variability of the
fund's net income and total returns from year to year; the relative
contributions of net income and capital gains to the fund's total return; how
much it costs to operate the fund; and the extent to which the fund tends to
distribute capital gains. The table also shows the Portfolio Turnover Rate, a
measure of trading activity. A turnover rate of 100% means that the average
security is held in the fund for one year.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL INDEX FUND
YEAR ENDED DECEMBER 31,
FOR A SHARE OUTSTANDING SIX MONTHS ENDED ----------------------------------------------------------
THROUGHOUT EACH PERIOD JUNE 30, 1998 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 89.56 $68.86 $57.93 $43.22 $44.20 $41.45
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT OPERATIONS
Net Investment Income .717 1.391 1.38 1.28 1.23 1.204
Net Realized and Unrealized Gain (Loss)
on Investments 15.148 21.415 11.90 14.86 (.66) 2.92
--------------------------------------------------------------------------
Total from Investment Operations 15.865 22.806 13.28 16.14 .57 4.12
--------------------------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.600) (1.391) (1.36) (1.27) (1.21) (1.19)
Distributions from Realized Capital Gains (.205) (.715) (.99) (.16) (.34) (.18)
--------------------------------------------------------------------------
Total Distributions (.805) (2.106) (2.35) (1.43) (1.55) (1.37)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $104.62 $89.56 $68.86 $57.93 $43.22 $44.20
=================================================================================================================================
TOTAL RETURN 17.74% 33.36% 23.06% 37.60% 1.31% 10.02%
=================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $18,964 $15,348 $11,426 $6,674 $3,265 $3,103
Ratio of Total Expenses to
Average Net Assets 0.06%* 0.06% 0.06% 0.06% 0.07% 0.07%
Ratio of Net Investment Income to
Average Net Assets 1.48%* 1.77% 2.18% 2.49% 2.80% 2.72%
Portfolio Turnover Rate** 14%* 7% 9% 4% 23% 4%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized.
**Portfolio turnover rates excluding in-kind redemptions were 3%, 6%, 9%, 4%,
19%, and 3%, respectively.
17
<PAGE> 20
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL INDEX FUND-INSTITUTIONAL PLUS SHARES
SIX MONTHS ENDED JULY 7* TO
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD JUNE 30, 1998 DEC. 31, 1997
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 89.56 $84.91
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .734 .681
Net Realized and Unrealized Gain (Loss) on Investments 15.146 5.455
--------------------------
Total from Investment Operations 15.880 6.136
--------------------------
DISTRIBUTIONS
Dividends from Net Investment Income (.615) (.866)
Distributions from Realized Capital Gains (.205) (.620)
--------------------------
Total Distributions (.820) (1.486)
- --------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $104.62 $89.56
====================================================================================================================
TOTAL RETURN 17.75% 7.29%
====================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $4,124 $3,488
Ratio of Total Expenses to Average Net Assets 0.025%** 0.025%**
Ratio of Net Investment Income to Average Net Assets 1.52%** 1.72%**
Portfolio Turnover Rate+ 14%** 7%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations.
**Annualized.
+Portfolio turnover rates excluding in-kind redemptions were 3% and 6%,
respectively.
18
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
Vanguard Institutional Index Fund is registered under the Investment Company Act
of 1940 as a diversified open-end investment company, or mutual fund. The fund
offers two classes of shares, Institutional Shares and Institutional Plus
Shares. Institutional Plus Shares are designed primarily for institutional
investors that meet certain administrative and servicing criteria and have a
minimum investment of $200 million. Institutional Shares are offered to other
institutional investors that have a minimum investment of $10 million.
A. The following significant accounting policies conform to generally accepted
accounting principles for mutual funds. The fund consistently follows such
policies in preparing its financial statements.
1. SECURITY VALUATION: Equity securities are valued at the latest
quoted sales prices as of the close of trading on the New York Stock Exchange
(generally 4:00 p.m. Eastern time) on the valuation date; such securities not
traded on the valuation date are valued at the mean of the latest quoted bid and
asked prices. Prices are taken from the primary market in which each security
trades. Temporary cash investments acquired over 60 days to maturity are valued
using the latest bid prices or using valuations based on a matrix system (which
considers such factors as security prices, yields, maturities, and ratings),
both furnished by independent pricing services. Other temporary cash investments
are valued at amortized cost, which approximates market value. Securities for
which market quotations are not readily available are valued by methods deemed
by the Board of Trustees to represent fair value.
2. FEDERAL INCOME TAXES: The fund intends to continue to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for federal income taxes is required in the financial
statements.
3. REPURCHASE AGREEMENTS: The fund, along with members of The
Vanguard Group, transfers uninvested cash balances into a Pooled Cash Account,
which is invested in repurchase agreements secured by U.S. government
securities. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal; however, in the event of default or bankruptcy by the other party
to the agreement, retention of the collateral may be subject to legal
proceedings.
4. FUTURES: The fund uses S&P 500 Index futures contracts to a
limited extent, with the objectives of maintaining full exposure to the stock
market, enhancing returns, maintaining liquidity, and minimizing transaction
costs. The fund may purchase futures contracts to immediately invest incoming
cash in the market, or sell futures in response to cash outflows, thereby
simulating a fully invested position in the underlying index while maintaining a
cash balance for liquidity. The fund may seek to enhance returns by using
futures contracts instead of the underlying securities when futures are believed
to be priced more attractively than the underlying securities. The primary risks
associated with the use of futures contracts are imperfect correlation between
changes in market values of stocks held by the fund and the prices of futures
contracts, and the possibility of an illiquid market.
Futures contracts are valued at their quoted daily settlement
prices. The aggregate principal amounts of the contracts are not recorded in
the financial statements. Fluctuations in the value of the contracts are
recorded in the Statement of Net Assets as an asset (liability) and in the
Statement of Operations as unrealized appreciation (depreciation) until the
contracts are closed, when they are recorded as realized futures gains
(losses).
5. DISTRIBUTIONS: Distributions to shareholders are recorded on the
ex-dividend date. Distributions are determined on a tax basis and may differ
from net investment income and realized capital gains for financial reporting
purposes.
6. OTHER: Dividend income is recorded on the ex-dividend date.
Security transactions are accounted for on the date securities are bought or
sold. Costs used to determine realized gains (losses) on the sale of investment
securities are those of the specific securities sold. Income, expenses
19
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
not attributable to a specific class, and realized and unrealized gains and
losses on investments are allocated to each class of shares based on its
relative net assets.
B. The Vanguard Group provides investment advisory, corporate management,
administrative, marketing, and distribution services and pays for all other
operating expenses, except for taxes, in return for a fee calculated at an
annual percentage rate of the average net assets of the fund. For the six months
ended June 30, 1998, the annualized fees for such services were 0.06% and
0.025%, respectively, of average net assets for the Institutional and
Institutional Plus Shares of the fund, of which .04% and .005%, respectively,
related to class-specific shareholder services. The fund's Trustees and officers
are also Directors and officers of Vanguard.
C. During the six months ended June 30, 1998, the fund purchased $2,420,686,000
of investment securities and sold $1,444,243,000 of investment securities, other
than temporary cash investments.
During the six months ended June 30, 1998, the fund realized
$595,890,000 of net capital gains resulting from in-kind redemptions--in which
shareholders exchanged fund shares for securities held by the fund rather than
for cash. Because such gains are not taxable to the fund, and are not
distributed to shareholders, they have been reclassified from accumulated net
realized gains to paid in capital.
The Institutional Index Fund used a tax accounting practice to apply
$4,986,000 of the price of capital shares redeemed to reduce capital gain
distribution requirements for tax purposes for the fiscal year ended December
31, 1997. Capital gains that were so offset have been reclassified from
accumulated net realized gains to paid in capital.
D. At June 30, 1998, net unrealized appreciation of investment securities for
financial reporting and federal income tax purposes was $9,375,987,000,
consisting of unrealized gains of $9,560,816,000 on securities that had risen in
value since their purchase and $184,829,000 in unrealized losses on securities
that had fallen in value since their purchase.
At June 30, 1998, the aggregate settlement value of open futures
contracts expiring in September 1998 and the related unrealized appreciation
were:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
(000)
----------------------------------------
NUMBER OF AGGREGATE
LONG SETTLEMENT UNREALIZED
FUTURES CONTRACTS CONTRACTS VALUE APPRECIATION
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
S&P 500 Index 646 $184,595 $2,737
- -------------------------------------------------------------------------------------------
</TABLE>
E. The market value of securities on loan to brokers/dealers at June 30, 1998,
was $3,099,000, for which the fund held cash collateral of $3,372,000. Cash
collateral received is invested in repurchase agreements.
20
<PAGE> 23
TRUSTEES AND OFFICERS
JOHN C. BOGLE
Senior Chairman of the Board and Director of The Vanguard Group, Inc., and of
each of the investment companies in The Vanguard Group.
JOHN J. BRENNAN
Chairman, Chief Executive Officer, and Director of The Vanguard Group, Inc., and
of each of the investment companies in The Vanguard Group.
BARBARA BARNES HAUPTFUHRER
Director of The Great Atlantic and Pacific Tea Co., IKON Office Solutions, Inc.,
Raytheon Co., Knight-Ridder, Inc., Massachusetts Mutual Life Insurance Co., and
Ladies Professional Golf Association; Trustee Emerita of Wellesley College.
BRUCE K. MacLAURY
President Emeritus of The Brookings Institution; Director of American Express
Bank Ltd., The St. Paul Companies, Inc., and National Steel Corp.
BURTON G. MALKIEL
Chemical Bank Chairman's Professor of Economics, Princeton University; Director
of Prudential Insurance Co. of America, Amdahl Corp., Baker Fentress & Co., The
Jeffrey Co., and Southern New England Telecommunications Co.
ALFRED M. RANKIN, JR.
Chairman, President, and Chief Executive Officer of NACCO Industries, Inc.;
Director of NACCO Industries, The BFGoodrich Co., and The Standard Products Co.
JOHN C. SAWHILL
President and Chief Executive Officer of The Nature Conservancy; formerly,
Director and Senior Partner of McKinsey & Co. and President of New York
University; Director of Pacific Gas and Electric Co., Procter & Gamble Co., and
NACCO Industries.
JAMES O. WELCH, JR.
Retired Chairman of Nabisco Brands, Inc.; retired Vice Chairman and Director of
RJR Nabisco; Director of TECO Energy, Inc., and Kmart Corp.
J. LAWRENCE WILSON
Chairman and Chief Executive Officer of Rohm & Haas Co.; Director of Cummins
Engine Co. and The Mead Corp.; Trustee of Vanderbilt University.
OTHER FUND OFFICERS
RAYMOND J. KLAPINSKY
Secretary; Managing Director and Secretary of The Vanguard Group, Inc.;
Secretary of each of the investment companies in The Vanguard Group.
RICHARD F. HYLAND
Treasurer; Principal of The Vanguard Group, Inc.; Treasurer of each of the
investment companies in The Vanguard Group.
KAREN E. WEST
Controller; Principal of The Vanguard Group, Inc.; Controller of each of the
investment companies in The Vanguard Group.
OTHER VANGUARD OFFICERS
R. GREGORY BARTON
Managing Director, Legal Department.
ROBERT A. DiSTEFANO
Managing Director, Information Technology.
JAMES H. GATELY
Managing Director, Individual Investor Group.
KATHLEEN C. GUBANICH
Managing Director, Human Resources.
IAN A. MacKINNON
Managing Director, Fixed Income Group.
F. WILLIAM McNABB, III
Managing Director, Institutional Investor Group.
MICHAEL S. MILLER
Managing Director, Planning and Development.
RALPH K. PACKARD
Managing Director and Chief Financial Officer.
GEORGE U. SAUTER
Managing Director, Core Management Group.
"STANDARD & POOR'S(R)," "S&P(R)," "S&P 500(R)," "STANDARD & POOR'S 500," AND
"500" ARE TRADEMARKS OF THE MCGRAW-HILL COMPANIES, INC. FRANK RUSSELL
COMPANY IS THE OWNER OF TRADEMARKS AND COPYRIGHTS RELATING TO THE
RUSSELL INDEXES. "WILSHIRE 4500" AND "WILSHIRE 5000" ARE
TRADEMARKS OF WILSHIRE ASSOCIATES.
21
<PAGE> 24
VANGUARD FAMILY OF FUNDS
STOCK FUNDS
Convertible Securities Fund
Equity Income Fund
Explorer Fund
Growth and Income Portfolio
Horizon Fund
Aggressive Growth Portfolio
Capital Opportunity Portfolio
Global Equity Portfolio
Index Trust
500 Portfolio
Extended Market Portfolio
Growth Portfolio
Mid Capitalization Stock
Portfolio
Small Capitalization Growth
Stock Portfolio
Small Capitalization Stock
Portfolio
Small Capitalization Value
Stock Portfolio
Total Stock Market Portfolio
Value Portfolio
Institutional Index Fund
International Equity Index Fund
Emerging Markets Portfolio
European Portfolio
Pacific Portfolio
International Growth Portfolio
International Value Portfolio
Morgan Growth Fund
PRIMECAP Fund
Selected Value Portfolio
Specialized Portfolios
Energy Portfolio
Gold & Precious Metals
Portfolio
Health Care Portfolio
REIT Index Portfolio
Utilities Income Portfolio
Tax-Managed Fund
Capital Appreciation
Portfolio
Growth and Income Portfolio
Total International Portfolio
Trustees' Equity Fund
U.S. Portfolio
U.S. Growth Portfolio
Windsor Fund
Windsor II
MONEY MARKET FUNDS
Admiral Funds
U.S. Treasury Money Market
Portfolio
Money Market Reserves
Federal Portfolio
Prime Portfolio
Municipal Bond Fund
Money Market Portfolio
State Tax-Free Funds
(CA, NJ, NY, OH, PA)
Treasury Money Market Portfolio
BOND FUNDS
Admiral Funds
Intermediate-Term U.S.
Treasury Portfolio
Long-Term U.S. Treasury
Portfolio
Short-Term U.S. Treasury
Portfolio
Bond Index Fund
Intermediate-Term Bond
Portfolio
Long-Term Bond Portfolio
Short-Term Bond Portfolio
Total Bond Market Portfolio
Fixed Income Securities Fund
GNMA Portfolio
High Yield Corporate Portfolio
Intermediate-Term Corporate
Portfolio
Intermediate-Term U.S.
Treasury Portfolio
Long-Term Corporate
Portfolio
Long-Term U.S. Treasury
Portfolio
Short-Term Corporate
Portfolio
Short-Term Federal Portfolio
Short-Term U.S. Treasury
Portfolio
Municipal Bond Fund
High-Yield Portfolio
Insured Long-Term Portfolio
Intermediate-Term Portfolio
Limited-Term Portfolio
Long-Term Portfolio
Short-Term Portfolio
Preferred Stock Fund
State Tax-Free Funds
(CA, FL, NJ, NY, OH, PA)
BALANCED FUNDS
Asset Allocation Fund
Balanced Index Fund
Horizon Fund
Global Asset Allocation
Portfolio
LifeStrategy Portfolios
Conservative Growth
Portfolio
Growth Portfolio
Income Portfolio
Moderate Growth Portfolio
STAR Portfolio
Tax-Managed Fund
Balanced Portfolio
Wellesley Income Fund
Wellington Fund
Q942-6/1998
(C) 1998 Vanguard Marketing
Corporation, Distributor.
All rights reserved.
[THE VANGUARD GROUP LOGO]
Post Office Box 2600
Valley Forge, Pennsylvania 19482
FUND INFORMATION
1-800-662-7447
INDIVIDUAL ACCOUNT SERVICES
1-800-662-2739
INSTITUTIONAL INVESTOR SERVICES
1-800-523-1036
www.vanguard.com
[email protected]
All Vanguard funds are offered by prospectus only. Prospectuses contain more
complete information on advisory fees, distribution charges, and other expenses
and should be read carefully before you invest or send money. Prospectuses can
be obtained directly from The Vanguard Group.
22
