AGREEMENT
AGREEMENT
Made as of this 9th day of December, 2004, by and among VANGUARD WELLINGTON FUND, VANGUARD WINDSOR FUNDS, VANGUARD WORLD FUNDS, VANGUARD EXPLORER FUND, VANGUARD XXXXXX GROWTH FUND, VANGUARD WELLESLEY INCOME FUND, VANGUARD FIXED INCOME SECURITIES FUNDS, VANGUARD MONEY MARKET FUND, VANGUARD MUNICIPAL BOND FUNDS, VANGUARD STAR FUND, VANGUARD XXXXXXX FUNDS, VANGUARD INDEX FUNDS, VANGUARD TRUSTEES EQUITY FUNDS, VANGUARD SPECIALIZED FUNDS, VANGUARD CALIFORNIA TAX-FREE FUNDS, VANGUARD NEW YORK TAX-FREE FUNDS, VANGUARD PENNSYLVANIA TAX-FREE FUND, VANGUARD OHIO TAX-FREE FUNDS, VANGUARD FLORIDA TAX-FREE FUNDS, VANGUARD CONVERTIBLE SECURITIES FUND, VANGUARD QUANTITATIVE FUNDS, VANGUARD BOND INDEX FUNDS, VANGUARD FENWAY FUNDS, VANGUARD NEW JERSEY TAX- FREE FUNDS, VANGUARD ADMIRAL FUNDS, VANGUARD MALVERN FUNDS, VANGUARD VARIABLE INSURANCE FUNDS, VANGUARD BALANCED INDEX FUND, VANGUARD INSTITUTIONAL INDEX FUND, VANGUARD INTERNATIONAL EQUITY INDEX FUNDS, VANGUARD TAX-MANAGED FUNDS, VANGUARD WHITEHALL FUNDS, VANGUARD TREASURY FUND, VANGUARD HORIZON FUNDS, AND VANGUARD MASSACHUSETTS TAX-EXEMPT FUNDS, VANGUARD CMT FUNDS (hereinafter collectively referred to as the "Funds") and THE VANGUARD GROUP, INC., VANGUARD ADVISERS, INC., AND VANGUARD MARKETING CORPORATION (hereinafter collectively referred to as "Vanguard").
THIS AGREEMENT is entered into under the following circumstances:
WHEREAS, Section 17(g) of the Investment Company Act of 1940 ("the Act") provides that the Securities and Exchange Commission ("SEC") is authorized to require that the officers and employees of registered management investment companies who, either singly or jointly with others, may have access to the Funds'
assets, be bonded against larceny and embezzlement, and the SEC has promulgated such rules and regulations ("Rule 17g- 1"); and
WHEREAS, the Funds and Vanguard are named as joint insureds under the terms of a bond or policy of insurance with total coverage of $400,000,000 which insures against larceny and embezzlement by officers and employees (the "Joint Insured Bond"); and
WHEREAS, a majority of the Board of Trustees of the Funds (the "Board"), who are not "interested persons" as defined by Section 2(a)(19) of the Act, have given due consideration to all factors relevant to the form, amount and apportionment of recoveries and premium on the Joint Insured Bond, and the Board has approved the term and amount of the Joint Insured Bond, the portion of the premium payable by each party, and the manner in which recovery on the Joint Insured Bond, if any, shall be shared by and among the parties as set forth below in this Agreement; and
WHEREAS, the Funds and Vanguard now desire to enter into this Agreement as required by Rule 17g-1(f) of the Act to establish the manner in which recovery on the Joint Insured Bond, if any, shall be shared.
NOW, THEREFORE, IT IS HEREBY AGREED by and among the parties as
follows:
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1. |
ALLOCATION OF PREMIUMS |
The annual premium shall be allocated among the Vanguard Funds, based on relative net assets, in accordance with a Board-approved methodology, and expensed monthly over the term of the Joint Insured Bond.
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2. |
ALLOCATION OF RECOVERIES |
A. In the event of a separate loss or losses under the Joint Insured Bond, the party suffering a loss or losses shall be entitled to be indemnified up to the full amount of the Joint Insured Bond.
B. If more than one party is damaged in a single loss or occurrence for which recovery is received under the Joint Insured Bond, each such party shall receive that
portion of the recovery which represents the loss sustained by that party, unless the recovery is inadequate to fully indemnify each party sustaining a loss.
C. If the recovery is inadequate to fully indemnify each party sustaining a loss, the recovery shall be allocated among the parties as follows:
(i) Each party sustaining a loss shall be allocated an amount
equal to the lesser of its actual loss or at least equal to the amount which it would have
received had it provided and maintained a single insured bond with the minimum coverage
as set forth in Exhibit A as attached.
(ii) The remaining portion of the recovery shall be allocated to each
party sustaining a loss not fully indemnified by the allocation under subparagraph (i)
above, in ratio of the premium paid by each such party to the premium paid by all parties.
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3. |
BOND COVERAGE REOUIRED |
Each party has determined the minimum amount of fidelity bond coverage deemed appropriate to be maintained. This amount is set forth in Exhibit A and each Fund represents and warrants to each of the other parties that the minimum amount of coverage required by Rule 17g-1(d)(1) as of November 30, 2004, is not more than reflected in Exhibit A. Each Fund further agrees that its minimum coverage shall not be less than the minimum coverage required by Rule 17g-1(d)(1).
4. This Agreement shall apply to the present fidelity bond coverage and any- renewal or replacement thereof and shall continue until terminated by any party that provides 60 days' written notice to the other parties.
5. Any dispute arising under this Agreement shall be submitted to arbitration under the Rules of the American Arbitration Association and the decision rendered therein shall be final and binding upon the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed as of the date aforesaid.
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VANGUARD WELLINGTON FUND |
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VANGUARD WINDSOR FUNDS |
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VANGUARD WORLD FUNDS |
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VANGUARD EXPLORER FUND |
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VANGUARD XXXXXX GROWTH FUND |
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VANGUARD WELLESLEY INCOME FUND |
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VANGUARD FIXED INCOME SECURITIES FUNDS |
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VANGUARD MONEY MARKET FUND |
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VANGUARD MUNICIPAL BOND FUNDS |
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VANGUARD STAR FUND |
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VANGUARD INDEX FUNDS |
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VANGUARD TRUSTEES EQUITY FUNDS |
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VANGUARD SPECIALIZED FUNDS |
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VANGUARD XXXXXXX FUNDS |
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VANGUARD CALIFORNIA TAX-FREE FUNDS |
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VANGUARD NEW YORK TAX-FREE FUNDS |
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VANGUARD CONVERTIBLE SECURITIES FUND |
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VANGUARD QUANTITATIVE FUNDS |
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VANGUARD BOND INDEX FUNDS |
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VANGUARD FENWAY FUNDS |
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VANGUARD BALANCED INDEX FUND |
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VANGUARD FLORIDA TAX-FREE FUND |
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VANGUARD ADMIRAL FUNDS |
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VANGUARD NEW JERSEY TAX-FREE FUNDS |
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VANGUARD MALVERN FUNDS |
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VANGUARD OHIO TAX-FREE FUNDS |
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VANGUARD VARIABLE INSURANCE FUNDS |
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VANGUARD INSTITUTIONAL INDEX FUND |
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VANGUARD INTERNATIONAL EQUITY INDEX FUNDS |
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VANGUARD TAX-MANAGED FUNDS |
VANGUARD HORIZON FUNDS
VANGUARD WHITEHALL FUNDS
VANGUARD TREASURY FUND
VANGUARD MASSACHUSETTS TAX-EXEMPT FUNDS
VANGUARD CMT FUNDS
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BY |
/s/ R. Xxxxxxx Xxxxxx |
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R. Xxxxxxx Xxxxxx, Secretary |
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Attest: |
/s/ Xxxxxxxxxxx X. Xxxxxxxx |
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Xxxxxxxxxxx X. Xxxxxxxx, |
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Assistant Secretary |
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THE VANGUARD GROUP, INC.
On behalf of itself and its affiliates and subsidiaries
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BY |
/s/ R. Xxxxxxx Xxxxxx |
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R. Xxxxxxx Xxxxxx |
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Managing Director and Secretary |
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Attest: |
/s/ Xxxxxxx X Xxxxx |
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Xxxxxxx X Xxxxx, |
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Assistant Secretary |
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EXHIBIT A
Rule 179-1
Minimum Bond Requirements
11/30/2004
(000 omitted)
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Portfolio |
Fund |
Portfolio |
Fund |
|
|
Fund/Portfolio Name |
Net Assets |
Net Assets |
Bond Req. |
Bond Req. |
|
|
|
|
|
|
|
|
Admiral Funds |
|
13,508,688 |
0 |
2,500 | |
|
|
Adm. Treasury MMF |
13,508,688 |
|
2,500 |
0 |
|
|
Balanced Index Fund |
7,068,036 |
7,068,036 |
2,500 |
2,500 |
|
Bond Index Funds |
|
39,654,946 |
0 |
2,500 | |
|
|
Intermediate-Term |
4,473,454 |
|
2,500 |
0 |
|
|
Long-Term Bond |
1,240,044 |
|
1,250 |
0 |
|
|
Short-Term Bond |
5,205,680 |
|
2,500 |
0 |
|
|
Total Bond Market |
28,735,768 |
|
2,500 |
0 |
|
Calif. Tax-Free Funds |
|
9,356,035 |
0 |
2,500 | |
|
|
CA Intermediate-Term |
2,582,531 |
|
1,900 |
0 |
|
|
CA Long-Term |
2,015,722 |
|
1,700 |
0 |
|
|
CA Tax-Ex Money Mkt. |
4,757,782 |
|
2,500 |
0 |
|
Convert. Securities Fund |
958,550 |
958,550 |
1,000 |
1,000 | |
|
Explorer Fund |
9,056,027 |
9,056,027 |
2,500 |
2,500 | |
|
Fenway Funds |
|
4,485,066 |
0 |
2,500 | |
|
|
Equity Income Fund |
3,704,853 |
|
2,300 |
0 |
|
|
Growth Equity Fund |
780,213 |
|
1,000 |
0 |
|
Fixed Income Funds |
|
81,772,468 |
0 |
2,500 | |
|
|
GNMA Fund |
24,004,000 |
|
2,500 |
0 |
|
|
High-Yield Corporate |
9,500,600 |
|
2,500 |
0 |
|
|
Inflation-Protected |
7,351,300 |
|
2,500 |
0 |
|
|
Inter-Term Corporate |
4,558,340 |
|
2,500 |
0 |
|
|
Inter-Term Treasury |
3,808,130 |
|
2,300 |
0 |
|
|
Long-Term Corporate |
4,767,500 |
|
2,500 |
0 |
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Long-Term Treasury |
2,832,600 |
|
1,900 |
0 |
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Short-Term Corporate |
18,254,260 |
|
2,500 |
0 |
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Short-Term Federal |
3,182,040 |
|
2,100 |
0 |
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Short-Term Treasury |
3,513,698 |
|
2,300 |
0 |
|
Florida Tax-Free Funds |
|
1,136,723 |
0 |
1,250 | |
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|
FL Long-Term Tax-Ex |
1,136,723 |
|
1,250 |
0 |
|
Horizon Funds |
|
12,878,023 |
0 |
2,500 | |
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Capital Opportunity |
8,267,762 |
|
2,500 |
0 |
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Global Equity Fund |
1,143,299 |
|
1,250 |
0 |
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Strategic Equity Fund |
3,466,962 |
|
2,100 |
0 |
|
Vanguard Index Funds |
|
204,263,907 |
0 |
2,500 | |
|
|
500 Index Fund |
103,351,406 |
|
2,500 |
0 |
|
|
Consumer Disc. Index Fund |
21,061 |
|
250 |
|
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|
Extended Mkt. Index |
8,776,924 |
|
2,500 |
0 |
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|
Growth Index Fund |
9,946,257 |
|
2,500 |
0 |
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|
Information Tech Index Fund |
18,500 |
|
225 |
|
|
|
Mid-Cap Index |
7,970,288 |
|
2,500 |
0 |
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Small-Cap Index |
9,103,321 |
|
2,500 |
0 |
|
|
Small-Cap Growth |
1,441,683 |
|
1,250 |
0 |
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|
Small-Cap Value |
2,942,852 |
|
1,900 |
0 |
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Total Stock Market |
54,816,422 |
|
2,500 |
0 |
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|
Value Index Fund |
5,518,255 |
|
2,500 |
0 |
|
|
Vngd Cons. Staples Fund |
22,299 |
|
250 |
|
|
|
Vngd Energy Index Fund |
32,997 |
|
300 |
|
|
|
Vngd Financials Index Fund |
21,924 |
|
250 |
|
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Vngd Hlth Care Index Fund |
54,510 |
|
400 |
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Vngd Industrials Index Fund |
21,428 |
|
250 |
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Vngd Large-Cap Index Fund |
99,807 |
|
450 |
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Vngd Materials Index Fund |
24,252 |
|
250 |
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Vngd Telecommunications |
32,016 |
|
300 |
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Vngd Utilities Index Fund |
47,705 |
|
350 |
|
|
Institutional Index Funds |
|
48,702,155 |
0 |
2,500 | |
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|
Institutional Index |
33,209,347 |
|
2,500 |
0 |
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|
Institutional Index PLUS |
13,099,313 |
|
2,500 |
|
|
|
Institutional Total Bond |
1,146,687 |
|
1,250 |
0 |
|
|
Inst. Total Stock Mkt. |
793,264 |
|
1,000 |
0 |
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|
Inst. Total Stock Mkt. PLUS |
453,544 |
|
750 |
|
|
Internat'l Equity Index |
|
18,509,655 |
0 |
2,500 | |
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|
Emerging Mkts.Stock |
3,165,211 |
|
2,100 |
0 |
|
|
European Stock Index |
10,455,907 |
|
2,500 |
0 |
|
|
Pacific Stock Index |
4,888,537 |
|
2,500 |
0 |
|
Malvern Funds |
|
11,489,223 |
0 |
2,500 | |
|
|
Asset Allocation Fund |
10,179,157 |
|
2,500 |
0 |
|
|
Capital Value Fund |
434,561 |
|
750 |
0 |
|
|
U.S. Value Fund |
875,505 |
|
1,000 |
0 |
|
Massachusetts Tax-Ex |
449,935 |
449,935 |
750 |
750 | |
|
Money Market Reserve |
|
53,807,161 |
0 |
2,500 | |
|
|
Federal MMF |
5,496,461 |
|
2,500 |
|
|
|
Prime MMF |
48,310,700 |
|
2,500 |
|
|
Xxxxxx Growth Fund |
4,947,797 |
4,947,797 |
2,500 |
2,500 | |
|
Municipal Bond Funds |
|
47,970,322 |
0 |
2,500 | |
|
|
High-Yield Tax-Ex |
4,359,230, |
|
2,500 |
0 |
|
|
Insured Long-Term |
2,910,952 |
|
1,900 |
0 |
|
|
Intermediate-Term |
11,938,617 |
|
2,500 |
0 |
|
|
Limited-Term Tax-ex |
6,896,385 |
|
2,500 |
0 |
|
|
Long-Term Tax-ex |
1,910,065 |
|
1,500 |
0 |
|
|
Short-Term Tax-ex |
4,596,041 |
|
2,500 |
0 |
|
|
Tax-ex MoneyMkt. |
15,359,032 |
|
2,500 |
0 |
|
New Jersey Tax-Free |
|
3,594,365 |
0 |
2,300 | |
|
|
NJ Long-Term Tax-ex |
1,520,725 |
|
1,500 |
0 |
|
|
NJ Tax-ex MMF |
2,073,640 |
|
1,700 |
0 |
|
New York Tax-Free |
|
4,433,262 |
0 |
2,500 | |
|
|
NY Long-Term Tax-ex |
2,139,288 |
|
1,700 |
0 |
|
|
NY Tax-ex MMF |
2,293,974 |
|
1,700 |
0 |
|
Ohio Tax-Free |
|
1,290,964 |
0 |
| |
|
|
OH Long-Term Tax-ex |
498,954 |
|
750 |
0 |
|
|
OH Tax-ex MMF |
792,010 |
|
1,000 |
0 |
|
Pennsylvania Tax-Free |
|
4,929,526 |
0 |
2,500 | |
|
|
PA Long-Term Tax-ex |
2,271,016 |
|
1,700 |
0 |
|
|
PA Tax-ex MMF |
2,658,510 |
|
1,900 |
0 |
|
PRIMECAP Fund |
26,301,209 |
26,301,209 |
2,500 |
2,500 | |
|
Quantitative Funds |
|
7,004,394 |
0 |
2,500 | |
|
|
Growth and Income |
7,004,394 |
|
2,500 |
0 |
|
Specialized Funds |
|
34,496,397 |
0 |
2,500 | |
|
|
Energy Fund |
5,300,448 |
|
2,500 |
0 |
|
|
Health Care Fund |
21,544,655 |
|
2,500 |
0 |
|
|
Precious Metals Fund |
885,440 |
|
1,000 |
0 |
|
|
RElT Index Fund |
5,824,223 |
|
2,500 |
0 |
|
|
Dividend Growth Fund |
941,631 |
|
1,000 |
0 |
|
STAR Funds |
|
38,431,631 |
0 |
2,500 | |
|
|
Xxx.Xxxxxxx Index |
1,117,174 |
|
1,250 |
0 |
|
|
Instit.Dev.Mkt. Index |
1,040,132 |
|
1,250 |
0 |
|
|
LifeStrategy Conserv |
3,569,311 |
|
2,300 |
0 |
|
|
LifeStrategy Growth |
5,828,094 |
|
2,500 |
0 |
|
|
LifeStrategy Income |
1,637,162 |
|
1,500 |
0 |
|
|
LifeStrategy ModGrow |
6,818,191 |
|
2,500 |
0 |
|
|
STAR Fund |
10,435,146 |
|
2,500 |
0 |
|
|
Total Int'l Stock Index |
7,986,421 |
|
2,500 |
0 |
|
Tax-Managed Funds |
|
8,268,794 |
0 |
2,500 | |
|
|
Tax-Mgd. Balanced |
549,068 |
|
900 |
0 |
|
|
Tax-Mgd. Cap App |
2,997,722 |
|
1,900 |
0 |
|
|
Tax-Mgd. Growth/lnc. |
2,547,100 |
|
1,900 |
0 |
|
|
Tax-Mgd. International |
913,946 |
|
1,000 |
0 |
|
|
Tax-Mgd. Small-Cap |
1,260,958 |
|
1,250 |
0 |
|
Treasury Money Mkt |
4,626,188 |
4,626,188 |
2,500 |
2,500 | |
|
Trustees’ Equity Fund |
|
2,463,239 |
0 |
1,700 | |
|
|
International Value |
2,463,239 |
|
1,700 |
0 |
|
Variable Insurance Fund |
|
8,183,118 |
0 |
2,500 | |
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|
Balanced Port. |
997,253 |
|
1,000 |
0 |
|
|
Diversified Value |
392,398 |
|
750 |
0 |
|
|
Equity Income |
424,570 |
|
750 |
0 |
|
|
Equity Index |
1,603,963 |
|
1,500 |
0 |
|
|
Growth Portfolio |
357,671 |
|
750 |
0 |
|
|
High-Yield Bond |
272,600 |
|
750 |
0 |
|
|
International Port. |
498,077 |
|
750 |
0 |
|
|
Mid-Cap Index |
497,768 |
|
750 |
0 |
|
|
Money Mkt. Portfolio |
847,237 |
|
1,000 |
0 |
|
|
RElT Index |
385,415 |
|
750 |
0 |
|
|
ST Corporate |
417,014 |
|
750 |
0 |
|
|
Small Co. Growth |
717,339 |
|
900 |
0 |
|
|
Total Bond Index |
615,205 |
|
900 |
0 |
|
|
Total Stock Market |
0 |
|
0 |
0 |
|
|
Small Cap Index |
0 |
|
0 |
0 |
|
|
Capital Growth |
156,608 |
|
600 |
0 |
|
Wellesley Fund |
10,665,709 |
10,665,709 |
2,500 |
2,500 | |
|
Wellington Fund |
32,895,323 |
32,895,323 |
2,500 |
2,500 | |
|
Whitehall Funds |
|
4,306,615 |
0 |
2,500 | |
|
|
International Explorer |
1,729,284 |
|
1,500 |
0 |
|
|
Mid-Cap Growth |
466,383 |
|
750 |
0 |
|
|
Selected Value |
2,110,948 |
|
1,700 |
0 |
|
Windsor Funds |
|
53,318,916 |
0 |
2,500 | |
|
|
Windsor Fund |
20,197,110 |
|
2,500 |
0 |
|
|
Windsor II Fund |
33,121,806 |
|
2,500 |
0 |
|
|
World Funds |
|
15,700,854 |
0 |
2,500 |
|
|
Xxxxxxx Social Index |
326,000 |
|
750 |
0 |
|
|
International Growth |
9,141,361 |
|
2,500 |
0 |
|
|
U.S. Growth |
6,233,493 |
|
2,500 |
0 |
|
|
|
|
|
|
|
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TOTALS |
830,925,221 |
830,925,221 |
205,275 |
79,500 |
