Investment Strategy
The portfolio invests all of its assets in the Vanguard Short-Term Reserves Account, through which the portfolio owns funding agreements (traditional and separate account), synthetic investment contracts (SICs), and shares of Vanguard Federal Money Market Fund. SICs are also called alternative investment contracts or wrapped bond contracts. Funding agreements and SICs are interest-bearing contracts that are structured to preserve principal and accumulate interest earnings over the life of the investment. Traditional funding agreements generally pay interest at a fixed interest rate and have fixed maturity dates that normally range from 2 to 5 years. Separate account funding agreements and SICs pay a variable interest rate and have an average duration range between 2 and 5 years. Investments in either new funding agreements or SICs are based upon the available liquidity in the portfolio, and the competitiveness of offered yields, based on market conditions and trends. The Short-Term Reserves Account also purchases shares of Vanguard Federal Money Market Fund to meet normal liquidity needs.
The total amount invested in the Federal Money Market Fund is expected to range between 0% and 25%. The Federal Money Market Fund invests in high-quality, short- term money market instruments issued by the U.S. government and its agencies and instrumentalities. The Federal Money Market Fund maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less.
The performance of the Stable Value Portfolio will reflect the blended earnings of the funding agreements, SICs, and Federal Money Market Fund shares held by the portfolio, minus the portfolio’s expenses. Because the Vanguard Short-Term Reserves Account is not a registered investment company (mutual fund), there is no separate prospectus available.
Investment Risks
These risks are discussed under Vanguard Investment Risks per the Disclosure Booklet.
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The Program Manager may voluntarily limit the Stable Value Portfolio's Management Fee in an effort to maintain a net yield of 0.00%.
Since Inception returns for less than one year are not annualized.The performance data shown represents past performance. Past performance - especially short-term past performance - is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' units, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, click here.
For more information about the Indiana529 Direct Savings Plan ("Indiana529 Direct"), call 1.866.485.9415 or visit www.indiana529direct.com to obtain a Disclosure Booklet, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing. Ascensus Broker Dealer Services, LLC ("ABD") is Distributor of Indiana529 Direct.Please Note: Before you invest, consider whether your or the beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state's qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state's 529 plan(s), or any other 529 plan, to learn more about those plan's features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.You could lose money by investing in a portfolio which includes the Vanguard Short-Term Reserves Account which in turn invests in the Vanguard Federal Money Market Fund. Although the money market fund in which your investment option invests (the "underlying fund") seeks to preserve its value at $1.00 per share, the underlying fund cannot guarantee it will do so. An investment in this investment option is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The underlying fund's sponsor has no legal obligation to provide financial support to the underlying fund, and you should not expect that the sponsor will provide financial support to the underlying fund at any time.
Indiana529 Direct is administered by the Indiana Education Savings Authority (Authority). ABD, the Program Manager, and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping and administrative services, and marketing. Indiana529 Direct's Portfolios invest in: (i) mutual funds; (ii) a stable value account held in trust by the Authority at Vanguard; and/or (iii) an FDIC-insured omnibus savings account held in trust by the Authority at NexBank. Except for the Savings Portfolio, investments in Indiana529 Direct are not insured by the FDIC. Units of the Portfolios are municipal securities and the value of units will vary with market conditions.
Investment returns will vary depending upon the performance of the Portfolios you choose. Except to the extent of FDIC insurance available for the Savings Portfolio, depending on market conditions, you could lose all or a portion of your money by investing in Indiana529 Direct. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.
